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Steve Keen proves Australian Housing Bubble Collapse is following JAPAN slow bleed exactly!; Japan's Property Prices Fall for 21st Straight year
Topic Started: 2 Aug 2012, 02:54 PM (14,663 Views)
Shadow
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Aussiehouseprices
2 Aug 2012, 11:38 PM
Assuming we do have a bubble...
Assuming we have a bubble is the greatest error made by Steve Keen (and property bears in general).

Bears seem to assume that the Australian property boom (that ended in 2003) launched Australia into a massive bubble.

But after that boom, Australia's current price/income ratio, and price/rent ratio, are still middle of the road by global standards.

There is nothing particularly high about Australian ratios... http://www.numbeo.com/property-investment/rankings_by_country.jsp

Furthermore, those ratios have been more or less static for a decade now.

Australia had a national property boom, but it ended a decade ago. We're not in a bubble and house prices are not going to crash. That is, they're not going to crash from current levels. They might grow to bubble levels sometime in the future and then crash. Irish house prices rose by 420% (520% in Dublin) over one decade. If that happens here we might end up with a crash afterwards.
Edited by Shadow, 3 Aug 2012, 12:08 AM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Strindberg
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Shadow
3 Aug 2012, 12:03 AM
But after that boom, Australia's current price/income ratio, and price/rent ratio, are still middle of the road by global standards.

There is nothing particularly high about Australian ratios... http://www.numbeo.com/property-investment/rankings_by_country.jsp

Furthermore, those ratios have been more or less static for a decade now.
Yep.
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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
"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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Peak Debt
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Strindberg
2 Aug 2012, 04:50 PM
Keen says his Japan line begins mid 1991. The index in that table for 1991 is 223.4 and for 1993 it's 149.1, giving a fall of 33.3%

So residential land prices in Japan's 6 major cities fell by 33.3% from peak in two years. Ok, houses might not have fallen that much but I'd be surprised if the land dropped 33.3% but the house prices dropped only 9% as Keen claims.

Perhaps a Steve Keen subscribing member would like to tell us which data Keen is using for his Japanese house prices.
Steve said on his blog he'll post his source tomorrow

In the meantime I found this one from Bank of Japan

Quote:
 
Japan's House Price Depression

Many of the reasons put forward during the UK housing boom as to why house prices would not fall in the UK as elaborated earlier could equally apply to the Island of Japan. However, whilst we in the UK enjoyed a booming housing market the Japanese endured a severe bear market as the below graph illustrates.

Posted Image

Japan's house prices peaked in 1991 and 18 years later still stand an average 60% below their peak.

http://www.marketoracle.co.uk/Article8080.html
Edited by Peak Debt, 3 Aug 2012, 12:44 AM.
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Peak Debt: A term coined by Jaswant Jain in 2006. Debt taken on by an economy must reach a limit.
Then deflation is inevitable as consumption is reduced to repay the debt.

Peak Debt Blog
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mugshot
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Steve Keen compares the Australia capital city houses index (ABS) with the Japan 'all Japan' index.

That mightn't be the best comparison, much of rural Japan didn't experience any price bubble.

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Edited by mugshot, 3 Aug 2012, 01:17 AM.
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miw
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Peak Debt
3 Aug 2012, 12:44 AM
Steve said on his blog he'll post his source tomorrow

In the meantime I found this one from Bank of Japan

And rental yields in Japan are *still* below those of Australian capital cities. At the peak of the boom, gross rental yields in Tokyo dropped well below 1%.

Additionally, Japan's population is falling.

Under the circumstances, you would expect property prices in Japan to be falling. What relevance to Australia does it have? Not much.

The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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Ex BP Golly
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Smug arsed property bulls attack Keen on the basis that he didn't predict that they would be turned into the equivalant of dole bludgers, with their investment choices only surviving because of massive amounts of public monies injected to prop up the market.


RMBS through AOFM, bank guarantees, first home owner grants, building the education revolution, pink batts, solar panels, tax exemptions, stamp duty cuts, social housing initiative, interest rate manipulation, lies about inflation rates, lies about unemployment, blah blah blah......


It's just so incredibly funny how evil infestors are!
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Ex BP Golly
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nofriends
2 Aug 2012, 07:49 PM


House prices falling 40 per cent by 2023. Despite reports that Keen said prices would crash – and an ill-advised bet on prices falling in a shorter time scale – his initial predictions were always for Australian property prices to fall by 40 per cent over the next 10 to 15 years. Time will tell.
Funny how the bulls always forget that was the prediction.

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Ex BP Golly
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Shadow
2 Aug 2012, 08:01 PM
Recessions accompanied by slowing credit growth are not unusual... it's hardly a big deal to predict there will be another one sometime in the future.

I predict there will be another one in the future. Can I get a Revere Award for Economics if I'm right?


Steve Keen has made many wild predictions and bad calls about the Australian housing market and economy.

They have all been wrong (see below). Can you think of any predictions about Australia that Keen has got right? Any?

01 - In 2006, Keen said we may already be in a recession
02 - In 2006, Keen said the Australian Debt/GDP ratio would exceed 160% by 2007
03 - In 2006, Keen said Australia will be in recession long before our Debt/GDP ratio falls
04 - In 2008, Keen said interest rates would be at 2% by 2009, and ZIRP by 2010
05 - In 2008, Keen said we would have double digit unemployment (up to 20%)
06 - In 2008, Keen said we would have a severe recession, possibly a depression
07 - In 2008, Keen said house prices would be down 40% within 'a few years'
08 - In 2008, Keen admitted he was hopelessly wrong on house prices after losing a bet with Rory Robertson
09 - in 2008, Keen sold his Sydney home at a cyclical low point, just before prices rose 20%
10 - In 2010, Keen predicted an accelerating rate of decline in Australian house prices
11 - Between 2008 and 2011, Keen claimed the Australian property bubble began in 1964, 1983, and 1988
12 - In 2008, Keen said his biggest regret was not buying property at the start of the property bubble in the 1970s
Hmmm, I predicted that hundreds if.not thousands of Australian child raping Catholic priests would be imprisoned by now.

Imagine my suprise that an almost non religious country like Australia protects the Catholic Church better than the crazily religious Irish do.

We live in one of the most corrupt, and easily manipulated countries on the world.

We are now on the verge of having a royal commission into the Catholic Church, and the daily telegraph has not made one report on the scandal.

House prices recieve the same level of unholy protection from the state.

That Keen doesnt get that is hardly something for you bull clowns to get orgasmic over!
Edited by Ex BP Golly, 3 Aug 2012, 02:03 AM.
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Ex BP Golly
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miw
2 Aug 2012, 11:59 PM
Yeah, but I don't think anyone seriously proposes that house prices will never fall. The only argument is about when, how fast, and how far. These are pretty important things. So to me, people out there who are saying "house prices are gonna fall" are not really predicting anything. It's like saying "It's gonna be 12 noon."

It becomes interesting and useful if somebody puts a time and some measurements around it, and you have to admit the accuracy of the pundits has not been good. I'm not saying I could do any better, though.
Funny now that house prices have fallen that bull people now argue that "no one ever said they wouldn't".
:dry:

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Ex BP Golly
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Strindberg
3 Aug 2012, 12:10 AM

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Hmmmmm!

So America never had a bubble either then?

put it away you joke!
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