Mandurah - Where the f*** did that joint spring from re the conversation? ... A 'fascinating' (??? Maybe not??? ) little spot with a population the size of Frank's Rockvegas maybe?:
I don’t understand the argument that the programme’s lack of data undermined it.
This is standard story telling for a general audience. Assault them with data and statistics and they switch off. Tell them stories and they continue watching.
The program did well to highlight the preposterous nonsense that comes from Lord Rat and his harem of sycophants, the ‘it’s all part of the cycle’ brigade.
Only the wilfully ignorant could describe what’s going on in Sydney and Melbourne right now as part of a regular economic cycle.
In what sane world, would Bevis and Butthead be allowed to carry a 1.5 million dollar debt on a joint income of 120k?
The most telling remark was by Minick. This is as good as it gets for Australian mortgage holders: low interest rates, low unemployment, decades of economic growth and decent wage growth and there are still a worrying amount of households in stress. Where is the upside from here?
Australia’s housing market and financial system was part of the very same neo-liberal experiment that blew up it after the GFC. Australia dodged that bullet but didn’t know how to put the genie back in the bottle. Interest rates had to be cut to control the dollar. The fact that prices boomed since is largely attributable to that and the property cult driving sentiment in Australia. It’s nothing to do with Lord Rat’s imaginary, unsubstantiated property cycle. The RBA could have (and should have) introduced Irish style macro prudential lending restrictions but didn’t, probably because they knew they needed the housing construction boom to cushion the blow of the end of the mining boom. Caught between the Devil and the deep blue sea.
Now we are out on a very fragile limb in a very tall tree.
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
What is annoying about this media coverage is that it is still controlling the narrative.
What would be refreshing is rather than the data, if they looked at the mindset. I would have liked if they got the perky couple from the investment company ad in a room with the old lady who'd lost everything.
Interest rates had to be cut ... The fact that prices boomed since is largely attributable to that ... The RBA ... knew they needed the housing construction boom to cushion the blow of the end of the mining boom.
Seems so.
Which makes the RBA's occasional moans about high housing prices seem a bit strange to me, when in many ways they cooked them up quite intentionally.
Albeit to overcome an apparent housing shortage by encouraging more housing supply to come on line thru higher housing prices? - Hmmm
It genuinely all does regularly get a bit hard for my poor old head I surely must admit - LOL
And can only say I actually hope the f***ers know what they're doing ...
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
Every arguement I've given acknowledges this, gains are a cemented fact and until it happens loses are a guesstimate at best
Losses occur every few years - just part of the cycle. Sydney suffered a decade-long price decline in real terms between 2003 and 2012. That's the main reason why Sydney boomed in 2012. By 2012, price/income ratios had improved dramatically after a decade of prices falling relative to incomes, plus interest rates were lower meaning Sydney property in 2012 was more affordable than it had been since the 1990s.
In addition, the 2003-2012 real price declines resulted in a huge shortage of property, because construction activity ground to a halt. So a house price boom and construction boom were pretty much inevitable for Sydney, and widely predicted by those in the know. Only a complete muppet would have expected Sydney prices to crash instead of boom.
This is all just the property cycle doing its thing. House prices transition between periods of growth, decline and stagnation, driven by the fundamentals of supply, demand and affordability.
This site is great material for use showing people why, when the bubble does pop, there should be no sympathy, bail out or as Steve Keen stupidly proposed, debt forgiveness- for those stupid enough to create the problem.
I had thought once that just maybe when they thought their banks were sound Golly, that they'd be prepared to take 'the hit' - But Nope, I no longer do ... A little hit maybe but surely not a big one - For the primary reason Tanner elucidated.
The most telling remark was by Minick. This is as good as it gets for Australian mortgage holders: low interest rates, low unemployment, decades of economic growth and decent wage growth and there are still a worrying amount of households in stress. Where is the upside from here?
I don’t understand the argument that the programme’s lack of data undermined it.
This is standard story telling for a general audience. Assault them with data and statistics and they switch off. Tell them stories and they continue watching.
