Thanks Peter for your balanced and unbiased analysis on a local market market you obviously know very well.
Just in case you missed it, here's Peter correcting me 15 months ago when I predicted a surging bull run in Sydney that would continue until October 2015, despite many on here calling a top:
We duly note that prices are around 25% higher now - great call!
change the fundamentals and you change the outcome. Now tell me you saw those rate reductions coming and didn't just get lucky. those rate reductions still have a bit of kick left in them.
I like the spurious accuracy, "7.5%". I think this is code for saying "prices will collapse by an unknown amount". All this will need to be revised anyway if Turnbull comes up with a CGT/negative gearing revision in a mini-budget.
I like the spurious accuracy, "7.5%". I think this is code for saying "prices will collapse by an unknown amount". All this will need to be revised anyway if Turnbull comes up with a CGT/negative gearing revision in a mini-budget.
It's like the 60s when people were free and easy with the joints and free sex. Roll forward to 2015 and they've suddenly become quantitative forecasters with no apparent reason. Charlie Manson probably sits around rattling on about house prices now.
It's like the 60s when people were free and easy with the joints and free sex. Roll forward to 2015 and they've suddenly become quantitative forecasters with no apparent reason. Charlie Manson probably sits around rattling on about house prices now.
This is my first ever post to the forums, even though I have visited the "bear" sites since 4 or 5 years ago. That was about the time that I was "enlightened" to certain things going on in the world economy that I could instantly visualize through the economies of NZ and Australia (I'm a Kiwi expat based in Japan). Many things didn't add up to me, particularly outside the productive sectors, and this was verified by the GFC and the rise of precious metals. At this stage, Aussie appears to be relatively immune, but I still feel uneasy about the "miracle" that is the Aussie economy and the endless hype about the property market. I've been on the front lines of capitalism in electronics and FMCG, and I have seen first hand the drastic decline in business in Japan and China, so I'm somewhat skeptical about a sustained economic boom in China. When companies such as P&G have to rely on scalability in this market, you know something is up.
Anyway, I still believe that Aussie will remain one of the most robust economies in the developed world, so I am considering moving there later in 2010. I don't own property in Australia (but I do own mining stocks, some small caps, and some gold ETFs) so I need to be able to rent a decent apartment/house in Sydney and have enough money left over to enjoy a comfortable life (my material needs are relatively few; for example, I recently bought a car after 15 years without one). I ridicule the idea that I need property for my retirement and that I will be forced to beg for food if I don't. However, of course, I will need to be able to cover my living costs. I believe that if Australia continues on the path is is on, inflation will be so far out of control that "having a roof over your head" will be irrelevant anyway. Who cares if you a house in the burbs when you can't afford to repair your roof? So I see Aussie as a good place to make money, but not a good place to live if you're not working. Perhaps that's how many other Kiwis see the country as well. One of my ex-Japan colleagues, a Swiss engineer, recently retired to Thailand where he lives a content life on approx USD1200 per month. Needless to say, he doesn't have much of a beer gut.
I think you will find many other foreigners thinking as I do about Australia, and they will head there to make money and then leave. Realistically, they will have to be on seriously good money (USD300,000+) to emigrate for good when the cost of living is so much better elsewhere. Obviously, for migrants from the 3rd World, this will be the source of Aussie's future billionaires but their parents will sacrifice their lives for them to get there. For people like me, the struggle for middle-class acceptance is not a satisfying goal. For those from the 3rd World, it is like reaching a Himalayan peak.
I look forward to taking in the debates.
When I used the word "enlightened", I didn't mean like Buddha or John Lennon, I meant I understood how eventually there would be shock to the gobal economic/financial system because of excessive debt leveraging.
Let me summarize my points for you:
-- I think Aussie will be a good place to work because of the relatively better environments for economic activity (and stimulus to some extent), but I don't think it will be a good place to settle long term for someone who doesn't aspire to a middle-class, suburban lifestyle. -- For Aussie citizens, I think inflation will prove to be a mill stone in the long run. While some will argue that it supports asset prices, they tend to forget that inflation is a friend to nobody, even if house prices do rise 10% per year.
I aspire to independence and the ability to live life on my own terms (within reason). It's a simple philosophy but it works for me spiritually and financially. I am neither a bear or a bull because for every boom there's a bust. However, when it comes to Aussie property I can accept the possibility that the market will hit a wall, because even at this point, Australia doesn't seem to be producing the income to sustain these prices. Basically, the country lives beyond its means (and that's after the country's greatest economic expansion) and is over-reliant on private debt. I feel this so painfully obvious, yet I don't see many people out there who "get it."
Yes, you are right about house prices but you will find that most people will think of that 10% as an increase in wealth, not inflation. However, I think house prices or rent are not included in Aussie CPI figures. Nor are taxes or any other government excesses. That's why inflation figures are nothing more than a smoke screen. I actually believe that inflation is probably much higher than is officially reported. The RBA will know this, but they are not working in the interests of you and the general public. They have many interest groups to appease.
we've had rate reductions since then John. Now tell me you saw those rate reductions coming and didn't just get lucky. those rate reductions still have a bit of kick left in them.
Are you saying that when the Governor of the RBA said that the local currency unit was too strong and was hurting exports, that you didn't see a rate drop coming?
Oh dear...
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
change the fundamentals and you change the outcome. Now tell me you saw those rate reductions coming and didn't just get lucky. those rate reductions still have a bit of kick left in them.
The fundamentals didn't change Pete, the rates were reduced because of the fundamentals.
If past history serves, you sure the next move is down?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
You don't think that interest rates are a housing market fundamental?
I do.
If you think about any asset market or property, you should come to the conclusion that interest rates as a "fundamental" are a driver of behavior, not of house prices. A change in interest rates do not necessarily result in a change in house prices.
If you think about any asset market or property, you should come to the conclusion that interest rates as a "fundamental" are a driver of behavior, not of house prices. A change in interest rates do not necessarily result in a change in house prices.
Terry you have just made the connection between interest rates and behaviour, but fail to make the connection between buyer behaviour and market prices.
Any expressed market opinion is my own and is not to be taken as financial advice
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.
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