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Australian Property Chart of Shame - The Epic Failure of the Oz Housing Bears is Complete
Topic Started: 28 Nov 2013, 10:33 PM (27,066 Views)
Will
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The Whole Truth
20 May 2015, 12:34 PM
2005 an investor in Brisbane; Adelaide, perth, hobart is told " Property prices double every 10 years, buy now on an interest only loan and in 10 years rental income will be double and so will he value of the property. 10 years later they find out it was all bullshit. All a pack of lies and they are still saddled with a property that has 10 years worth of maintenence due on it and the rent still doesn't cover the basic repayment of the IO loan and rates bills.

Epic fail house investor. Epic fail.
Actually, if you invested in some areas in Brisbane in 2005 you would be doing well. However generally if you invested in Brisbane in late 2007, your looking at around 15% growth in total over about 7.5 years. And the current market is hardly on fire at the moment. Now you would certainly be re-evaluating your retirement plans.
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Shadow
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Evil Mouzealot Specufestor

foxbat
20 May 2015, 02:08 PM
Come on Shadow, you can do a lot better than that last statement.
https://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http%3A%2F%2Ftermolorenzoni.com%2Fterm%2F38507467&ei=YftbVbS3H4uR8QXyx4GABQ&bvm=bv.93756505,d.dGc&psig=AFQjCNGkN-RhKIraKI-XoNyZLoXFJpCuyA&ust=1432177841083670
I totally agree that "real" assets are better than money as an investment.
Sydney real estate has proved to be useful hedge against the continual debasement of our dollars purchasing power.
Peter
I'm not sure how any of that is relevant to the questions I asked you. It's certainly not an answer anyway.

The questions were...

1. Why would the chart be more 'correct' if it was in real terms. What is 'incorrect' about the chart as it stands?

2. Have you ever seen a vendor advertise his property in 'real' terms?
Edited by Shadow, 20 May 2015, 02:56 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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Rastus2
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Shadow
20 May 2015, 11:31 AM
GC has never had a 50% crash, although some individual properties may have fallen by that much.

There were ~20% falls in the early 80s and early 90s, and then obviously the most recent fall in the 2000s... every decade or so. It's a volatile market.

Posted Image


thanks for that chart... it was the 1st one that came up on google for me as well (PRD document) but since it only went to 2012, I didn't bother using it.

Quote:
 
GC crashes regularly. It's pretty volatile. It doesn't take much skill to predict a GC crash as there's always going to be one coming along every decade or so.


Sure, every decade or so eh..

GC is pretty volitile, so what ? Sydney is more volotile than Melbourne, does that make picking the market easy ?

Like most property markets, it's easy to sit down after the event and make claims of how easy it was to predict the peak/trough.

Indeed, look at any chart and it's easy to predict where the cycle was... here is a nice chart showing what looks like 5 year cycles.
http://www.propertyobserver.com.au/images/2014/10/10/derived_median_house_prices.png


The question should not be, are there cycles, but rather, how easy was it to pick a particularly nasty fall, and how many predicted it ...


Indeed fact, another chart on the GC shows that the period 2008-2012 was particularly unique... the market did not just slow, or stall, had one of the few extended (a few years) of negative rolling annual change .. the 1st time since the chart starts in 1989. Most likely well before that period as well since it was sitting @ +40% in march 89.

Rolling annual change in Gold Coast home values - page 2.

http://www.mpmproperty.com.au/wp-content/uploads/2014/05/RP-Data-Housing-Market-Review-May-2014.pdf


as for the decade or so... I wonder what someone who has 30 years in GC real estate says ...

http://propertyupdate.com.au/whats-really-happening-to-the-gold-coast-property-market-2/

The typical Gold Coast real estate cyclical
The Gold Coast housing cycle is very pronounced and history shows that this cycle, typically, has a six-year frequency. Also, our analysis, going back to the 1960s, shows that the peaks are usually 250% higher (in sales/construction volumes) than the previous five-year averages, and the downturns are 50% lower.
Since I have been working in the industry, the Gold Coast experienced market peaks in 1988, 1992, 2002 and 2008. Downturns were experienced in 1982, 1990, 1995, 2000 and 2012.

