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Is Australian property in a bubble? What are the typical signs of a housing bubble?
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Topic Started: 14 Dec 2011, 01:20 PM (21,522 Views)
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Shadow
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14 Dec 2011, 01:20 PM
Post #1
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Evil Zealot Specufestor
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I thought this might warrant its own thread...
- Bigukraine
- 14 Dec 2011, 09:55 AM
what would constitute a property bubble in Australia and in your opinion what would it look like (indicators)?
Signs of a housing bubble, in my opinion, would include...
1. Recent sharp rise in the house price to income ratio (it has been steady for almost a decade)
2. Developers making huge profit, building excess stock due to greed/expectation of further price rises (construction is at record lows)
3. High rental vacancy rates indicating over-supply of dwellings (vacancy rates are near record lows)
4. Media pro-property frenzy... 'to the moon, house prices never fall' etc. (quite the opposite in the media these days)
5. A drop in lending standards (this isn't happening - lending is much tighter than it was just a few years ago)
- Bigukraine
- 14 Dec 2011, 09:55 AM
who or what will give us the heads up (Moody's or Main stream media etc etc) when it will start, who would you look towards that you trust ???
Where to get the heads up when these things start to happen? This forum, that's why I hang out here!
I'd be interested to hear other opinions.
Is Australian property in a bubble? If you believe so, what are the signs you see that indicate a bubble?
Where to you go for data/analysis/information that might give you a 'heads up' on the development or collapse of a bubble?
Edited by Shadow, 14 Dec 2011, 01:20 PM. |
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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Catweasel
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14 Dec 2011, 01:30 PM
Post #2
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- Shadow
- 14 Dec 2011, 01:20 PM
I thought this might warrant its own thread...
Signs of a housing bubble, in my opinion, would include...
1. Recent sharp rise in the house price to income ratio (it has been steady for almost a decade)
2. Developers making huge profit, building excess stock due to greed/expectation of further price rises (construction is at record lows)
3. High rental vacancy rates indicating over-supply of dwellings (vacancy rates are near record lows)
4. Media pro-property frenzy... 'to the moon, house prices never fall' etc. (quite the opposite in the media these days)
5. A drop in lending standards (this isn't happening - lending is much tighter than it was just a few years ago)
Where to get the heads up when these things start to happen? This forum, that's why I hang out here!
I'd be interested to hear other opinions.
Is Australian property in a bubble? If you believe so, what are the signs you see that indicate a bubble?
Where to you go for data/analysis/information that might give you a 'heads up' on the development or collapse of a bubble?
Catweasel laugh. Still it miss a whole point. Only a constant in identify of a bubble is critical mass not beyond to do the identify after a fact. Subjective meandering of mouzealot not a real the good yardstick. But it clear that bubble defined in its head, whether it be media, expert, mouzealot or bear cult.
Truth of matter is that only a observe in a hindsight. A Greenspan will attest to it. That not to a say that Australia guru be a wrong, but it be a wrong to a think that it account for what it not want to a see. That a true about a all the bubble.
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Shadow
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14 Dec 2011, 01:38 PM
Post #3
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Evil Zealot Specufestor
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- Catweasel
- 14 Dec 2011, 01:30 PM
Truth of matter is that only a observe in a hindsight.
A bubble can only be confirmed after it bursts, but there are still indicators that may identify the presence of a potential bubble in advance. We have enough experience of housing bubbles that burst in other countries to be able to identify some factors that were common to most bubbles.
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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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Catweasel
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14 Dec 2011, 02:01 PM
Post #4
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- Shadow
- 14 Dec 2011, 01:38 PM
- Catweasel
- 14 Dec 2011, 01:30 PM
Truth of matter is that only a observe in a hindsight.
A bubble can only be confirmed after it bursts, but there are still indicators that may identify the presence of a potential bubble in advance. We have enough experience of housing bubbles that burst in other countries to be able to identify some factors that were common to most bubbles.
Catweasel laugh. Yes, it the true. In the psychological, one a big the factor is belief bubble not a be a exist. Like a Catweasel say, it can provide its own benchmark, but it not a approve exist of or non-exist of bubble. It just subjective pis in wind.
If it a want do cross-country compare, it a think NZ is best the "proof" (or narrative) that the big bubble not do a exist in a Australia. In a terms of a like with like, a NZ provide nice the lab rat of what may the be.
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kennyjaiz
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14 Dec 2011, 02:10 PM
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- Catweasel
- 14 Dec 2011, 02:01 PM
Catweasel laugh. Yes, it the true. In the psychological, one a big the factor is belief bubble not a be a exist. Like a Catweasel say, it can provide its own benchmark, but it not a approve exist of or non-exist of bubble. It just subjective pis in wind.
If it a want do cross-country compare, it a think NZ is best the "proof" (or narrative) that the big bubble not do a exist in a Australia. In a terms of a like with like, a NZ provide nice the lab rat of what may the be.
What is your opinion, Catweasel - Is Australian in a real estate bubble?
