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Supply and demand. Sorry to repeat myself.
Topic Started: 4 Aug 2013, 11:13 AM (17,708 Views)
peter fraser
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Wisebear
8 Aug 2013, 11:43 PM
Irrelevant.

Both require funds and if you don't have the funds you can't have either.
If you had read what I posted you would have noticed that I factored in a change to the availability of credit, which is what happens in the real world, although it mightn't in the model that only exists in your mind.

when credit becomes more available all of those people who wanted to buy but couldn't because they didn't have the ability to raise credit, suddenly become enabled, and they surge into the market and an undersupply has been guaranteed by the credit squeeze.

If you really want to cause a massive future housing boom, then create a credit squeeze now.

I actually cannot believe that there are still people who believe the clearly idiotic myth that a credit squeeze is a good thing for housing demand. Seriously how can you? there isn't a shred of evidence to support that in any long term scenario.

Any expressed market opinion is my own and is not to be taken as financial advice
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Veritas
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Wisebear
8 Aug 2013, 11:51 PM
Why do people here want to ignore the established definition of demand with one they just made up?
Because then they would have to admit that house prices are determined by what we are willing to borrow and what banks are willing to lend.

But carry on, I think Shadow was talking about Ferraris or something.
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
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miw
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Veritas
8 Aug 2013, 11:47 PM
The supply council made that mistake last year and overestimated household formation rates by close to 1 million.
I thought you said that demand had been driven higher by a massive expansion of credit which drove up prices. Now you are saying that demand is down?
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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herbie
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Veritas
8 Aug 2013, 11:07 PM
I get angry at you.

Because you are clown.
I think of Skamy 'n Mike as being extremely poor versions of Harry Triguboff. And as Strindberg and Shadow as being rather more sophisticated versions of him. I've got a bit of respect for ole Harry. He genuinely battled as a boy. Though he's become a bit of an ole charlatan now - IMO.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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peter fraser
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Veritas
8 Aug 2013, 11:55 PM
Because then they would have to admit that house prices are determined by what we are willing to borrow and what banks are willing to lend.

But carry on, I think Shadow was talking about Ferraris or something.
Sure - I bid up the price of apples at my green grocers every day because I have better access to credit than the other shoppers.

that might happen if apples were in short supply and there were no alternatives, but that isn't the case today so the price of apples won't change unless there is - wait for it - a shortage - boom boom.
Any expressed market opinion is my own and is not to be taken as financial advice
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mel
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Wisebear
8 Aug 2013, 11:51 PM
Why do people here want to ignore the established definition of demand with one they just made up?
that's fucking gold! :lol
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
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Shadow
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Evil Mouzealot Specufestor

peter fraser
9 Aug 2013, 12:00 AM
Sure - I bid up the price of apples at my green grocers every day because I have better access to credit than the other shoppers.
Yes, we just need to look at how Aussies have bid up the price of cars and boats with all this cheap credit.

And ever since the big department stores introduced store credit, customers just rushed in to bid up the price of shoes and make-up.

It also explains why house prices rose more in Perth than Sydney last year... for some reason the banks must have decided to give more credit to people from Perth.

And in 2009 they decided to give the most credit to people from Melbourne.

In WiseBear/Veritas La La Land. :wak:
Edited by Shadow, 9 Aug 2013, 12:09 AM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Veritas
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miw
8 Aug 2013, 11:57 PM
I thought you said that demand had been driven higher by a massive expansion of credit which drove up prices. Now you are saying that demand is down?
No demand is still enough to cause inflation.

But a lot of people cant/wont buy.

You can see that in how rents surged since 06.
Shadow
9 Aug 2013, 12:06 AM
Yes, we just need to look at how Aussies have bid up the price of cars and boats with all this cheap credit.

And ever since the big department stores introduced store credit, customers just rushed in to bid up the price of shoes and make-up.

In WiseBear/Veritas La La Land. :wak:
There are only two parties to the sale of an apple and virtually everyone can afford one. No credit required.

Housing is buyer, vendor and bank.

If the bank wont play ball I dont get the house.
Edited by Veritas, 9 Aug 2013, 12:08 AM.
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
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Shadow
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Evil Mouzealot Specufestor

Veritas
9 Aug 2013, 12:06 AM
There are only two parties to the sale of an apple and virtually everyone can afford one. No credit required.
What about cars and boats?
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Veritas
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Shadow
9 Aug 2013, 12:10 AM
What about cars and boats?
What about cars and boats?
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
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