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.
Do you think infant children are going to buy houses?
The massive decline in population growth is attributable to people leaving and less people coming. This represents the effective demand for housing.
That leaves you with the people who stay having kids at a greater rate than oldies dying off.
Quote:
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.
There have never been more rental properties available in Perth. Never. 5.7% vacancy rate.
Approaching 10,000 on the market.
Arguing that this doesn't effect IP owners is delusional nonsense.
Quote:
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.
WA unemployment is at 13 year high. The premier himself said he thought it would be higher at this stage.
Yes, we are all going to rich buying and selling houses to each other.
But, of course, no one will be worse off as a result of this money making scheme.
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
Do you think infant children are going to buy houses?
The massive decline in population growth is attributable to people leaving and less people coming. This represents the effective demand for housing.
That leaves you with the people who stay having kids at a greater rate than oldies dying off.
You are displaying breathtaking ignorance of the components of household formation rates which form housing demand.
Were you truly not aware of the positive components to household formation rates? Few people are happy to live with mum and dad for the whole of their adult life.
- net overseas immigration - net new arrivals form households and require their own unit of accommodation - renting or buying - many immigrants of recent years require to change their accommodation from initial temporary renting to buying their own home especially when they gain residency
- adult children usually at some time leave the parental home and create new accommodation demand
- couples decide to create new households - often on marriage or when preggers - this process has been going on for thousands of years and is unlikely to be replaced by hippy style communal living
- people get divorced and/or separated - thus creating new households
- people are living longer thus retaining occupancy of their accommodation longer than when lives were shorter and thus lowering the occupancy rate
Veritas
2 Dec 2015, 01:33 PM
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.
Complete illogical bollocks.
Lower population growth may be associated with lower growth in demand. That lower population growth will equate to a drop in demand is cuckoo.
You are displaying breathtaking ignorance of the components of household formation rates which form housing demand.
Were you truly not aware of the positive components to household formation rates? Few people are happy to live with mum and dad for the whole of their adult life.
- net overseas immigration - net new arrivals form households and require their own unit of accommodation - renting or buying - many immigrants of recent years require to change their accommodation from initial temporary renting to buying their own home especially when they gain residency
- adult children usually at some time leave the parental home and create new accommodation demand
- couples decide to create new households - often on marriage or when preggers - this process has been going on for thousands of years and is unlikely to be replaced by hippy style communal living
- people get divorced and/or separated - thus creating new households
- people are living longer thus retaining occupancy of their accommodation longer than when lives were shorter and thus lowering the occupancy rate
Complete illogical bollocks.
Lower population growth may be associated with lower growth in demand. That lower population growth will equate to a drop in demand is cuckoo.
What are you wittering on about now Strindberg? When did I say that the factors listed above do not contribute to household formation. My basic point is that less adults moving to the State results in less demand for housing. Do you disagree?
Strindberg if I moved to Melbourne tomorrow there would be a drop in demand seeing as I am no longer spending money in the Perth economy. Unless someone takes my place (assuming people spend roughly the same amount) there is a drop in demand. This is not hard.
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
You are displaying breathtaking ignorance of the components of household formation rates which form housing demand.
Were you truly not aware of the positive components to household formation rates? Few people are happy to live with mum and dad for the whole of their adult life.
- net overseas immigration - net new arrivals form households and require their own unit of accommodation - renting or buying - many immigrants of recent years require to change their accommodation from initial temporary renting to buying their own home especially when they gain residency
- adult children usually at some time leave the parental home and create new accommodation demand
- couples decide to create new households - often on marriage or when preggers - this process has been going on for thousands of years and is unlikely to be replaced by hippy style communal living
- people get divorced and/or separated - thus creating new households
- people are living longer thus retaining occupancy of their accommodation longer than when lives were shorter and thus lowering the occupancy rate
Complete illogical bollocks.
Lower population growth may be associated with lower growth in demand. That lower population growth will equate to a drop in demand is cuckoo.
You're sounding like skamy now stringberger. Is that it? Is that really the best you can do?
I think we can take that as capitulation.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
What are you wittering on about now Strindberg? When did I say that the factors listed above do not contribute to household formation.
You clearly wrote that "This represents the effective demand for housing" after stating only three elements - infants - people leaving and less people coming", completely ignoring the net effect of comings/goings and household formation by maturing individuals and couples.
Quote:
My basic point is that less adults moving to the State results in less demand for housing. Do you disagree?
Yes, I disagree. Any net positive number of people moving to the State results in MORE demand for housing - ceteris parabis.
