Welcome Guest [Log In] [Register]


Reply
Perth sales surge; No of sales up 17% on the month and 7% y/y
Topic Started: 16 Oct 2014, 10:42 AM (13,334 Views)
Mike
Default APF Avatar


Veritas
22 Oct 2014, 01:28 AM
HAHAHA. FOMO! Quick guys, buy now or miss out forever. Quit talking your book Mike.

I thought it was me who just said that WA construction is booming did I not?

Are you suggesting that this is the harbinger of higher prices because here was I thinking that extra supply puts downward pressure on prices not the opposite.Obviously, housing is different eh?

What I see is lots of investors who bought houses and apartments not realising that the days of big capital gains are long gone.

Then, there is the small matter of what is going on in the real economy Mike.

Posted Image
Vertias supply of land has increased over the past year. We now have 200-300 blocks of land more each week then this same time period last year.

Despite increased supply of land by some 20% prices of land have skyrocketed by 25%.

http://reiwa.com.au/The-WA-Market/Perth-Metro/

Why?

Using your logic, increased supply must lead to lower prices, yet it has not happened for land. Why are land prices not falling with higher supply and lower demand, yet prices are rising.

Do you understand why? If so explain it to me because I don't think you do.

You need to stop coming hear and repeating the MB stories line for line, you know MB have been wrong for many years now.
http://mike-globaleconomy.blogspot.com.au/
Profile "REPLY WITH QUOTE" Go to top
 
Kulganis
Member Avatar


Mustapha Mond
22 Oct 2014, 01:37 AM
Just sitting with a wood fire burning and thought of the global warming religion, what will you do Kluganis when you finally understand you have been deceived??

Peter
There is an active thread for that topic, in fact quite a few. If you want to continue that discussion, those threads are still available. But I suppose you're embarrassed to continue them due to the thrashing you have received in them.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Profile "REPLY WITH QUOTE" Go to top
 
skamy
Member Avatar


Kulganis
21 Oct 2014, 11:32 PM
Yes, I apologise, I was reading from your post rather than researching the figure myself, I misread your post as saying Australia had a poverty rate of 15%.


Interesting, didn't know that.

So lets use the same measure...

Posted Image

The US has been hovering around 1 percentage point of 17% for the last 16 years. Whereas since the year 2000, Australia has seen an increase of almost 2 percentage points.

It is interesting that Ireland saw a massive reduction in their poverty levels after the GFC.

I can't get the image to size properly, no matter what size I put in, the forum squishes it.


Australia has almost twice as many homeless people per capita than the US, yes we do have a bigger problem, especially when you consider we have a much more expansive welfare system.

I actually picked one of the higher stats for my sums, I do remember saying 'on any given night', your 2.5 million number counts up all the people who experienced homelessness in a year. Such an obvious obfuscation.


The problem I had, was you linking home ownership rates with affordability. It would be like saying (for instance) iPhone market share is about 28%, therefore iPhones are unaffordable and if iPhones were less costly, everyone would use them, despite some people liking Windows phones or Android or Blackberries for their features rather than just the price.


That isn't what you were saying, what you were saying is that housing in the US is less affordable than in Australia, because Australia has a higher ownership rate. Which is a ridiculous leap.


I like how you describe one of the most tumultuous periods in modern history as a 'problem'. And I wonder, would World War 2 and the fact we sent most of our young men overseas have anything to do with a lack of building new homes? I suppose the shortage of materials had nothing to do with it either? And anyway, the government regulated rents, not prices. Which reduced private investment into rental properties. The government built houses for people to rent instead. Which stopped in the 70s, due to NIMBYs
So using the poverty measure in equals shows Australia at 13% to the US at 17% that would be right as the previous figure you used was employing a definition of about 44% of median income cf Australia's 50%.

Ireland's poverty level increased the statistical measure reduced probably because it is relative to median income

How on earth can you believe that Australia has a bigger problem with homelessness than the US? It can be nothing but nonsense. We probably just measure it more effectively as there are safety nets people can claim etc. I have been to many large US cities and beggars and homeless people are ubiquitous. You are using a measurement for a single night and the definition of homelessness differs too, with the ABS figures being broader and encompassing inadequate housing, shared housing, temp housing, crowded housing and short tenure. Whereas the US figure only uses sheltered accommodation, transitional housing programs and un-sheltered housing. So the two figures just cannot be compared. People sleeping rough is just 6% of the Australian figure and 35% of the US figure. So they must be underestimating other forms of homelessness.

Quote:
 
According to studies from the National Alliance to End Homelessness, there is an estimated 1.6 million to 2.8 million homeless youth in the United States.

