Fifty Australian Property FACTS - The TRUTH about the Aussie Housing Bubble

Welcome to the Australian Property Forum. Please register here or log in below.

Pages:
1
2
…
9

Fifty Australian Property FACTS - The TRUTH about the Aussie Housing Bubble
Topic Started: 1 Apr 2012, 11:14 PM (9,422 Views)
Bobby	1 Apr 2012, 11:14 PM Post #1
Posts: 93 Group: Member Member #1,761 Joined: 07/03/2012	1. House prices do go down in Australia 2. House prices do not double every 7 - 10 years 3. When you come into the market definitely matters 4. Negative gearing does not provide affordable and available rental property 5. Now is NOT a great time to buy 6. Real estate agents have a horrible ethical track record 7. Interest rates are low by long term historical standards and those low interest rates cannot solely account for the huge run up in mortgage debt 8. Neither major political party really wants to affect change to realise 'affordable housing' 9. Housing grants like the FHB grant are crack cocaine for the market. They are a political tool to prop the market in times of dire need and effectively a hand out to vendors, and a trick to draw in the 'greater fools' with 'free money'. 10. House prices are not underpinned by fundamentals. They are underpinned by hopium, lies, spin, a credit explosion, dodgy stats, real estate propaganda, and a seemingly endless supply of greater fools being suckered in for a life time of indentured servitude to a heartless bank. 11. Sales are NOT through the roof, stock is getting more and more bloated and taking longer and longer to sell. New home sales are DEAD. 12. If you don't buy now, you will save yourself a lot of money i.e. rent money is definitely NOT dead in this market. 13. Our housing stock is not better than the rest of the world. 14. The housing bubble is primarily built upon the back of land appreciation. Houses are still the same old depreciating steaming pile (money pit) they always were. 15. State governments are addicted to stamp duties and other property related taxes. 16. We are having to spend more and more for blocks of land that get smaller and smaller. 17. Australia does not have a shortage of land. Just state governments that wish to artificially reduce land supply with 'smart growth boundaries' and the like. 18. Australian bank lending is not prudent and bordering on the reckless - high LVRs, large amount of residential loans on the books, large number of interest only investor loans, loans for housing comprising a huge proportion of bank assets. 19. High house prices is not a good thing (why would anyone want to pay more for an essential item forever more?). 20. High construction costs do not account for high prices. 21. Income growth has not kept pace with house prices. 22. Property investment is largely in pre-existing housing. It does not add to housing supply significantly. 23. 'Strong' employment figures underpinning the market are probably a major under-estimate (based on Roy Morgan figures). 24. There is little to no relationship between population growth and house prices i.e. population growth will NOT save house prices. 25. The market is not tracking sideways (no bubble ever has) and there has already been significant losses in all capitals. 26. House prices do NOT rise faster than consumer prices over the very long term 27. In the long term, you will NOT always win on housing as the coming 'age quake' of retiring baby boomers will put long term downward pressure on house prices as they own some 1/2 of all investment properties 28. Auction rates that are initially reported always appear to be a significant over-estimate. The long term auction rate trend is down 29. Payments on first home loan mortgages have exploded - financial stress is increasing dramatically. Consequently home owners are very sensitive to minute interest rate movements because they have overcommitted 30. The Aussie property market has all the classic symptoms of a