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RBA enormously worried about Australian house price surge, but won't admit it; House prices are popping, Sydney is going berserk
Topic Started: 26 Sep 2013, 05:04 PM (8,086 Views)
b_b
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Massive
27 Sep 2013, 09:05 PM
yeah.. im making the assumption that if it comes to mums and dads pulling out ... incomes are falling, unemployment rising, and renters are disappearing ... mum and dads arent going to pull out otherwise ....

thats why its unlikely IMO... need the perfect storm of shit market conditions.
Where will the renter disappear to?
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Massive
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b_b
27 Sep 2013, 09:17 PM
Where will the renter disappear to?
Shared housing , mum and dads , country of origin ... If ur unemployed and can't pay rent u can't keep renting
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b_b
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Massive
27 Sep 2013, 09:27 PM
Shared housing , mum and dads , country of origin ... If ur unemployed and can't pay rent u can't keep renting
The rent will alway get paid. Remember renters are "saving the difference" so when they become unemployed, the landlord will claim their savings until they get another job.

If unemployment increases, I do not expect food or energy prices to fall. If housing is under supplied, then rents will not fall either for the same reason. Discretionary items will suffer first - and there are a lot of discretionary items which will be sacrificed before rent.
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Veritas
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b_b
27 Sep 2013, 09:17 PM
Where will the renter disappear to?
Where did they go in Dublin?
b_b
27 Sep 2013, 09:39 PM
The rent will alway get paid. Remember renters are "saving the difference" so when they become unemployed, the landlord will claim their savings until they get another job.

If unemployment increases, I do not expect food or energy prices to fall. If housing is under supplied, then rents will not fall either for the same reason. Discretionary items will suffer first - and there are a lot of discretionary items which will be sacrificed before rent.
or people will use more the housing we already have.

In fact, this is already happening as evidenced by the increase in the number of group households in recent years.

Remember, Australian housing is chronically underutilized.

Millions of empty bedrooms.
Pig Iron
27 Sep 2013, 07:23 PM
ugh.

someone investing in a house is not at the expense of someone else's opportunity. the concept of opportunity cost is applied when comparing investment choices, say bank interest vs a house. if i spend 1 million on a house it doesn't prevent the next guy spending a million to start a business.

it is MY opportunity cost, not the next guys.
Ugh what?

This is not hard Timmy.

If people are investing in one asset class, they are ipso facto, not investing in other shit.
Edited by Veritas, 27 Sep 2013, 09:45 PM.
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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Massive
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b_b
27 Sep 2013, 09:39 PM
The rent will alway get paid. Remember renters are "saving the difference" so when they become unemployed, the landlord will claim their savings until they get another job.

If unemployment increases, I do not expect food or energy prices to fall. If housing is under supplied, then rents will not fall either for the same reason. Discretionary items will suffer first - and there are a lot of discretionary items which will be sacrificed before rent.
U really r a firm believer of money coming from nowhere.. U get kick started by an inheritance by any chance ?

Sane unemployed renters will avoid owing landlord and get out .. It happens in downturns all the time... Usually a good catalyst for people let go of their ip's in market crash ..

As keep saying though .. Not going to happen .. Its not that fuckrd in oz
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b_b
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Massive
27 Sep 2013, 09:53 PM
U really r a firm believer of money coming from nowhere.. U get kick started by an inheritance by any chance ?

Sane unemployed renters will avoid owing landlord and get out .. It happens in downturns all the time... Usually a good catalyst for people let go of their ip's in market crash ..

As keep saying though .. Not going to happen .. Its not that fuckrd in oz
You are suggesting I got a free kick in life, while at the same time you think unemployed renters will go and stay rent free with benevolent strangers and family?

You have lost perspective.

Some people will co share - I have no doubt. But probably only enough to keep the market moderately under supplied. Remember new supply has crashed under your scenario, and the population is still growing, albeit at a slower rate.

ACCOMODATION ranks very high on people's needs. I can't see rents falling under your scenario without excess supply. I can see a collapse in holidays, retail, the car industry, the restaurant industry etc. but not rents.
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Pig Iron
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Bogan scum

Veritas
27 Sep 2013, 09:40 PM
Ugh what?

This is not hard Timmy.

