It was me who originally said prices would be up in 12 months time. Newjez said prices would begin falling 3 months from the date of the bet. I gave him an option to instead look at the market in 12 months time as I knew prices would not fall in that time frame. Newjez was sure prices would fall, yet he had said similar things in 2012 and prices continued to rise. That was at least the 3rd occasion Newjez had said prices would fall over the past year or so, wrong on all counts. He will continue to be wrong over the next 18 months or so as this bull market runs its course.
I am happy for Newjez to keep me on ignore as I can refute his claims yet he cannot counter mine, a win win for me.
It is surprising though that some one who claims to live presently in the UK would have any real knowledge on the present market in Perth, hence why he keeps getting it wrong.
Mike,
I think you have a point and deserve credit for your call.
That said, even the best have massive difficulty picking the precise moment when a bubble will burst.
Its usually because a black swan is required to do the pricking.
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
How can you look at the data and see anything other than a cheap money fuelled bull run?
the fundamentals of the economy are deteriorating and yet house price inflation is off the charts. What gives?
This will end badly, make no mistake. And the cheap money Mike.
Please stop forgetting to mention what you know is true.
This is bubble territory.
No. Perth's market was already turning prior to the interest rate cuts. Prices had fallen 10% and buyers had moved in and stock was falling rapidly prior to rate cuts. Rate cuts have just made it more affordable for FHB.
Why do you call it cheap money when rates are still above the average of the last 130 years. Rates may remain at close to 5% for the next 50 years, it may go to 6% or they could head to 4%. Perhaps rates are just returning to there long term median level and will remain around this level for many years.
It is only heap money if high interest rates was the long term norm which it was not, it was the norm for 20 years out of the last 130 years. So for 110 years rates had a median of 5%. Many reasons for this of course.
What if you are wrong and rates remain around 5% for decades to come. Certainly possible as that is the long term historical norm. It is not my personal view that rates will remain at 5% for decades, merely pointing out that it is certainly a possibility.
So tell me if it was only cheap money why are places outside of Perth falling, even cheap locations. All this cheap money must push up prices everywhere.
Supply and demand are the key to housing, lower rates just greases the wheels. If Perth had 20,000 houses on the market like in 2011 prices would be falling as supply would massively outstrip demand, instead we have under 6,000 houses and prices are rising. Lower rates will just increase this demand for limited supply, if supply was ample low rates would not be a concern.
Hey Mike I'll be happy to take a bet with you that prices will be down in 12 months time in Perth. I don't think it's a sure thing but better than an even money bet. We won't use RPData though because Shadow assures me it has a lag of 3-6 months. Something for you to consider. We might have to use ABS if that's Ok.
The loser has to admit that they get it wrong occasionally and shouldn't be trusted for accurate predictions.
Oh dear. WA unemployment rate among males rises from 4.6% to 5.2% in one month!
Cheap money, I'd like to introduce you to deteriorating fundamentals.
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
I think you have a point and deserve credit for your call.
That said, even the best have massive difficulty picking the precise moment when a bubble will burst.
Its usually because a black swan is required to do the pricking.
No he doesn't Veritas - the man lies and is full of shit. I was bullish for a lot of 2012. I might not of been happy about it, but there was no denying Perth prices would stop dropping and start to rise. I was even bullish in some posts in early 2013 - up to about March April when it was pretty obvious the economy was changing.
I said was we sill start to see evidence of a turn around in 3 months, but it won't be obvious for 12. Three months isn't even up yet, but REIWA are showing the market is changing.
Mike has made his stand. In 17th May 2014 we will see if he is right or not.
anyway - here is there thread so you can read what was and what wasn't said
No. Perth's market was already turning prior to the interest rate cuts. Prices had fallen 10% and buyers had moved in and stock was falling rapidly prior to rate cuts. Rate cuts have just made it more affordable for FHB.
Why do you call it cheap money when rates are still above the average of the last 130 years. Rates may remain at close to 5% for the next 50 years, it may go to 6% or they could head to 4%. Perhaps rates are just returning to there long term median level and will remain around this level for many years.
It is only heap money if high interest rates was the long term norm which it was not, it was the norm for 20 years out of the last 130 years. So for 110 years rates had a median of 5%. Many reasons for this of course.
