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Chris Joye talks housing bubbles...
Topic Started: 16 Sep 2013, 09:28 AM (4,964 Views)
willy_nilly
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We know the end is in sight when permabulls like CJ change their tune.

http://www.abc.net.au/radionational/programs/saturdayextra/economy-update/4955946
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Shadow
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willy_nilly
16 Sep 2013, 09:28 AM
We know the end is in sight when permabulls like CJ change their tune.

http://www.abc.net.au/radionational/programs/saturdayextra/economy-update/4955946
He seems to be saying there is a risk of a bubble developing from here - i.e. the beginning of the bubble is in sight (not the end).
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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willy_nilly
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Shadow
16 Sep 2013, 11:24 AM
He seems to be saying there is a risk of a bubble developing from here - i.e. the beginning of the bubble is in sight (not the end).
lol...CJ is talking bubbles and their inevitable bust. Plain and simple.
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Shadow
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willy_nilly
16 Sep 2013, 11:31 AM
CJ is talking bubbles and their inevitable bust.
We've all been talking about that for many years.

I have been saying on these forums for a long time that Australian house prices won't crash until after a bubble develops.

This view appears to be becoming more mainstream now.
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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willy_nilly
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Shadow
You seem to be avoiding an answer.
Are rising house prices, beyond wage growth, good or bad for an advanced society?
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Shadow
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willy_nilly
16 Sep 2013, 02:35 PM
Shadow
You seem to be avoiding an answer.
You didn't ask a question.

Quote:
 
Are rising house prices, beyond wage growth, good or bad for an advanced society?
Like most things, good for some people and bad for others (regardless of how advanced society is).
willy_nilly
16 Sep 2013, 09:28 AM
Anyway, do you agree with CJ's position about a big rise in house prices coming up?
Edited by Shadow, 16 Sep 2013, 03:05 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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stinkbug
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Compared with places that had a genuine bubble, I don't think we're in bubble territory yet. If prices doubled again in the near future I'd say we were probably in a bubble.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Sweetdish
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stinkbug
16 Sep 2013, 03:07 PM
Compared with places that had a genuine bubble, I don't think we're in bubble territory yet. If prices doubled again in the near future I'd say we were probably in a bubble.
I guess the problem with bubbles is that you only see them after they pop.
I dont know if we are in a bubble now. Probably but not for sure.

But if this rally continues then I'd say we would definitely be in dangerous bubble territory very soon.
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stinkbug
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Sweetdish
16 Sep 2013, 03:24 PM
I guess the problem with bubbles is that you only see them after they pop.
I dont know if we are in a bubble now. Probably but not for sure.

But if this rally continues then I'd say we would definitely be in dangerous bubble territory very soon.
I think the thing to look for is wildly unrealistic yields. When the Tokyo bubble was at its peak, property yield was around 0.2%. That indicates that on a Price to Earnings ratio basis, Tokyo was at least 10 times more expensive than inner Sydney is now, possibly 15-20 times more expensive.

That's a rather extreme example, but it illustrates the point.

When we see yields of 1% or less, I'll be selling. Frankly, I don't think we'll get to this point in Australia.

I guess this is why I hold the rather boring opinion of 'steady as she goes', instead of being at either extreme of 'the sky is falling' or 'I'm gunna be rich, rich...'
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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