ponzi market i.e. investors keep chasing an asset with negative yields (eg negative gearers) in anticipation of significant future capital gains. Ponzi markets tend to collapse of their own accord when the pool of greater fools is tapped and people wake up to the scam. That is happening now. 31. Negative gearing costs to the average Aussie taxpayer have exploded in the period 2000 onwards 32. First home buyers are NOT flooding back into the market on the back of 'improved affordability'. Further, 'improved affordability' is VERY modest at best, given the huge run up in prices over the last 15 years 33. As well as houses taking longer to sell, vendor discounts are increasing to make a sale 34. Australian property is expensive by international standards and is both expensive in capital centres AND outside capital centres (expensive everywhere) 35. Property investment no longer makes sense in an environment of stagnant or negative capital growth, because the yields are worse than term deposits. 36. The property market is in terminal decline, as evidenced by declining housing credit growth. Housing annual credit growth hit a fresh all time (35-year) low of 5.32% in February 2012). Plus, people are starting to save again and have stopped drawing equity out of their homes en masse. Consumer sentiment has changed - we want to pay down debt, not take more on 37. Full recourse loans won't save us. It didn't save America who have the VAST MAJORITY of states as full recourse. 38. The tone of the property market will be determined on the margins, by those who MUST sell. 39. Trends towards decreases in aggregate hours worked and increased casualisation of the workforce does not bode well for employment security underpinning the market. Further, ongoing decrease in credit growth is likely to excerbate the unemployment problem. 40. The current Aussie housing market is undergoing a 'slow melt' more akin to what Japan has experienced since 1991. That does not mean it cannot accelerate dramatically. 41. Real median rents for houses and units have gone nowhere in recent years. Contrary to investor philosophy, incomes growth determines market rents, not their level of unbridled greed. 42. Negative equity is becoming a more common experience. It is particularly bad in areas of Qld. 43. Tight vacancy rates do not necessarily put a floor under house prices 44. 'Housing shortages' are often exposed as BS after the bubble bursts. Rentals may become VERY available if we follow what happened in the UK and US post bubble bursting 45. Average first home loans have ballooned in recent years 46. House prices are ridiculously high measured against any standard fundamental measures (against income, rents, CPI, GDP per capita, or construction costs for example) 47. Australia is just one of many international housing bubbles that have formed (and busted) around the world. The reason being - they were all driven by easy access to credit following broad deregulation of the financial system around the world. That party has now come to an end. 48. If we follow the American model, following further deleveraging (paying off debt) in earnest, unemployment will rise and asset markets will fall 49. Banks are tending towards riskier lending practices again (eg higher LVRs) in an attempt to maintain their ridiculous profit growth of the last 15 - 20 years. Hence the reason the RBA has been warning them off in recent weeks 50. Australia has taken a very large one way bet on housing. Most of our wealth is tied up in bricks and mortar (some 60%). Many property investor faces are about to be ground in the mud with further ongoing deflation of this morbidly obese market over the long term.
Posts: 93 Group: Member Member #1,761 Joined: 07/03/2012	'Chess is war over the board. The object is to crush the opponent's mind' - Bobby Fischer Beware the Real Estate Astroturfers, for they are among you!
View Profile	"REPLY WITH QUOTE" Go to top

