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Very big call; Almost Steve Keen Esk given the trajectory of prices to date
Topic Started: 8 Sep 2015, 10:56 PM (975 Views)
Chris
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http://www.domain.com.au/news/no-stopping-melbourne-cbd-oversupply-get-out-as-soon-as-possible-20150908-gjhbqi/

Surprised this got through to the keeper today
Edited by Chris, 8 Sep 2015, 10:56 PM.
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Terry
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Chris
8 Sep 2015, 10:56 PM
Interesting and could read like a conspiracy by the industry mouthpieces to influence behavior.
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Loki
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Terry
8 Sep 2015, 10:59 PM
Interesting and could read like a conspiracy by the industry mouthpieces to influence behavior.
Government behaviour or investor behaviour?


“Talk sense to a fool and he calls you foolish.” - Euripides
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Terry
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Loki
8 Sep 2015, 11:02 PM
Government behaviour or investor behaviour?
Good question. Typically, the MSM is targeted at consumer behavior, which comprises investor behavior. Perhaps someone got pissed off because the spoils are not being shared accordingly. Control of the media is extremely important in influencing consumer behavior.

Also, industry can also communicate to the govt through media releases. It's one way to get tongues wagging in the suburbs, which the govt needs to ensure embodies positive sentiment in terms of its relationship with the populace.
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Elastic
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Interesting that this article appeared the same day the Victorian government announced 24 storey height limits on new CBD residential developments.
Not really sure what the link is but the announcement must have pissed off some of the folk who had recently bought development blocks in the city.
This has effectively reduced the value of land in the CBD.
Only a rat can win a rat race.

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Loki
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Elastic
8 Sep 2015, 11:24 PM
Interesting that this article appeared the same day the Victorian government announced 24 storey height limits on new CBD residential developments.
Not really sure what the link is but the announcement must have pissed off some of the folk who had recently bought development blocks in the city.
This has effectively reduced the value of land in the CBD.
Well, different players get different values.

For existing owners, reducing supply increases their property's value.

For developers, reducing height reduces profitability. Every floor of a high rise is marginally cheaper than the one below it.

So the 24 story height limit protects the property values of existing owners (voters), but reduces profitability of the developers.

If the article is designed to create a rush to the exits, values will go down for existing owners as well, which they will blame on the government, and act accordingly the next time they are in a polling booth.


“Talk sense to a fool and he calls you foolish.” - Euripides
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Chris
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Loki
9 Sep 2015, 12:10 AM

If the article is designed to create a rush to the exits, values will go down for existing owners as well, which they will blame on the government, and act accordingly the next time they are in a polling booth.
That it is, but it won't have the desired effect as a significant portion of these apartments are owned by FI, an estimated 70-80% in some cases more. Unless the PRC have relaxed internet restrictions I can't imagine anyone of these FI would have read the article.

It was then a big call that is relying more on sentiment of those FI and negativity around lower dollar, ver supply and restrictions. The article itself will have no baring on the matter if prices were to fall.
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