Welcome Guest [Log In] [Register]


Reply
The crash has begun!; It’s official - the crash has begun!
Topic Started: 4 Mar 2011, 02:16 PM (11,103 Views)
cokatoo56
Default APF Avatar


So where do you guys think we are now ? enthusiasm ? greed ? delusion ?

i downloaded on wikipedia the graph of Melbourne median house prices vs wage from 1965 to 2013 . (i believe the graph for Sydney is similar).
And it is quite amazing how the graph can be overlayed on the graph that mohamed showed on the first post of this thread.
this would mean the current market is in the greed phase i assume.
the time that separates the greed from the return to normal phase is rather short.

question is how long can it take to move from one phase to the other when the market starts to decline seriously ? 6 months from now ? 1 year ? 2 more years ?
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


cokatoo56
16 Sep 2014, 11:59 PM
So where do you guys think we are now ? enthusiasm ? greed ? delusion ?

i downloaded on wikipedia the graph of Melbourne median house prices vs wage from 1965 to 2013 . (i believe the graph for Sydney is similar).
And it is quite amazing how the graph can be overlayed on the graph that mohamed showed on the first post of this thread.
this would mean the current market is in the greed phase i assume.
the time that separates the greed from the return to normal phase is rather short.

question is how long can it take to move from one phase to the other when the market starts to decline seriously ? 6 months from now ? 1 year ? 2 more years ?
The longest running house price series in the world is the Herengracht index which is a record of one house located on the Herengracht Canal in Amsterdam. If you follow this link you will find a chart of that house over about 220 years until 1973.

The nominal price curve from 1950 onwards will look familiar.
http://www.blytic.com/Player.aspx?key=c5c39319833c481783c75aa387e0b80c

Steve Keen was using this to demonstrate his points just a few years ago. At the current moment the real price has risen well above the mean and no one uses this house as an example anymore. It no longer fits the bear narrative.

More data here - http://hotelivory.wordpress.com/2010/08/29/a-very-long-view-on-house-prices/
Edited by peter fraser, 17 Sep 2014, 12:34 AM.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
bundy
Member Avatar


These graphs for individual states are interesting:
http://www.whocrashedtheeconomy.com.au/blog/2014/09/housing-ratios-state-by-state/
Profile "REPLY WITH QUOTE" Go to top
 
cokatoo56
Default APF Avatar


peter fraser
17 Sep 2014, 12:27 AM
The longest running house price series in the world is the Herengracht index which is a record of one house located on the Herengracht Canal in Amsterdam. If you follow this link you will find a chart of that house over about 220 years until 1973.

The nominal price curve from 1950 onwards will look familiar.
http://www.blytic.com/Player.aspx?key=c5c39319833c481783c75aa387e0b80c

Steve Keen was using this to demonstrate his points just a few years ago. At the current moment the real price has risen well above the mean and no one uses this house as an example anymore. It no longer fits the bear narrative.

More data here - http://hotelivory.wordpress.com/2010/08/29/a-very-long-view-on-house-prices/
Peter > thanks for the link to the herengracht study. this is an amazing work that they did.

Quote:
 
Lessons from 380 year of house price data

As the text on the last graph says, over a 380 year period the real (ie inflation adjusted) house prices have only doubled, which corresponds to an annual average price increase of something like 0.1%. And that’s with a starting point just at the start of the Dutch golden age


And there are some fools in Australia (they usually call themselves property experts) who tell you that property prices double up every 10 years, and some even more fools who eat that :re:
Profile "REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


cokatoo56
17 Sep 2014, 12:54 AM
Peter > thanks for the link to the herengracht study. this is an amazing work that they did.

I first read that index in a NYT article called this old house, it was one of my favourites and quite interesting until the coffee shop took effect.
Profile "REPLY WITH QUOTE" Go to top
 
stinkbug
Member Avatar


cokatoo56
17 Sep 2014, 12:54 AM




And there are some fools in Australia (they usually call themselves property experts) who tell you that property prices double up every 10 years, and some even more fools who eat that :re:
Relevance?
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


cokatoo56
17 Sep 2014, 12:54 AM
Peter > thanks for the link to the herengracht study. this is an amazing work that they did.