If people are investing in one asset class, they are ipso facto, not investing in other shit.
so now we have gone from existing houses lock up capital, to opportunity cost, and now it's people are only investing in housing being the problem?

it's actually pretty funny that you think these are all the same thing.

how about you just stick to one argument and if/when it's shown to be wrong you just concede it, then we can all get off the merry-go-round.
Massive
27 Sep 2013, 09:27 PM
If ur unemployed and can't pay rent u can't keep renting
which it funny because as a home owner i can lose my jobs, deploy the huge buffer i have on my mortgage and then claim the 12 month repayment holiday thats part of it.

and yet bears still want us all the believe it's home owners who will suffer...
Edited by Pig Iron, 27 Sep 2013, 10:24 PM.
I am the love child of Tony Abbott and Pauline Hanson
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Massive
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b_b
27 Sep 2013, 10:06 PM
You are suggesting I got a free kick in life, while at the same time you think unemployed renters will go and stay rent free with benevolent strangers and family?

You have lost perspective.

Some people will co share - I have no doubt. But probably only enough to keep the market moderately under supplied. Remember new supply has crashed under your scenario, and the population is still growing, albeit at a slower rate.

ACCOMODATION ranks very high on people's needs. I can't see rents falling under your scenario without excess supply. I can see a collapse in holidays, retail, the car industry, the restaurant industry etc. but not rents.
how you started has nothing to do with what unemployed renters would do ... i just wonder how u think money will keep appearing in a falling economy ..

whether they are rent fee or paying , and who they rent with, it doesnt matter.. they would seek a lifestyle that is less cost, not be choice, but necessity .. and that means finding alternative living arrangements - and it will change from person to person ..

grouped housing will increase .. it already is !
http://www.news.com.au/realestate/news/meet-the-sandwich-generation-perth-homes-redesigned-for-extended-families/story-fndbaln9-1226724471929



population growth rate will fall .. and rents DO fall in a recession .. its not breaking news

Pig Iron
27 Sep 2013, 10:20 PM
and yet bears still want us all the believe it's home owners who will suffer...
did i say as much ? read my posts... best place to be in a recession is an outright owner of property .. ( manage mortgages on multiple IP's if unemployed might be a headache though )

i dont even think there will be a recession in the near future . keep your shirt on... just some friendly banter with BB... ( holidays time coming in china so slow day in the office )

Edited by Massive, 27 Sep 2013, 10:43 PM.
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b_b
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Massive
27 Sep 2013, 10:37 PM
how you started has nothing to do with what unemployed renters would do ... i just wonder how u think money will keep appearing in a falling economy ..

whether they are rent fee or paying , and who they rent with, it doesnt matter.. they would seek a lifestyle that is less cost, not be choice, but necessity .. and that means finding alternative living arrangements - and it will change from person to person ..

grouped housing will increase .. it already is !
http://www.news.com.au/realestate/news/meet-the-sandwich-generation-perth-homes-redesigned-for-extended-families/story-fndbaln9-1226724471929



population growth rate will fall .. and rents DO fall in a recession .. its not breaking news


did i say as much ? read my posts... best place to be in a recession is an outright owner of property .. ( manage mortgages on multiple IP's if unemployed might be a headache though )

i dont even think there will be a recession in the near future . keep your shirt on... just some friendly banter with BB... ( holidays time coming in china so slow day in the office )
Yes - I heard last year house prices will fall as unemployment rises. That didn't work out too well either.

And yes grouped housing has increased....and so have rents. Perhaps you should reflect on that.

It is not all about the demand side.
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miw
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b_b
27 Sep 2013, 09:17 PM
Where will the renter disappear to?
The renters won't necessarily disappear, but if people move away or become fewer, then obviously rents can fall. If incomes drop then you'll probably see a mixture of people moving into cheaper digs and scrunching up. Low-end rents would hold up, but as you move up the scale, the impact would become more marked, I would have thought.

All that said, in my lifetime rents have never dropped in established suburbs in Brisbane. They have merely trod water on occasion....

On the topic of mums and dads pulling out, it can definitely happen. Mums and dads pulled out in Germany decades ago and seem to be in the process of doing so in the US, but I am not so sure this is a good thing for the renter. In most places in the US, rentals have been tight, and in the few German cities that are growing, rents are very expensive. One thing I noticed here in Beijing 3 years ago when rents actually did fall was that apartment buildings where all the apartments belonged to a single operating company did not reduce their rents at all, letting apts go empty, whereas in the buildings with small private owners landlords were cutting asking rent to just get somebody into their properties.
Edited by miw, 27 Sep 2013, 11:21 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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