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Forecasts of $20/t iron ore. The response? IO now $48/t.; Iron ore recovery offers budget boon hopes
Topic Started: 21 Feb 2016, 07:58 PM (42,860 Views)
Simon_S
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Quote:
 
The keyword is "demand"

We all agree that when demand exceeds supply and credit is available prices will rise.


Quote:
 
So what controls DEMAND?


Quote:
 
Consumer sentiment.


Quote:
 
Demand for houses - household formation.


What am I missing? So is it Consumer sentiment or Household formation or are they the same thing?


skamy
6 Mar 2016, 08:09 PM

The reason is that confidence is lacking in Perth and this reduces demand as people are spooked by doomsayers.

When people in Perth feel confident to buy again they will borrow again - no amount of reduced interest rates or looser lending will move the market until confidence improves.

I think you actually agree with me on this one Andrew - you are just late to the debate.
So Rufus says Demand comes from Household Formation and your saying its consumer confidence.

Which is it?

Edited by Simon_S, 6 Mar 2016, 08:23 PM.
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newjez
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Andrew Judd
6 Mar 2016, 07:17 PM
That statement is just nuts. In a rising market, or in a market that is perceived to be about to rise, people are under tremendous personal emotional pressure to 'buy now or be priced out for ever', Price rises happen at the margin, which means in this case that if a significant number of people can only buy because they have easy access to credit then these price rises can only have happened because credit was easy to get.

Everybody here agrees that access to credit causes prices to be higher when there is demand for houses.
You have the patience of a saint Andrew.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Rufus
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Simon_S
6 Mar 2016, 08:11 PM

What am I missing? So is it Consumer sentiment or Household formation or are they the same thing?



So Rufus says Demand comes from Household Formation and your saying its consumer confidence.

Which is it?
You don't know why people need a house?

No one can be that stupid.
Edited by Rufus, 6 Mar 2016, 08:27 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Simon_S
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So your saying Household Formation and Confidence are the same thing?

So which is that controls Demand?

Why is it such a difficult question to answer?

Quote:
 
You have an opportunity to learn something, but you probably won't.


You tell me i have an opportunity to learn something but when i ask you a question to learn something you instantly brand me an idiot?

I guess i must be too stupid to learn?

Edited by Simon_S, 6 Mar 2016, 08:41 PM.
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Rufus
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Simon_S
6 Mar 2016, 08:33 PM
So your saying Household Formation and Confidence are the same thing?

I have never said that. You are confused.

Demand for housing comes from people who need a house to live in. This is not rocket science.

They can buy, rent, or share. Lets assume that people don't want to live on the streets, and they can afford one of those three options, with a preference for one of the first two options. People who share don't add much to demand for housing.

If the population rises so too will the demand for houses, although not necessarily proportional with the increase, but lets put that to one side.

Is that clear?
Take risks - if you win you will become wealthy, if you lose you will become wise
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Simon_S
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So where does Bardons answer to my question of

Q.
Quote:
 
So what controls DEMAND?


A.
Quote:
 
Consumer sentiment.


Fit into the Demand equation? Because when you say "Household Formation" creates demand i think your implying Demand is a given?

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Rufus
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Simon_S
6 Mar 2016, 08:56 PM
So where does Bardons answer to my question of
Q.

A.

Fit into the Demand equation? Because when you say "Household Formation" creates demand i think your implying Demand is a given?
You would have to ask Bardon.

Take risks - if you win you will become wealthy, if you lose you will become wise
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Bardon
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consumer

a ​person who ​buys ​goods or ​services for ​their own use

consumer demand

​demand for ​goods and ​services that comes from ​individual ​people rather than from ​companies

consumer sentiment

consumer confidence
Edited by Bardon, 6 Mar 2016, 09:34 PM.
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Simon_S
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Bardon
6 Mar 2016, 09:32 PM
consumer sentiment

consumer confidence
So which is it?

House Formation or consumer sentiment/consumer confidence that creates Demand?

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Bardon
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Simon_S
6 Mar 2016, 09:37 PM
So which is it?

House Formation or consumer sentiment/consumer confidence that creates Demand?
Maslows Hierarchy of Needs.
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