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Chris Joye Agrees 30% Over Valued; Housing overvalued by as much as 30%
Topic Started: 25 Aug 2014, 02:49 PM (1,340 Views)
Chris
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Chris Joye agrees finally that housing is 20-30pc over valued at the current state and in for a big shock to come!

Read the Article Here

Christopher Joye

Houses overvalued by up to 30 per cent, says ex-RBA official

One of Australia’s top economic experts, Jeremy Lawson, says the ­housing market is 20 per cent to 30 per cent overvalued and has left Australia vulnerable to a big international ­economic shock.

Mr Lawson is the global chief ­economist of Standard Life, a massive British fund manager with $460 billion in assets under management. He was previously a senior economist at the Reserve Bank of Australia and the OECD, and in 2007 advised then ­opposition leader Kevin Rudd.

In an interview, Mr Lawson ­criticised fiscal policy settings, ­suggested the RBA’s organisational ­culture was insular and said there was a bias towards big banks in the financial system inquiry panel and argued low interest rates are pushing house prices out-of-line with fundamentals.

As an economist focused on investing Standard Life’s capital around the world, Mr Lawson said he can take a longer-term view than “sell-side” counterparts inside investment banks, who have to relentlessly promote new angles to clients and the media in a battle for attention.

Mr Lawson said it is “reasonable to assume that future house prices will grow in line with real household ­disposable income as the commodity boom unwinds”.

“That would imply overvaluation of between 20 per cent and 30 per cent,” he said, based on a new valuation model released by the Reserve Bank in July.

House prices are 26 per cent above their peaks before the financial crisis and 11.2 per cent higher over the 12 months ended August 23, RP Data said. Prices in Sydney and Melbourne have surged over the last three months.
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Dr Watson
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I don't think that's what Joye himself is saying. I think that's the quote from the man he's interviewing.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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herbie
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Dr Watson
25 Aug 2014, 03:55 PM
I don't think that's what Joye himself is saying. I think that's the quote from the man he's interviewing.
Whatever; But 25% 'overvalued' was about the figure The Economist also felt inclined to run with last time I noticed Doc?
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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b_b
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Whatever happened to the standard "40% overvalued". Are the Bears getting less bearish...
(S – I) + (T - G) + (M - X) = 0
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herbie
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b_b
25 Aug 2014, 05:55 PM
Whatever happened to the standard "40% overvalued". Are the Bears getting less bearish...
There's probably some bears who reckon it's all 80% overvalued?

But then, there's always bin those bears as well as all the rest of all us other bears.

Just that it's never suited the rhetoric of the "All bears are Nutters - RAVING LUNATICS in fact!!!" bulls to acknowledge that.

So eff orf lame brain ... :)
Edited by herbie, 25 Aug 2014, 06:09 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Ex BP Golly
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herbie
25 Aug 2014, 06:08 PM
There's probably some bears who reckon it's all 80% overvalued?

But then, there's always bin those bears as well as all the rest of all us other bears.

Just that it's never suited the rhetoric of the "All bears are Nutters - RAVING LUNATICS in fact!!!" bulls to acknowledge that.

So eff orf lame brain ... :)
Im closer to one of those. I think about 70-75% over valued.

30% is just for starters. :lol
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Dr Watson
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herbie
25 Aug 2014, 05:51 PM
Whatever; But 25% 'overvalued' was about the figure The Economist also felt inclined to run with last time I noticed Doc?
I think Joye's view is that there's a very slight overvaluation — but not in the neighbourhood of 30%. Well — not yet. We are getting there slowly. The indices continue to march higher. There is no sign of this current boom — jointly engineered by the RBA and the FIRB — losing steam. You see it on the ground — absurd prices for 3-bedroom dual-occ now. Two families under one roof? Nobody minds. Just lay your hands on something. You see it in the numbers on the RP Data website. You hear it in the anguished cries of renters across the land. You know it from the deafening silence from politicians.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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