Economic fundamentals are now in an almighty arm wrestle with low interest rates.
I am very bearish on the WA economy which will be a major drag on demand, but maybe even if unemployment tops 7 or 8 per cent, zirp or close to it will be enough to shore up investor demand which is keeping the plate spinning.
Or maybe sentiment will sour and investors will rush for the door. Its hard to say.
But, I'm happy to sit it out and watch on in disgust.
At this stage, I almost have a political objection to buying into the state sponsored madness.
You need to look at the lending data. It is not investors driving the Perth market. It is FHB and upgraders.
We will have a transition period which will be bumpy. However that will not really hurt the property price market much, it will hurt the rental market a little.
What will stabilise property is one of two things. A large construction boom, which while possible I don't see happening anytime soon due to a large shortage of land. Second is rising interest rates. The reason I think prices will stall in 24 months is interest rates could well be on an upward swing at this point. Lower rates now will bring forward demand and once we have the first few rate rises the market will pause for awhile. What happens next will depend on the strength of the economy vs rising interest rates.
The reason I think rates will rise in 2 years time is the world economy is not as weak as most would suggest. My opinion is that over the next few years we will move from a world of lower growth into higher growth primarily driven by a resurgent US economy.
If this does happen you wont get your price crash but you may get a few years of stagnation or very low price growth prior to prices rising again.
The question over the next 6-12 months is how low will rates go and how high will prices respond. WA already has a very low supply of land, units and houses on the market so any increase in demand due to lower rates will reduce supply further. Unemployment from mining will be a drag but it will not be enough to slow the housing market by any large margins. The remaining employed population will be stimulated by lower rates to buy a first home, upgrade or downgrade which will dwarf job losses from mining. Lets say unemployment rises to 8% which is very unlikely but lets go with it. What effect will low interest rates do to the remaining 92% of the work force and will that influence be of greater affect then the job losses. If job losses continue to mount the RBA will head to ZIRP over time and my predictions of rising rates will be pushed back a year or 2. The Federal Govt would also be forced to do some stimulation.
Almost any way you look at the next 2-3 year period, it ends with significant rising prices and demand for housing as that is what the Federal, State and RBA all want and they will get it.
To get some good price declines what you need is a situation similar to late 2010 and 2011. An investment boom which leads to higher then expected inflation, rising interest rates and for Europe to get the wobbles to cause a higher spread in overseas funding. This would force banks to raise rates beyond increases from the RBA to contain inflation. That would shatter the confidence of many buyers and lead to price declines or at least a few years of stagnation. This option seems gone for the next 3-5 year period at present.
What then did you mean when you posted on 4th August that "you can place a safe bet that it won't be double figures tomorrow.", the day before the ABS were due to report?
So you are now saying you were referring to rp data. Was "tomorrow" some figurative term substituted for "some unspecified time in the future"? What is the point of such a remark?
I really don't understand your obsession with this. I was wrong on either abs or rpdata. hands up your honor. But it does reflect your inability to read. Apologies if you are not a native English speaker. Maybe the reason you demand so much precision is because you lack basic literary skills. I also said some people - other people - post when they were tired or drunk. I was referring to you actually, trying to give you a way out. I mean, Christ, even Nelsen got it and he can't even string a sentence. Anyway, hopefully you are sober now and a bit calmer. I was worried you may have a stroke at one point. All the best mate. Keep posting, we appreciate your input. I thought maybe you and shadow could do something useful, and discuss your different opinions on the various indexes on a new thread. You seem to have let that one go in the palava about me. Apologies for typos, I'm on a tablet.
I really don't understand your obsession with this. I was wrong on either abs or rpdata. hands up your honor. But it does reflect your inability to read. Apologies if you are not a native English speaker. Maybe the reason you demand so much precision is because you lack basic literary skills. I also said some people - other people - post when they were tired or drunk. I was referring to you actually, trying to give you a way out. I mean, Christ, even Nelsen got it and he can't even string a sentence. Anyway, hopefully you are sober now and a bit calmer. I was worried you may have a stroke at one point. All the best mate. Keep posting, we appreciate your input. I thought maybe you and shadow could do something useful, and discuss your different opinions on the various indexes on a new thread. You seem to have let that one go in the palava about me. Apologies for typos, I'm on a tablet.
