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House Prices and the Illusion of Certainty; Parsing the April house price data
Topic Started: 30 Apr 2012, 03:20 PM (2,585 Views)
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Prices and the illusion of certainty

April 30, 2012 - 12:38PM

Tomorrow is a big day for the market. All eyes will be watching to see which way the Reserve Bank of Australia jumps, with many commentators staking no less than the health of country on the outcome. But I’m a lot more interested in gambling on what another three letter government institution, ABS, has to say tomorrow. The Australian Bureau of Statistics is set to roll a three out of five, breaking the deadlock on just what is happening with property prices.

Nearly every week for the last month I’ve written up the latest property price data release covering the March quarter for my regular Sunday Age “Market Wrap” column. And it's been quite a ride...

Down a little. Up a little. Up a lot. Down a lot. Four different price movements from four different analysts groups.

Melbourne (Houses) March Q 2012
RP Data-Rismark -1.0%
REIV 0.9%
APM 1.6%
Residex -1.89%

All seek to measure the same thing but use very different methodologies to do it. The only thing they all agree on is that they are right and everyone else is wrong. It’s almost perfectly calculated to do your head in. Given what’s been released about the other states and nationally over the same time, I’m gathering I’m probably not the only person to feel that way.

Houses APM Residex RP Data-Rismark
Melbourne 1.6% -1.89% -1.0%
Sydney 1.4% 1.73% 1.2%
Brisbane 0.3% 0.33% -0.3%
Perth 0.1% 3.95% 0.7%
ACT 0.9% 1.99% 0.0%
Adelaide -0.3% -2.27% -1.9%
Darwin 6.0% -1.52% 4.3%
Hobart 1.0% -4.27% 6.5%
National 0.9% -0.70% -0.1%

You’d expect to see differing degrees of emphasis in the same general trend. But many of the movements are so extreme for the same cities they’re at risk of being irrelevant. Not to mention the fact that within this uncertainty there's plenty of room for abuse by the spruikers, who can quote whatever numbers suit the message of the moment.

Read more: http://smh.domain.com.au/real-estate-news/blogs/domain-investor-centre-blog/prices-and-the-illusion-of-certainty-20120430-1xtwt.html
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Sydneyite
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Sydney 1.4% 1.73% 1.2%
Well, for Sydney they all pretty much seem to agree!
Edited by Sydneyite, 30 Apr 2012, 03:40 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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themoops
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Sydneyite
30 Apr 2012, 03:40 PM
Well, for Sydney they all pretty much seem to agree!
That's just the follow on from the stamp duty exemption. It's all downhill from here!
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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themoops
30 Apr 2012, 04:35 PM
That's just the follow on from the stamp duty exemption. It's all downhill from here!
Perhaps, but then for the following 6 months you will probably be saying "that's just the follow on from the 0.5-1% cut in interest rates" :re:
Edited by Sydneyite, 30 Apr 2012, 05:21 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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themoops
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30 Apr 2012, 05:20 PM
Perhaps, but then for the following 6 months you will probably be saying "that's just the follow on from the 0.5-1% cut in interest rates" :re:
Assuming banks pass it on.

I reckon RBA will hold tomorrow. The RBA has a semblance of integrity, the sort that sees the parasites and bogans for what they are and sees them as bad!

stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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raveswei
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themoops
30 Apr 2012, 05:57 PM
Sydneyite
30 Apr 2012, 05:20 PM
Perhaps, but then for the following 6 months you will probably be saying "that's just the follow on from the 0.5-1% cut in interest rates" :re:
Assuming banks pass it on.

I reckon RBA will hold tomorrow. The RBA has a semblance of integrity, the sort that sees the parasites and bogans for what they are and sees them as bad!

It really doesn’t matter. Even if RBA cuts 4.25% that will not change much (it didn’t in any property bubble place so why it would here).

0.5%-1% cut is just too little too late.
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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themoops
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So if inflation is below their target of 2-3%, it's only at 1. something percent, why is that bad?

Seems as though "economists", ie primarily a bunch of corrupt old farts singing for their supper, only *want* a rate cut. I don't see the case for it seeing as according to the latest "stats" property hasn't come down much if at all.
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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georgie
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The interest rate cut will do far more for confidence and the small fall in the $AU (anything helps) rather than people's capacity to borrow/repay debt. With inflation raping essentials, $1.70 at the petrol pump causes more problems than $10-$15 saved from a fall interest rates for one weeks repayments.
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Sydneyite
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themoops
30 Apr 2012, 08:20 PM
So if inflation is below their target of 2-3%, it's only at 1. something percent, why is that bad?
1.x% CPI is bad because that would be only a heart beat away from deflation. Deflation is endemic, it creates a monetary negative feedback loop / spiral that can cripple an economy, cause unemployment to skyrocket, GDP to plummet and so on. The whole purpose of a modern fiat monetary system is to avoid devastating periods of deflation.
Edited by Sydneyite, 30 Apr 2012, 11:25 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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genX
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Sydneyite
30 Apr 2012, 11:05 PM
1.x% CPI is bad because that would be only a heart beat away from deflation. Deflation is endemic, it creates a monetary negative feedback loop / spiral that can cripple an economy, cause unemployment skyrockets and so on. The whole purpose of a modern fiat monetary system is to avoid devastating periods of deflation.
Because we've never seen an inflationary feedback loop in a fiat money system .... except for the Weimar republic, and Yugoslavia, and Zimbabwe and Argentina and ...

If the purpose of the fiat monetary system is to stop prices from falling, then it follows that prices must always go up. So what you are telling us is that inflation is on the way?

Time to get some bullion.
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