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Thirteen Questions for the APF Bulls and Spruikers
Topic Started: 9 Oct 2014, 05:13 PM (1,819 Views)
Barista
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1. Do you think Australian residential real estate prices are in a bubble?

2. What do you propose as measures to improve Australian housing affordability?

3. Over what timeframe do you think this affordability could be improved?

4. Do you think that renting is more expensive or cheaper than buying where a large mortgage is involved?

5. Do you agree/disagree that the concessions for Australian real estate – Negative gearing, capital gains tax concessions in particular – are an effective use of Australian tax policy. Do you believe they help promote development of a better economy?

6. Do you agree/disagree that the concessions for Australian real estate disproportionately benefit older Australians with more assets?

7. What would you advise people thinking about buying now to do? take as big a loan as they think they can reasonably afford and plough it into a house, or save up?

8. Would you agree if they bought now they would be paying off someone elses speculative position?

9. In what context would you advise people against buying now?

10. Do you think not addressing Australia’s real estate costs is a factor in Australia’s economic competitive position?

11. Do you think lowering interest rates to prompt an expansion of aggregate demand will expand aggregate demand by more or less than it rewards those with a position speculating on rising asset prices?

12. Do you think the Foreign Investment Review Board adequately monitors applications made by foreign nationals to buy existing Australian residential real estate?

13. Do you think Austrac adequately monitors funds originating offshore coming into Australia to ensure the traceable probity and provenance of those funds?
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Stan
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Quite the Pandora's box of questions, with some of them being extremely valid.

If I were going to start a thread, I would simply ask:

"Given Australia is already home to the second most expensive RE on the planet we call earth, why do you believe this trend will continue forever? " :)

Maybe that one can be number 14 :to:
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b_b
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Barista
9 Oct 2014, 05:13 PM
1. Do you think Australian residential real estate prices are in a bubble?
A Bubble is a extreme and highly emotive term. I do think over the past 12 months prices have now moved above fair value in Sydney
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2. What do you propose as measures to improve Australian housing affordability?

Reduce the cost of production.
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3. Over what timeframe do you think this affordability could be improved?

A typical real estate cycle - i.e.: 5-7 years
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4. Do you think that renting is more expensive or cheaper than buying where a large mortgage is involved?

The NPV of rent into perpetuity will generally equals the cost of production. On that basis today it is marginally cheaper to rent in pure financial terms.
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5. Do you agree/disagree that the concessions for Australian real estate – Negative gearing, capital gains tax concessions in particular – are an effective use of Australian tax policy. Do you believe they help promote development of a better economy?

These policies reduce the required pre-tax ROCE relative to the cost of production. In that way, it benefits renters and depositors and therefore has a social benefit. The biggest tax break in housing is for the PPOR.
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6. Do you agree/disagree that the concessions for Australian real estate disproportionately benefit older Australians with more assets?

Disagree. People selling capital always have an advantage over people selling Labour. People sell capital to get a return. People sell Labour to eat. It is, and always will be, an unfair negotiation (and why NAIRU is always lower than people think). It has nothing to do with "concessions".
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7. What would you advise people thinking about buying now to do? take as big a loan as they think they can reasonably afford and plough it into a house, or save up?

Its impossible (and unfair) to give such general advice.
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8. Would you agree if they bought now they would be paying off someone elses speculative position?

No. However, I would say that about a share investor.
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9. In what context would you advise people against buying now?

If they were looking for an investment in Sydney.
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10. Do you think not addressing Australia’s real estate costs is a factor in Australia’s economic competitive position?

Nope. Real Estate costs have nothing to to with Australia's "competitive position".
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11. Do you think lowering interest rates to prompt an expansion of aggregate demand will expand aggregate demand by more or less than it rewards those with a position speculating on rising asset prices?

Lowering interest rates is a low quality approach to stimulus. It only works by encouraging private credit creation (and therefore deposit creation). And you get you biggest credit kicker by buying large assets (like a house). Anyone who advocates low interest rates as a method to stimulate the economy implicitly advocates private debt growth and therefore financial instability. A far better method is via fiscal policy.
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12. Do you think the Foreign Investment Review Board adequately monitors applications made by foreign nationals to buy existing Australian residential real estate?

No idea. Not relevant in the long term. If they pay too much (which looks like the case) it is a value shift to Aussies.
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13. Do you think Austrac adequately monitors funds originating offshore coming into Australia to ensure the traceable probity and provenance of those funds?

Yes.
Edited by b_b, 9 Oct 2014, 06:03 PM.
(S – I) + (T - G) + (M - X) = 0
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Foxy
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Zero is coming...

Ok,
This is fairly simple,
Supply and demand.

All government subsidies on established properties should be stopped.

Only help new builds.

That way supply is being added,and the people are not competing with eachother for an ever shrinking supply.

Bubble scmuggle

No house makes its owner money.
It costs you every day of the week.

The entire industry is a loss maker you knuckle heads.

Peter


http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Prove It
Unregistered

Stan
9 Oct 2014, 05:44 PM
Australia is already home to the second most expensive RE on the planet
I call BS. Please prove this is the case. Off the top of my head I can think of HK, Singapore, Monaco, Tokyo, Seoul, London, Milan, Geneva, Moscow, Oslo, and Manhattan where real estate prices are much higher per square metre, and also much higher as a ratio of income, than anywhere in Australia.
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Blondie girl
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"Barista"

It's about realism in using what's there in place to make it work .

Simple as that.

Or you get left behind & be an internet troll that takes pleasure in being horrid & play games with sooky sock tactics.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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Stan
Unregistered

Prove It
9 Oct 2014, 06:07 PM
I call BS. Please prove this is the case. Off the top of my head I can think of HK, Singapore, Monaco, Tokyo, Seoul, London, Milan, Geneva, Moscow, Oslo, and Manhattan where real estate prices are much higher per square metre, and also much higher as a ratio of income, than anywhere in Australia.
LOL so you want me to put up a few links, so that you can then put up a few more to start an argument based on prices per square meter of floor space?

No thanks. It's a widely accepted fact that *housing* for many people in Australia is generally up there with the best of them. If you want to bury your head in the sand about that fact by using selective measurement, then that's your problem.
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Prove It
Unregistered

Stan
9 Oct 2014, 06:55 PM
It's a widely accepted fact that *housing* for many people in Australia is generally up there with the best of them. If you want to bury your head in the sand about that fact by using selective measurement, then that's your problem.
What's your preferred measurement then, if my "selective measurements" of price per square metre and price to income aren't to your liking?

I would have thought those were fairly standard ways to measure house prices?

So what's your preferred measurement? Are you going with plain nominal price (adjusted for currency exchange rates?). Or something else?

Yes, I'd like to see some links proving Australia has the "second most expensive RE on the planet" (using whatever measurement you deem best).

If it's a "widely accepted fact" then you shouldn't have too much difficulty proving it, right?

Thanks.
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b_b
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Stan
9 Oct 2014, 06:55 PM
LOL so you want me to put up a few links, so that you can then put up a few more to start an argument based on prices per square meter of floor space?

No thanks. It's a widely accepted fact that *housing* for many people in Australia is generally up there with the best of them. If you want to bury your head in the sand about that fact by using selective measurement, then that's your problem.
Translation: "I've got nothing."
(S – I) + (T - G) + (M - X) = 0
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Stan
Unregistered

b_b
9 Oct 2014, 07:54 PM
Translation: "I've got nothing."
Yep. I concede I was incorrect.

Housing in Australia is well below replacement cost and currently represents bargain buying.

As a side note b_b, I've actually done developments and not just studied them. How many have you done?
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