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Be wary of property doomsayers, because they don't have a clue; Imagine if you had missed out because you placed faith in a forecast by Steve Keen or Harry Dent
Topic Started: 29 Aug 2017, 08:46 PM (4,484 Views)
Veritas
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Sydneyite
3 Sep 2017, 10:24 AM
Yes, we all agree that house price inflation relative to incomes is only part of the story.

But Shadow's position is that people doing things later in life it is the whole story.

At least Rufus has now conceded that house price inflation is an important factor too.

Pretty hard not to when faced with the diverging fortunes of Perth and Sydney during the last 6 years in terms of home ownership rates.

You would have to be f***ing daft to argue that the Sydney property boom, for example, didnt prevent households who wanted to buy a house buying one.

And the falling FTB numbers are testament to that.
Edited by Veritas, 3 Sep 2017, 06:40 PM.
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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Sydneyite
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Veritas
3 Sep 2017, 06:40 PM
Yes, we all agree that house price inflation relative to incomes is only part of the story.

But Shadow's position is that people doing things later in life it is the whole story.

At least Rufus has now conceded that house price inflation is an important factor too.

Pretty hard not to when faced with the diverging fortunes of Perth and Sydney during the last 6 years in terms of home ownership rates.

You would have to be f***ing daft to argue that the Sydney property boom, for example, didnt prevent households who wanted to buy a house buying one.

And the falling FTB numbers are testament to that.
You seem to have changed your tune. For example, in this post: http://australianpropertyforum.com/single/?p=10045166&t=30135484 you make this assertion:

Veritas
 
Home ownership rates are falling. They are falling most profoundly among younger cohorts. The impact of higher house prices is far greater than changes in consumer choice.
That is pretty much what you, and many others (eg Chris), have been arguing for some time - that it is PRIMARILY, if not SOLELY, house price rises that have resulted in the changing ownership patterns for different age cohorts that can seen in the ABS and other data.

The reality is that the other factors that Rat and others have been pointing out may actually be more pertinent as an explanation for the observed ownership trends - from less young home owners right through to changing "outright" ownership levels. This contention is supported by the over-all ownership rate, which has remained reasonably steady for decades and continues to do so even in the latest census data (at 69% +-/2%).

Veritas you also asked for links showing "any serious commentator" that supported these contentions - turned out there are plenty, and you can add Roy Morgan research now to that list - in the article that I linked to, they conclude "The increasing price of housing relative to incomes – especially among younger Australians, is only part of the story.". Not "the biggest part", not "the only part", but only a "part" of the story. This is exactly the position you have been arguing against it seems to me for pages on this thread! :re:
Edited by Sydneyite, 3 Sep 2017, 07:58 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Veritas
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Sydneyite
3 Sep 2017, 07:56 PM
You seem to have changed your tune. For example, in this post: http://australianpropertyforum.com/single/?p=10045166&t=30135484 you make this assertion:

That is pretty much what you, and many others (eg Chris), have been arguing for some time - that it is PRIMARILY, if not SOLELY, house price rises that have resulted in the changing ownership patterns for different age cohorts that can seen in the ABS and other data.

The reality is that the other factors that Rat and others have been pointing out may actually be more pertinent as an explanation for the observed ownership trends - from less young home owners right through to changing "outright" ownership levels. This contention is supported by the over-all ownership rate, which has remained reasonably steady for decades and continues to do so even in the latest census data (at 69% +-/2%).

Veritas you also asked for links showing "any serious commentator" that supported these contentions - turned out there are plenty, and you can add Roy Morgan research now to that list - in the article that I linked to, they conclude "The increasing price of housing relative to incomes – especially among younger Australians, is only part of the story.". Not "the biggest part", not "the only part", but only a "part" of the story. This is exactly the position you have been arguing against it seems to me for pages on this thread! :re:
There is nothing inconsistent in my statements.

I never said there weren't other forces at work.

Shadow flat out denies that house prices are having an impact and Rufus had to be dragged kicking and screaming to concede the point.

They pretend that nothing has changed but the academic disagree.

AHURI: https://www.ahuri.edu.au/__data/assets/pdf_file/0007/2104/AHURI_Final_Report_No187_Sustaining_home_ownership_in_the_21st_century_emerging_policy_concerns.pdf


Quote:
 
As real house prices outstrip real household incomes,
young prospective first home buyers must save harder to meet deposit requirements
(or get help from parents), borrow more, and devote an increasing share of the
household budget to meet loan repayments. Similar accessibility problems are now
being confronted by a new group of households—those exiting home ownership due
to financial pressures but striving to regain home ownership status.


Quote:
 
These facts clearly document a changing policy environment. The housing career
featuring a smooth passageway from the parental home in youth to outright ownership
in retirement is over for many Australians
.


And this

Governments are trapped in a vicious cycle of housing policies and prices

http://theconversation.com/governments-are-trapped-in-a-vicious-cycle-of-housing-policies-and-prices-75126

And from CEDA only last week:

Home ownership dream dead: CEDA report

http://www.sbs.com.au/news/article/2017/08/29/home-ownership-dream-dead-ceda-report

Shadow wants it both ways:

On the one hand he concedes that there was a systemic shift in the housing market from the 1990s on but on the other that this is 'all part of the cycle' that has been playing out for much longer.

That Sydney property boomed because investors flooded the market but this had no effect on the ability of FTBs to get in.

Its absurd.

As I argued in a previous post you only need to look at the relative performance of Perth over Sydney since 2011.

Perth's home ownership rate is up. Its FTB participation rates are far higher. Its home ownership rate is up.

Sydney's figures have all gone the other direction.

Are people in Sydney delaying home buying decisions for lifestyle reasons in a way that Perth households are not?

Of course not, so the common denominator must be affordability.

In Perth house prices have been flat or falling in Sydney the polar opposite.
Edited by Veritas, 3 Sep 2017, 08:47 PM.
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
 
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