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ANZ Chairman David Gonski: Correction inevitable, anybody who believes prices always go up is a fool; Going to happen tomorrow, at five o’clock this afternoon or in three months
Topic Started: 3 Sep 2014, 08:49 AM (3,587 Views)
RealEstateAgent
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noopsy05
3 Sep 2014, 07:12 PM
does he think you are a fool if you dont think house prices will crash but maybe stay stagnant for afew years to balance out then start going up again? Becasue thats what i think, if prices drop the slightest all the FHB's who have been missing out and piling up on the side lines will jump into the market and push prices back up
ummm no.

The herd mentality will lead to the FHB's staying out of the market cause their mates who already bought over the last 12 months suddenly owe more than their house is worth...following that the husband just lost his job and the wife is now pregnant as they were planning to fill that nice big 4 bedder in Kellyville which they purchased for the small sum of $1.2m on a 95% loan...
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peter fraser
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John Frum
3 Sep 2014, 07:36 PM
Dream on - classic deluded bubble talk.
He has a point - there will be a fall in some house prices, interest rates will fall, maybe we will see some stimulus, and then we will see a market revival.

The issue is how many more times can that be done? there has to be a genuine increase in household income for it to stick. Maybe that will happen, maybe it won't.
Any expressed market opinion is my own and is not to be taken as financial advice
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John Frum
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peter fraser
3 Sep 2014, 08:28 PM
He has a point - there will be a fall in some house prices, interest rates will fall, maybe we will see some stimulus, and then we will see a market revival.

The issue is how many more times can that be done? there has to be a genuine increase in household income for it to stick. Maybe that will happen, maybe it won't.
If prices drop 30% from here in a couple of years I probably still won't buy, because the economic climate we would be facing - whether it be higher interest rates, deflation, unemployment, or lower LVRs - will make it difficult.
Edited by John Frum, 3 Sep 2014, 08:59 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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goldbug
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Without a rise in surplus household income it can't happen. Either wages must go up, or the cost of living go down. The latter is basically impossible and the former is not very likely given the trend over the last 30 years.
30 years ago a crappy adult hourly rate was $10 an hour, today it's about $22/ hour. And with progressive tax and super and the higher cost of living that is a shit load worse than it seems. As for interest rates falling, falling where? Given the bank's spread they are almost at bottom now.

The only reason millions of people bought homes in the last 7 years was because they fully expected them to double in value in 10 years. If the people in Australia had known they were signing up for in excess of a million dollars in liability for a decade of stagnate home prices as we are seeing I believe many would have opted out.

There is a time to buy and a time to rent. And if you don't own this is a good time to rent and earn interest on money invested than to pay compound interest to a bank for a house that is depreciating.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Crocstar
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How many bulls do we need to keep prices rising?

1 million investor bulls?
100,000 investor bulls?
10,000 investor bulls?
Perhaps we only need two bulls to buy and sell to each other at ever increasing prices?
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herbie
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Crocstar
3 Sep 2014, 09:38 PM
How many bulls do we need to keep prices rising?

1 million investor bulls?
100,000 investor bulls?
10,000 investor bulls?
Perhaps we only need two bulls to buy and sell to each other at ever increasing prices?
It could take the pressure off the rest of us to go through the mental angst of participating? - Just all sit back 'n let those two bulls backed by one endlessly benevolent bull bank swap one house back 'n forwards between themselves endlessly - Whilst the rest of us do quiet little side bets on the outcome - Should we feel inclined ta have a bit of a flutter ... :)
Edited by herbie, 3 Sep 2014, 10:10 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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newjez
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peter fraser
3 Sep 2014, 12:16 PM
Over the last decade the average rise in Sydney has been quite modest, as have most cities except for Perth and I think Darwin.

Jennifer Duke had some interesting figures in a brief article yesterday. I'll post it if I can get my work done on time.

I think that Brisbane was just 3.7% annually which is just a shade over inflation.

EDIT - Actually it was Sydney that averaged just 3.7% - Brisbane was lower at 3.4%

http://www.propertyobserver.com.au/finding/residential-investment/35184-which-capitals-did-not-double-in-value-in-the-past-10-years.html

change in dwelling values over the past 10 years:
Darwin - 8.5%
Perth - 7.1%
Melbourne - 6.2%
Adelaide - 4.0%
Canberra - 3.7%
Sydney - 3.7%
Brisbane - 3.4%
Hobart - 2.0%

Source: RP Data

Only Perth and Darwin look frothy based on that average, maybe Melbourne to a degree.
When you consider Perth was all in the first five, frothy is an understatement.
John Frum
3 Sep 2014, 08:58 PM
If prices drop 30% from here in a couple of years I probably still won't buy, because the economic climate we would be facing - whether it be higher interest rates, deflation, unemployment, or lower LVRs - will make it difficult.
Buy into the upswing.
Edited by newjez, 3 Sep 2014, 10:24 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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noopsy05
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John Frum
3 Sep 2014, 07:36 PM
Dream on - classic deluded bubble talk.
well your the one who has been completely wrong so far. Yous guys talking about this big crash and burn. I brought just less than 5 years ago and i was reading you guys talking about this big bubble and crash. If it hasnt happened within 3 - 4 years ill be living mortgage free. Let me guess what your comeback is now "yeah but you have had no life for 8 years because your paying off a mortgage and cant afford to go out"......so predictable
John Frum
3 Sep 2014, 08:58 PM
If prices drop 30% from here in a couple of years I probably still won't buy, because the economic climate we would be facing - whether it be higher interest rates, deflation, unemployment, or lower LVRs - will make it difficult.
lol, you wont buy after a 30% drop! becasue you think the economic climate we will be facing will make it difficult? you bears must be 100% certain this big crash will happen. I know you guys think this will 100% happen, but lets just pretend you think it only has a 99% chance of happening, and the 1% gets up and it doesn't. What are you and the bears plans then? not counting the noose
Edited by noopsy05, 3 Sep 2014, 10:50 PM.
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noopsy05
3 Sep 2014, 10:33 PM
I know you guys think this will 100% happen, but lets just pretend you think it only has a 99% chance of happening, and the 1% gets up and it doesn't. What are you and the bears plans then? not counting the noose
If the economy tanks it would be a disaster for the bears. They have it all wrong as usual.
The first thing that would happen is the government would hit the stimulus button just like they did in 2009. House prices would rocket up and they would tax people like John Frum to pay it off again.

Australia has a huge amount of juice in the tank to deal with a down turn. I hope it happens just to see the tears of rage from the bears.
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noopsy05
3 Sep 2014, 10:33 PM
well your the one who has been completely wrong so far. Yous guys talking about this big crash and burn. I brought just less than 5 years ago and i was reading you guys talking about this big bubble and crash. If it hasnt happened within 3 - 4 years ill be living mortgage free. Let me guess what your comeback is now "yeah but you have had no life for 8 years because your paying off a mortgage and cant afford to go out"......so predictable

lol, you wont buy after a 30% drop! becasue you think the economic climate we will be facing will make it difficult? you bears must be 100% certain this big crash will happen. I know you guys think this will 100% happen, but lets just pretend you think it only has a 99% chance of happening, and the 1% gets up and it doesn't. What are you and the bears plans then? not counting the noose
So after all the warnings you were given and all you have seen around the world, when they all said it could not happen too( abeit with the GFC not having hit yet ) you went out with complete ignorance as to what was going on around you, and went out to leverage up a year or two after the greatest depression in history surfaces.

What you also dont understand is this no no normal downturn or decline.

Dont you see our wages are too high and thats why we are losing all our jobs.

Dont you understand that what jobs are not taken by cheap overseas labour will be taken by rapid advances in technology and automation.

Will you still have a job in another year or so ?

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