The artificial component is derived from exponential growth in asset values driven by speculation and cheap easy credit thats all supported by massive tax payer funded subsidies.
How is that artificial? If you're saying 'tax payer funded subsidies' are artificial then how is that any different to any other part of the tax system? Taxes are an artificial concept, full stop. So is money. So are houses. So are all markets. By your logic, all demand for everything is artificial.
Can you give me an example of a housing market where demand is not 'artificial'?
The public policy group Demographia, which conducted the study, said affordability in Australia was worsening relative to Britain, Ireland and New Zealand, where prices had recently collapsed.
Australia would be next, it said. "Sooner or later, the inherent instability that characterises virtually all bubbles will lead to house price declines in Australia.
Monetary policy is no more 'artificial' than anything else controlled by humans. By your logic, all demand for everything is 'artificial'. It's meaningless.
You squirmed when ABC 4 Corners examined the bubble, but enter a frenzy of masturbation every time Dr Wilson opens his mouth.
That is artificial.
Rat
25 Aug 2017, 07:56 PM
The discussion was about 'artificial' demand - whatever that means.
So? It can be expanded lots of ways.
Indeed it can expand in many ways. Some of them meeting actual need and demand.
Then you can have what we have, lazy banks surfing a market of their own creation, Murdoch press failing it's historical business model and being reliant upon real estate advertising for its profits, lemmings suiciding by mortgage poisoning, spivs paid to spruik the joy of debt servitude, FOMO etc.
Bardon
25 Aug 2017, 11:21 PM
Which bit is the artificial bit?
You'll find out when you are trying to get your own bit of turf at The Darlinghurst Wall.
The FOMO part. You squirmed when ABC 4 Corners examined the bubble, but enter a frenzy of masturbation every time Dr Wilson opens his mouth.
That is artificial.
Indeed it can expand in many ways. Some of them meeting actual need and demand.
Then you can have what we have, lazy banks surfing a market of their own creation, Murdoch press failing it's historical business model and being reliant upon real estate advertising for its profits, lemmings suiciding by mortgage poisoning, spivs paid to spruik the joy of debt servitude, FOMO etc. You'll find out when you are trying to get your own bit of turf at The Darlinghurst Wall.
Every $1 earned has $2 debt.....now that's artificial!
Can you point to something that shows what the ratio is?
I'd like to know.
It's pretty simple - saying "for every $1 earned there is $2 in debt" is rubbish. Even if the household debt/income ratio was 200% (and it is not quite that high - it's about 160% I believe), you can only count the debt once, while the income is recurring. Eg if every $1 I earned last year had $2 in debt, then what about the $1 I earned this year? Or the year before last? It's comparing a flow (income) with a capital measure (debt). A meaningless measure in aggregate especially, without further understanding of the data.
Or another way to say the same thing would be "my total debt could be paid of with 2 years income"...... Doesn't make bears like you wet their pants though.....
For Aussie property bears, "denial", is not just a long river in North Africa.....
It's pretty simple - saying "for every $1 earned there is $2 in debt" is rubbish. Even if the household debt/income ratio was 200% (and it is not quite that high - it's about 160% I believe), you can only count the debt once, while the income is recurring. Eg if every $1 I earned last year had $2 in debt, then what about the $1 I earned this year? Or the year before last? It's comparing a flow (income) with a capital measure (debt). A meaningless measure in aggregate especially, without further understanding of the data.
Or another way to say the same thing would be "my total debt could be paid of with 2 years income"...... Doesn't make bears like you wet their pants though.....
And 40% of loans are interest only. So the interest debt repayment is unlimited/infinite until they start paying the principal. I wonder how many people keep re-extending the balloon payments to the next horizon to cash in on all that future, potential, unrealised gains?
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