Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 6
Crikey - There is NO Australian Housing Bubble; Four Corners hypes Australia's property 'bubble'
Topic Started: 23 Aug 2017, 08:49 PM (4,163 Views)
Rat
Member Avatar
Filthy Rodent

Nailed it... https://www.crikey.com.au/2017/08/22/4-corners-hypes-property-bubble/

Four Corners hypes Australia's property 'bubble'

Doomsday predictions about the imminent bursting of the property bubble have become a media cliché despite the evidence.

Bernard Keane — Politics Editor

There are many things to accuse the big banks of. But pushing Australians into buying residential property isn’t exactly up there in the long list of their sins, despite last night’s Four Corners expose of the “powder keg” that apparently is the Australian property market.

Such stories, which are normally to be found near the top of the SMH site because they represent the ideal Sydney combination of talking about property prices and speculating about disaster, normally require at least one of two things. They need a foreign investment analyst who, from a comfortable office in London, or ensconced in a Manhattan skyscraper, declares that the Australian property market is wildly overpriced compared to other countries and is a bubble that will burst any moment. Alternatively, they need a perma-bear economist who has predicted 20 of the last three recessions and is happy to continue to insist economic disaster is just around the corner no matter how silly they look.

Steve Keen being, presumably, unavailable, Gerard Minack filled in that role last night for the ABC and gave them the “powder keg” line. Minack loves a good doomsday prediction. Back in 2014, he warned that the fall in mining investment was going to inflict a calamitous cut in growth in Australia. “‘We’re not forecasting a recession, but we’re saying here’s some evidence that the chance of a precipitous fall may be larger than people think,” Minack said back then. In early 2015, Minack said there was a one-third chance of recession that year or shortly after. Early in 2016, Minack claimed a global recession was coming. And in April this year, possibly to celebrate the second anniversary of his prediction of a one-in-three chance of a recession, Minack said there was — guess what — a one-in-three chance of recession this year.

And, of course, Minack will one day be right. After all, Access Economics eventually got it right after predicting the end of the mining boom for much of the 2000s.

A gentleman called Jonathan Tepper filled in the role of the foreign investment analyst for the ABC, predicting from London that we’ll all be rooned. Tepper hasn’t been in the doomsday game quite as long but has been claiming the imminent end of the property bubble since the start of 2016, when he graced a 60 Minutes program on the looming property disaster.

Much of Four Corners focused on mortgage stress and the harrowing stories of households struggling to meet mortgage repayments with stagnant incomes. There was also a heavy focus on Perth, presumably because, due to the end of the mining boom there, property prices have fallen in Western Australia. But the problem with mortgage stress is that there’s no evidence it’s getting any worse while interest rates remain at record lows. According to Roy Morgan polling, mortgage stress is currently close to its lowest levels since 2006. And earlier this year, economist Rod Mattock noted that Australians now have greater equity in their properties. “The proportion of people who have very high exposure to a fall in house prices — those with loan-to-valuation ratios above 90% — has been declining over time,” he concluded. “Once again, the basic picture is one of prudent households, rather than a community of people gambling on house price rises.”

And as the debate around tax concessions for negative gearing and capital gains, land supply and infrastructure provision suggests, the real issue in housing is the way taxpayers are subsidising investors to compete against young people and low-income earners for an overly limited supply of property — a supply that is now being expanded in Sydney and Melbourne courtesy of low interest rates and a massive increase in apartment building. In case you didn’t notice, no one’s been too focused on banks trying to push young people and low-income earners into the property market — they’re quite keen enough by themselves.

Blame the banks for all sorts of things, yes. It’s entirely deserved in areas like financial advice, insurance, retail superannuation and money laundering. But pinning a non-existent property bubble on them doesn’t wash.
Consumer protection laws extended to small businesses. Banks not permitted to repossess due to non-monetary defaults (for example, a fall in the property value).
Profile "REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


Rat
23 Aug 2017, 08:49 PM
In case you didn’t notice, no one’s been too focused on banks trying to push young people and low-income earners into the property market — they’re quite keen enough by themselves.
Its all created by buyer demand there is nothing else to see.
Profile "REPLY WITH QUOTE" Go to top
 
Ex BP Golly
Member Avatar


Australia's banks punch way above their weight internationally (profitability) precisely because 60% of their book is in a market they have artificially stimulated - residential housing.

Working out what has happened here isn't rocket science Rat.
Edited by Ex BP Golly, 23 Aug 2017, 11:41 PM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


Bardon
23 Aug 2017, 09:52 PM
Its all created by buyer demand there is nothing else to see.
All bubbles are characterised by high buyer demand you moron.

Whats your point?


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
Profile "REPLY WITH QUOTE" Go to top
 
Ex BP Golly
Member Avatar


Bardon
23 Aug 2017, 09:52 PM
Its all created by buyer demand there is nothing else to see.
Bank simulated demand
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
Profile "REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


Ex BP Golly
24 Aug 2017, 03:01 PM
Bank simulated demand
No, buyer demand is not bank demand.
Profile "REPLY WITH QUOTE" Go to top
 
Dr Kinetoscope
Member Avatar


A sardonic series of half-baked attacks with only one small paragraphs dedicated to an actual rebuttal of the program- and that included only one genuine source in Rod Mattock! (Roy Morgan polling? Give me a break!)

Far from compelling.

Architecture Porn
ShadBerg's torrid Macrobusiness love affair
Profile "REPLY WITH QUOTE" Go to top
 
Rat
Member Avatar
Filthy Rodent

Ex BP Golly
23 Aug 2017, 10:54 PM
Australia's banks punch way above their weight internationally (profitability) precisely because 60% of their book is in a market they have artificially stimulated - residential housing.
It's much less risky than business lending. Smart banks.
Consumer protection laws extended to small businesses. Banks not permitted to repossess due to non-monetary defaults (for example, a fall in the property value).
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


Rat
24 Aug 2017, 10:38 PM
It's much less risky than business lending. Smart banks.
Posted Image

It is a wonderful scam alright: pump up the price of an essential good and reap the profits in mortgage interest payments.

It does beg the question however, why aren’t all the rest of the world’s banks as super clever as the Aussie ones?

Are Australian’s just smarter?

Maybe the 'property cycle' is different overseas?
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
Profile "REPLY WITH QUOTE" Go to top
 
herbie
Member Avatar


Veritas
25 Aug 2017, 12:20 PM
Posted Image

It is a wonderful scam alright: pump up the price of an essential good and reap the profits in mortgage interest payments.

It does beg the question however, why aren’t all the rest of the world’s banks as super clever as the Aussie ones?

Are Australian’s just smarter?

Maybe the 'property cycle' is different overseas?
To me that begs the question of what the banks of the world's various nations are into making loans for (aside from housing) and I'd be interested to see any breakdown on that which you might have access to Veritas?
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
DealsFor.me - The best sales, coupons, and discounts for you
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 6



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.

For more information go to Limitations on Exclusive Rights: Fair Use

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