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Australian Homes Overpriced: Unconventional Economist Leith van Onselen from Macrobusiness; By How Much is the Real Question.
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Topic Started: 14 Sep 2011, 07:01 PM (2,541 Views)
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Perthite
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14 Sep 2011, 07:01 PM
Post #1
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Gotta love that first sentence what a cracker in the MSM!
In my Opinion i can see another 10% fall then i will have to reassess.
Anyway the article is a good read and the comments are insightful. I would like to hear others thoughts on the type of falls they expect.
http://www.watoday.com.au/business/australian-homes-are-overpriced-but-how-much-20110914-1k8tm.html#comments
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newjez
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14 Sep 2011, 08:50 PM
Post #2
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Cue Stringberg.
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A plug for my books on kindle Jack - a thin veil of duplicity
and Summer Days
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Perthite
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14 Sep 2011, 09:34 PM
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Ohh how sentiment has turned....
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Shadow
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14 Sep 2011, 10:11 PM
Post #4
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Evil Zealot Specufestor
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Leith van Onselen's Fairfax article is just a copy of the 'exclusive' subscribers-only Macrobusiness blog post already discussed here...
http://australianpropertyforum.com/topic/9078014/findpost/8252629
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Shadow's Blog - The Australian Housing Market
1 - Debunking Demographia. Demographia Survey Debunked. Australian housing is not particularly unaffordable by global standards.
2 - USA, Ireland, UK, Spain and Japan Property Bubbles versus Australia. All confirmed property bubbles had one thing in common... a particular house price/income ratio pattern.
3 - Banks can't margin call on residential property unless borrower defaults, because residential property loans are regulated by the NCCP Act 2009.
4 - Housing is the second highest taxed sector of the Australian Economy. Renters don't pay their fair share of tax, and are subsidised by high taxes incurred by homeowners.
5 - Epic Fail! Steve Keen's Bad Calls and Predictions.
Parse: A rep's spare spear pares pears, reaps as per AREPS.
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Perthite
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14 Sep 2011, 10:26 PM
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- Shadow
- 14 Sep 2011, 10:11 PM
Well as long as its in the MSM for everyone to see while the BULLshit stays here on the blog. The arguments that price to income ratios are closer to 4.5 are being savaged more and more regularly for everyone to see.
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Thatguy
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14 Sep 2011, 11:06 PM
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Right now??? 15% on average.
In Perth? Prices there are a bit more than 15% overpriced, but I wouldn't expect a correction of that much before 2020.
Sydney is irrelevant - normal rules do not apply due to the willingness of Sydney residents to work their entire life away, then sit in traffic for an hour each way simply because they believe they have to. So they are willing to absorb high prices and this seem fairly robust.
Edited by Thatguy, 14 Sep 2011, 11:09 PM. |
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sentsie
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14 Sep 2011, 11:20 PM
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- Thatguy
- 14 Sep 2011, 11:06 PM
Right now??? 15% on average.
In Perth? Prices there are a bit more than 15% overpriced, but I wouldn't expect a correction of that much before 2020.
Sydney is irrelevant - normal rules do not apply due to the willingness of Sydney residents to work their entire life away, then sit in traffic for an hour each way simply because they believe they have to. So they are willing to absorb high prices and this seem fairly robust.
.........." due to the willingness of Sydney residents to work their entire life away, then sit in traffic for an hour each way simply because they believe they have to. So they are willing to absorb high prices and this seem fairly robust. "........
Could you provide any data/links ?
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Thatguy
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14 Sep 2011, 11:40 PM
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What would I be linking to??? A link to reality?
I mean, honestly, what part of that do you want a link to?
Surely you don't need a link to a chart showing that Sydney has had the highest median property prices in this country for a long time (probably since the end of the gold rush of the late 19th century)? So I'd call that robust. But if you do then perhaps you shouldn't be posting replies here.
With regards to traffic?
So here is a link to the RTA live cam site. Traffic Cams
My linking of the two is clearly my opinion - so.....ahhhh.......there is nothing to link to.
I don't need a demographer or a chart with no scaling or quasi-objective data to tell me that people in Sydney tend to:
1. Live in a Sydney-centric bubble
2. Sit in traffic a LOT
3. Are willing to pay higher prices than other cities
4. Have paid higher prices for a long time
Edited by Thatguy, 14 Sep 2011, 11:44 PM. |
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sentsie
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15 Sep 2011, 12:27 AM
Post #9
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- Thatguy
- 14 Sep 2011, 11:40 PM
What would I be linking to??? A link to reality? I mean, honestly, what part of that do you want a link to? Surely you don't need a link to a chart showing that Sydney has had the highest median property prices in this country for a long time (probably since the end of the gold rush of the late 19th century)? So I'd call that robust. But if you do then perhaps you shouldn't be posting replies here. With regards to traffic? So here is a link to the RTA live cam site. Traffic CamsMy linking of the two is clearly my opinion - so.....ahhhh.......there is nothing to link to. I don't need a demographer or a chart with no scaling or quasi-objective data to tell me that people in Sydney tend to: 1. Live in a Sydney-centric bubble 2. Sit in traffic a LOT 3. Are willing to pay higher prices than other cities 4. Have paid higher prices for a long time
Based on ABS data :
http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/D3031D0C8ACF9962CA2579040013CA18/$File/62020_aug%202011.pdf
Page 9, 12 & 24.
