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Foxbats new prediction; House prices and all assets to come under pressure
Topic Started: 25 Nov 2015, 06:17 PM (59,407 Views)
Foxy
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Zero is coming...

Housing shortage, what housing shortage.
http://www.businessfirstmagazine.com.au/mining-job-losses-to-increase/13392/

Tick tock...
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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hidflect
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The price of copper is now below the cost of production. That's the stuff they call "Dr. Copper" because, as a critical production material, it signals the economy. And iron ore is in exactly the same class. There's every chance IO goes down to $28/tonne which is allegedly BHPB's break even price. I think that's an artificially low claim though. It probably only ring-fences operating costs to just the mines and ignores all the peripheral costs BHPB incurs with its other operations as well as its lunatic, official policy of ever-increasing the dividends year-on-year. With BHPB's $35Billion in debt to show at the end of a massive boom I think that the massive mis-management of this bonanza, including the enormous waste of investment into houses via pseudo-granite counter tops and designer stucco, will come home to roost.

WA has nothing to show for the unbelievable good times it got. Not even an airport rail link. Unless you want to include that sad, little Victoria Quay project that's expected to draw millions in from overseas haha. Talk is, Hilton are back-peddling and want OUT. Perth blew it. Barnett's run the place into $18Billion of debt and that money will need to be extracted from the gropers who live here. With crashing wages the only solution seems to be hiking property rates. People can't run away with their land and the government knows it. So yes, 3-5 years from now Perth will be back to where it was in the '90's. It's massively expensive to live here. Easily 2x that of Tokyo. Tokyo! Where the rent for my old unit has gone from $1300/month in 2000 to $700/month this year. The miracle ended for Japan and they never recovered despite being world leaders. Perth is Over. House prices could easily halve over 8 years.

P.S. And forget about the gas saving WA. The price is so low, it's almost as bad as copper. Russia and the US have seen to that.
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Steve99
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hidflect
2 Dec 2015, 03:16 AM
The price of copper is now below the cost of production. That's the stuff they call "Dr. Copper" because, as a critical production material, it signals the economy. And iron ore is in exactly the same class. There's every chance IO goes down to $28/tonne which is allegedly BHPB's break even price. I think that's an artificially low claim though. It probably only ring-fences operating costs to just the mines and ignores all the peripheral costs BHPB incurs with its other operations as well as its lunatic, official policy of ever-increasing the dividends year-on-year. With BHPB's $35Billion in debt to show at the end of a massive boom I think that the massive mis-management of this bonanza, including the enormous waste of investment into houses via pseudo-granite counter tops and designer stucco, will come home to roost.

WA has nothing to show for the unbelievable good times it got. Not even an airport rail link. Unless you want to include that sad, little Victoria Quay project that's expected to draw millions in from overseas haha. Talk is, Hilton are back-peddling and want OUT. Perth blew it. Barnett's run the place into $18Billion of debt and that money will need to be extracted from the gropers who live here. With crashing wages the only solution seems to be hiking property rates. People can't run away with their land and the government knows it. So yes, 3-5 years from now Perth will be back to where it was in the '90's. It's massively expensive to live here. Easily 2x that of Tokyo. Tokyo! Where the rent for my old unit has gone from $1300/month in 2000 to $700/month this year. The miracle ended for Japan and they never recovered despite being world leaders. Perth is Over. House prices could easily halve over 8 years.

P.S. And forget about the gas saving WA. The price is so low, it's almost as bad as copper. Russia and the US have seen to that.
I think the comparison to Japan is very good, totally different economies and cities. And by that I mean that if Tokyo (a world city with many strings to its bow) can decline in house prices and rents and even wages so much for so long then what is going to happen to an oversized hick town at the arse end of the known world? If it is extremely lucky it could go back to the easy going micro city it was back some decades ago but to be honest I dont believe the current populace has that in them now and they have become a collective of money crazed nut cases strutting around with important expressions of their faces on account of the wages and house prices they have had for the last decade or so. They will resent that part time McJob serving McBurgers to second class McCustomers.
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skamy
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Jimbo
28 Nov 2015, 07:53 AM
Contracts may well have been signed but 6000 on site workers during construction will be replaced by a max 350 on site during production.

Not forgetting the many, many thousands of off site workers involved during the construction phase that will no longer be needed.

Your daughter being one of them?

Most of the jobs went ages ago - Both of mine came back to Perth both are moving to other jobs in their company. You are such a drama queen Jimbo.

So many of the workers were Irish and from the Eastern states and they have all gone home with their big bags of savings to settle in their hometowns. They went home ages ago and all we are seeing is a bit of hesitancy in the economy. You bears turn this into a huge drama and make silly extrapolations into dire tragedies that will never happen in this rich city.

You know low oil prices never stay that way and WA will make a motza as soon as the Baltic index lifts and the global economy recovers from the GFC. Do you think people don't know this Jimbo - why on earth would they sell you a bargain home? They have not done it in the year and a half since you sold your home why would they do it now.

All your plans are based on the stupidity of others and that is a big mistake in a city like Perth made up of a huge migrant population. Noone is donna sell you a cheap home Jimbo.
Steve99
2 Dec 2015, 10:34 AM
I think the comparison to Japan is very good, totally different economies and cities. And by that I mean that if Tokyo (a world city with many strings to its bow) can decline in house prices and rents and even wages so much for so long then what is going to happen to an oversized hick town at the arse end of the known world? If it is extremely lucky it could go back to the easy going micro city it was back some decades ago but to be honest I dont believe the current populace has that in them now and they have become a collective of money crazed nut cases strutting around with important expressions of their faces on account of the wages and house prices they have had for the last decade or so. They will resent that part time McJob serving McBurgers to second class McCustomers.
You got some serious grudges going on there.