You clearly wrote that "This represents the effective demand for housing" after stating only three elements - infants - people leaving and less people coming", completely ignoring the net effect of comings/goings and household formation by maturing individuals and couples.
Yes, I disagree. Any net positive number of people moving to the State results in MORE demand for housing - ceteris parabis.
Ah, so we are splitting hairs are we?
You can take it as read that I understand that people get divorced and form new households.
The main point is ( as you fcking well know) less people moving to the State means less demand for housing.
And the jury is in: the rental vacancy rate is at 5.7%
As for the rest of your post, you seem to have confused me with someone who argued that there are more people leaving than coming. I never said that. I said that net migration numbers have dropped considerably and that this would reduce demand for housing. And it has, as evidenced by falling rental prices and house prices.
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
BHP have a cash cost of US$19 per tonne. They will be ok. What fundamental economic reasoning do you have for that comment?
Matthew you might be referring to bhp's c1 cost? That number has little relevance to whether a company "will be ok" as you put it. For example fmg are saying they now have a c1 cost of around US$16.50, but they estimate their "breakeven" cost at US$39. Even then, their "breakeven" guidance does not include depreciation and amortisation, only sustaining capex. Their true breakeven on their financial statements is between $6-9 USD higher than their "breakeven" guidance, which is really an all in sustaining cost.
The number you are quoting does not include interest charges, depreciation, amortisation, sustaining capex or indirect costs not directly attributable to the mine site, i.e. overhead costs and other non mine-site costs.
The quote you are responding to has a much more relevant number, although it is still likely to underestimate the true breakeven level for bhp.
I think bhp will be fine, but you are focusing on a number that will not tell you that.
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.
I notice you're very careful to avoid saying rents will increase because of the growth in any demand from people moving here. And you're right to do so. It's not the absolute number coming here but their individual capacity to pay. With all the high=pay jobs evaporating, if no one can afford more than $400/week then that's your rent ceiling. Sure, it could have a bit of the LA effect where people are doubling and tripling up in houses with 5-8 cars on the lawn but then why move here? The rest of the high costs involved make it prohibitive. The yield for the owner of the house I'm renting is 3.5% GROSS. And there's been plenty of repairs let alone the govt. fees. The only reason it makes sense for them is they bought it 12 years ago at third of its current "value". So their estimation of the price ($700+K) is unrealisable. No new investor will buy this place to get almost null return. Which means the price has to drop at least 25%. Or more as the rent drops.
I notice you're very careful to avoid saying rents will increase because of the growth in any demand from people moving here. And you're right to do so. It's not the absolute number coming here but their individual capacity to pay. With all the high=pay jobs evaporating, if no one can afford more than $400/week then that's your rent ceiling. Sure, it could have a bit of the LA effect where people are doubling and tripling up in houses with 5-8 cars on the lawn but then why move here? The rest of the high costs involved make it prohibitive. The yield for the owner of the house I'm renting is 3.5% GROSS. And there's been plenty of repairs let alone the govt. fees. The only reason it makes sense for them is they bought it 12 years ago at third of its current "value". So their estimation of the price ($700+K) is unrealisable. No new investor will buy this place to get almost null return. Which means the price has to drop at least 25%. Or more as the rent drops.
https://au.news.yahoo.com/thewest/wa/a/30248374/dvg-cuts-jobs-as-car-sales-slide/Remember any house bought on credit only. Has to drop by the amount of the deposit and the owner suffers a 100% loss if he is forced to sell. A $1m house with a $100,000 deposit only has to drop be 10% to wipe outtheowner. A 30% drop would claim a lot of victims. Peter
That number has little relevance to whether a company "will be ok" as you put it.
A company has far more chance of surviving if its C1 costs are below the spot rate than one with C1 costs above it.
Quote:
The quote you are responding to has a much more relevant number, although it is still likely to underestimate the true breakeven level for bhp.
BHP's actual relevant (All in delivered) number is US$27.20 at the moment and they are working it lower.
Quote:
I think bhp will be fine, but you are focusing on a number that will not tell you that.
BHP will be fine because they are not a one trick pony welded onto Iron Ore. However their iron ore business will not send them under if a stand alone. Therefore they will be ok.
foxbat
2 Dec 2015, 11:59 PM
Remember any house bought on credit only. Has to drop by the amount of the deposit and the owner suffers a 100% loss if he is forced to sell. A $1m house with a $100,000 deposit only has to drop be 10% to wipe outtheowner.
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