How does that quote sit in any way with your figures?

With regards to the debate on home purchasing in the US.
You have misrepresented the debate by introducing brands of phones, we were not talking about the desirability of types of houses (a classic straw man). It would be more accurate if you used buying a phone compared to not buying a phone and borrowing your mates or renting a phone. Clearly most people would prefer to buy a phone and this is what they do. If they cannot afford the phone they desire then they will borrow one or rent one.

With respect to housing some people will be making a conscious decision not to buy, but that number will not be large in a Country where the population usually has much higher levels of home ownership,( about 67% across the US). To presume that home ownership rates are not strongly correlated with home affordability would be an error of logic.


The argument originated with some developer type posting about how great it is to have lenient land release and claimed that Atlanta and Dallas were examples where this had led to more affordable housing. The problem with this logic is that it is plainly false, it results in cheap homes in the boondocks and expensive homes where people really want to live. You have the situation where there is high levels of poverty and low levels of home ownership. People are not buying homes and a very large part of that will be because they cannot afford the homes they want to buy. An aggregate low value for the house price to income is a dreadful measure of home affordability.

If the houses were so affordable people would be buying them. As I said before the proof of the pudding is in the eating. It is not a ridiculous leap at all it is a perfectly logical conclusion to come to.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


Mike
22 Oct 2014, 01:39 AM
Vertias supply of land has increased over the past year. We now have 200-300 blocks of land more each week then this same time period last year.

Despite increased supply of land by some 20% prices of land have skyrocketed by 25%.

http://reiwa.com.au/The-WA-Market/Perth-Metro/

Why?

Using your logic, increased supply must lead to lower prices, yet it has not happened for land. Why are land prices not falling with higher supply and lower demand, yet prices are rising.

Do you understand why? If so explain it to me because I don't think you do.

You need to stop coming hear and repeating the MB stories line for line, you know MB have been wrong for many years now.
Answer: because there is a lag Mike.

That's why. There always is. Ireland had a building boom just like this one, but the supply response came a bit late sadly. Hence the overhang.

Posted Image

Posted Image


Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Profile "REPLY WITH QUOTE" Go to top
 
Kulganis
Member Avatar


Mike
22 Oct 2014, 01:39 AM
Despite increased supply of land by some 20% prices of land have skyrocketed by 25%.

http://reiwa.com.au/The-WA-Market/Perth-Metro/

Why?
Investor expectations of infinitely rising rent? Caused by decades of spruiking by land developers?

Or could it be the massive inflow of migrants up till now? This may continue, it may not.

If it doesn't continue, WA will have built heaps of dwellings for no one, they will sit empty and unadvertised, to artificially keep vacancy rates low, so as to continue the dream that there is a shortage of houses (because prices would collapse otherwise).

If it does continue, what jobs will people have to pay for these bits of land? Is construction really the kind of perpetual economic engine as Skamy believes it is?
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Profile "REPLY WITH QUOTE" Go to top
 
skamy
Member Avatar


Veritas
22 Oct 2014, 12:17 AM
Yeah thats all true if you are willing to ignore the fact that:

1. house prices are falling
2. Rents are falling
3. stock on the market is rising
4. We are on the verge of a supply overhang
5. Rental vacancy rate us up over 50% in a year.

Unless you were buying a place with a large deposit and it would suit your family situation come what may for a decade or more you would be crackers to buy in Perth right now. ( unless you got a really tasty discount from a sensible vendor)
Veritas seriously how do you fall for this shit, none of it is true.

I get really irritated with the charlatans who pass this kind of nonsense on to young people. You deserve better than getting fed this crap.

Can you really not yet see how you have been lied to ?

Over and over again you come out with these tales of a disaster just around the corner. For heavens sakes we have only 5% unemployment in the State, it would be understandable if you were hesitant about the economy if we were at 7% like Melbourne.
We have a building boom to pay wages - no-one at all will be needing to have fire-sales for their homes. Can you really not see how silly that fantasy is?
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Profile "REPLY WITH QUOTE" Go to top
 
Mike
Default APF Avatar


Kulganis
22 Oct 2014, 01:50 AM
Investor expectations of infinitely rising rent? Caused by decades of spruiking by land developers?

Or could it be the massive inflow of migrants up till now? This may continue, it may not.

If it doesn't continue, WA will have built heaps of dwellings for no one, they will sit empty and unadvertised, to artificially keep vacancy rates low, so as to continue the dream that there is a shortage of houses (because prices would collapse otherwise).

