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A History of Australian House Prices by Philip Soos; Australia’s property market vastly overvalued, driven by debt-financed speculation and relative non-taxation of land
Topic Started: 13 Feb 2013, 12:37 PM (5,983 Views)
Trojan
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Barista
13 Feb 2013, 07:55 PM
Magnificent data set. Lays it out clear as day. (Another good chart would be average age of mortgagee to working population).

Odds on politicians/policymakers coming up with a credible plan to do anything about it in the upcoming election campaign?

Lets have some RE spruikers to restate why younger Australians should sign up for a lifetimes worth of debt, or why policy should be directed towards supporting/encouraging this.

By the way, who is Denise Brailey and what did she discover?
Lol. Some people think McDonalds is fine dining too!
I have seen some good bear articles (Keen writes good theoretical articles but not so good at predictions)
But the stuff Phillip Soos has churned out so far is nothing but rants and bear porn.
Edited by Trojan, 13 Feb 2013, 08:02 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Pig Iron
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Bogan scum

Shadow
13 Feb 2013, 02:42 PM
Gold always has zero net yield. Is gold always in a massive bubble?
well... i would argue gold IS in a bubble but not due to yield, haha.
I am the love child of Tony Abbott and Pauline Hanson
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peter fraser
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Barista
13 Feb 2013, 07:55 PM
Deakin Master
13 Feb 2013, 12:37 PM
The question is often asked why housing prices are so high. Instead, the real question is to ask why prices are so low. The banking and financial system is ready to lend absurd amounts of debt to the willing army of “greater fools,” and has constructed an elaborate chain from mortgage brokers’ offices through to the business development managers (BDMs) at the banks in order to commit extensive fraud by manipulating loan application forms. This is the “six degrees of separation” Denise Brailey has uncovered. Consequently, the only determinant that prevents the banks from lending more credit is debtors’ ability to finance repayments out of current income. Only when it becomes difficult to finance repayments will the housing and land markets finally capitulate.
Magnificent data set. Lays it out clear as day. (Another good chart would be average age of mortgagee to working population).

Odds on politicians/policymakers coming up with a credible plan to do anything about it in the upcoming election campaign?

Lets have some RE spruikers to restate why younger Australians should sign up for a lifetimes worth of debt, or why policy should be directed towards supporting/encouraging this.

By the way, who is Denise Brailey and what did she discover?
Oh stop trolling gunna.

Any expressed market opinion is my own and is not to be taken as financial advice
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Strindberg
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peter fraser
13 Feb 2013, 08:17 PM
Oh stop trolling gunna.
I don't mind trolls, but I'd prefer it if the bear trolls could put up some decent stuff like Foundation used to do on GHPC and we could have a decent debate. But Barista/Gunnamatta doesn't even know what a mortgagee is. It seems unfair to contest with such ignorance.
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Another good chart would be average age of mortgagee to working population

What would be the use of a chart of the average age of banks? Is that something to do with the latest bear bubble theory?
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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miw
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Deakin Master
13 Feb 2013, 01:04 PM
The prior era is inconvenient for you, shall we pretend like it never happened?

That era of low prices and stability in house prices is the period to which we shall return when the government supply of bubble fuel is extinguished.
Yes. I think denying everyone credit would make house prices low and stable. Not sure many people would be happy with that, but it's true.

I'm most interested in how you can construct a "constant quality" index going back to 1970, let alone 1900.

Did you include all the retrofitting costs to bring a 1900 dwelling up to code, put plumbing, a kitchen and a bathroom into the house, wire it for electricity and communications, etc.?
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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stinkbug
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Barista
13 Feb 2013, 07:55 PM

Lets have some RE spruikers to restate why younger Australians should sign up for a lifetimes worth of debt...
This is exactly the sort of made up, generalised shit that I was referring to in the other thread.

Home loans are generally taken out over 30 years or less, and most people pay them down a little quicker meaning they finish years early anyway.

