The chinese have been bidding up some prices here like they have in china, creating an even greater mass of overbuilding than would have been otherwise. Just like in china, they all thought prices were headed to the moon to fever and wanted to jump on the bandwagon too or missout forver. But they are now learning otherwise, they are not going to keep pumping money in when prices are falling, here or there. They will start to pull out rather than lose their money.
But in the meantime , let them create the even greater mass of overbuilding than we would have experienced here otherwise. These buildings are being created for investors to try and rent out while the next generation coming along have no jobs to pay the rent let alone a mortgage .
Prices rose so fast in China many did not even rent them out, or could not rent them out. They have adopted the same thing here thinking prices would rise and it saves them dealing with the tax office and hassles.This is just more property sitting vacant for now that will be unleashed on the market down the line along with the other overbuilding going on.
But as the economy continues on its path to self destruction they will start to sell up on mass , both here and there, rather than lose half their money. And we will be left with 100s of thousands of extra units and houses to rent out and sell to whoever can pay for it or wishes to have there arse burnt as prices decline with the economy, jobs and the money that goes with it.
this pessimistic scenario won't happen, because I am confident in tony abbott's will and power to keep this economy on track if all those people from china, aware that the property business is gone mad in china, are now pouring their money into the aussie property market, we could be confident that properties will keep going up here for a few more years at least, despite the fundamentals looking bad (unemployment up, retail down, commercial activity down etc...)
this pessimistic scenario won't happen, because I am confident in tony abbott's will and power to keep this economy on track if all those people from china, aware that the property business is gone mad in china, are now pouring their money into the aussie property market, we could be confident that properties will keep going up here for a few more years at least, despite the fundamentals looking bad (unemployment up, retail down, commercial activity down etc...)
But you don't want prices going crazy either...
Different Capitl cities have distinct positives / negatives stuff going on.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
The Chinese central bank doesn't publish their monetary statistics anymore. Even bulletins ceased in 2013. My god even the Argentine central bank produces monetary statistics. It's a pretty bad show from the Celestial Kingdom.
My take, China monetarily is completey f...'d up!
We have no idea how much money China is printing. The Chinese central bank essentially fixes the exchange rate and uses exchange controls. The end result is speculation on the grand scale that is now imploding on the grand scale.
Yes, but why would that cause deflation?
b_b
19 Aug 2014, 11:24 AM
Strange comment.
US bonds are bought with US dollars. Not sure why the float would impact the US Bond market. Ether way a foreigner must buy (or borrow) US dollars before they buy the bonds.
Don't the Chinese buy US bonds to control their currency fluctuations? I assume they will stop doing this if they float.
Because the Chinese central bank expands its currency supply by something like 11% pa and under the Basel floating currency system they'd almost have to half that to 6% pa. Technically this would be disinflation rather than true deflation, but the result would be a massive credit crunch.
People buy speculative assets because money is continuously devalued so nobody wants to be in cash. Hence what it is created is a huge synthetic short on the currency. If the AUD was suddenly to go gold standard the result would be similar, asset prices would be slashed and the synthetic short would get burned.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
Yes, but why would that cause deflation? Don't the Chinese buy US bonds to control their currency fluctuations? I assume they will stop doing this if they float.
Yeh - the market expected higher bond yields after qe1 qe2 and the taper. Now a new narrative - it's the Chinese. They keep getting it wrong. I wonder why?
The currency is likely to float in 2015 (or 2016) and then all bets are off for the US bond markets and everything else as the hedgemony position of the US is seriously challenged with the float.
Strange comment.
US bonds are bought with US dollars. Not sure why the float would impact the US Bond market. Ether way a foreigner must buy (or borrow) US dollars before they buy the bonds.
I am going off some numbers presented to me a while ago but I think that total world trade in yuan is around 2% in 2013...give or take.
The reason the game changes is following the float trade with China and eventually other countries will be in yuan not $US. The structural changes required to implement such a vast movement will take about 5-10 years. China will not have to purchase the US bonds as they will not have the $US to purchase them. The float provides the vehicle for china to open its markets making them more transparent.
World trade in yuan is still at dismal proportions albeit growing. Surprisingly the largest contributor to that growth is the USA.
Yeh - the market expected higher bond yields after qe1 qe2 and the taper. Now a new narrative - it's the Chinese. They keep getting it wrong. I wonder why?
So if the world sells (some of) it's treasuries to diversify it's reserves into CNY, this will have no effect on the dollar exchange rate or the bond market?
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
But as the economy continues on its path to self destruction they will start to sell up on mass , both here and there, rather than lose half their money. And we will be left with 100s of thousands of extra units and houses to rent out and sell to whoever can pay for it or wishes to have there arse burnt as prices decline with the economy, jobs and the money that goes with it.
1000's of extra units can quickly be filled. Immigration into Sydney & Melbourne is about 700 per day.
this pessimistic scenario won't happen, because I am confident in tony abbott's will and power to keep this economy on track if all those people from china, aware that the property business is gone mad in china, are now pouring their money into the aussie property market, we could be confident that properties will keep going up here for a few more years at least, despite the fundamentals looking bad (unemployment up, retail down, commercial activity down etc...)
So you believe politicians
And have faith in them
Tony Abbott's priority like all politicians before him and those of western economy has been to fuel the government gravy train. If it means bending you over , your children and your grandchildren to do so , then so be it.
Watch those units and houses getting built like no tommorow in every capital, watch those vacancy rates along with unemployment. Watch the rents start dropping as they scramble to find a tennant, then watch them start jumping ship, see how much the chinese keep buying then. Already unfolding in perth snd canberra, with apartment and housing building headed to the moon at the same time job losses are headed to the moon at a time when interest rates cant go much lower, and with the amount of job losses we will just keep seeing , it wont matter how low they go
1000's of extra units can quickly be filled. Immigration into Sydney & Melbourne is about 700 per day.
The US , euro and UK have had more migrants flowing in than australia over the decades, but it did not stop their house prices or economy collapsing with no endnin sight six years on, just more and more desperate attempts and more debt to avoid further collapse.
Our housing per capita is already higher than the US euro and UK and we are building more in record numbers in every capital city.
By your reckoning, house prices in ethiopia should be a gazillion dollars with all the people they have there.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy