Exactly, there are some useful indicators - markets usually crash after many years (10 maybe more ) of large price growth - long enough that people forget markets can crash. This is where risk taking gets rather silly in some markets.
So I would be pretty certain we will not see a crash in Australia for quite some time.
Wait, what? There is no such thing as an indicator that houses will crash, but there are some useful indicators and you are pretty certain we will not see a crash in Australia for quite some time.
Which one is it?
“Talk sense to a fool and he calls you foolish.” - Euripides
Wait, what? There is no such thing as an indicator that houses will crash, but there are some useful indicators and you are pretty certain we will not see a crash in Australia for quite some time.
Which one is it?
The world is not and never has been black or white Miles.
Humans use fuzzy logic all the time. Whenever anyone since the beginning of time bought a house there was some risk of a downturn but the risk of rising prices is greater in growing cities. Check out your city Sydney it hardly ever falls, when it does fall it is only for a relatively short period. This is why most people, most of the time, would rather take the risk of surviving a downturn and buying, than weeping over prices rising beyond their means. ~70% of homes are owner occupied. This is factual information contrary to what that doomster charlatan kinetoscope was trying to tell everyone in another thread.
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.
I don't give a rats what your charts say. IO is going down like a 2 dollar crack whore. Do you guys think that you make money betting with the consensus? Let it ride higher. It will be that much sweeter as a short.
I don't give a rats what your charts say. IO is going down like a 2 dollar crack whore. Do you guys think that you make money betting with the consensus? Let it ride higher. It will be that much sweeter as a short.
You are just a speculator Kodiac nothing more and nothing less. I have seen a many a fool in my life bet against property. At least you can never complain that no-one took the time to actually explain the extremely low probability that you will win.
I will tell you that constantly losing makes these types very bitter and much poorer than their peers. But go ahead be my guest and join the losers.
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.
I speculate with about 10% of my money. I think that's a reasonable amount. But I think that the bear case for IO is stronger than a rise.
I made about 500K USD on "the big short" while risking 10K. The charts said I was crazy.
70% of the time or more, it pays to be a bull. I'm not a good bull as my mind isn't wired that way, but I can smell opportunities on the opposite side and this is definitely one of those times.
The question was: Are there indicators of a coming crash in house prices or not?
Simple question, but as you have gone into deflection/waffle/bullshit mode, I'm going to assume that you don't like either answer, or as per usual, you are talking out of your hat.
Why bother? Is it a form of Coué autosuggestion for yourself? "Everyday in everyway, house prices are going upper and upper."
“Talk sense to a fool and he calls you foolish.” - Euripides
I speculate with about 10% of my money. I think that's a reasonable amount. But I think that the bear case for IO is stronger than a rise.
I made about 500K USD on "the big short" while risking 10K. The charts said I was crazy.
70% of the time or more, it pays to be a bull. I'm not a good bull as my mind isn't wired that way, but I can smell opportunities on the opposite side and this is definitely one of those times.
It could fall back to the 30's for a while, but there's not much meat left on it to go further. The opportunity to short and make a killing has passed.
It could fall back to the 30's for a while, but there's not much meat left on it to go further. The opportunity to short and make a killing has passed.
Whats more likely is a plunge in the gold price.
Gold will always be in demand for as long as people perceive it to be a hedge against political/monetary risk and as long as there is political/monetary risk.
As long as those two conditions exist, it will never go below the cost of production. Houses in Detroit, or those sitting on contaminated land can even go below zero.
Gold is a hedge against losing everything.
Iron ore's fortunes will depend on the path of industrialisation for the rest of the developing world. You don't HAVE to build houses with reinforced cement. You don't HAVE to build car bodies from steel. Steel is only cheap if you consider purchase cost. If you consider total cost of ownership, it's expensive.
“Talk sense to a fool and he calls you foolish.” - Euripides
And that Andrew is where you concede us the point - the demand must be there first- without the demand no amount of loose credit can push up prices, So there you have it three people need to want the same house. If there were not three people bidding for one house the banks can lend as much as they want and it wont make a skerrick of difference to the price.
Are you guys being deliberately stubborn not conceding this point.
Okay, you dont believe me or Jimbo or Andrew? How about the RBA. this paper is from 2006 about the Australian housing boom.
This happened on the demand side
Quote:
One of the most important common factors driving housing developments internationally has been the wave of deregulation and product innovation taking place in financial sectors in most countries. This has reduced interest margins on housing loans, lowering real interest rates paid by mortgage borrowers. Greater competition and product innovation has also encouraged lenders to make finance available to a wider range of potential borrowers than before. At the same time, declines in inflation in a number of countries over the past decade and a half have lowered nominal interest rates, thereby magnifying these effects.
Which has this effect due to the inherently sticky nature of the supply side.
Quote:
The supply of housing is inherently slow to adjust, and would certainly not be able to adjust quickly to a surge in demand of this size. The increase in demand is for the whole housing stock, because it affects (almost) the whole household sector. The available supply of housing is the existing stock, which is fixed, plus whatever building and renovating work is done over a given period. So the only increment to supply is the flow of new dwellings and renovations of existing dwellings, which represents just a few percentage points of the size of the stock (Table 2).3 Even the most flexible and least regulated construction sector would struggle to lift its output from something equal to a few percentage points of the dwelling stock to accommodate a surge in demand of 50 per cent or more.
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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