Punting on Australian houses is bonkers, attracting dumb money, speculation, not investment; Ordinary people priced out of Great Australian Dream by cashed-up older generations
Tweet Topic Started: 20 Sep 2013, 10:18 AM (4,928 Views)
We have a new candidate for the title of “worst real estate article of the year”.
Unsurprisingly, it appeared in Australia’s most dismal newspaper, The Daily Telegraph.
The headline claimed that families have given up on the “great Aussie dream”. You can be fairly sure that when an article starts with that most tired of clichés, what follows is likely to be nonsense. The article did not disappoint.
It relied on another great cliché of journalism, that you never let the facts get in the way of a good story. This piece made a number of startling claims, but provided no evidence to support them.
It began with this statement: “An alarming number of Australian families are losing sight of the home ownership dream, being forced into long-term rental situations and struggling to provide security for their children.”
That’s a pretty big statement. I searched the article for information that backed it up, but there was none. No figures to support the “alarming number” claim. Nothing to justify the claim that large numbers of families are “struggling to provide security for their children”.
The second paragraph talked about “soaring property prices”. Again it didn’t provide any figures, which is a shame because I’d love to know where property prices have soared any time in the past three years.
The only markets that have achieved double-digit growth in any of the years since 2010 have been regional towns and cities, mostly those boosted by the resources sector. (Chinchilla in Queensland, for example, has averaged 10.8% annual growth in recent years, according to Australian Property Monitors figures).
The third paragraph says that “the situation is particularly severe in NSW”. Why? Apparently, because NSW has a third of the nation’s renters. Well, you would expect NSW to have a third of nation’s renters because NSW has a third of the nation’s population.
NSW is in line with national averages, whereby roughly a third of households rent and two-thirds own their homes, with or without mortgages. It’s been that way for a long time.
Paragraph six begins with this: “News that the home ownership dream is fading comes …” Really? What news that the home ownership dream is fading? Certainly it’s not contained in this article, which presents zero evidence to support the claim.
The article then moves on to blame the planning system for the crisis they say exists, but for which they have presented no supporting information.
Sensationalism at its worst and not one, not two, but three Telegraph writers interviewed their keyboards to come up with this pile of twaddle.
Yes, this anorexic article totalling 15 shallow paragraphs required contributions from three non-journalists. There was a triple byline, as if this was an epic of investigative journalism.
It was the antithesis of journalism, but sadly typical of print media’s coverage of real estate issues. No wonder the two major media organisations have been sacking journalists by the thousands recently. If this is the best three colluding writers can come up with, they don’t deserve their jobs.
So, I repeat my comment from last week on Property Observer. If you want to be informed about real estate, stop reading newspapers and start looking elsewhere for information.
True, but is that not slightly troubling from a contrarian perspective? It reminds of Bernanke's soothing subprime quotes just prior to the GFC. Be very careful of central bankers telling you that everything is under control. It usually means there is trouble brewing.
True, but is that not slightly troubling from a contrarian perspective? It reminds of Bernanke's soothing subprime quotes just prior to the GFC. Be very careful of central bankers telling you that everything is under control. It usually means there is trouble brewing.
I disagree, it usually means the opposite. I think most people tend to tell the truth most of the time.
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Capitulations from bears should be pause for thought. In the past, it has been a classic sign of an overbought market.
In that case you should have no difficulty providing at least a few examples?
Capitulations from bears who have been wrong about the imminent crash? Sorry, but I'm not about to let those clueless people decide when I buy and when I sell.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
I have yet to meet anyone that can convincingly argue that bubbles must burst within a certain time frame otherwise they are not bubbles.
Why cant a bubble inflate and stay inflated for a decade or more?
Need we remind ourselves that there hasnt been a recession in this country for over two decades.
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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