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.
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.
Japan's house prices peaked in 1991 and 18 years later still stand an average 60% below their peak.
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
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 AREPS™
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!
WHAT WOULD EDDIE DO? MAAAATE! Share a cot with Milton?
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.
WHAT WOULD EDDIE DO? MAAAATE! Share a cot with Milton?
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".
WHAT WOULD EDDIE DO? MAAAATE! Share a cot with Milton?
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