LOL, Sydney median house price is at an all time high, rising fast, and set to approach $1M by the end of 2015.
Gold has crashed.
Live with it.
Shadow, do you expect this house price boom to lead to a booming economy or do you think the price rises will keep rising despite the economy struggling and unemployment rising?
The point is that iin many major cities, the service workers don't live in the blue chip suburbs, but commute considerable distances into the city centre. Why should Sydney be any different?
Ageed, with the caveat I mentioned earlier that Sydney is not yet marked out as an important financial center and therefore is subject to sudden capital flight that would kill off a fledgling services industry built around it.
I suspect that its isolation would make it hard for Sydney to attain more business gravitas, although the advent of a high speed Concord replacement might change things.
"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.
Way to misinterpret. How many service workers live in central London, or on Manhattan island?
But central London or Manhattan are only fairly small areas compared with all of Sydney. If you were comparing central Sydney maybe, but something's not right if the median price for all of Sydney hits a million dollars. You mentioned service workers being forced to rent, but if median property prices are so high median rents are likely to be very high too. Probably unaffordable for lower paid workers unless two families or several singles share the same small unit. Or unless they commute very long distances every day. Supply is obviously constrained in Sydney, but its constrained in a lot of other world cities too, so why should Sydney's prices be so extraordinarily high?
The point is that iin many major cities, the service workers don't live in the blue chip suburbs, but commute considerable distances into the city centre.
Actually that only really tends to happen in trade/financial hubs because insurance workers and bankers can be crammed into tiny little cubicles in very tall buildings, but manufacturing workers cannot. This makes the worker density 4-10 times higher than residential living, so it is simply a matter of space.
Quote:
Why should Sydney be any different?
The chances of Sydney becoming a major financial/trade centre are practically NIL. Asia's largest and busiest ports are in North Asia and Singapore, Sydney doesn't even make the list (although Melbourne did in 2005). Asia has financial hubs in Tokyo, Hong Kong, Singapore all of which have telecommunications, transport,banking and finance infrastructure that makes Sydney look like a laughable backwater (oh wait, it is).
I remember 10 years ago people telling me that Sydney would become the financial hub of Asia because we were an English speaking country. That prediction has become funnier with each passing year.
Prices rise in Australia because property taxes fund incompetent spend thrift state governments, and those revenues depend on both volume and price. If property tax revenues go into serious decline because transaction volume is receding faster than prices are increasing, then the governments of Australia will change their policy on supply.
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
The chances of Sydney becoming a major financial/trade centre are practically NIL. Asia's largest and busiest ports are in North Asia and Singapore, Sydney doesn't even make the list (although Melbourne did in 2005). Asia has financial hubs in Tokyo, Hong Kong, Singapore all of which have telecommunications, transport,banking and finance infrastructure that makes Sydney look like a laughable backwater (oh wait, it is).
I remember 10 years ago people telling me that Sydney would become the financial hub of Asia because we were an English speaking country. That prediction has become funnier with each passing year.
Sydney *was* a major financial hub in the 1990s, at least partly because it was home to so many Asia Pacific headquarters. In the 1990s, Australia was the largest market outside Japan for most multinationals. Since then it has been overtaken by Taiwan, China, Korea, India and, for some things, Malaysia and I don't know of any tech companies that have their APAC HQ or even part of a split APAC HQ in Sydney. Hong Kong, Singapore and Shanghai seem to be the places now. Singapore has probably been the biggest winner recently because India has become relatively more important and Hong Kong has been tainted somewhat by the PRC policy stating that it can deem Hong Kong companies to be mainland companies for tax purposes. Moving HQ to Shanghai seems to have been a bit of a failure for most.
Sydney *was* a major financial hub in the 1990s, at least partly because it was home to so many Asia Pacific headquarters. In the 1990s, Australia was the largest market outside Japan for most multinationals. Since then it has been overtaken by Taiwan, China, Korea, India and, for some things, Malaysia and I don't know of any tech companies that have their APAC HQ or even part of a split APAC HQ in Sydney. Hong Kong, Singapore and Shanghai seem to be the places now. Singapore has probably been the biggest winner recently because India has become relatively more important and Hong Kong has been tainted somewhat by the PRC policy stating that it can deem Hong Kong companies to be mainland companies for tax purposes. Moving HQ to Shanghai seems to have been a bit of a failure for most.
It was a financial hub, but not a major one. Still, the potential was there, all we needed to do was (a) install a decent telecommunications network (still arguing about this even now, i.e. NBN) (b) improve the banking system (some progress was made but quickly fell behind HK and Sing) and (c) upgrade Sydney's mass transit system (complete and utter failure).
A rank of 15 versus 3 is irrelevant. As long as the commodities boom continues, there will always be financial activity in play, but bulk commodity trade will never compete with manufacturing trade, and we still have a lot more capital controls and regulations than places like Singapore and Hong Kong, and very little infrastructure to show for the money generated by the boom. Australia is now seen as a mine and somewhere to store your family in case of political trouble in North Asia.
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
The correct time to start “warning about housing bubbles” is when the median multiples exceed 4.
When they range from 6.5 to 9 point something, and you have record mortgage debt along with it, you already have a housing bubble that is fully ready to burst and do just as much economic damage as has already been witnessed in California, Ireland and Spain.
Not to mention several years of rising aggregate rental sector operating losses, having flipped from a normal healthy profit situation years ago.
I am bemused by this new line of commentary that “we had better be careful we don’t end up with a bubble”.
All this talk of could would or might have a bubble looking forward IF XYZ happens is bull.
There has been a bubble for some time, it has never deflated, and policy of RBA government and FIRE is to inflate it more. I’ve seen a few property bubbles elsewhere. There is always a manic phase to carry it to the absolute peak, and the end always comes quick – usually from some seemingly insignificant event that nobody at the time really gets.
All this talk of could would or might have a bubble looking forward IF XYZ happens is bull.
There has been a bubble for some time, it has never deflated, and policy of RBA government and FIRE is to inflate it more. I’ve seen a few property bubbles elsewhere. There is always a manic phase to carry it to the absolute peak, and the end always comes quick – usually from some seemingly insignificant event that nobody at the time really gets.
Catweasel say it a applaud it for challenge gurus, experts and its assorted followers.
But as same as bubble deny, how can it prove it bubble exist?
It the cannot. As a bubble the show, it only the know after a fact.
And a then, every mouse and its dog know.
It cannot apply a scientific,
so its bubble like genie,
firmly in a bottle.
Of the course,
it can do a speculate on its the exist.
Nothing a wrong with it.
Mouse bombarded with speculate on daily the basis.
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