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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 (4,486 Views)
Veritas
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Rufus
1 Sep 2017, 10:26 PM
We discussed prices, not inflation.
People buy during inflationary times. You will probably see ownership rates for the young fall in Perth during this period.

Yet you won't concede that a later start in a career makes any difference to the ownership rates of younger Australians, which is actually what this discussion is about, it's not all about Perth.
Same thing. Inflating house prices is the issue. If they weren't inflating it would be a moot point.

And yes people are still buying. In the case of Sydney over the last 5 years more and more investors and less and less FTBs.

I have conceded that point.

I have also posted the HILDA data that you have not addressed and that Shadow ran a mile from that shows that there has been a stark drop in the home ownership rate among couples with kids during the last 20 years.

To what do you attribute that if not, as HILDA conclude, house price inflation?
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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Rufus
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Veritas
2 Sep 2017, 09:27 PM
Same thing. Inflating house prices is the issue. If they weren't inflating it would be a moot point.

And yes people are still buying. In the case of Sydney over the last 5 years more and more investors and less and less FTBs.

I have conceded that point.

I have also posted the HILDA data that you have not addressed and that Shadow ran a mile from that shows that there has been a stark drop in the home ownership rate among couples with kids during the last 20 years.

To what do you attribute that if not, as HILDA conclude, house price inflation?
The original point was less young people owned than in past years. The main factors are not rising prices, it's a change in the lifestyle of young people.
You keep avoiding that point.

I'm well acquainted with the HILDA chart.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Veritas
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Rufus
2 Sep 2017, 10:10 PM
The original point was less young people owned than in past years. The main factors are not rising prices, it's a change in the lifestyle of young people.
You keep avoiding that point.

I'm well acquainted with the HILDA chart.
Really? So since 2002 the lifestyle of the average Australian has changed so much to account for an almost 20% drop in home ownership rates for couples with kids?

Really?
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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herbie
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Veritas
3 Sep 2017, 12:23 AM
Really? So since 2002 the lifestyle of the average Australian has changed so much to account for an almost 20% drop in home ownership rates for couples with kids?

Really?
Could be now you mention it mate ...

Do you have any stats to show it hasn't?
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Veritas
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herbie
3 Sep 2017, 12:38 AM
Could be now you mention it mate ...

Do you have any stats to show it hasn't?
Herbie, Im too long in the tooth to be told by Shadow and Rufus that its raining while they piss down my back, but how about this?

Quote:
 
The deposit gap is the biggest barrier to home ownership. The survey calculated the average gap between the deposit currently available to an individual and the amount the individual expected to need for home purchase. This gap was around A$50,000.

Among Gen Ys already in home ownership, 38% reported they had received financial assistance from their parents or grandparents. For those yet to enter home ownership, only 17% expected to receive some assistance to buy. A further 24% indicated help might be offered.

Therefore, almost 60% of Gen Ys surveyed are unlikely to receive the benefit of intergenerational assistance. This may prevent them from ever entering home ownership.


Shadow NEVER wants to talk about the deposit gap. Jarrs with the rest of his cherry picked fun facts.

This is to 2010, imagine what it is now? Bank of mum and dad getting raped by the lucky ones.

Posted Image

https://theconversation.com/whats-the-key-to-home-ownership-for-gen-y-60637

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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Rufus
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Veritas
3 Sep 2017, 12:23 AM
Really? So since 2002 the lifestyle of the average Australian has changed so much to account for an almost 20% drop in home ownership rates for couples with kids?

Really?
It goes back further than 2002. You could start at the growing use of the birth control pill in the seventies which allowed women the choice of having a career, which began the march towards a two income household.

You could also look at the election of Whitlam. Whitlam was an educated man who knew that in Australia only 2% of students went on to complete a university education. That meant we as a nation couldn't compete with other similar nations who had mush higher education standards. So he encouraged the young to get a university education by cutting the fees. They were free before that to those who won scholarships, and scholarship winners were about the only people who went to Uni. After Whitlam opened up more places about 4% of students obtained a degree. That meant 96% of people in the boomer generation didn't, they commenced work at 15 or 17 years of age. Currently just under 40% of students go on to complete some type of tertiary education.

Since Whitlam successive generations have gained ever higher education standards and delayed entering the full time workforce while they gained that education. Nothing wrong with that, it's entirely logical, but it happened and it changed the timing of a house purchase for a very large number of households.