I am not surprised that you have chosen to refuse to answer my simple questions to clarify your posts and your slimy attempt to rewrite them. Simply admitting your errors at the outset would have left your reputation in tact.
Your decision to respond with another personal and insulting attack is simply yet another wriggling and deceitful attempt to hide the issue and avoid facing up to your failure. It may be true that I lack literary skills and am not always sober. But I would be much happier with those attributes than being seen to be a slimy wriggling dishonest creep.
I really don't understand your obsession with this. I was wrong on either abs or rpdata. hands up your honor. But it does reflect your inability to read. Apologies if you are not a native English speaker. Maybe the reason you demand so much precision is because you lack basic literary skills. I also said some people - other people - post when they were tired or drunk. I was referring to you actually, trying to give you a way out. I mean, Christ, even Nelsen got it and he can't even string a sentence. Anyway, hopefully you are sober now and a bit calmer. I was worried you may have a stroke at one point. All the best mate. Keep posting, we appreciate your input. I thought maybe you and shadow could do something useful, and discuss your different opinions on the various indexes on a new thread. You seem to have let that one go in the palava about me. Apologies for typos, I'm on a tablet.
I am not surprised that you have chosen to refuse to answer my simple questions to clarify your posts and your slimy attempt to rewrite them. Simply admitting your errors at the outset would have left your reputation in tact.
Your decision to respond with another personal and insulting attack is simply yet another wriggling and deceitful attempt to hide the issue and avoid facing up to your failure. It may be true that I lack literary skills and am not always sober. But I would be much happier with those attributes than being seen to be a slimy wriggling dishonest creep.
Its you who is the creep pal. Every post a chilling insight into the soul of a, I don't know how to describe it; But its a cold, dark, miserable place.
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 am not surprised that you have chosen to refuse to answer my simple questions to clarify your posts and your slimy attempt to rewrite them. Simply admitting your errors at the outset would have left your reputation in tact.
Your decision to respond with another personal and insulting attack is simply yet another wriggling and deceitful attempt to hide the issue and avoid facing up to your failure. It may be true that I lack literary skills and am not always sober. But I would be much happier with those attributes than being seen to be a slimy wriggling dishonest creep.
what question? christ - if that's all you want - ask away|
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
That's another wriggle. You quoted them in your post (post#222). Forget it. I'm no longer interested in your slippery remarks.
How many times do you want me to answer this? We had been discussing the fact that rp data had Perth yoy over ten percent. This move into double figures was deemed significant, and several bulls quoted the figures with joy. I know that rpdata bounces around a lot for Perth, and I thought it fairly likely that it would bounce back below the ten percent mark. I was wrong, but at the time I thought it likely. rpdata is actually approaching 11% which has surprised me.
This is honestly what I meant. Yes, abs were coming out the next day, but I really don't know how you can possibly have thought that I meant abs. I used the words rp data in the sentence. Okay, I admit you may have assumed it was a mis type on my behave. But you can't really hold me responsible for your assumtions.
okay - I have answered this several times now. I'm sorry if it's not the answer you want, but do you want me to lie to make you happy?
how much more acknowledgement do you want bg - do you want me to write it in blood? I conceded several times?
Spiderman You suck You won't acknowledge that you are in the wrong
Not to worry You are not the only one.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
For many months on here BP was insulted and mocked whilst he persistently predicted the tipping point of the market to be the third quarter of 2011. We can now see just how amazingly accurate he turned out to be.
You may want to read this thread and look at the replies of bears. Is not the only thread with many from earlier dates. Bears were warned well in advance of what was happening, they decided not to believe BP and myself. Turns out we told the truth and what we experienced translated into the data.
Stock has fallen over recent weeks and is at levels at the start of winter. Without the build-up of stock occurring over winter Perth is entering the peak buying season in a very tight market for Land, Units and tight market for Houses. We could see stock rise some in the next few weeks as sellers bring properties to market ready for spring, this should happen in the last 1-2 weeks of August.
What we could also be seeing is sellers keeping property off the market as they think prices will rise much further. Sellers might wait for the Feb/March/April selling period to see how much further prices rise.
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