That doesn't make sense b_b - not even in your world.
You can easily ask why are anyone building at all if prices are below cost? The answers are the same as your question about the "recovery" of the previous 4 months. Key reasons may include - some people opting to pay more for new properties because it happens to be their preference (although as the data shows, this is not sustainable) - some developers stuck with old stock a and discounting to improve cashflow (developers buy for profit, and sell for cash) - general volatility of the data
Because of these and other factors, in "my world", trend is more important than point data. I think most serious analysts would say the same - and the trend data here is very clear.
The replacement cost thesis has been consistently backed up by the data.
It is why listed property developers have been trading like crap for the past 5-7 years and keep recording losses (unlike the US developers in their boom years).
That is why prices have increase so much and there has been no supply response.
Some bears will kid themselves we are oversupplied - and ignore the obvious facts that rents have been growing strongly for over 7 years.
Some will accept we have a supply problem, but will argue there are unnatural supply / land / zoning constraints - and ignore the obvious fact most listed developers have plently of available land on balance sheet but are unable to develop it because the market price will not cover the cost to develop / service and bring the land to market
I have been arguing this it since 2009 when I was a regular commentator on Steve Keen's debtdeflation site. Everyone there thought it was crap too. No - the replacement cost thesis has been the only argument I can find which has been totally consistent with the data for such a long period of time.
You can easily ask why are anyone building at all if prices are below cost? The answers are the same as your question about the "recovery" of the previous 4 months. Key reasons may include - some people opting to pay more for new properties because it happens to be their preference (although as the data shows, this is not sustainable) - some developers stuck with old stock a and discounting to improve cashflow (developers buy for profit, and sell for cash) - general volatility of the data
Because of these and other factors, in "my world", trend is more important than point data. I think most serious analysts would say the same - and the trend data here is very clear.
The replacement cost thesis has been consistently backed up by the data.
It is why listed property developers have been trading like crap for the past 5-7 years and keep recording losses (unlike the US developers in their boom years).
That is why prices have increase so much and there has been no supply response.
Some bears will kid themselves we are oversupplied - and ignore the obvious facts that rents have been growing strongly for over 7 years.
Some will accept we have a supply problem, but will argue there are unnatural supply / land / zoning constraints - and ignore the obvious fact most listed developers have plently of available land on balance sheet but are unable to develop it because the market price will not cover the cost to develop / service and bring the land to market
I have been arguing this it since 2009 when I was a regular commentator on Steve Keen's debtdeflation site. Everyone there thought it was crap too. No - the replacement cost thesis has been the only argument I can find which has been totally consistent with the data for such a long period of time.
Catweasel say one the problem with a non-the-science theories support by a data is ability of protagonist to disprove its the theory.
That not to say theory of a chin scratch is the right or a wrong.
But narrative of a replacement the cost is quite the nutty.
Because always possible to reduce a cost.
Cost of a mouse house in a Japan in a 89 very the different in 13.
But that because of pop pop.
Before the pop pop, similar the replacement cost narrative very the popular in a Japan.
Catweasel say one the problem with a non-the-science theories support by a data is ability of protagonist to disprove its the theory.
That not to say theory of a chin scratch is the right or a wrong.
But narrative of a replacement the cost is quite the nutty.
Because always possible to reduce a cost.
Cost of a mouse house in a Japan in a 89 very the different in 13.
But that because of pop pop.
Before the pop pop, similar the replacement cost narrative very the popular in a Japan.
People with no understanding of the value of things (because they are in the service industries) will always be befuddled and pay too much.
Inded the fools here engage in arguments that of course they should pay much more for mass produced chinese products then people in other countries......simply because they can!
Then they have the gall to argue that their clearly over valued houses are actually cheap!
God damn!
What happened to our education system?
WHAT WOULD EDDIE DO? MAAAATE! Share a cot with Milton?
You really need to moderate your language if you wish to engage in intelligent conversation.
Says the man who starts threads calling other posters criminals and impersonates posters on Macrobusiness
Ill be back to deal with the rest of your post tommorrow.
But for starters, can we attribute the fact that the price of new builds in Perth rose in line with a broader property market that saw house double in price in a little over 2 years to "replacement cost" theory?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
You can easily ask why are anyone building at all if prices are below cost? The answers are the same as your question about the "recovery" of the previous 4 months. Key reasons may include - some people opting to pay more for new properties because it happens to be their preference (although as the data shows, this is not sustainable) - some developers stuck with old stock a and discounting to improve cashflow (developers buy for profit, and sell for cash) - general volatility of the data
Because of these and other factors, in "my world", trend is more important than point data. I think most serious analysts would say the same - and the trend data here is very clear.
The replacement cost thesis has been consistently backed up by the data.
It is why listed property developers have been trading like crap for the past 5-7 years and keep recording losses (unlike the US developers in their boom years).
That is why prices have increase so much and there has been no supply response.
Some bears will kid themselves we are oversupplied - and ignore the obvious facts that rents have been growing strongly for over 7 years.
Some will accept we have a supply problem, but will argue there are unnatural supply / land / zoning constraints - and ignore the obvious fact most listed developers have plently of available land on balance sheet but are unable to develop it because the market price will not cover the cost to develop / service and bring the land to market
I have been arguing this it since 2009 when I was a regular commentator on Steve Keen's debtdeflation site. Everyone there thought it was crap too. No - the replacement cost thesis has been the only argument I can find which has been totally consistent with the data for such a long period of time.
It's a sound theory, but unless there has been a change to costs recently, it doesn't match the data.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Says the man who starts threads calling other posters criminals
I have correctly called others (not necessarily posters here) criminals when they have admitted or it has been revealed that they have committed crimes.
I correctly called Bullion Baron a criminal for requesting and inciting Telstra employees, on his own website, to use their access to reveal IP addresses to himself.
I correctly called Gunnamatta a criminal after he he confessed to deliberately submitting false and misleading information to FIRB, which FIRB clearly state is a criminal offence.
I have correctly called others (not necessarily posters here) criminals when they have admitted or it has been revealed that they have committed crimes.
I correctly called Bullion Baron a criminal for requesting and inciting Telstra employees, on his own website, to use their access to reveal IP addresses to himself.
I correctly called Gunnamatta a criminal after he he confessed to deliberately submitting false and misleading information to FIRB, which FIRB clearly state is a criminal offence.
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