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Catweasel
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14 Dec 2011, 02:23 PM
Post #6
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- kennyjaiz
- 14 Dec 2011, 02:10 PM
- Catweasel
- 14 Dec 2011, 02:01 PM
Catweasel laugh. Yes, it the true. In the psychological, one a big the factor is belief bubble not a be a exist. Like a Catweasel say, it can provide its own benchmark, but it not a approve exist of or non-exist of bubble. It just subjective pis in wind.
If it a want do cross-country compare, it a think NZ is best the "proof" (or narrative) that the big bubble not do a exist in a Australia. In a terms of a like with like, a NZ provide nice the lab rat of what may the be.
What is your opinion, Catweasel - Is Australian in a real estate bubble?
Catweasel say to a Kenny that it cannot objective a bubble, so how can the Catweasel have the meaningful opinion? It can do an argue until a cow come home, but it will be a confront with a wall of number from protest by mouzealot or bear cult. It it talk about a music, art, or literature, then a different the story.
A Catweasel think the psychology, groupthink, and master dynamics have the much influence in asset bubble. It a not see any the ability on a world to quantify impact in meaningful way for mouse or a Catweasel to do a digest. As for a expert, it largely shaped by its own interest, so it impossible the assign itself to a guru like a Joye-alicous in mouzealot camp or a Steve the Keen in bear cult camp.
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georgie
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14 Dec 2011, 02:34 PM
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All those symptoms are present in China's "property bubble". Now who buys Australian dirty??? China!!.
So when China's property bubble bursts our economy goes into recession as we shipped all our manufacturing off shore. People lose their jobs and then guess what?? I think you know whats coming, Australian property prices fall. We don't need to be in a bubble to crash. The negative feedback loop will make Australian property crash and burn.
But wait!!! There's more, our love for property is built on using overseas funding, what happens if Europe implodes and credit markets crunch?? We can't borrow to buy property at current prices so we stop buying property and prices fall.
Home prices go down, people go into negative equity and:
Negative equity will make people feel poorer and thus spend less. Our economy worsens and more people will lose their jobs. House prices will continue to fall and more people will experience negative equity. More people will feel poorer and thus spend less. Our economy worsens and even more people will lose their jobs. House prices will fall further and more…
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Catweasel
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14 Dec 2011, 02:50 PM
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- georgie
- 14 Dec 2011, 02:34 PM
All those symptoms are present in China's "property bubble". Now who buys Australian dirty??? China!!.
So when China's property bubble bursts our economy goes into recession as we shipped all our manufacturing off shore. People lose their jobs and then guess what?? I think you know whats coming, Australian property prices fall. We don't need to be in a bubble to crash. The negative feedback loop will make Australian property crash and burn.
But wait!!! There's more, our love for property is built on using overseas funding, what happens if Europe implodes and credit markets crunch?? We can't borrow to buy property at current prices so we stop buying property and prices fall.
Home prices go down, people go into negative equity and:
Negative equity will make people feel poorer and thus spend less. Our economy worsens and more people will lose their jobs. House prices will continue to fall and more people will experience negative equity. More people will feel poorer and thus spend less. Our economy worsens and even more people will lose their jobs. House prices will fall further and more…
Catweasel say to a George that expert can debunk all what it say. Even the very rare one who think it see the bubble can be smack down by pointiest head on planet with database bigger than a Nullabor.
More the interesting than bubble denial is the question as a why cannot the brainpower of a world with super predict capacilty in a computer not be able to do a predict or identify? That the question where Catweasel never the receive answer with a insight and a profound. Mouzealot and a bear cult stick to its squabble and a cut-and-paste from whatever tickle emotion.
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raveswei
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14 Dec 2011, 03:23 PM
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- Quote:
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I thought this might warrant its own thread...
Signs of a housing bubble, in my opinion, would include...
very respectful opinion :lol:
- Quote:
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1. Recent sharp rise in the house price to income ratio (it has been steady for almost a decade)
House price to income has been steady for almost a decade? really? in your dreamland?
does that includes 20% income growth in 2009/2010?
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2. Developers making huge profit, building excess stock due to greed/expectation of further price rises (construction is at record lows)
Bubbles inflate cost of land not cost of construction. Our monopoly developers are hoarding land while waiting for price increase - that is why they have net margins twice as high as USA developers. They buy cheap land, wait few years for price to double and than build for quick profit. So why would they build quickly after they get land? to decrease their margin?
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3. High rental vacancy rates indicating over-supply of dwellings (vacancy rates are near record lows)
really? rental vacancy rates are near record lows? what rental vacancy rates? Please don't quote SQM data so-called "rental vacancy rate" because those numbers do not show percentage of vacant rental homes - not at all.
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4. Media pro-property frenzy... 'to the moon, house prices never fall' etc. (quite the opposite in the media these days)
Our media was all about 'to the moon, house prices never fall' etc. for a decade, now they slowly start to get the idea that things are not as simple as they thought.
For a decade US media was all about rising house prices; than in 2006/07 all American media turned gloomy about housing. Do you claim there was no bubble in 2006/07 because media was gloomy?
- Quote:
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5. A drop in lending standards (this isn't happening - lending is much tighter than it was just a few years ago)
After a period of easy lending in USA, it got tighter in 2008. So there was no bubble in 2008 because lending was tighter?
- Quote:
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Where to get the heads up when these things start to happen? This forum, that's why I hang out here!
I'd be interested to hear other opinions.
most of signs you quoted are signs of bubble inflation not signs of bubble burst. It is clear that we don’t have bubble inflation at this moment. But, you somehow missed the fact that our bubble is already inflated and it started to burst. You should start looking into different signs that point into bubble burst because for long time you will not see significant house price rise.
So, you are right: our housing bubble is not inflating at tme moment or any time soon - it is bursting as we speak.
Edited by raveswei, 14 Dec 2011, 03:32 PM. |
http://popping-bubble.blogspot.com/
Thinking of an Australian property speculator (PI):
Inaction = missing opportunities.
Missing opportunities = losing.
Too much thinking = inaction.
Thinking = missing opportunities.
Therefore thinking = losing.
disgraceful little man Frank Castle owes a house to Salvation Army
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Strindberg
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14 Dec 2011, 03:28 PM
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- georgie
- 14 Dec 2011, 02:34 PM
All those symptoms are present in China's "property bubble". Now who buys Australian dirty??? China!!.
So when China's property bubble bursts our economy goes into recession as we shipped all our manufacturing off shore. People lose their jobs and then guess what?? I think you know whats coming, Australian property prices fall. We don't need to be in a bubble to crash. The negative feedback loop will make Australian property crash and burn.
But wait!!! There's more, our love for property is built on using overseas funding, what happens if Europe implodes and credit markets crunch?? We can't borrow to buy property at current prices so we stop buying property and prices fall.
Home prices go down, people go into negative equity and:
Negative equity will make people feel poorer and thus spend less. Our economy worsens and more people will lose their jobs. House prices will continue to fall and more people will experience negative equity. More people will feel poorer and thus spend less. Our economy worsens and even more people will lose their jobs. House prices will fall further and more…
Fair enough. With an outlook like that I suppose you have resigned yourself to continue renting until you lose your job and then move into a charity hostel and eat in soup kitchens.
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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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IXin
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14 Dec 2011, 03:30 PM
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Hi all, interesting thread. Long time lurker from GHPC days.
Had to sign up just to say Catweasal I think a lot of what you write is lost in the way you try to communicate it. I'm not sure if you are trying to mimic a character from Alice in Wonderland or something but using rather plain english would make you easier to understand.
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IXin
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14 Dec 2011, 03:32 PM
Post #12
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- IXin
- 14 Dec 2011, 03:30 PM
Had to sign up just to say Catweasal I think a lot of what you write is lost in the way you try to communicate it. I'm not sure if you are trying to mimic a character from Alice in Wonderland or something but using rather plain english would make you easier to understand.
ps how do i edit posts ?????
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zaph
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14 Dec 2011, 03:41 PM
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the edit button. but perhaps as a new member you can't edit.
edit - located here
- Attached to this post:
 edit.png (13.59 KB)
Edited by zaph, 14 Dec 2011, 03:43 PM. |
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georgie
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14 Dec 2011, 03:48 PM
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- Strindberg
- 14 Dec 2011, 03:28 PM
Fair enough. With an outlook like that I suppose you have resigned yourself to continue renting until you lose your job and then move into a charity hostel and eat in soup kitchens.
Lol so whats your solution? buy a property and end up bankrupt?
Speaking to a neighbour of mine who's daughter is at Westpac HR. Every day they have a meetings about cost cutting (layoffs). Another, who is with Commonwealth said his department of 50 was told to sit at their desks and wait for a phone call. Half got the sack, he was fortunately told he had until February when he would receive another call.
The best way to combat this uncertainty is not to put yourself financially at risk. Does buying a house in these current times sound financially smart to you?
If so your either cashed up or living in fairy land.
Edited by georgie, 14 Dec 2011, 03:50 PM. |
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raveswei
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14 Dec 2011, 04:02 PM
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- georgie
- 14 Dec 2011, 03:48 PM
Lol so whats your solution? buy a property and end up bankrupt?
Speaking to a neighbour of mine who's daughter is at Westpac HR. Every day they have a meetings about cost cutting (layoffs). Another, who is with Commonwealth said his department of 50 was told to sit at their desks and wait for a phone call. Half got the sack, he was fortunately told he had until February when he would receive another call.
This is scary part of the great Australian housing bubble: financial white collar workers who pay much higher percentage of income for mortgage repayments will lose jobs among first.
They cannot afford to be unemployed for long - they need huge money to continue paying debt (that will quickly drain savings – if they have any after paying 60-70% of income), they cannot count on government help (do not qualify) and those financial jobs will not return any time soon because we are already saturated with debt so financial business will be subdued for long time.
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http://popping-bubble.blogspot.com/
Thinking of an Australian property speculator (PI):
Inaction = missing opportunities.
Missing opportunities = losing.
Too much thinking = inaction.
Thinking = missing opportunities.
Therefore thinking = losing.
disgraceful little man Frank Castle owes a house to Salvation Army
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edit.png (13.59 KB)
9:22 PM May 18