The program did well to highlight the preposterous nonsense that comes from Lord Rat and his harem of sycophants, the ‘it’s all part of the cycle’ brigade.
Only the wilfully ignorant could describe what’s going on in Sydney and Melbourne right now as part of a regular economic cycle.
In what sane world, would Bevis and Butthead be allowed to carry a 1.5 million dollar debt on a joint income of 120k?
The most telling remark was by Minick. This is as good as it gets for Australian mortgage holders: low interest rates, low unemployment, decades of economic growth and decent wage growth and there are still a worrying amount of households in stress. Where is the upside from here?
Australia’s housing market and financial system was part of the very same neo-liberal experiment that blew up it after the GFC. Australia dodged that bullet but didn’t know how to put the genie back in the bottle. Interest rates had to be cut to control the dollar. The fact that prices boomed since is largely attributable to that and the property cult driving sentiment in Australia. It’s nothing to do with Lord Rat’s imaginary, unsubstantiated property cycle. The RBA could have (and should have) introduced Irish style macro prudential lending restrictions but didn’t, probably because they knew they needed the housing construction boom to cushion the blow of the end of the mining boom. Caught between the Devil and the deep blue sea.
Now we are out on a very fragile limb in a very tall tree.
I thought that the arguments were generally weak, but specifically from my perspective the supposed "mortgage broker" they interviewed was just bullsh*tting to get on TV - he is no longer a broker BTW.
He said that brokers have to meet targets - almost none do and no independent brokers do. He said they have to write $2M to $3M per month otherwise they are under financial stress - that would give them an income of approx. $20K per month plus trails - so between $240K to $500K per annum including trails after some years in the industry - which is the sort of stressful position most people dream about.
In fact the average broker earns $140K pa - so most are not writing anywhere near that level of business.
The interviewer when talking to Beavis and Butthead mentioned that they earned $130K between them for a debt of $1.2M or $1.3M (somewhere around there) and they had $300K in equity - so property worth around $1.6M.
I would think the rental income would be between $65,000 and $90,000 per annum depending on where the property is. At an average price of about $300K per dwelling it isn't Sydney or Melbourne - so the yields will be just over 4% to maybe 5.5% Loan to income ratio therefore isn't 8 times, it's probably about 5.5 times.
I have no idea why they bothered with Mandurah where losses haven't been that bad - why didn't they go for Gladstone of other some other areas where investors were encouraged to go and are now underwater.
Martin North from DFA is fast turning into a media tart - his data has some merit but I doubt that he has covered every postcode with depth as mentioned, that's a lot to survey for one guy.
I thought that overall it was a poor effort and not up to the usual standard of Four Corners. I guess at least we didn't have to suffer a couple of other clowns waffling on about control fraud.
Mandurah - Where the f*** did that joint spring from re the conversation? ... A 'fascinating' (??? Maybe not??? ) little spot with a population the size of Frank's Rockvegas maybe?:
But anyway, is Mandurah REALLY down 50% nominal Musty?
Hmmm - I'll be MOST disappointed in ya if ya turns out ta just be makin' shit up tho - Or having a little bit of a hopeful fantasy even?
But fire away; Show me your stats ...
I'm more than happy to believe if you've got the numbers to back ya?
Did you watch 4 corners???
It was mention in the part where the two older people are losing their home after investing in Mandurah.
The 50% drop in the investment has caused a systemic collapse in the investment model..
Or did i hear wrong??
Foxy
22 Aug 2017, 01:53 PM
Did you watch 4 corners???
It was mention in the part where the two older people are losing their home after investing in Mandurah.
The 50% drop in the investment has caused a systemic collapse in the investment model..
Or did i hear wrong??
You did watch where the property sold for $2.6m in the boom and failed to get a bid at $1.6m??
Or did you miss that bit to?
What you may not fully understand is that a 50% nominal fall over say 10 years is way more in real terms. In the case put forward by 4 corners it is a total whipout of networth, a systemic implosion of the persons finances.
This gets back to the great compression i spoke about all those years ago...
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