Welcome Guest [Log In] [Register]


Reply
Chris Joye talks housing bubbles...
Topic Started: 16 Sep 2013, 09:28 AM (4,967 Views)
b_b
Default APF Avatar


I read somewhere (probably here) that a financial bubble is where prices are increasing in an asset where the commentator is not long.

Pretty good description IMO.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
Sydneyite
Member Avatar


b_b
16 Sep 2013, 04:15 PM
I read somewhere (probably here) that a financial bubble is where prices are increasing in an asset where the commentator is not long.

Pretty good description IMO.
Oh very good! :lol :lol
For Aussie property bears, "denial", is not just a long river in North Africa.....
Profile "REPLY WITH QUOTE" Go to top
 
John Frum
Member Avatar


b_b
16 Sep 2013, 04:15 PM
I read somewhere (probably here) that a financial bubble is where prices are increasing in an asset where the commentator is not long.

Pretty good description IMO.
so as long as we have tall financial commentators we're safe from a bubble :lol
"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.
Profile "REPLY WITH QUOTE" Go to top
 
willy_nilly
Member Avatar
Gold Member
Shadow
16 Sep 2013, 03:00 PM
You didn't ask a question.


Like most things, good for some people and bad for others (regardless of how advanced society is).

Anyway, do you agree with CJ's position about a big rise in house prices coming up?
Nope. Not across all of Oz.
So, good for some and not for others is a bs answer.
At least Peter Fraser states it like it is.
Profile "REPLY WITH QUOTE" Go to top
 
Sweetdish
Default APF Avatar


stinkbug
16 Sep 2013, 03:39 PM
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...'
That is a very extreme example - wasn't aware of that...

I do know that Sweden is officially in a bubble now. The past few weeks there have been some major debates about what they can do to slowly deflate rather than pop.
Norway also looks increasingly dangerous and they are expecting property in Norway to deflate as well.
Its probably too late if you are discussing how to pop the bubble rather than if there is one.

Australia is more expensive than Sweden on any measurement I can think of but Australia has different fundamentals.

Profile "REPLY WITH QUOTE" Go to top
 
stinkbug
Member Avatar


Sweetdish
16 Sep 2013, 06:35 PM
That is a very extreme example - wasn't aware of that...

I do know that Sweden is officially in a bubble now. The past few weeks there have been some major debates about what they can do to slowly deflate rather than pop.
Norway also looks increasingly dangerous and they are expecting property in Norway to deflate as well.
Its probably too late if you are discussing how to pop the bubble rather than if there is one.

Australia is more expensive than Sweden on any measurement I can think of but Australia has different fundamentals.
Another good example is the tech stock bubble of early 2000s. What was the average yield on a tech stock back then? (Hint: very little...)
---------------------------------------------------------------

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.

Profile "REPLY WITH QUOTE" Go to top
 
Sweetdish
Default APF Avatar


stinkbug
16 Sep 2013, 06:49 PM
Another good example is the tech stock bubble of early 2000s. What was the average yield on a tech stock back then? (Hint: very little...)
ha yes.
I remember it well, so many of my friends lost a lot of money. Lucky me I didn't have any money to lose back then : )

Fundamentals were completely ignored, and replaced with a fear of missing out.
And yes, the yield was overlooked.

Im wondering if we are in that territory now?
How long can property prices stay as they are with such poor rental yield?
Edited by Sweetdish, 16 Sep 2013, 06:55 PM.
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


Posted Image
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
Profile "REPLY WITH QUOTE" Go to top
 
Trojan
Default APF Avatar


stinkbug
16 Sep 2013, 06:49 PM
Another good example is the tech stock bubble of early 2000s. What was the average yield on a tech stock back then? (Hint: very little...)
Still more than the average yield on gold
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
Profile "REPLY WITH QUOTE" Go to top
 
stinkbug
Member Avatar


Trojan
16 Sep 2013, 06:55 PM
Still more than the average yield on gold
Indeed! :oo:
Sweetdish
16 Sep 2013, 06:55 PM
ha yes.
I remember it well, so many of my friends lost a lot of money. Lucky me I didn't have any money to lose back then : )

Fundamentals were completely ignored, and replaced with a fear of missing out.
And yes, the yield was overlooked.

Im wondering if we are in that territory now?
How long can property prices stay as they are with such poor rental yield?
Fear of missing out, a huge problem...
Edited by stinkbug, 16 Sep 2013, 07:01 PM.
---------------------------------------------------------------

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.

Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Fully Featured & Customizable Free Forums
Learn More · Register Now
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy