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Will the Sydney median house price reach $1 million by the end of 2015?
Topic Started: 4 Sep 2014, 03:48 PM (22,832 Views)
Mallard
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I would say the impact of house prices on incomes is zero. What's your hypothesis?
Collecting desperation.
Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
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Trollie
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newjez
5 Sep 2014, 10:50 PM
So, are we talking $950,000.01? Australian dollars, or US or Canadian?
Nahhh. I'm calling the top. Probably rise for a couple of months of Spring then peter out. I reckon you'd be lucky to be any higher at xmas than today. Melbourne also. I even expect the national average to drop. Using RP data. I think by xmas Brissy will be the only market not looking crap.

Basis - world economy.

If I'm wrong I'll chew my throng. (Australian not British)
Want another stab at calling top again? Come on, you know you want to!
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Terry
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Mallard
4 Jun 2015, 09:21 PM
I would say the impact of house prices on incomes is zero. What's your hypothesis?
What is "zero"? What an unusual hypothesis and state the null hypothesis if you want to follow a research design.
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peter fraser
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Mallard
4 Jun 2015, 09:21 PM
I would say the impact of house prices on incomes is zero. What's your hypothesis?
It would add to aggregate income and have a very small affect on median incomes, but the kicker would be a falling UE rate and growing retail sales, which would increase incomes for retailers, building material suppliers etc. Wouldn't expect a big change in price income ratios though.
Any expressed market opinion is my own and is not to be taken as financial advice
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Terry
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peter fraser
4 Jun 2015, 09:42 PM
It would add to aggregate income and have a very small affect on median incomes, but the kicker would be a falling UE rate and growing retail sales, which would increase incomes for retailers, building material suppliers etc. Wouldn't expect a big change in price income ratios though.
Rising house prices could have impacts on income across the economy in both the private and public sectors, as seen in most bubbles. If rising house prices drive incomes, then naturally changes in ratios would be hardly noticeable. Given that house prices and incomes have a positive correlation, it passes the first test before proceeding to a regression analysis.
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Sydneyite
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Terry
4 Jun 2015, 08:24 PM
Not quite Rupert. The relationship between house prices and incomes is fascinating and I suspect that in most bubbles, house prices have a strong impact on incomes. In the case where house prices have a greater impact on driving income than other sectors of the economy, then you have the potential for a "masked bubble", where you don't understand the magnitude to which the bubble actually drives your economy. And in the case of many commentators in Australia, it's all about how incomes drive or "track" house prices. They take it as a fundamental truth without the actual ability to quantitatively prove it.
You are so full of shit. Just like your previous persona's..... :re:
Edited by Sydneyite, 4 Jun 2015, 09:59 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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peter fraser
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Terry
4 Jun 2015, 09:54 PM
Rising house prices could have impacts on income across the economy in both the private and public sectors, as seen in most bubbles. If rising house prices drive incomes, then naturally changes in ratios would be hardly noticeable. Given that house prices and incomes have a positive correlation, it passes the first test before proceeding to a regression analysis.
Well I'm going to have to contradict myself on further thought. Sydney house prices have increase 15% pa for two years in a row, but wage growth has only been a fraction of that, about 2.5% in the last 12 months I believe, so although incomes have increased there doesn't appear to be a strong correlation.
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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Sydneyite
4 Jun 2015, 09:59 PM
You are so full of shit. Just like your previous persona's..... :re:

I don't think he's full of shit - I remember he made the same chicken/egg comparison with wages and house prices under his catweasel account and I though it was a pretty valid and interesting one, although very hard to decipher under all that Chinglish.
"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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Elastic
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Credit growth, house prices, inflation and wages are all linked.
Without credit growth you are unlikely to see house price growth, general inflation or wage increases.
And most credit growth arises as a result of rising house prices (and greater leverage).
Only a rat can win a rat race.

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Terry
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peter fraser
4 Jun 2015, 10:22 PM
Well I'm going to have to contradict myself on further thought. Sydney house prices have increase 15% pa for two years in a row, but wage growth has only been a fraction of that, about 2.5% in the last 12 months I believe, so although incomes have increased there doesn't appear to be a strong correlation.
It all depends on the strength of the relationship and it is clear that there is a correlation between the 2 variables since 2003. Secondly, you are looking at comparisons over a time period that may not be relevant to examining the relationship. Thirdly, you want to use multivariate techniques to quantify the relationship.

Now, we're talking real analytics.
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