Jimbo you are wrong when you talk about people buying and building houses during the boom, this is just not true during the peak of the mining investment boom house prices were stagnant and dropped markedly. In your are houses are discounted by about 40% from 2007 prices how can you seriously believe they will fall more than that?
Again, the GFC had an impact on house prices in WA but that impact was softened greatly by mining capex spending.
You answer that yourself
Quote:
Edwards argues that Australian incomes and productivity grew faster in the decade prior to the mining boom. He is basically stating the obvious that there were serious headwinds from the GFC that impacted negatively during the mining investment boom.
So if it wasn't for the mining capex spend in WA, Perth would have taken a real beating during the GFC.
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.
The real end game, that's a good one Mike, would you like me to elaborate.
The end game is clear, only a fool is still unable to see this.
Counterfelt chinese money has bubbled the WA economy and house prices, as they have Melbourne or Sydney too.
China has, over 2011-2012 alone, used more cement and built more stuff than the US did in the 20th century, increasing their debt from 1 trillion to 15 trillion to do so.
This has been a building boom on a scale unimaginable on any level. Building hundreds of ghost cities to just to spend the counterfeit money and build something with it, creating millions of jobs in the process. At the time our mines were not capable of supplying this massive demand all of a sudden, and comapnies outbid each other for this shit, rocks in the ground , paying around $200 a tonne at one stage.
Their overbuilding debt binge stupidity has now hit a brick wall fast, was never sustainable and was never going to be sustainable, just a complete dissater in the making.
They now have enough building to last decades but jobs will now dissapaer fast , very fast, extremely fast.
All that building , needed workers, supplies, trucks , tyres , fuel, maintenance, work clothes, work gear and whatever else. When the building hits a brick wall, all this building of iron or cement and EVERYTHING else will collapse. When their cement production drops from 20, 000 gazillion tonnes a year, to 50 gazillion tonnes a year. We won't need all those workers, all those cement plants, all those supplies that accompany it. We won't need all those trucks, all those tyres, all that fuel, all the maintenance and insurance and servicing costs. And this is a very small example of just one aspect of building.
Its all over Mike, wake up and smell the reality and stop encouraging kids to leverage into this ponzi, and more so your WA and Perth one.
Wake up Mike, look at the bigger picture.
You don't think these things mentioned above may have a further impact on iron ore prices resulting in further cost cutting measures and job cuts skamy ?
Take Gore Hill for example, at peak it will employ 4000 construction workers but less that that for most of the project. This project will create 2000 jobs and will operate for 20 years.
There will be no major downturn as the investment stage tails off, why? because Australia has had billions invested in its future.
Don't believe the hype of the news.com media, there will not be a major effect as we move from the construction phase to the money making phase.
Yes, anyone can point out that there are still projects in the pipeline - I have said so myself - but unless there is a remarkable turnaround, the number of jobs created by the new projects will be swamped by the number that dissapear as the investment boom winds up.
The amount of money that mining is currently spending employing people to do stuff is going to plummet - it takes a vivid imagination to see no negative impact arising from that.
"This property is a great opportunity for investors and the owners would be happy to rent back."
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.
"This property is a great opportunity for investors and the owners would be happy to rent back."
So my read on that is that this is a forced sale.
But why advertise this fact unless the REA is:
a) dumb, because this will attract low ball offers b) acceptant of the fact that the only people who might by this place are investors hence the promise of a guaranteed tenant.
My, my. The chickens are really starting to come home to roost now.
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
The country, boosted by its largest trading partner China's hunger for resources, has enjoyed a mining investment boom which has helped it avoid recession for more than two decades.
But as that boom draws to a close and the economy transitions away from resources-led expansion, signs that non-resources sectors will fill the gap are mixed.
While the housing sector has flourished as interest rates remain at a record low of 2.5 percent -- with property prices in cities such as Sydney now among the most unaffordable in the world -- spending has been weak in other areas.
The Australian government is determined to narrow the budget deficit by cutting welfare and spending, while consumers continue to favour paying down their debt to splashing out in shops.
At the same time, the local dollar remains strong against its US counterpart despite plunging commodity prices, hurting exports-oriented and import-competing businesses.
Quentin Grafton, the former head of Australia's Bureau of Resources and Energy Economics, said the country faced a challenging time, exacerbated by concerns of property bubbles and over-investment in China.
"If I look at the numbers in China, they are worrying. There are definite concerns -- it's a clear and present danger," Grafton told AFP.
Together with the other domestic economic concerns and a global economy still struggling to get back on its feet after the financial crisis, Grafton said it was a "situation of high risk".
"The Australian economy is fragile... and there are a lot of things that could go wrong. I'm not saying that they will, but they could go wrong and I don't think Australia is well prepared for that," he said.
a) dumb, because this will attract low ball offers b) acceptant of the fact that the only people who might by this place are investors hence the promise of a guaranteed tenant.
My, my. The chickens are really starting to come home to roost now.
Just guessing (but an educated guess). Someone isn't earning as much as they were and can't pay the bills?
This is a typical example of buying a cheap block and building too much house on it.
The property sits right next to a busy dual carriageway. This block would have cost about 30% less than a much quieter block two streets closer to the beach. Building a 4x2 with a big pool will not alter the fact that on the other side of your side fence is constant stream of noisy traffic. There is also a walkway from the main road that takes people right past the front. There are quite a few houses like this in every suburb. What they save on the block they plough into the house.
Also, pictures tell a story. Note the thermomix, huge TV, very new looking furniture, pool table, boat in the driveway. All signs of someone who likes to spend money.
I did a flypast earlier and there is a Pajero sat in the drive with a for sale sign on it. I can't see it fetching $425k from an owner occupier. An investor may buy it for the guaranteed rental return but not for that much. There are cheaper and better places around.
Stan
10 Sep 2014, 04:27 PM
They might be building a house somewhere else.
Why go to the trouble of moving all your shit into a rental for 12 months when you are already settled?
Possibly true, but why not state that in the ad to make it clear that the owners are not in the shit?
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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