Sure, and where are they renting? In established builds bought by investors not adding to supply by buying new and thus making the supply and demand imbalance even worse.
Anyway, you get the picture.
Price rose because supply just couldn't keep up with credit fueled demand. Ask Luci Ellis, she says exactly that in her 2006 paper on the subject in posted earlier.
Natural demand caused by demographics was turbocharged by falling interest rates and banks who, all over the English speaking world, decided to liberalize their lending practices.
This is not opinion. It is fact. Tell me Skamy, what caused this second big bubble of price growth if it wasnt the credit boom?
Oh sorry I forgot you disagree with Glen Stevens when he says the world had a credit boom.
Eejit you still do not understand debt and housing, but why is that a surprise from someone your age who has still not even managed to buy a home for yourself.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Eejit you still do not understand debt and housing, but why is that a surprise from someone your age who has still not even managed to buy a home for yourself.
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
Peter, it's really very simple. My definition of demand is the official one from economic text books not made up like yours, MIW's or Shadows.
This states that if you don't have the funds you don't demand therefore you don't effect price. If later on these people get funded then they can demand goods and affect the price i.e. active, available funds creates demand not people's wants or needs.
Tell me, if there was a credit squeeze and mortgage rates doubled over, say, the next few years, what do you think would happen to housing demand & prices? And do you think the outcome would be good for anyone?
Do you think for one second that high interest rates or a credit squeeze will last forever?
You don't start at the beginning, and you don't follow through to the end, you select a short time frame in the middle and think that it begins and ends there - it just doesn't.
We all need food, clothing and shelter. Demand for those things just never goes away, it can't. Your economics book may be relevant for consumer goods, but for necessities it is just wrong.
Any expressed market opinion is my own and is not to be taken as financial advice
Sure, and where are they renting? In established builds bought by investors not adding to supply by buying new and thus making the supply and demand imbalance even worse.
Anyway, you get the picture.
Price rose because supply just couldn't keep up with credit fueled demand. Ask Luci Ellis, she says exactly that in her 2006 paper on the subject in posted earlier.
Natural demand caused by demographics was turbocharged by falling interest rates and banks who, all over the English speaking world, decided to liberalize their lending practices.
This is not opinion. It is fact. Tell me Skamy, what caused this second big bubble of price growth if it wasnt the credit boom?
Oh sorry I forgot you disagree with Glen Stevens when he says the world had a credit boom.
Veritas. I have a straight forward question for you.
Price of median house in Broken Hill is $115k. Price of median house in Sydney is 6x that. Why?
They have the same banks, interest rates and build costs.
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
Veritas. I have a straight forward question for you.
Price of median house in Broken Hill is $115k. Price of median house in Sydney is 6x that. Why?
They have the same banks, interest rates and build costs.
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
They have not done this the banks have been lending the same relative to income for decades.
Absolute rubbish.
Shadow
9 Aug 2013, 12:50 AM
So let's say banks were to offer $2m mortages to anyone that wants one at , say, 0.1% fixed for 20 years. You don't think that this will cause demand to exceed supply because people won't bid up prices.
Quote:
It would depend on supply. If there was a virtually unlimited supply of houses, then no, people would not bid up the price of houses, in the same way they would not bid up the price of cars or boats if the bank gave them $2m at 0.1% fixed for 20 years.
So is there a virtually unlimited supply of houses?
peter fraser
9 Aug 2013, 01:15 AM
Do you think for one second that high interest rates or a credit squeeze will last forever?
No, but irrelevant.
The point is a severe credit squeeze will cause prices to fall and this will benefit some people. This has been proven over and over again by history. Why do you argue with the facts?
Quote:
You don't start at the beginning, and you don't follow through to the end, you select a short time frame in the middle and think that it begins and ends there - it just doesn't.
No one said it ends there? but what comes next is irrelevant to the point being made.
Quote:
Your economics book may be relevant for consumer goods, but for necessities it is just wrong.
So the the text books and the historical facts on which they are based are wrong and the crazy property bulls are right? Do you even think about what you're saying? This really is a religion to you isn't it?
My daughter was offered very similar mortgage conditions to those we were offered buying our first home in 1981. Here is the chart from the ABS showing % of salary for new loans over 3 decades.
A person taking on a new loan today has the lowest level of debt burden we have seen in a decade,and this chart is before the big IR drops. It is so silly thinking that banks would be stupid enough to be offering $2m loans to folk who cannot pay it off.
It is absolutely unbelievable that so many seemingly intelligent people fall hook line and sinker for the stuff they print on doomer sites.
It is no wonder they cannot understand the property market and that they believe their own wild claims of Armageddon.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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