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Residex Update: Sydney median house price defies logic, surging to $840K in July; 53% of household income needed to service the debt on a Sydney home
Topic Started: 4 Sep 2014, 01:29 PM (3,406 Views)
Bardon
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Shadow
4 Sep 2014, 05:04 PM


I will probably sell at least one and maybe two IPs close to the top of this cycle... next year or early 2016.

I dunno, I guess it depends on your age and other things but I wouldn't be selling on the top of this one as the next dip will be short and tiny then we have the real big one to follow. After that returns on capital will be ridiculously small for a very long time.
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herbie
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Mike
4 Sep 2014, 05:58 PM
... The question is would the RBA raise interest rates to slow down a runaway Sydney housing boom despite the overall economy growing at below trend growth with unemployment trending up ...
No. Has to be my punt. Having read this (courtesy of Golly):

"Its stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that.” Mr Stevens indicated to a function organised by the Committee for the Economic Development of Australia in Adelaide on Wednesday that it was the task of state and federal gov­ernments to help ensure price gains didn’t become unsustainable.

He said monetary policy could not add to the amount of land available for housing or improve the ability of the construction sector to respond to demand for extra housing.

“Other policies have to do that – and it’s important that they do, if we are to see easy credit result in more dwellings as opposed to just higher prices for the existing dwellings,” he said. “Monetary policy can’t create the additional in­frastructure that most people agree we need. Funding conditions are not, in fact, an impediment to infrastructure.

“The real issues are governance, ­risk-sharing and pricing – areas where other policies have to be right.”

http://m.afr.com/p/national/rba_glenn_stevens_urges_action_to_zQDQkxTeiTKlXdg9qXSN8H

With my reading of it (well my reading between the lines of it anyway) pretty much being that Stevens is clearing the deck to do a Pontius Pilate routine on housing prices - Whatever might happen to them going forward - Not his fault; Not his problem; Per se anyway.

With that sounding a bit similar to the general sentiment Yellen seems to be adopting to the prices of US assets.

Three further dot points:

* Cross your fingers and hope the banks really are in good knick
* As in, just maybe a fair bit of that 53% has been ponied up by silly ole BBs what can afford ta lose it on behalf of their dearly beloved little Bazzas 'n Shazzas (or whatever the trendy names for Gen Ys were)
* I forgot the third dot point - 'Cause I'm old; And stupid. But I'm not THAT stupid ... LOL!

'N a PS for the highly leveraged bulls: Are you continuing to buy on leverage right about now? Would you recommend others should??? :)
Edited by herbie, 5 Sep 2014, 06:10 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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