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The Perth Property Crash Thread; Let us enjoy the inevitable collapse as it unfolds in WA
Topic Started: 13 Aug 2014, 12:28 AM (89,625 Views)
skamy
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peter fraser
2 Sep 2014, 06:52 AM
This is The Perth Property Crash Thread.

House prices in Perth increased by 0.27% in August

House prices are up 3.51% for the last 12 months.

Can someone show me where the crash is in Perth? It's not showing in the data.

Does a crash in Perth just mean a period of slow growth?
The bears cannot seem to understand that crashes only happen after major shocks and then they only disrupt to the degree that people are already under stress. The property market world wide is usually very stable increasing at an average of about 5-10% a year. Perth is the only major city in WA and WA has a huge economy, its property market has been very stable for decades.

They think that because money was invested in new mines that this will lead to mass unemployment when they are finished and start making the real contribution to GDP. Whereas the truth is that the Perth Headquarters of the companies who own these new mines are doing very well indeed.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Veritas
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skamy
3 Sep 2014, 04:01 PM
The bears cannot seem to understand that crashes only happen after major shocks and then they only disrupt to the degree that people are already under stress. The property market world wide is usually very stable increasing at an average of about 5-10% a year. Perth is the only major city in WA and WA has a huge economy, its property market has been very stable for decades.

They think that because money was invested in new mines that this will lead to mass unemployment when they are finished and start making the real contribution to GDP. Whereas the truth is that the Perth Headquarters of the companies who own these new mines are doing very well indeed.
As usual, you are entirely wrong.

The bubble causes the crash.

It contains the seeds of its own destruction.

Spain, Ireland, the US and Sweden all show this.

Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Jimbo
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skamy
3 Sep 2014, 04:01 PM
They think that because money was invested in new mines that this will lead to mass unemployment when they are finished and start making the real contribution to GDP. Whereas the truth is that the Perth Headquarters of the companies who own these new mines are doing very well indeed.
I still fail to see how having a few big mining company offices in Perth is going to make up for the end of the largest capex boom in WA history?

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Veritas
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Jimbo
3 Sep 2014, 04:27 PM
I still fail to see how having a few big mining company offices in Perth is going to make up for the end of the largest capex boom in WA history?
Everyone fails to see that. Except Skamy and her adherence to Skamenomics.

Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Jimbo
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Veritas
3 Sep 2014, 04:30 PM
Everyone fails to see that. Except Skamy and her adherence to Skamenomics.
That new BHP tower has got a lot of windows though. Maybe we could all be window cleaners.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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skamy
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Veritas
3 Sep 2014, 04:12 PM
As usual, you are entirely wrong.

The bubble causes the crash.

It contains the seeds of its own destruction.

Spain, Ireland, the US and Sweden all show this.
For heavens sake Veritas there is no bubble in Perth it there ever was one it peaked in 2007.

Overbuilding and over speculation by people gambling on making money by simply buying and selling off the plan was the major destabiliser and the credit crunch was the trigger in the markets that crahed eg Spain and Ireland.

Lose the bubble talk Veritas, this will become a running joke wait and see. Look at all the press now ridiculing bubble claims.

The bubble, if it was anything, was a graph of activity in the economy, it did not cause anything, it simply tracked the economy.

There is no overbuilding in Sweden
Quote:
 
Stockholm is one of Europe's fastest growing capitals with the population expanding at a rate of 30,000 each year and is expected to grow by 50% by 2030. Despite this, there is little construction of new housing to cater for annually increasing demand.

nor is there a bubble
Posted Image

http://www.ipinglobal.com/ipin-live/407295/are-house-prices-in-europe-in-touch-with-reality

Edited by skamy, 3 Sep 2014, 05:09 PM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Veritas
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Jimbo
3 Sep 2014, 04:35 PM
That new BHP tower has got a lot of windows though. Maybe we could all be window cleaners.
Au contraire, they are all going to get jobs building houses to meet demand from all their formal colleagues who also have jobs building houses.
Quote:
 
For heavens sake Veritas there is no bubble in Perth it there ever was one it peaked in 2007.


Peaked just as the mining boom went into overdrive. That's odd, I wonder what will happen now that the boom is unwinding.

Quote:
 
Overbuilding and over speculation by people gambling on making money by simply buying and selling off the plan was the major destabiliser and the credit crunch was the trigger.


So you agree, bubbles contain the seeds of their own destruction. I expect we will hear less nonsense to the contrary from you from now on then?

Quote:
 
Lose the bubble talk Veritas, this will become a running joke wait and see. Look at all the press now ridiculing bubble claims.


By the press do you mean the same people who take in millions in ad revenue from the property industry and in return the favour by publishing articles written by men who sell houses for a living that encourage people to buy houses?

Quote:
 
The bubble, if it was anything, was a graph of activity in the economy, it did not cause anything, it simply tracked the economy.



Is this what tracking the economy looks like?

Posted Image

Edited by Veritas, 3 Sep 2014, 04:49 PM.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Jimbo
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Veritas
3 Sep 2014, 04:42 PM
Au contraire, they are all going to get jobs building houses to meet demand from all their formal colleagues who also have jobs building houses.
Ah yes, the old "dog eating its own poo" form of economic growth.

Meanwhile, all this talk of low rental vacancy rates has me laughing.

Down Rocko way (which is very popular with the FIFO brigade), I am watching a rental market collapse as it happens.

In a few weeks, we have gone from 67 available properties in Warnbro, Waikiki and Port Kennedy to 88. It has been trending up consistently for over two months.

http://www.realestate.com.au/rent/in-warnbro%2c+wa+6169%3b+waikiki%2c+wa+6169%3b+port+kennedy%2c+wa+6172%3b/list-1?includeSurrounding=false

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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skamy
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Veritas
3 Sep 2014, 04:42 PM
Au contraire, they are all going to get jobs building houses to meet demand from all their formal colleagues who also have jobs building houses.



Peaked just as the mining boom went into overdrive. That's odd, I wonder what will happen now that the boom is unwinding.




So you agree, bubbles contain the seeds of their own destruction. I expect we will hear less nonsense to the contrary from you from now on then?




By the press do you mean the same people who take in millions in ad revenue from the property industry and in return the favour by publishing articles written by men who sell houses for a living that encourage people to buy houses?




Is this what tracking the economy looks like?


You will hear plenty from me Veritas. It is very nice to watch as my age and experience works as a better predictive model than anything those drama queens over at Macrobusiness pull from their arses hats.

That graph of yours is nonsense it says nothing about real house prices it just states the obvious that the Australian economy has grown more than most over the last 3 decades. If you think Australia will return to where it was 3 decades ago when a manual labourer could buy a big house in Centennial Park you would have to have rocks in your head.

This is realistic price comparison. No bubble anywhere is there.

Posted Image
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Jimbo
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Veritas
3 Sep 2014, 04:42 PM
Au contraire, they are all going to get jobs building houses to meet demand from all their formal colleagues who also have jobs building houses.



New build approvals up 23% in July in WA.

http://www.perthnow.com.au/realestate/news/wa-building-approvals-up-23-per-cent-in-july-after-sixmonth-plateau-say-master-builders-association-wa/story-fnhlgriw-1227046280631

Of course, this is great. More new houses means greater supply and we all know what happens to the supply/demand price impact when you change the balance.

You could argue that a surge in house building will bring in more people but the most likely outcome is that someone who was doing a bit of plumbing or electrical in Jimblebar or Chrsitmas Creek, will soon be plying his trade in Baldivis (for half the money).

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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