If it does continue, what jobs will people have to pay for these bits of land? Is construction really the kind of perpetual economic engine as Skamy believes it is?
Can you show me the data for Investor Finance Loans as data from the ABS does not show any large increase in investor activity in WA. So that does not explain it, I also have not seen any noticeable increase by investors for the purpose to buy and rent.

Owner occupiers is what is driving the market, not investors.

The current dwellings are being built by the owners, so they are already have owners. Unless those people sell up and move elsewhere are buying a brand new home, I don't see a problem.

Now if a developer was doing a large development without many sales then yes this could be a problem. However most developments need 40-60% sales prior to lending finance approval for a development to proceed.

Construction is just one part of a much larger machine. But you and Skamy can have that debate.
Veritas
22 Oct 2014, 01:50 AM
Answer: because there is a lag Mike.

That's why. There always is. Ireland had a building boom just like this one, but the supply response came a bit late sadly. Hence the overhang.

Posted Image

Posted Image

Still peddling Ireland hey, MB have really done a number on you.

Did you not read the threads on Ireland a year or two ago. Ireland a nation of 4.5 million people was spending 300% the amount of money on a per capita basis on residential construction compared to Australia a nation of 22 million prior to 2008.

Australia's construction levels might have increased in the past year by 20-25% in the most extreme cases, but we have a very long way to go to even come close to Irelands level of construction.

We simply do not have the same problems Ireland does due to our much stronger regulation of banks and lending criteria, even prior to 2008 hence why we never had that problem.

If construction levels increased doubled from this point, then I might get on board with oversupply if sustained for a few years. Then I would agree.

You really need to go do your home work on how much Australia has spent on construction on per capita basis compared to these nations who had construction oversupply. I know a construction oversupply is one of your last hopes for a market correction but it is unlikely to happen, not due to interest rates but banking regulations. They are simply to strict to allow to this to develop into a large problem like it did in Ireland and some other nations.
Edited by Mike, 22 Oct 2014, 02:11 AM.
http://mike-globaleconomy.blogspot.com.au/
Profile "REPLY WITH QUOTE" Go to top
 
USianInPerth
Unregistered

Mike
22 Oct 2014, 01:39 AM
Vertias supply of land has increased over the past year. We now have 200-300 blocks of land more each week then this same time period last year.

Despite increased supply of land by some 20% prices of land have skyrocketed by 25%.

http://reiwa.com.au/The-WA-Market/Perth-Metro/

Why?
"[...]The price of the object of speculation goes up. ... This increase and the prospect attracts new buyers; the new buyers assure a further increase. Yet more are attracted; yet more buy; the increase continues. The speculation building on itself provides its own momentum.

This process, once it's recognized, is clearly evident, and especially so after the fact. So also, if more subjectively, are the basic attitudes of the participants. These take two forms. There are those who are persuaded that some new price-enhancing circumstance is in control, and they expect the market to stay up and go up, perhaps indefinitely. It is adjusting to a new situation, a new world of greatly, even infinitely increasing returns and resulting values. Then there are those, superficially more astute and generally fewer in number, who perceive or believe themselves to perceive the speculative mood of the moment. They are in to ride the upward wave; their particular genius, they are convinced, will allow them to get out before the speculation runs its course. They will get the maximum reward from the increase as it continues; they will be out before the eventual fall.

[...]Something, it matters little what - although it will always be much debated - triggers the ultimate reversal. Those who had been riding the upward wave decide to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. Thus the collapse. And thus the rule, supported by the experience of centuries: the speculative episode ends not with a whimper but a bang."

Galbraith, John Kenneth. _A Short History of Financial Euphoria._ Whittle / Penguin Books. 1990. Pg 3-4.
"REPLY WITH QUOTE" Go to top
 
skamy
Member Avatar


Kulganis
22 Oct 2014, 01:50 AM
Investor expectations of infinitely rising rent? Caused by decades of spruiking by land developers?

Or could it be the massive inflow of migrants up till now? This may continue, it may not.

If it doesn't continue, WA will have built heaps of dwellings for no one, they will sit empty and unadvertised, to artificially keep vacancy rates low, so as to continue the dream that there is a shortage of houses (because prices would collapse otherwise).

If it does continue, what jobs will people have to pay for these bits of land? Is construction really the kind of perpetual economic engine as Skamy believes it is?
People have already bought the homes that are being built, even the units are almost all selling out.

Just two years ago no-one could sell land and there were so many cheap deals, but doomers sold young people lies and they missed out, prices are now skyrocketing due to pent up demand. The big migration here was already over by the time land sales began to grow again.

The doomers did more spruiking for developers than anyone else with their endless spruiking of their silly demographia figures and their clamouring for less planning restrictions and environmental controls.