Frank Castle	1 Apr 2012, 11:21 PM Post #2
Business As Usual Posts: 4,386 Group: Diamond Member Member #33 Joined: 02/11/2010	Mostly a steaming pile of shit Please work your way through the list and PROVE these so called FACTS 1)...
	The T.A.M.P.O.N effect - A NEW whinging bear acronym emerges Timo And Moops Protest Over Nothing Proof that moops is a simple minded hypocritical turnip
View Profile	"REPLY WITH QUOTE" Go to top

Elastic	2 Apr 2012, 12:30 AM Post #3
Posts: 1,304 Group: Platinum Member Member #341 Joined: 22/02/2011	Frank Castle 1 Apr 2012, 11:21 PM Mostly a steaming pile of shit Please work your way through the list and PROVE these so called FACTS 1)... 1. House prices do go down in Australia If I need to prove this first one to you then the entire lesson could take some time.

View Profile	"REPLY WITH QUOTE" Go to top

Shadow	2 Apr 2012, 11:32 AM Post #4
Evil Zealot Specufestor Posts: 6,014 Group: Diamond Member Member #22 Joined: 02/11/2010	Bobby 1 Apr 2012, 11:14 PM 1. House prices do go down in Australia 2. House prices do not double every 7 - 10 years 3. When you come into the market definitely matters 4. Negative gearing does not provide affordable and available rental property 5. Now is NOT a great time to buy 6. Real estate agents have a horrible ethical track record 7. Interest rates are low by long term historical standards and those low interest rates cannot solely account for the huge run up in mortgage debt 8. Neither major political party really wants to affect change to realise 'affordable housing' 9. Housing grants like the FHB grant are crack cocaine for the market. They are a political tool to prop the market in times of dire need and effectively a hand out to vendors, and a trick to draw in the 'greater fools' with 'free money'. 10. House prices are not underpinned by fundamentals. They are underpinned by hopium, lies, spin, a credit explosion, dodgy stats, real estate propaganda, and a seemingly endless supply of greater fools being suckered in for a life time of indentured servitude to a heartless bank. 1. Who said they didn't? 2. They have for the past 60 years 3. So? 4. Prove it 5. Buy where? 6. Compared to who? 7. Australian rates are high by global standards 8. A positive sign for house prices 9. They work very well, and the government has plenty of scope for more 10. Emotive nonsense Can't be bothered doing all 50...
	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.
View Profile	"REPLY WITH QUOTE" Go to top

schooner	2 Apr 2012, 01:49 PM Post #5
Posts: 250 Group: Gold Member Member #243 Joined: 15/01/2011	Shadow 2 Apr 2012, 11:32 AM Can't be bothered doing all 50... Thats not like you.

View Profile	"REPLY WITH QUOTE" Go to top

Rastus2	2 Apr 2012, 04:35 PM Post #6
Posts: 2,441 Group: Platinum Member Member #76 Joined: 12/11/2010	Frank Castle 1 Apr 2012, 11:21 PM Mostly a steaming pile of shit Please work your way through the list and PROVE these so called FACTS 1)... why the abuse frank. If you disagree, just prove it. You remember how shadow decided the onus is for others to disprove his claims.... well it works both ways. Off you go... perhaps shadow can help you.
	Joye did not understand the functions of the RBA, Joye did not read the ABS tables correctly Joyd did not predict the most major financial collapse in the world since the great depression... Keen can and has done all of the above... but Shadow is still blind to those simple facts, and he claims .. Shadow For the most part, Chris Joye's predictions have been quite accurate - certainly a lot closer to the mark than Steve Keen. Love is Blind :c)
View Profile	"REPLY WITH QUOTE" Go to top

Aussiehouseprices	2 Apr 2012, 06:17 PM Post #7
Posts: 712 Group: Gold Member Member #328 Joined: 18/02/2011	Shadow 2 Apr 2012, 11:32 AM 8. A positive sign for house prices 9. They work very well, and the government has plenty of scope for more Inflating the bubble further (if successful) is only a temporary positive for house prices (if you consider high prices to be a positive). However, government intervention often has unintended consequences (a "perverse incentive"). The government trying to keep prices high results in a bigger bubble and a bigger burst - house prices over shoot on the upside and then again on the downside - and so I suspect we'll end up with prices lower than would have been the case without any government intervention. Good new for those that consider low house prices to be a positive. Downside is the economic devastation that bubbles tend to cause. Edited by Aussiehouseprices, 2 Apr 2012, 06:20 PM.
	Aussie House Prices blog Latest post: Real Estate 101 - Lecture 1: Never use the "F" word
View Profile	"REPLY WITH QUOTE" Go to top

earthsta	2 Apr 2012, 06:26 PM Post #8
Posts: 4,563 Group: Diamond Member Member #31 Joined: 02/11/2010	schooner 2 Apr 2012, 01:49 PM Shadow 2 Apr 2012, 11:32 AM Can't be bothered doing all 50... Thats not like you. Thinking about negative equity all the time tends to grind one down.