Anyone who has been to Perth knows it is a beautiful city within a state which has huge wealth.

You just spew a pile of bile, designed to make yourself look superior than the people of Perth who are nowhere near like your nasty name calling.
Edited by skamy, 2 Dec 2015, 10:46 AM.
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.
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Veritas
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Quote:
 
So many of the workers were Irish and from the Eastern states and they have all gone home with their big bags of savings to settle in their hometowns. They went home ages ago and all we are seeing is a bit of hesitancy in the economy. You bears turn this into a huge drama and make silly extrapolations into dire tragedies that will never happen in this rich city.


You do realise that this reduces demand for housing and everything else right?
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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Ex BP Golly
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foxbat
2 Dec 2015, 01:11 AM
Housing shortage, what housing shortage.
http://www.businessfirstmagazine.com.au/mining-job-losses-to-increase/13392/

Tick tock...
Thank god this forum was so important in getting rid of the useless quango "THE NATIONAL HOUSING SUPPLY COUNCIL".
It was as bent as the main street of Rylstone!

http://www.treasury.gov.au/Policy-Topics/PeopleAndSociety/completed-programs-initiatives/NHSC


Steve99
2 Dec 2015, 10:34 AM
I think the comparison to Japan is very good, totally different economies and cities. And by that I mean that if Tokyo (a world city with many strings to its bow) can decline in house prices and rents and even wages so much for so long then what is going to happen to an oversized hick town at the arse end of the known world? If it is extremely lucky it could go back to the easy going micro city it was back some decades ago but to be honest I dont believe the current populace has that in them now and they have become a collective of money crazed nut cases strutting around with important expressions of their faces on account of the wages and house prices they have had for the last decade or so. They will resent that part time McJob serving McBurgers to second class McCustomers.
It could become the retirement capital of Australia.
Lots of cheap homes, could make it a lot like Florida.

Surely this is a workable model for WA: https://en.m.wikipedia.org/wiki/The_Villages,_Florida

They have plenty of holes to fill with the departing newcomers!
Edited by Ex BP Golly, 2 Dec 2015, 12:58 PM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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skamy
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Veritas
2 Dec 2015, 12:28 PM


You do realise that this reduces demand for housing and everything else right?
The population grew enormously and it is still continuing to grow. So we have no problem there in WA do we?
Edited by skamy, 2 Dec 2015, 01:15 PM.
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.
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Veritas
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skamy
2 Dec 2015, 01:13 PM
The population grew enormously and it is still continuing to grow. So we have no problem there in WA do we?
What do you mean by problem?

On the one hand, lower population growth can be considered a good thing. Less pressure on all sorts of infrastructure and demand for government services (schools, healthcare etc.) In addition, in respect to housing, it is having a wonderful effect on housing affordability. Renters are being treated to lower rents and far greater choice in terms of available rentals. Equally, prospective buyers are being treated to falling house prices making the cost of housing themselves and their families cheaper and lowering the immediate and long run costs of owning a home.

On the other, lower population growth can have a negative effect on the real economy as it equates to a drop to demand for goods and services in the economy. But really, falling population growth is a function of the fact that WA is not the draw card it once was as jobs dry up in the mining and construction industries. People are leaving and others are not coming.

The people who will likely suffer the most are people (like yourself) who believed that WA’s boom was a new normal that would deliver a permanent rental crisis and massive capital growth in house prices.
Instead you are faced with falling rents, difficulty getting tenants and falling house prices.

Should have read the tea leaves better Skamy.
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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Matthew
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hidflect
2 Dec 2015, 03:16 AM
There's every chance IO goes down to $28/tonne which is allegedly BHPB's break even price.
BHP have a cash cost of US$19 per tonne. They will be ok.
hidflect
2 Dec 2015, 03:16 AM
Perth is Over. House prices could easily halve over 8 years.
What fundamental economic reasoning do you have for that comment?
Edited by Matthew, 2 Dec 2015, 01:49 PM.
My only hope for my three boys is that they turn out nothing at all like Chris.
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skamy
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Veritas
2 Dec 2015, 01:33 PM
What do you mean by problem?

On the one hand, lower population growth can be considered a good thing. Less pressure on all sorts of infrastructure and demand for government services (schools, healthcare etc.) In addition, in respect to housing, it is having a wonderful effect on housing affordability. Renters are being treated to lower rents and far greater choice in terms of available rentals. Equally, prospective buyers are being treated to falling house prices making the cost of housing themselves and their families cheaper and lowering the immediate and long run costs of owning a home.

On the other, lower population growth can have a negative effect on the real economy as it equates to a drop to demand for goods and services in the economy. But really, falling population growth is a function of the fact that WA is not the draw card it once was as jobs dry up in the mining and construction industries. People are leaving and others are not coming.

The people who will likely suffer the most are people (like yourself) who believed that WA’s boom was a new normal that would deliver a permanent rental crisis and massive capital growth in house prices.
Instead you are faced with falling rents, difficulty getting tenants and falling house prices.

Should have read the tea leaves better Skamy.
We will not see lower housing demand if the population is still growing. As the population is still growing we will not see a drop in demand only a slowing growth in demand and I ain't ever seen an economy with growth slowing from 7% to 3.5% crash.

Rents boomed in Perth and now they are down but our stuff is all let out and we are still very happy with the rents we get - we will not be selling up anytime soon. Seems all the other IP owners on here are in the same boat.

You always rush from the least wee bit of negative news to dreaming of an enormous crash. Perth has low unemployment -WA is still growing at a good pace - wages are still high here and really there is no drama as everyone sits around waiting for the global economy to recover so that we can make a motza.
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.
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