And there are some fools in Australia (they usually call themselves property experts) who tell you that property prices double up every 10 years, and some even more fools who eat that :re:
Lol - no property doesn't double in value every 10 years on average although it could in one decade as long as it corrected.

However what you do need to consider is that since we have been on a fiat money systems central banks have sought to keep inflation in a narrow band of around 2% to 3%, so they deliberately keep asset prices inflated. Doc Watson continually alludes to that point.

That plan can go wrong though. In the seventies the oil producing countries got together, formed a cartel (OPEC) and jacked up the price of their oil. Because of that inflation was around 17% pa at one stage, which is why there was a period of extreme price rises around then. It really hurt a lot of people at the time and central banks didn't regain control until the nineties.

(It has nothing to do with a boomer conspiracy as they make out over at Macrobusiness - it was out of Western control. I don't know how they peddle that crap with a straight face)

Central banks will not act to reduce asset prices, they will continue to pump them up. That didn't happen in the period prior to the post WW2 period, so the period post 1950 is particularly relevant to our current period.

Central banks may change their focus in the future, or there could be an event that takes inflation away from their control like the OPEC induced oil shock inflation in the latter half of the 20th century, but if prices fall below what central banks consider to be a healthy correction, they will pump them up again, and we know that they can.
Edited by peter fraser, 17 Sep 2014, 08:27 AM.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
Ex BP Golly
Member Avatar


Shadow
4 Mar 2011, 02:39 PM

Nice chart... here's my version...

Posted Image
4 years to crash by your reckoning.

I cannot say I totally disagree with that.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
Profile "REPLY WITH QUOTE" Go to top
 
Guest
Unregistered

peter fraser
17 Sep 2014, 08:25 AM
Lol - no property doesn't double in value every 10 years on average although it could in one decade as long as it corrected.

However what you do need to consider is that since we have been on a fiat money systems central banks have sought to keep inflation in a narrow band of around 2% to 3%, so they deliberately keep asset prices inflated. Doc Watson continually alludes to that point.

That plan can go wrong though. In the seventies the oil producing countries got together, formed a cartel (OPEC) and jacked up the price of their oil. Because of that inflation was around 17% pa at one stage, which is why there was a period of extreme price rises around then. It really hurt a lot of people at the time and central banks didn't regain control until the nineties.

(It has nothing to do with a boomer conspiracy as they make out over at Macrobusiness - it was out of Western control. I don't know how they peddle that crap with a straight face)

Central banks will not act to reduce asset prices, they will continue to pump them up. That didn't happen in the period prior to the post WW2 period, so the period post 1950 is particularly relevant to our current period.

Central banks may change their focus in the future, or there could be an event that takes inflation away from their control like the OPEC induced oil shock inflation in the latter half of the 20th century, but if prices fall below what central banks consider to be a healthy correction, they will pump them up again, and we know that they can.
You mean they can keep trying to pump them up before it all comes to an end.

And that is exactly why the GFC surfaced, not that your brain seems to comprehend that. Your just a debt peddler spriuker troll Peter.

The sustainablitlity became completely unsustainable as mum and dad paypackets did not cover the debt levels the fed had created in house prices. This is what happens in a ponzi, it becomes unsustainable.

What was their answer to debt levels they were unable to pay, whack rates at zero and take on even more debt to pay the bills they no longer could. Yet you dopes think this is an answer or solution, it is merely the most extreme desperate measures they have had to resort as they have no other answers.

Any dope knows the western world has run its economic course to self destruction. Wages and jobs falling for decades in the US. Wages now dropping in all weatern economies including Australia, you wanted to argue this yesterday , but wage freeze from coke and a 38% pay reduction for new employees doing the same job for far less pay than the current worker.

Don't you know all our jobs are heading off shore because our wages are too high an unable to compete.

Why do you think unemployment has now reached over 6%, the real figure being double or triple that if you take out all the bullshit fudging of figures .

Keep praying for some gains up there Peter, you might get a bit over the short term, but it will be short lived then back to the crappy market IT ALWAYS has been.
"REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


stinkbug
16 Sep 2014, 08:39 PM
Bump.

For posterity.
LOL.

Thanks for that Stinkbug. That was a blast form the past!
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



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