Look at Sydney if you want to see what a healthy housing market does for the economy. Have you seen the state of a lot of the housing stock here it is seriously dated, I think there will be plenty of building work for a while and it is as good a way as any make a living. Construction workers are coming back to Perth from their FIFO jobs with a wallet full of money and they are buying nice new homes for themselves.

You tell yourself all these weepy sad stories about Perth with no people and Perth with no water etc etc. Can you really not see how silly these stories are. How much money has just been invested in this state? How many new Gas and oil fields have just been found? Have you any comprehension of what the opening on facilities such as Gorgon will do for the state? Have you any idea how much money is in Perth?

Heaven knows how you would survive if you had to cope with living in poor old Tasmania, you would be suicidal about the future.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Profile "REPLY WITH QUOTE" Go to top
 
Kulganis
Member Avatar


skamy
22 Oct 2014, 01:50 AM
So using the poverty measure in equals shows Australia at 13% to the US at 17% that would be right as the previous figure you used was employing a definition of about 44% of median income cf Australia's 50%.



Which is why, when the fact that different measures were used, I went and found somewhere that used the same measures for each case.
Quote:
 
Ireland's poverty level increased the statistical measure reduced probably because it is relative to median income
Can you restate that? It doesn't make sense.

Quote:
 
How on earth can you believe that Australia has a bigger problem with homelessness than the US? It can be nothing but nonsense.
Because there are TWICE as many homeless people per capita in Australia than there are in the US.

Quote:
 
We probably just measure it more effectively as there are safety nets people can claim etc. I have been to many large US cities and beggars and homeless people are ubiquitous.
Probably? That's not like you, you usually use data to back up your claims, though sometimes you don't use data that has anything to do with your claims, but at least you try.

Quote:
 
You are using a measurement for a single night and the definition of homelessness differs too, with the ABS figures being broader and encompassing inadequate housing, shared housing, temp housing, crowded housing and short tenure. Whereas the US figure only uses sheltered accommodation, transitional housing programs and un-sheltered housing. So the two figures just cannot be compared. People sleeping rough is just 6% of the Australian figure and 35% of the US figure. So they must be underestimating other forms of homelessness.
Nice try, I used the same measurement for both cases, people actually sleeping on the street on any given night.

Quote:
 
How does that quote sit in any way with your figures?
Another nice try, that is a year figure, as in, 1.6 - 2.8 million children experience homelessness at some point in a year, not 1.6 - 2.8 million children are sleeping on the streets every night.

Quote:
 
With regards to the debate on home purchasing in the US.
You have misrepresented the debate by introducing brands of phones, we were not talking about the desirability of types of houses (a classic straw man). It would be more accurate if you used buying a phone compared to not buying a phone and borrowing your mates or renting a phone. Clearly most people would prefer to buy a phone and this is what they do. If they cannot afford the phone they desire then they will borrow one or rent one.
I was trying to use an analogy, I suppose your emerald glasses are screwed on too tight though.

Quote:
 
With respect to housing some people will be making a conscious decision not to buy, but that number will not be large in a Country where the population usually has much higher levels of home ownership,( about 67% across the US). To presume that home ownership rates are not strongly correlated with home affordability would be an error of logic.
The error in logic is to assume that all or even most people aspire to own their own homes. Bring in more data, sure, but to simply argue that low home ownership rates = unaffordable homes is complete rubbish.

Quote:
 
The argument originated with some developer type posting about how great it is to have lenient land release and claimed that Atlanta and Dallas were examples where this had led to more affordable housing. The problem with this logic is that it is plainly false, it results in cheap homes in the boondocks and expensive homes where people really want to live. You have the situation where there is high levels of poverty and low levels of home ownership. People are not buying homes and a very large part of that will be because they cannot afford the homes they want to buy. An aggregate low value for the house price to income is a dreadful measure of home affordability.
We in Australia don't even have the cheap homes in any areas, which is possibly why our rate of homelessness is higher.

For instance...

371 Santa Lucia Ter Nw, Atlanta, GA 30318

$18,000

3 Bed
1 Full Bath

Posted Image

LINK

It's less than 10km from downtown Atlanta, hardly boondock territory, where in Sydney can you buy a 3 bedroom house for $18,000?

Quote:
 
If the houses were so affordable people would be buying them. As I said before the proof of the pudding is in the eating. It is not a ridiculous leap at all it is a perfectly logical conclusion to come to.
Unless they have reasons not to buy other than affordability. It's only logical to you, because you are pushing all this information through your filter. That is, you aspire to owning homes, therefore, everyone aspires to own homes.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy