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The Economist - Global Housing Markets, Trend Chart; Shows us once again, a property affordability bubble between 2002 and today
Topic Started: 21 Aug 2013, 01:16 AM (8,248 Views)
skamy
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Sober
21 Aug 2013, 04:22 PM
But you have not actually done so, have you? And in the absence of such an admission on your part, you are agreeing with my original assertion: "Shadow's core modus operandi is "never admit defeat"
So despite the fact that I have corrected you on your false assertion you chose to reiterate it.

Specks of sawdust and planks come to mind.
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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Shadow
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Evil Mouzealot Specufestor

Sober
21 Aug 2013, 04:31 PM
You may disagree with my statement. But you have failed to disprove it.
Nothing was proved or disproved. You gave an opinion. I (and others) disagreed with it.
Edited by Shadow, 21 Aug 2013, 04:35 PM.
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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Strindberg
21 Aug 2013, 11:15 AM
The Economist tool doesn't have an "affordability index".

FHBs tend to have small deposits and borrow most of the money to buy a house. Thus affordability for FHBs is about the cost of repayments compared to their incomes, rather than the price to income ratio (which is anyway no higher now than it was 10 years ago).

The following chart thus presents affordability for people who require an 80% loan which is very typical for FHBs. The chart shows the percentage of household disposable income required for the repayments. It therefore represents affordability for FHBs.

The chart is a little out of date and repayment costs have now fallen further.

Posted Image
This seems to include investors so it is very skewed lower with all that activity. I mean how many first time buyers in the last 10 years spend only 20% of their income on their mortgage virtually noone. Shows how an average number can have no relevance to any group.
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Sydneyite
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21 Aug 2013, 05:24 PM
This seems to include investors so it is very skewed lower with all that activity. I mean how many first time buyers in the last 10 years spend only 20% of their income on their mortgage virtually noone. Shows how an average number can have no relevance to any group.
I think you should read the notes at the bottom of the chart! The figures are based on the loan repayments after 2 years, assuming only required payments have been made, for an 80% LVR loan taken against the national median priced home. it is not influenced one way or the other by the activity of investors in the market, other than indirectly based whatever impact investors might have on the median prices being acheived at any point in time.
Edited by Sydneyite, 21 Aug 2013, 05:54 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Strindberg
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21 Aug 2013, 05:24 PM
This seems to include investors so it is very skewed lower with all that activity. I mean how many first time buyers in the last 10 years spend only 20% of their income on their mortgage virtually noone. Shows how an average number can have no relevance to any group.
It isn't an "average" and it isn't based on investors.

It's based on the repayments on an 80% loan for a median value house at each point in time expressed as a percentage of the household disposable income.

If anything, it probably overstates the repayments for FHBs. We know from ABS data (I'll show it if you ask) that FHBs on average purchase below median price houses and they have above average household incomes. The average repayment for FHBs is thus likely to be less than shown in the chart.

Thanks for getting the thread back on track after it was derailed.
Edited by Strindberg, 21 Aug 2013, 06:07 PM.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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Veritas
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something similar, only on a longer time frame. tells a different story at first glance.

Posted Image

http://www.thirdwavegroup.com.au/tidal-report/tidal-report-will-renting-be-the-new-black/
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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skamy
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Veritas
21 Aug 2013, 06:49 PM
something similar, only on a longer time frame. tells a different story at first glance.

Posted Image

http://www.thirdwavegroup.com.au/tidal-report/tidal-report-will-renting-be-the-new-black/
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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goldbug
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Strindberg
21 Aug 2013, 06:04 PM


Thanks for getting the thread back on track after it was derailed.
Housing boom over, not to return: RBA
April 24, 2013
http://www.abc.net.au/news/2013-04-24/strong-house-price-growth-a-thing-of-the-past/4648580

The Reserve Bank says home prices are likely to grow slowly, if at all, now that the low-inflation driven boom of the late 1990s and early 2000s has ended.
The Reserve Bank warns that this slower housing market will lead to more periods when house prices are falling
"We are pretty sure that the boom we saw in the early 2000s managed to end with a fizzle, not a bust. "
"But we certainly can't rule out the possibility of a major housing downturn in the longer-term future."
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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skamy
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goldbug
21 Aug 2013, 07:29 PM
Housing boom over, not to return: RBA
April 24, 2013
http://www.abc.net.au/news/2013-04-24/strong-house-price-growth-a-thing-of-the-past/4648580

The Reserve Bank says home prices are likely to grow slowly, if at all, now that the low-inflation driven boom of the late 1990s and early 2000s has ended.
The Reserve Bank warns that this slower housing market will lead to more periods when house prices are falling
"We are pretty sure that the boom we saw in the early 2000s managed to end with a fizzle, not a bust. "
"But we certainly can't rule out the possibility of a major housing downturn in the longer-term future."
You forgot to add the bit about there would be little likelihood of a downturn until after another significant price boom.
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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Shadow
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Evil Mouzealot Specufestor

Veritas
21 Aug 2013, 06:49 PM
That chart is by Leith van Onselen of Macrobusiness and the article quotes 'sources' such as the Bubblepedia Forum. Not much credibility there.

Here's a chart sourced directly from the RBA which suggests Leith van Onselen pulled the above chart out of his...

Posted Image
Edited by Shadow, 21 Aug 2013, 08:09 PM.
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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