If you can't put 2 and 2 together then I can't help you.
Take risks - if you win you will become wealthy, if you lose you will become wise
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herbie
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Veritas
3 Sep 2017, 01:52 AM
Herbie, Im too long in the tooth to be told by Shadow and Rufus that its raining while they piss down my back, but how about this?




Shadow NEVER wants to talk about the deposit gap. Jarrs with the rest of his cherry picked fun facts.

This is to 2010, imagine what it is now? Bank of mum and dad getting raped by the lucky ones.

Posted Image

https://theconversation.com/whats-the-key-to-home-ownership-for-gen-y-60637
I'm not too sure of anything anymore perhaps Veritas?

With the recent preceding chat between you and Rat and Rufus about longish term home ownership rates having been one more pretty prime example of a case where I've had to question another one of my assumptions.

But I surely have swallowed at least the occasional bear furphy over the years - Because they just sounded so logical and reasonable - Well, to me at the time anyway - And repeated them I fully expect - And argued the veracity of them - In good faith - Believing them:

Including stuff (I expect) like the retirement of all the boomer housing investors would push lots of property onto the market - So prices would fall.

But with that (in hindsight) being a stupid thing to believe - Absolutely bloody ridiculous in fact; Especially given that I'd personally never even bothered looking at the nation's demographic makeup.

So I can only attempt to be rather more cautious about what bear arguments I might accept these days - And especially so, in light of the fact that the bulls have basically been right and the bears have basically been wrong.

Edited by herbie, 3 Sep 2017, 09:38 AM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Rufus
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Veritas
3 Sep 2017, 01:52 AM
Shadow NEVER wants to talk about the deposit gap. Jarrs with the rest of his cherry picked fun facts.

This is to 2010, imagine what it is now? Bank of mum and dad getting raped by the lucky ones.

Buyers need a minimum of about 8.5% to cover a 5% deposit plus LMI. Actually what I do is arrange a 91.5% loan plus LMI which works out to be a bit cheaper. What has until recently been a big issue is the stamp duty, but there have been some discounts on offer for FTB's in NSW and Vic, Qld has had a discount for a long time, not sure about the other states.

The bank of Mum and Dad generally doesn't put in any money, they guarantee up to 20% which saves their kids quite a lot of money in LMI costs. There seems to be a large degree of misunderstanding about this issue.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Sydneyite
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Rat
1 Sep 2017, 07:07 PM
I specifically asked "Show me the data for all couples with kids (not just lower age groups".

So you showed me the (already debunked) data just for lower age groups again. :re:

We know home ownership is down for 18-25 years olds. I have already explained why. They are delaying buying until later in life.

Overall home ownership in Australia has been within +-2% of 69% for the past six decades. That's what the official ABS data shows.
A timely article from Roy Morgan research:

http://www.roymorgan.com/findings/7329-australia-getting-older-2007-2017-201709011548?utm_medium=email&utm_campaign=2017-09-01-AU-MRU&utm_content=2017-09-01-AU-MRU+CID_ae21cafe53121d54ecc8d1794c537204&utm_source=Market%20Research%20Update&utm_term=Its%20Official%20Everything%20is%20happening%20later%20in%20life

Roy Morgan
 
It’s Official: Everything is happening later in life

Analysis of long-running trends in Australia reveals key life-events are happening later in life than they did a decade ago. Key life-events highlighted include moving out from the family home, living in a shared household, renting, having a home loan, and owning one’s own home.

..............

“Important life-changing decisions are happening later in life than they used to – even compared to just a decade ago. Australians are living at home for longer, a significant proportion are now renting well into their 40s, and it is only near retirement that a majority of Australians are finally owning their own home after a lifetime of work.

“The changing shape of Australia is driven by two demographic trends – millennials are staying at school or in education longer and staying at home or in shared accommodation while they do that; Baby Boomers, rather than paying off homes as quickly as possible, are using the equity in their homes to renovate, upgrade, invest or finance whatever other activities that want to engage in.

The increasing price of housing relative to incomes – especially among younger Australians, is only part of the story.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Jon Snow
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Sydneyite
3 Sep 2017, 10:24 AM
Given the improvements in longevity it is almost certain that this trend will apply to retirement also.

People will need to work longer to save for their longer retirements. Sadly, employment and wages are on the decline.

We need a new way of distributing money. I propose a UBI that decreases with every child you have. If you have one child, the UBI can be $50K. Two children and it goes down to $30K, three and it goes down to $10K. For those employed it is a tax rebate, for the unemployed it is paid directly as a benefit.
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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