After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
and if you plunged your hard earned into the average house in 2008 you are still up like a mother fucker. What's your point Timo?
To prevent sheep like you losing even more money and people buying houses now don't have a time machine to go back to 2008 and buy houses, but my guess is your already buried in negative equity.
After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
Not really Timo - there were much more generous FHOG entitlements and lower stamp duty rates in place then, so although you might be down a little on a comparison with what a buyer today would pay, it would be less than what you have calculated.
mel
3 Dec 2012, 04:12 AM
There will not be a crash in the near term.
If we get to ZIRP repayments will be cheaper than current rents. It's over Timo - Steve Keen is calling for a rally.
You're in Melbourne so you will have a better feel for the market than I have, but I think that 2013 might be a tough year in Melbourne real estate - it might be a good time to buy Mel, there will be some negative press if iron ore and coal prices fall lower and our dollar stays high. A few high profile job losses, builder and sub-contractor quotes should fall for your project Mel. Population increases should soak up the housing surplus in Melbourne fairly quickly.
If we get to ZIRP repayments will be cheaper than current rents. It's over Timo - Steve Keen is calling for a rally.
Keen isn't sure if his 40% drop is gunna be real or nominal:
"Lelde Smits: Steve, you're well known for your property price predictions, forecasting a few years ago Australian property prices will fall by 40 per cent over the next 15 years: Do you still expect to say to Australia, 'I told you so'?
Steve Keen: Yes I do. And of course I had my words distorted by my property market competitors, claiming that I was calling the peak effectively in September 2008, which I was not. But I'm quite happy to say the peak reached in June of 2010 was the peak. And I would expect to look back and see house prices 40 per cent lower than that in either real or nominal terms, it's hard to say which one will lead because we are in a deflationary world as well. But certainly 40 per cent lower in real or nominal terms than June 2010 sometime in the next decade."
And given he reckons prices are down 10% in real terms since he made his call (7% nominal?), he could achieve that 40% total by prices staying flat for a decade while inflation stays nicely within the RBA's 2 to 3% target range.
"House prices flat for a decade" just doesn't sell as many papers as the original "House prices to drop 40%" prediction though I guess?
but I think that 2013 might be a tough year in Melbourne real estate - it might be a good time to buy Mel, there will be some negative press if iron ore and coal prices fall lower and our dollar stays high. A few high profile job losses, builder and sub-contractor quotes should fall for your project Mel. Population increases should soak up the housing surplus in Melbourne fairly quickly.
I agree with all that Peter - if the RBA cuts this month i will take it as a sign to not be so complacent this time.
herbie
3 Dec 2012, 08:24 AM
Keen isn't sure if his 40% drop is gunna be real or nominal:
"Lelde Smits: Steve, you're well known for your property price predictions, forecasting a few years ago Australian property prices will fall by 40 per cent over the next 15 years: Do you still expect to say to Australia, 'I told you so'?
Steve Keen: Yes I do. And of course I had my words distorted by my property market competitors, claiming that I was calling the peak effectively in September 2008, which I was not. But I'm quite happy to say the peak reached in June of 2010 was the peak. And I would expect to look back and see house prices 40 per cent lower than that in either real or nominal terms, it's hard to say which one will lead because we are in a deflationary world as well. But certainly 40 per cent lower in real or nominal terms than June 2010 sometime in the next decade."
And given he reckons prices are down 10% in real terms since he made his call (7% nominal?), he could achieve that 40% total by prices staying flat for a decade while inflation stays nicely within the RBA's 2 to 3% target range.
"House prices flat for a decade" just doesn't sell as many papers as the original "House prices to drop 40%" prediction though I guess?
I have a lot of respect for Keen but he is full of shit with regards to OZ housing. How can he know it will be 40% but not have any idea if it will be real or nominal?
Anything is possible but how did he arrive at the 40% figure if he doesn't know which doom scenario will get us there?
Quote:
Steve Keen: Yes I do. And of course I had my words distorted by my property market competitors, claiming that I was calling the peak effectively in September 2008, which I was not. But I'm quite happy to say the peak reached in June of 2010 was the peak. And I would expect to look back and see house prices 40 per cent lower than that in either real or nominal terms, it's hard to say which one will lead because we are in a deflationary world as well. But certainly 40 per cent lower in real or nominal terms than June 2010 sometime in the next decade."
That's a bit of back stepping from him isn't it?? If he was talking about the 2010 peak, why did he "do the walk" before the 2010 peak?
Jesus Herbs, you have made me feel like having a cigarette.
If we get to ZIRP repayments will be cheaper than current rents. It's over Timo - Steve Keen is calling for a rally.
I agree with you about a crash.
But we'll only see ZIRP if the shit really hits the fan, and in those circumstances, property will suffer like everything else.
Keen's predictive record is pretty ordinary. I think he's wrong again. It's more likely prices will continue trending downwards now because there is little or no panic buying. The greed has been replaced with a little fear. Would-be FHB are just biding their time, waiting patiently for a discount. They are no longer in a rush.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
But we'll only see ZIRP if the shit really hits the fan, and in those circumstances, property will suffer like everything else.
Keen's predictive record is pretty ordinary. I think he's wrong again. It's more likely prices will continue trending downwards now because there is little or no panic buying. The greed has been replaced with a little fear. Would-be FHB are just biding their time, waiting patiently for a discount. They are no longer in a rush.
Im not expecting ZIRP anytime soon (and im not super bullish on our local market). The irony of SHTF Round 1 in 2008 was that our prices spiked while the u.s. was simultaneously burning to the ground in real time. I agree with you on the FHB's - i wouldn't buy right now if i was a fhb but i'd be looking at getting ready to buy in the near future.
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