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Outside Sydney, National growth in the past year is only 4%, after several years of price declines; Headline obsessed writers need a reality check - Terry Ryder discusses the bubble
Topic Started: 30 Sep 2014, 08:24 PM (2,006 Views)
John Frum
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Bardon
1 Oct 2014, 10:30 AM
Third, the creation of a politically accepted reason for a huge military build up in the mid east and further regime change in the region including Syria, Iran and most probably Lebanon.

The terror is very real up there, no time for the locals to be watching porn and talking about house prices either.
I'm not so sure about that. Do you really think the west has the stomach or the finances for another messy, bloody war in the middle east?

Sure, post 9/11 there was. But it's a different, more jaded world we inhabit now.
"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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Ex BP Golly
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Bardon
1 Oct 2014, 09:51 AM
. I have been out of the country for a while and on return the media would have had anyone that believed them think that there was a full scale jihade taking place down under. Even though there has never been a single death in OZ from terrorism since 911.

Journalism was supposed to challenge the accepted norms and put the bogeyman spin doctors through the bull shit shredder. They fail here as they continue to parrot out the usual non analysis and cut and paste the latest fear mongering script.
Youll be suprised to hear that Allah Akbah chanting terrorists ripped apart Golburn Gaol recently.

It must be true, it was in the Daily Terrorgraph, and confirmed by Alan Jones and death Ray Hadely.


n.b. actually, a couple of Aborigines broke a fence, but don't let that get in the way of Oi Oi Oi journalism.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Bardon
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John Frum
1 Oct 2014, 10:37 AM
I'm not so sure about that. Do you really think the west has the stomach or the finances for another messy, bloody war in the middle east?

Sure, post 9/11 there was. But it's a different, more jaded world we inhabit now.
Yes I am absolutely convinced of it. Plus it is happening right now, Abbot will have us up there any day now. The yanks have never stopped plugging away at achieving their unfinished foreign policy for the the mid east. The current phase of this regime change has already started as they got rid of their previous mafiosi don Maliki as he was not aggressive enough on Iran and had signed off, on a local pipeline that did not suit the yanks for a new more compliant don.

Edited by Bardon, 1 Oct 2014, 10:51 AM.
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miw
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Bardon
1 Oct 2014, 10:30 AM
Third, the creation of a politically accepted reason for a huge military build up in the mid east and further regime change in the region including Syria, Iran and most probably Lebanon.

The terror is very real up there, no time for the locals to be watching porn and talking about house prices either.
A scared population is malleable and can be controlled. The political leadership will always have one or more particular threats that they blow up into an irrational fear in order to get things done.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Admin
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Rational talk on housing prices lost in a bubble

Danika Wright | 3 October 2014

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The latest house price index figures released by RP Data earlier this week show a year-on-year increase in property values in Sydney of 14.3%. This has sparked the current hot debate on property prices and speculation of a price bubble. Though, it seems many people have forgotten what house price indices represent.

The All Ordinaries, the index of broad Australian equities market movements, increased by around 9% in the 12 months to the start of September. As investors understand, this doesn’t equate to all stocks on the market increasing in price by 9% over that period.

For example, shareholders in BHP, one of the largest ASX companies by market capitalisation, have suffered a modest loss over that period, even after dividend payments are considered. And as the All Ordinaries Index value has fallen 6% over the past month, there have been some stocks that have fallen more (Myer shares tumbled nearly 20% in the month) and others that have gone against the trend (insurer QBE was up 1.2% in September).

Similarly, a house price index gives a measure of the broad property market movement. In the case of the RP Data-Rismark Index, the change in the index value reflects the average increase or decrease in property prices.

Prices in Australian capital cities, the typical benchmark measure of the Australian residential real estate market, increased by 9.3% in the year to September.

In Canberra and Perth, however, the reported growth in real estate prices was significantly lower at 3.2% and 1.7% respectively. Outside of capital cities property price growth was also a modest 3.3%.

Even in Sydney, which has experienced the strongest price growth of any capital city, there are marked differences in the rate of price appreciation between different suburbs. Western Sydney clearly captures this with residents in South Granville enjoying an increase in median property price of around 17.5%, while reported median prices have shown virtually no annual change in Auburn.

Blunt policy tools are not the answer

It wasn’t so long ago that the average price of Perth’s houses surpassed Sydney’s on the back of a mining industry-led boom in the West. At the national level, these differences in property price growth are the result of shifting labour and economic factors, and to a lesser extent state-specific regulation.

Within a city, local amenities and employment, as well as the preferences of the potential home buyers are reflected in price growth variation.

This is a key point that needs to be remembered when blunt policy tools are debated. Measures to tighten home loan lending, increase borrowing costs or remove negative gearing affect the market as a whole, whether in Sydney, Perth, or a regional centre.

For policy to be effective it needs to firstly identify what it aims to achieve. Housing policy is a double-edged sword. Rapidly rising house prices can put home ownership beyond the reach of younger and lower-income Australians. But policy designed to lower house prices can put existing homeowners at risk of falling “underwater” - holding negative equity in their property. Again, it is typically lower-income households that are most at risk in this scenario.

Cooling the bubble talk

The growing pressure for a policy response to rising house prices is in part due to fears of a price bubble. The last time the Australian or Sydney house price index increased at more than 10% in a year was 2009. Unsurprisingly, there were calls then too that increased regulation was required to prevent a property bubble burst and housing crisis.

Since 1996, Sydney real estate prices have grown at an average annual rate of 7.26% though, with considerable variation in that time. A growth rate in a single year of 10% in any other asset market with these dynamics would not be cause for alarm. Yet housing has this perception of being low risk, pervading our cultural psyche. Something idiomatically described as “safe as houses” is viewed as guaranteed or risk-free.

When faced with the reality that property prices go up and down, sometimes fast and sometimes slow, we seek ways to explain the conflict with these cultural expectations. Assigning the label or “price bubble” shifts the responsibility for our own irrationalities back on the market.

Read more: http://www.propertyobserver.com.au/finding/residential-investment/36435-rational-talk-on-housing-prices-lost-in-a-bubble.html
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Drgonzo
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Ex BP Golly
1 Oct 2014, 09:18 AM
Ryder is just being a great big sook, whinging because, despite the vaste sums spent on advertising and massaging the media by the housing sector, the message that prices are stupid is getting traction.

That will happen Terry, when prices reach a point where everyone can see that not only is the Emperor stark naked, but that his penis is an odd shade of dayglow orange.

So as you suggest Mr. Ryder, take your pills and have a little lay down.

Stop the f exposing youself in public.

Ask him how his predictions for Queensland property have gone recently - that's why he is having a sook.
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