View Profile	"REPLY WITH QUOTE" Go to top

Shadow	2 Apr 2012, 07:50 PM Post #9
Evil Zealot Specufestor Posts: 6,014 Group: Diamond Member Member #22 Joined: 02/11/2010	Aussiehouseprices 2 Apr 2012, 06:17 PM Inflating the bubble further (if successful) is only a temporary positive for house prices (if you consider high prices to be a positive) House prices have only risen in line with incomes for almost a decade. That's not a bubble. Stimulus that causes house prices to continue rising in line with incomes would neither create nor 'further inflate' a bubble. Edited by Shadow, 2 Apr 2012, 07:51 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.
View Profile	"REPLY WITH QUOTE" Go to top

Aussiehouseprices	2 Apr 2012, 11:23 PM Post #10
Posts: 712 Group: Gold Member Member #328 Joined: 18/02/2011	Shadow 2 Apr 2012, 07:50 PM House prices have only risen in line with incomes for almost a decade. That's not a bubble. Stimulus that causes house prices to continue rising in line with incomes would neither create nor 'further inflate' a bubble. OK, without going any further into whether there is or isn't a bubble, are you saying you don't think house prices will keep up with incomes if the government doesn't add extra stimulus? If so, for how long? Out of interest, do you think an increase in stimulus (say increasing the FHOG by $10,000) would/should, in theory: (a) increase house prices by a certain amount/percentage just in that year (relative to what they would have been), or (b) increase house prices by a certain amount/percentage every year that the stimulus is in place (relative to what they would have been)? Edited by Aussiehouseprices, 2 Apr 2012, 11:29 PM.
	Aussie House Prices blog Latest post: Real Estate 101 - Lecture 1: Never use the "F" word
View Profile	"REPLY WITH QUOTE" Go to top

Shadow	3 Apr 2012, 12:14 AM Post #11
Evil Zealot Specufestor Posts: 6,014 Group: Diamond Member Member #22 Joined: 02/11/2010	Aussiehouseprices 2 Apr 2012, 11:23 PM OK, without going any further into whether there is or isn't a bubble, are you saying you don't think house prices will keep up with incomes if the government doesn't add extra stimulus? If so, for how long? It depends on a lot of things, interest rates, population growth, economy etc. What I'm saying is that if house prices were falling and the government introduced stimulus that caused prices to rise again, the net effect being that prices over the long term continued to track incomes, then the stimulus would not be causing or exacerbating a bubble. Quote: Out of interest, do you think an increase in stimulus (say increasing the FHOG by $10,000) would/should, in theory: (a) increase house prices by a certain amount/percentage just in that year (relative to what they would have been), or (b) increase house prices by a certain amount/percentage every year that the stimulus is in place (relative to what they would have been)? I'd say there would be diminishing returns - i.e. lower effectiveness in the later years.
	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.
View Profile	"REPLY WITH QUOTE" Go to top

TED BULLPIT	3 Apr 2012, 07:12 AM Post #12
Posts: 808 Group: Gold Member Member #1,830 Joined: 29/03/2012	Frank Castle 1 Apr 2012, 11:21 PM Mostly a steaming pile of shit Please work your way through the list and PROVE these so called FACTS 1)... Facts that will drive you into the ground and through the floor. Lets see you prove them wrong. Lets also see if bulls can make a list of 50 facts. Says it all really , finished

View Profile	"REPLY WITH QUOTE" Go to top

NotFooled	3 Apr 2012, 07:23 AM Post #13
The Bear Whisperer Posts: 3,184 Group: Diamond Member Member #931 Joined: 01/08/2011 Blog Please insert the title of your blog	TED BULLPIT 3 Apr 2012, 07:12 AM Facts that will drive you into the ground and through the floor. Lets see you prove them wrong. Lets also see if bulls can make a list of 50 facts. Says it all really , finished Here's the only fact you need to know: * HOUSE PRICES HAVEN'T CRASHED.