After close to 30 years in this business, you see certain patterns emerge. History usually repeats. The Gold Coast looks set to have a market peak in 2014-2015, followed by peaks in 2020 and 2026. Downturns will also return and most likely in 2017-2018 and in 2023. This isn’t gospel but history is on my side.


So sure, cycles exist, and it's easy to pick a downturn after the event... not so easy to pick a particularly nasty downtun prior to it. Did you ?
Edited by Rastus2, 20 May 2015, 06:40 PM.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Trojan
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Shadow
20 May 2015, 02:54 PM
I'm not sure how any of that is relevant to the questions I asked you. It's certainly not an answer anyway.

The questions were...

1. Why would the chart be more 'correct' if it was in real terms. What is 'incorrect' about the chart as it stands?

2. Have you ever seen a vendor advertise his property in 'real' terms?
The problem with posting charts in real terms is people then go around and try and compare it to a chart in nominal terms
e.g. "look, property prices only went up 2%pa .... you would be better off with cash in the bank"
Edited by Trojan, 20 May 2015, 06:25 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Shadow
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Evil Mouzealot Specufestor

Rastus2
20 May 2015, 05:17 PM
So sure, cycles exist, and it's easy to pick a downturn after the event... not so easy to pick a particularly nasty downtun prior to it. Did you ?
Did I what, pick a nasty downturn?

There hasn't been one yet in any market I'm interested in since I started investing, so there's been nothing to pick. I don't pay much attention to the Gold Coast.

I expect Sydney to have a nasty one in a couple of years.
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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Rastus2
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Shadow
20 May 2015, 06:44 PM
Did I what, pick a nasty downturn?

There hasn't been one yet in any market I'm interested in since I started investing, so there's been nothing to pick. I don't pay much attention to the Gold Coast.

I expect Sydney to have a nasty one in a couple of years.
My point exactly.
gc had heaps of bulls when I was a bear, also heaps who had no opinion, they hardly get to claim they were right about their absence of prediction.. i am not so bearish on cg now, but not exactly bullish either. Some locations have done ok, some will continue to do so.

Yes, i have read your sydney downturn predictions for the future... fair enough, i assume if it's that close, you would not be looking to sell beforehand, but rather, ride it out ... any opinion on its likely duration ?
Edited by Rastus2, 20 May 2015, 06:58 PM.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Tick Tock
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We've NEVER had interest rates so low....In fact present rates are at 'RECORD' lows.

Even Joe Hockey has admitted that record low rates are a sign that economy is not doing so well.

Wots going to happen when/if rates rise again???

OR How long are rates going to stay at record lows???

Too many buyers taking on 'interest only' loans??? :mad:
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Foxy
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Zero is coming...

Will
20 May 2015, 02:43 PM
Actually, if you invested in some areas in Brisbane in 2005 you would be doing well. However generally if you invested in Brisbane in late 2007, your looking at around 15% growth in total over about 7.5 years. And the current market is hardly on fire at the moment. Now you would certainly be re-evaluating your retirement plans.
Is that adjusted for inflation??
Peter
Lukey01
20 May 2015, 06:59 PM
We've NEVER had interest rates so low....In fact present rates are at 'RECORD' lows.

Even Joe Hockey has admitted that record low rates are a sign that economy is not doing so well.

Wots going to happen when/if rates rise again???

OR How long are rates going to stay at record lows???

Too many buyers taking on 'interest only' loans??? :mad:
Ok,
But what about costs??

Then taxes??

Peter

Interest rates are only one input cost.


Peter
Edited by Foxy, 20 May 2015, 09:58 PM.
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Trojan
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Lukey01
20 May 2015, 06:59 PM
We've NEVER had interest rates so low....In fact present rates are at 'RECORD' lows.

Even Joe Hockey has admitted that record low rates are a sign that economy is not doing so well.

Wots going to happen when/if rates rise again???

OR How long are rates going to stay at record lows???

Too many buyers taking on 'interest only' loans??? :mad:
Low rates are bad for savers and good for borrowers.
We've had falling rates for a while now ... meanwhile Sydney house prices are booming....
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Shadow
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Evil Mouzealot Specufestor

I updated the Chart of Shame with today's ABS house price data, and added a few extra quotes by Soos, David and Kiyosaki...

Posted Image
Edited by Shadow, 23 Jun 2015, 05:39 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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