The average amount of hour/month spent for work :
August 08 : WA = 145.78 and NSW = 144.10.
August 11 : WA = 145.61 and NSW = 140.61.
It doesn’t look like NSW residents work harder and longer than WA residents.
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earthsta
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15 Sep 2011, 07:36 AM
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- sentsie
- 15 Sep 2011, 12:27 AM
- Thatguy
- 14 Sep 2011, 11:40 PM
What would I be linking to??? A link to reality? I mean, honestly, what part of that do you want a link to? Surely you don't need a link to a chart showing that Sydney has had the highest median property prices in this country for a long time (probably since the end of the gold rush of the late 19th century)? So I'd call that robust. But if you do then perhaps you shouldn't be posting replies here. With regards to traffic? So here is a link to the RTA live cam site. Traffic CamsMy linking of the two is clearly my opinion - so.....ahhhh.......there is nothing to link to. I don't need a demographer or a chart with no scaling or quasi-objective data to tell me that people in Sydney tend to: 1. Live in a Sydney-centric bubble 2. Sit in traffic a LOT 3. Are willing to pay higher prices than other cities 4. Have paid higher prices for a long time
Based on ABS data : http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/D3031D0C8ACF9962CA2579040013CA18/$File/62020_aug%202011.pdfPage 9, 12 & 24. The average amount of hour/month spent for work : August 08 : WA = 145.78 and NSW = 144.10. August 11 : WA = 145.61 and NSW = 140.61. It doesn’t look like NSW residents work harder and longer than WA residents.
No
They just spend longer stuck in traffic and crammed onto public transport.
Great life! :lol:
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Strindberg
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15 Sep 2011, 07:36 AM
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- Shadow
- 14 Sep 2011, 10:11 PM
How can that be? Macrobusiness claim to only publish exclusive articles on their website.
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Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
1990-2010 20 year house price growth the SLOWEST since 1950-1970
CHRIS BECKER NOW NEUTERED
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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earthsta
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15 Sep 2011, 07:38 AM
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- Strindberg
- 15 Sep 2011, 07:36 AM
- Shadow
- 14 Sep 2011, 10:11 PM
How can that be? Macrobusiness claim to only publish exclusive articles on their website.
You're just sooking that nothing of yours or Shallow's ever makes it mainstream.
Sums up nicely the type of garbage you write.
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Mc_Gusto
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15 Sep 2011, 08:13 AM
Post #13
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mcgusto
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What a fantastic article
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Silence of the BULLS
HA HA
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Strindberg
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15 Sep 2011, 01:35 PM
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A very sloppy piece of journalism. The title suggests "overpriced" whereas the article speaks of "overvalued". The author appears to believe those to be the same thing although it is more likely that any possible difference has never entered his head. I'll leave that point aside and assume he really means "overpriced" - that removes some of the ambiguity when it comes to addressing the article. However, I've been told on these forums many times that value and price are two entirely different things. Perhaps some of them will remind the author of their view.
Anyway, I'll address the author's claim that Australian houses are "overpriced". Price is established by agreement between sellers and buyers in a liquid market where goods and services are available from a choice of sellers. There is NO OTHER WAY to establish price. If buyers and sellers agree a price in such circumstances it is illogical for someone outside of those parties to say that that price is too high or too low. An advertised price can of course be too high and something in a shop window can be overpriced. If the same thing is available elsewhere for a lower price then it can be said to be overpriced. None of that applies to Australian houses where more than 1000 buyers and 1000 sellers agree prices every day. It is nonsense to assert generically that Australian houses are overpriced. It is tantamount to disputing the whole basis of price setting ie agreement between sellers and buyers. One house can be overpriced in relation to the price of a similar house in the same street. But if all the similar houses in the same street or area are similarly priced it cannot be said that they are all overpriced or all underpriced. That would be nonsense.
The article author seems to base his argument on the relative prices of houses in other countries. That is more nonsense. For most buyers considering a purchase they are not trying to decide between buying a house in Paramatta or a house in Tottenham. People buying in Paramatta generally confine their considerations to houses in Paramatta. The price of houses in Tottenham or Timbuktoo is totally and absolutely irrelevant to the level of prices in Paramatta.
I could make lots of comments about the wrong and invalid claims the author makes regarding international comparisons. But I would only be repeating other analysis and comment I've made elsewhere. However, it is interesting how the bear pin up boys are now qualifying their claims of Australia having the most expensive housing in the world with the new addition of "English speaking". Steve Keen has now adopted the same qualifier. I suppose it might have been prompted by the result of the very first analysis made by Demographia of a non-English speaking territory where they discovered housing to be much more expensive than in Australia. Plus the fact that the most comprehensive price/income data shows Australia to have a ratio lower than 70% of other countries. Nothing especially low about Australian rental yields either as the globalpropertyguide clearly illustrates.
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Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
1990-2010 20 year house price growth the SLOWEST since 1950-1970
CHRIS BECKER NOW NEUTERED
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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schooner
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15 Sep 2011, 01:48 PM
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- Strindberg
- 15 Sep 2011, 01:35 PM
The price of houses in Tottenham or Timbuktoo is totally and absolutely irrelevant to the level of prices in Paramatta.
Strindberg why do you use Tottenham as an example, I grew up in that shithole?
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1:10 AM May 20