A lifetime of debt? Only of you're a melodramatic drama queen or a piss-poor financial manager.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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peter fraser
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miw
14 Feb 2013, 06:30 PM
Yes. I think denying everyone credit would make house prices low and stable. Not sure many people would be happy with that, but it's true.

I'm most interested in how you can construct a "constant quality" index going back to 1970, let alone 1900.

Did you include all the retrofitting costs to bring a 1900 dwelling up to code, put plumbing, a kitchen and a bathroom into the house, wire it for electricity and communications, etc.?
I honestly think that it is nigh on impossible. one of the major problems is the relative immaturity of our cities.

Phillip goes back as far as the 19th century when our cities were quite tiny - just towns. In Brisbane for example the inner city suburb of Milton was not fully established - here is some data on Milton House which was the original farmhouse for the 30 surrounding acres - http://www.yourbrisbanepastandpresent.com/2011/02/milton-house-milton.html

The house is still there, although few know about it - saved by the developer around 1990 although he was so frustrated by BCC planning delays he threatened to bulldoze it - that got things moving.

A house constructed in Milton in 1900 around the Lang Park area is walk to the city, and now commands a high price for the benefits that the location brings. In 1900 it was a poor working class cottage area on an unsealed street in an unsewered area with no electricty or telephone. It was then crappy, but now it's trendy.

Seriously comparisons between then and now are just rubbish even if it is for the same property.
Edited by peter fraser, 14 Feb 2013, 11:44 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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nipa hut
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peter fraser
14 Feb 2013, 11:42 PM
Seriously comparisons between then and now are just rubbish even if it is for the same property.
But doesn't that also suggest a systemic problem with even such wondrous new-age statistical gimmicks as "hedonic" stratification?

How and where, precisely, does Rismark discount for (i.e. write off) the ongoing investment in "quality" needed to maintain the ongoing "qualititive" appreciation of the housing stock.

If before-and-after comparisons with decades-ago data are "rubbish", that suggests there is an ongoing decay of as-built property values over time, requiring not only "maintenance", but actual "improvement", just to maintain equivalency between long-established dwellings and new ones...

So where is that investment accounted for, in these indices?
Edited by nipa hut, 15 Feb 2013, 02:43 AM.
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miw
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nipa hut
15 Feb 2013, 02:33 AM
But doesn't that also suggest a systemic problem with even such wondrous new-age statistical gimmicks as "hedonic" stratification?

How and where, precisely, does Rismark discount for (i.e. write off) the ongoing investment in "quality" needed to maintain the ongoing "qualititive" appreciation of the housing stock.

If before-and-after comparisons with decades-ago data are "rubbish", that suggests there is an ongoing decay of as-built property values over time, requiring not only "maintenance", but actual "improvement", just to maintain equivalency between long-established dwellings and new ones...

So where is that investment accounted for, in these indices?
I think the answer is that it is hard. They try to take into account renovations and extensions but you can only know and do so much.

But there is a lightyear of difference in making a comparison between adjacent years and between years that are decades apart, since the errors tend to compound.

Similarly I think chained CPI over more than 20 years or so is pretty meaningless. There is just no comparison between what my parents bought in the 1960s and what people buy today.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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nipa hut
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miw
15 Feb 2013, 04:06 AM
But there is a lightyear of difference in making a comparison between adjacent years and between years that are decades apart, since the errors tend to compound.

Why do the "decades apart" comparisons represent "a lightyear of difference" vs an adjacent year comparison, other than as a function of increased passage of time? What event or mechanism precipitates a qualitative-based step-change in housing valuations?
- ColorBond vs unpainted tin?
- Corian vs Formica?
- real Granite vs Corian?
- Grohe vs Caroma?

AFAIK, hedonic indexes compensate for increases in bedroom/bathroom count, and possibly for square footage increases, but they have no way of accounting for the high-end (or low-end) finishes and fixtures in that one may have invested in one's kitchen, bathroom, or any other room.
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