What if you are wrong and rates remain around 5% for decades to come. Certainly possible as that is the long term historical norm. It is not my personal view that rates will remain at 5% for decades, merely pointing out that it is certainly a possibility.
So tell me if it was only cheap money why are places outside of Perth falling, even cheap locations. All this cheap money must push up prices everywhere.
Supply and demand are the key to housing, lower rates just greases the wheels. If Perth had 20,000 houses on the market like in 2011 prices would be falling as supply would massively outstrip demand, instead we have under 6,000 houses and prices are rising. Lower rates will just increase this demand for limited supply, if supply was ample low rates would not be a concern.
Mike its cheap enough to cause house price inflation while the productive sectors of the economy are in a see of red.
And its cheap enough to cause 11% inflation in Perth.
Personally, I think the RBA could give a fuck what happens in Perth.
It wont lean against the bubble unless and until the eastern states get frothy.
newjez
8 Aug 2013, 01:14 PM
No he doesn't Veritas - the man lies and is full of shit. I was bullish for a lot of 2012. I might not of been happy about it, but there was no denying Perth prices would stop dropping and start to rise. I was even bullish in some posts in early 2013 - up to about March April when it was pretty obvious the economy was changing.
I said was we sill start to see evidence of a turn around in 3 months, but it won't be obvious for 12. Three months isn't even up yet, but REIWA are showing the market is changing.
Mike has made his stand. In 17th May 2014 we will see if he is right or not.
Yeah, I know newjez, I wasn't referring to that.
I don't know the ins and outs of your "bet" with Mike.
I do know that Mike has a strong vested interest in talking up the market but I was acknowledging his bullish call.
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
It was me who originally said prices would be up in 12 months time. Newjez said prices would begin falling 3 months from the date of the bet. I gave him an option to instead look at the market in 12 months time as I knew prices would not fall in that time frame. Newjez was sure prices would fall, yet he had said similar things in 2012 and prices continued to rise. That was at least the 3rd occasion Newjez had said prices would fall over the past year or so, wrong on all counts. He will continue to be wrong over the next 18 months or so as this bull market runs its course.
I am happy for Newjez to keep me on ignore as I can refute his claims yet he cannot counter mine, a win win for me.
Mike, it's clear to all that you were right and newjez is making up slimy cringe making wriggling excuses and has you on ignore because he's sick of losing.
Quote:
It is surprising though that some one who claims to live presently in the UK would have any real knowledge on the present market in Perth, hence why he keeps getting it wrong.
Yes, he relies on his brother to give him info. He prefers that to professional data because his brother is a doomer and tells him what he wants to hear ie that Perth prices are falling and that justifies his waiting for the crash before buying. He doesn't then have to face the fact that he's lost bigtime by waiting.
Mike, it's clear to all that you were right and newjez is making up slimy cringe making wriggling excuses and has you on ignore because he's sick of losing.
Yes, he relies on his brother to give him info. He prefers that to professional data because his brother is a doomer and tells him what he wants to hear ie that Perth prices are falling and that justifies his waiting for the crash before buying. He doesn't then have to face the fact that he's lost bigtime by waiting.
Strindberg,
Why don't you take that poison pen of yours and stick in each of your eyeballs.
Newjez and Mike's argument is fuck all to do with you.
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
Hey Mike I'll be happy to take a bet with you that prices will be down in 12 months time in Perth. I don't think it's a sure thing but better than an even money bet. We won't use RPData though because Shadow assures me it has a lag of 3-6 months. Something for you to consider. We might have to use ABS if that's Ok.
The loser has to admit that they get it wrong occasionally and shouldn't be trusted for accurate predictions.
I am happy to take a bet for the market in 12 months time, no problems.
All we need to do is work out the parameters.
Are you saying that prices in 12 months from now will lose all of the 12.7% in gains according the ABS figures and be lower, erasing all the present gains?
Or are you saying prices will not rise further as per the ABS figures of june 30th 2013 and be lower on june 30th 2014. So if prices declined by 0.1% over the 12 months you would be correct.
For myself I am happy to say prices will rise over the year from 30th of June 2013 to 30th of June 2014. So we will know around this time next year by the time the ABS releases the data.
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