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I used to be a die hard believer in the Sydney housing bubble theory. I am no longer.; A correction in Sydney house prices is unlikely. A correction in our living standards is certain.
Topic Started: 14 Sep 2015, 04:01 PM (6,457 Views)
The Whole Truth
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Investors que up to buy moar sydney property
moar Moar MOAR

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"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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createdby
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John Frum
15 Sep 2015, 10:09 AM
Please read my recent comments here regarding China's crackdown on hot money flows.
Happened in the 90s to Japanese Gold Coast investors.

Yen plunged 120 Yen = 1 AUD in 1990 to 60 Yen = 1 AUD in 1995.

Same shit happening to Yuan now. "Investors" burned by currency implosion.

That's how hot money dries up.
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Sydneyite
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John Frum
15 Sep 2015, 10:09 AM
Average property values in a city are a function of its average income, not its desirability as a place to live.

Sydney has high prices because it's paying high wages to people like me who work in the financial services sector, which itself is an artefact of the now fading mining boom juicing our terms of trade and igniting a residential property boom. Sure, more people are coming to the city because they hear about well paid jobs like mine, but you're messing up cause and effect if you think that's what's driving prices higher.
I think on this point you are completely incorrect.

Sydney has *always* had high paying jobs, and lots of them, across many industries, that also have evolved over time. Sure right now there are lot of decent paying gigs in finance, in the past these were a lower proportion of the high paying gigs though, yet everyone in Sydney still generally earned more than elsewhere in Oz - certainly if you were in a profession. Also, not all high paying jobs in finance are the "bullshit" jobs in banking etc that you seem to view your current contract role as? Many finance jobs are historically, and will remain, very systemically important, to the operating of the economy - these jobs have historically been centred in Sydney and to a lesser extent Melbourne.

In my working life in Sydney (spanning 25 years with a year or so working overseas along the way), I have worked in many jobs as well as being self-employed within at least three completely different industries - all paid extremely well. Each had their "time in the sun" of course as well - nothing is static! My father worked in at least two other / different industries in Sydney and earned a great living in his day. Across this whole time Sydney has always been the place to be, in any of those industries and more, to earn the decent coin. In fact if anything the recent period of very high paying mining sector jobs out in whoop-whoop has been an exceptional/unusual time, in that good $$$ have been on offer outside of the big smoke for large numbers of people. If anything is changing this would to be it.

Anyway I don't think all this is going to suddenly change, even if jobs such as yours do for some reason fade away or become displaced. Something else will rise in place. Having said that depending on what your role is exactly in banking, you may well be safer than you seem to claim to think! :dry:
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Trollie
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Shadow
15 Sep 2015, 08:11 AM
Did they say it at the top of the gold bubble?
They did, they also said it on the way down (still going fyi).

Frankrider/goldbug/twat also called a new gold bull every other week.
Sydneyite
15 Sep 2015, 02:24 PM
I think on this point you are completely incorrect.

Sydney has *always* had high paying jobs, and lots of them, across many industries, that also have evolved over time. Sure right now there are lot of decent paying gigs in finance, in the past these were a lower proportion of the high paying gigs though, yet everyone in Sydney still generally earned more than elsewhere in Oz - certainly if you were in a profession. Also, not all high paying jobs in finance are the "bullshit" jobs in banking etc that you seem to view your current contract role as? Many finance jobs are historically, and will remain, very systemically important, to the operating of the economy - these jobs have historically been centred in Sydney and to a lesser extent Melbourne.

In my working life in Sydney (spanning 25 years with a year or so working overseas along the way), I have worked in many jobs as well as being self-employed within at least three completely different industries - all paid extremely well. Each had their "time in the sun" of course as well - nothing is static! My father worked in at least two other / different industries in Sydney and earned a great living in his day. Across this whole time Sydney has always been the place to be, in any of those industries and more, to earn the decent coin. In fact if anything the recent period of very high paying mining sector jobs out in whoop-whoop has been an exceptional/unusual time, in that good $$$ have been on offer outside of the big smoke for large numbers of people. If anything is changing this would to be it.

Anyway I don't think all this is going to suddenly change, even if jobs such as yours do for some reason fade away or become displaced. Something else will rise in place. Having said that depending on what your role is exactly in banking, you may well be safer than you seem to claim to think! :dry:
You are right, the other part this doofus won't accept is not all income is from salaries.

People who don't waste their money like he does, piled money into other income paying investments so while they might be making $200k salary, they are getting another income on top of that which is what keeps him baffled.
Edited by Trollie, 15 Sep 2015, 04:00 PM.
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Chris
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herbie
15 Sep 2015, 10:07 AM
Just a thought: But if it was all as simple as some of the simpletons who aren't home owners sometimes seem determined to make out, then they'd presumably be home owners - Rather than whinging about the fact that they aren't.

But maybe it is pretty simple after all? : If you want to own a home and can afford one then buy it. And if you don't want to own a home or can't afford to then rent one - And be happy that there's plenty of them about to rent.
Herb, if you think it is as simple as that then you are making it quite clear that you have no idea about the complexity of the situation and shouldn't be commenting.

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Veritas
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Quote:
 
People who don't waste their money like he does, piled money into other income paying investments so while they might be making $200k salary, they are getting another income on top of that which is what keeps him baffled.


200k salary? How many Sydneysiders do you think are on that?

2% maybe.

You are the doofus.



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
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Sydneyite
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Veritas
15 Sep 2015, 05:53 PM


200k salary? How many Sydneysiders do you think are on that?

2% maybe.


Maybe - but I reckon somewhere between 10%-20% of Sydney households would have that level of household income? And that's more than enough to own/occupy every house on the north shore, eastern suburbs and the inner west.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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The Professor
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Sydneyite
15 Sep 2015, 06:28 PM
Maybe - but I reckon somewhere between 10%-20% of Sydney households would have that level of household income?
I reckon you might be wrong.
http://www.abs.gov.au/AUSSTATS/subscriber.nsf/log?openagent&6523do00001_201314.xls&6523.0&Data%20Cubes&4F00682720AFA825CA257EB5001B77B9&0&2013-14&04.09.2015&Latest

EQUIVALISED DISPOSABLE HOUSEHOLD INCOME - 90th Percentile is $1,688 per week which is about $130,000 gross per annum.

And Sydney will definitely have higher incomes than the country, but 53% higher is probably a stretch.

Right?
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Veritas
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Sydneyite
15 Sep 2015, 06:28 PM
Maybe - but I reckon somewhere between 10%-20% of Sydney households would have that level of household income? And that's more than enough to own/occupy every house on the north shore, eastern suburbs and the inner west.
Well the median household income in NSW as a whole is A$66,820 according to this https://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand

Lets add 15 grand and you are still talking very, very few households pulling in 200k.


Veritas
15 Sep 2015, 07:18 PM
Well the median household income in NSW as a whole is A$66,820 according to this https://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand

Lets add 15 grand and you are still talking very, very few households pulling in 200k.
Less thatn two percent of households according to this

http://profile.id.com.au/australia/household-income?WebID=180
Edited by Veritas, 15 Sep 2015, 07:21 PM.
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
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John Frum
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Chris
15 Sep 2015, 05:29 PM
Herb, if you think it is as simple as that then you are making it quite clear that you have no idea about the complexity of the situation and shouldn't be commenting.
Aside from the fact that if it was so simple why do boards like this exist?
"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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