View Profile	"REPLY WITH QUOTE" Go to top

earthsta	3 Apr 2012, 07:45 AM Post #14
Posts: 4,563 Group: Diamond Member Member #31 Joined: 02/11/2010	NotFooled 3 Apr 2012, 07:23 AM TED BULLPIT 3 Apr 2012, 07:12 AM Facts that will drive you into the ground and through the floor. Lets see you prove them wrong. Lets also see if bulls can make a list of 50 facts. Says it all really , finished Here's the only fact you need to know: * HOUSE PRICES HAVEN'T CRASHED. There's only one thing you need to know HOUSE PRICES ARE FALLING

View Profile	"REPLY WITH QUOTE" Go to top

Frank Castle	3 Apr 2012, 09:12 AM Post #15
Business As Usual Posts: 4,386 Group: Diamond Member Member #33 Joined: 02/11/2010	TED BULLPIT 3 Apr 2012, 07:12 AM Facts that will drive you into the ground and through the floor. You really are delusional Quote: Lets also see if bulls can make a list of 50 facts. easy 1) Tenants pay us more in rent every week than our holding costs allowing us to live an enjoyable lifestyle without the need to work FACT v v v v 50) Tenants pay us more in rent every week than our holding costs allowing us to live an enjoyable lifestyle without the need to work FACT Says it all really , finished
	The T.A.M.P.O.N effect - A NEW whinging bear acronym emerges Timo And Moops Protest Over Nothing Proof that moops is a simple minded hypocritical turnip
View Profile	"REPLY WITH QUOTE" Go to top

2 users reading this topic (2 Guests and 0 Anonymous)

Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »

Pages:
1
2
…
9

Theme: Australian Property Forum

Track Topic · E-mail Topic

7:20 PM May 26

The Australian Property Forum is an Australian economics and finance forum dedicated to discussion of Australian and global real estate markets, including Aussie house prices, global house prices, housing affordability, and the likelihood of a global house price crash or Australian house price crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is it better to buy using a home loan, or rent and save the difference? How might a credit crunch or peak debt environment impact Australian property prices? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices rise forever as people bet on future gains, refinance their mortgage and borrow against equity, or can we find a more sustainable long term approach to managing the Australian housing market? These are the type of questions we hope to address here, at the Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators! Whether you're an Australian Property Investor, First Home Buyer (FHB) or you're a happily renting tenant, this forum has something for everyone. The forum includes a blog feature, so members may create their own property blog. Members may talk finance, modern monetary theory (MMT), debt deflation, talk money, or discuss Somersoft style property investing topics. Are reverse home equity loans good or bad for society? Is the housing shortage a myth? What about negative gearing? Reverse mortgages? Are too many Australians taking on debt consolidation when they cannot even manage basic debt management? Are they gambling with their future? Were the Australian floods a black swan event, exposing many Australians with inadequate home insurance? How does asbestosis and mesothelioma impact home values? Is it a good time to buy a house in Australia? To find out, keep a close eye on auction results and auction clearance rates, and visit this forum often for all the latest house price news. Our forum members regularly debate and dissect the latest blogs from Business Spectator, Money Morning, Daily Reckoning, SmartCompany, Property Observer, Macrobusiness Superblog, Macro Investor, Macro Associates, The Economist, Bubblepedia, Demographia, Steve Keen's Debtwatch and Chris Joye's Aussie Macro Moments, as well as recent MSM articles from well known media economists and reporters such Ross Gittins, Michael Pascoe, Chris Zappone, Alan Kohler, Shane Oliver, Philip Soos, Louis Christopher (SQM Research), Harry Dent, Mike (Mish) Shedlock, Jeremy Grantham, Gerard Minack, Leith van Onselen, Chris Becker, David Llewellyn-Smith, Chris Vedelago and more. We're the first to report and discuss the latest house price data from APM (Australian Property Monitors), Residex, RP Data Rismark, REIV (Real Estate Institute of Victoria), REINSW (Real Estate Institute of NSW) and REIA (Real Estate Institute of Australia), HIA (Housing Industry Association), RBA (Reserve Bank of Australia), API (Australian Property Institute), and the ABS (Australian Bureau of Statistics).

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. Posts on Australian Property Forum may contain links to other websites operated by third parties. These websites are not under the control of Australian Property Forum and APF management is not responsible for their content.

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. Australian Property Forum members are solely responsible for the accuracy and authenticity of their posts, including any alterations made to posts. 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 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 without profit 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