So you're saying the RBA and ABS have it all wrong?
Well, I guess we'll find out over the next few years.
Who will be proved right... the RBA and ABS?
Or the crash-dreaming property bear renters who post on housing chat forums?
herbie
3 Aug 2013, 02:20 PM
one can be just as productive living in a caravan providing it's close to work 'n the park manager chucks out the rowdies who might otherwise keep you awake at night
This is a furphy - there aren't enough caravan sites to house the growing population, and most people want to live in a proper dwelling anyway.
But I'm glad you agree with me that a dwelling (of some sort) is essential for productivity. It just so happens that the dominant dwelling type in Australia tends to be houses or units. If this ever changes to tents and caravans, then I would agree the construction industry will become less important.
My post was based on the current environment, not some hypothetical future environment where we all live in caravans. And I expect the RBA and ABS when they perform their analysis/forecasts etc would also be basing these on typical house/unit dwelling preferences (rather than caravans/tents).
Why be a bull or a bear, Just recognise anomalies in a market and exploit them. Ie. if you know when fish are in a certain area go fish them. If the fish move, just stop fishing. Peter from Perth Supply and demand yes the people must be housed and preferably at no cost to the government. Peter from Perth
My post was based on the current environment, not some hypothetical future environment where we all live in caravans. And I expect the RBA and ABS when they perform their analysis/forecasts etc would also be basing these on typical house/unit dwelling preferences (rather than caravans/tents).
The fact that they aren't made available just supports my contention that "if one wants to base their economy on Houses 'n Holes 'n Debt, then yep, we all obviously MUST need lovely big 'dwellings' close to work to be productive" I'd say.
But hey, I've read your stuff over the years dude - You know there's risks. But don't believe it'll blow yet. (And that 'it' just might 'never' blow maybe???) While I'm not nearly so confident.
But anyway, my main point still is:
... it's all debt based - And as such can tend to get less efficient at stimulating over time and to even get a bit wobbly on occasion - With the fallout from debt based housing busts (should one follow a boom) seeming to be particularly nasty.
Hey, as Stephens says “I am referring of course to a boom in credit, which saw a very significant increase in borrowing by households in particular, and a rise in asset values, especially dwellings.”
So you're saying the RBA and ABS have it all wrong?
Well, I guess we'll find out over the next few years.
Who will be proved right... the RBA and ABS?
Or the crash-dreaming property bear renters who post on housing chat forums?
Careful, dishing out those tired old taunts makes you sound like that mind numbing buffoon Skamy - perhaps she's your cranky-just-got-out-of-bed sock puppet?
Just for the record, not all bears are 'cheap house dreamers', if you knew anything about property crashes you'd know that there is often a long lag between financial liquidity tightening up (i.e. 20-25% LVRs) and price corrections, due to home owners' unwillingness to realise their loss.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Just for the record, not all bears are 'cheap house dreamers' ...
True - I've got a mill+ in equity in three debt free houses (my home; an IP in my name; an IP in the name of my SMSF) - I just think the bastards are overpriced - So I'm a bear - And I'm not too keen on committing any of my mill+ cash to more housing 'til I see what way the wind's gunna blow. (Though the housing I do have is a handy inflation hedge is my way of looking at it. At this time.)
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
I've got a mill+ in equity in three debt free houses (my home; an IP in my name; an IP in the name of my SMSF) - I just think the bastards are overpriced - So I'm a bear
A bear is someone who thinks house prices will fall.
The fact that you hold three houses suggests that you don't think prices will fall significantly.
Either that or you don't care about preserving your wealth.
Not sure how you arrive at that conclusion from bb's post.
By b_b's claim that rising prices->greater supply->lower rents Stop and think about that before you answer.
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For a start, most buyers are owner-occupiers.
It is irrelevant, there is no OO market separate from the investor market. They all buy in the same market. Rising prices for OOs == rising prices for investors.
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Secondly, investors will generally pay as little as possible when buying, and will then charge as much rent as possible.
Really??? Is that how investment works???? Where was your newsletter when those fools in Mackay QLD paid as much as possible to buy, and are now offering their 'investments' out at increasingly lower rents to find tenants???
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Investors won't intentionally set out to 'pay MORE for a house that they can rent out for LESS'.
Exactly, thank you for agreeing with me. Unfortunately for investors, it is irrelevant what their intention is. They pay the market price regardless, and the market price is a function of aggregate credit demand.
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But if prices are rising faster than rents then they are forced to accept a lower yield if they want to invest.
Or they could invest in SOMETHING ELSE. What a concept!! I hear that corporations offer a share of the assets and profits through something called equity.
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Do you really believe it would be politically palatable to burn down houses?
No, but that is what the RBA is doing by lowering rates. It just directs capital to houses that nobody needs because the price is rising. The RBA is burning down the economy, but nobody cares. Burning down the houses directly would cause an uproar, but the result is the same.
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And how would this improve supply?
Why do we need to increase supply? We could also reduce the demand.
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Housing is the most productive sector of the economy...
Specious argument.
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How productive would you be in your job if you didn't have a dwelling to live in?
How productive would you be if you didn't have air to breathe? Food to eat? Clothes to wear? Car/bus/train to get you to your job? How productive would be if you didn't have a job? When I lived in Hong Kong and Singapore there were plenty of homeless labourers who were very productive thank you very much. They were clothed and fed, but they slept on cardboard boxes. They built skyscrapers and apartments they would never work or live in. Productive. Pfffff. Off all the stupid things I've heard out of the property propaganda machine, that has to be the stupidest.
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