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The Data on First Homebuyers is Flawed
Topic Started: 5 Dec 2013, 12:01 PM (4,058 Views)
Dr Watson
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zaph
5 Dec 2013, 01:46 PM
Has anyone been in touch with the RBA?
I spoke on the phone with Glenn Stevens this morning and he said he isn't concerned about it. "We're enthusiastic property investors here at the RBA, and so long as those prices keep going up, the board and our families are happy," he told me.
Edited by Dr Watson, 5 Dec 2013, 01:59 PM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Shadow
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Evil Mouzealot Specufestor

And just to recap on the earlier discussion here, there are actually three reasons why FHB numbers are stronger than the official ABS data would suggest...

1. FHB box not being ticked when some FHBs apply for finance to purchase existing dwellings (as discussed in the OP)
2. FHBs buying off-the-plan won't show up in the stats until project completion and subsequent finance approval
3. FHBs are buying investment properties as their first home purchase and are thus classified as investors rather than FHBs

Of course, this doesn't fit with the theory that Australia has a massive bubble and FHBs are priced out, hence the reluctance of certain people to accept the facts.
Edited by Shadow, 5 Dec 2013, 02:05 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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zaph
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Dr Watson
5 Dec 2013, 01:58 PM
I spoke on the phone with Glenn Stevens this morning and he said he isn't concerned about it. "We're enthusiastic property investors here at the RBA, and so long as those prices keep going up, the board and our families are happy," he told me.
ops should have been ABS.

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Catweasel
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Shadow
5 Dec 2013, 01:58 PM
How else would the ABS get the numbers? There's no other way they could find such data outside a survey. They do ask the question in the Survey of Income and Housing, but that is only conducted every few years. The only way to get monthly data is via the application for FHB concessions when finance is being arranged.

If amateur APF members could figure this out months ago, how come MacroBusiness with its Chief Economist and property 'expert' Leith van Onselen couldn't figure it out?

I'll tell you why - it doesn't suit their agenda. They prefer to give the impression that FHBs are 'priced out' or 'on strike'.
Catwease say mouzealot need to learn about a data sets.

For the example, mouzealots and scallys trumpet a index the figures that a show a mouse house price go the up,

because it believe it and a wider mousedom is a richer.

Mouse not have ability simple the data question about a represent of a population,

so if it cannot the quantify,

its belief systems based on ephemeral,

yet it throw around narrative like mojito at banjo fest.

And if it not fit with naughty blogger narrative,

it irrelevant.

Mouzealots hunt for heretics,

but there be none.
Edited by Catweasel, 5 Dec 2013, 02:13 PM.
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peter fraser
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Shadow
5 Dec 2013, 01:24 PM
It will be a hard point for MacroBusiness to concede, as it goes against one of their core arguments for the past year - i.e. that FHBs are 'priced out'. Same goes for Catherine Cashmore and David Collyer - they've spent the past year telling their followers that homes are unaffordable for FHBs and that FHBs are 'on strike'. Will be funny to watch them try to reconcile this position with the fact that FHB numbers are probably pretty close to their historical average.
Actually I emailed Leith about this point some time ago and whilst he understood, he is probably not ready to let go of the official stats just yet. I can understand his position on this. I have discussed this at MB and the discussion was well received with most commenters understanding the issue.

I have also spoken with Catherine Cashmore on this and I can assure you that she understands. I do think though the high prices in inner city Sydney and Melbourne limit the number of FTB's buying in those areas, so unless someone was involved in the market on the city outskirts and rural centres it would be hard to see the evidence.

I think that this story will grow slowly until the mainstream pick it up and run with it. Once the lending software platforms are updated so that the data recorded is 100% correct we will be able to see whether this was a large issue or an insignificant one. But until then doubts will continue.

The danger for the market is that politicians will run with the official data and feel compelled to bring back the FHOG which would rectify the issue from a technical aspect, but potentially destroy the policy reasons for reducing the FHOG in the first place.

They will make important decisions based on wrong data.
Edited by peter fraser, 5 Dec 2013, 02:20 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Shadow
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Evil Mouzealot Specufestor

peter fraser
5 Dec 2013, 02:18 PM
The danger for the market is that politicians will run with the official data and feel compelled to bring back the FHOG which would rectify the issue from a technical aspect, but potentially destroy the policy reasons for reducing the FHOG in the first place.

They will make important decisions based on wrong data.
That's definitely a possibility. It would be a massive own goal for those bears like Cashmore who have been churning out hand-wringing articles each week about the 'priced out FHBs' and 'affordability crisis', if the politicians respond by bringing back FHB grants to fix this non-existent problem, in the same way they reacted to Steve Keen's 2008 gloom-spruiking by boosting the grants.
Edited by Shadow, 5 Dec 2013, 02:37 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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Catweasel
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peter fraser
5 Dec 2013, 02:18 PM
Actually I emailed Leith about this point some time ago and whilst he understood, he is probably not ready to let go of the official stats just yet. I can understand his position on this. I have discussed this at MB and the discussion was well received with most commenters understanding the issue.

I have also spoken with Catherine Cashmore on this and I can assure you that she understands. I do think though the high prices in inner city Sydney and Melbourne limit the number of FTB's buying in those areas, so unless someone was involved in the market on the city outskirts and rural centres it would be hard to see the evidence.

I think that this story will grow slowly until the mainstream pick it up and run with it. Once the lending software platforms are updated so that the data recorded is 100% correct we will be able to see whether this was a large issue or an insignificant one. But until then doubts will continue.

The danger for the market is that politicians will run with the official data and feel compelled to bring back the FHOG which would rectify the issue from a technical aspect, but potentially destroy the policy reasons for reducing the FHOG in the first place.

They will make important decisions based on wrong data.
Catweasel laugh.

Data is a data.

It not be the wrong or a right.

It is what it the is.

If it not know its the representative nor it the be the limitation,

it stumble around in a dark,

Even if it masquerade as white shoe armed with brief case of glossy brochure.

If mouse had gumption to test,

it would be a surprise what its experts not a know.

and create fluster for white shoes.
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Dr Watson
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Shadow
5 Dec 2013, 02:35 PM
It would be a massive own goal for those bears like Cashmore .... Steve Keen's 2008 gloom-spruiking ....
This isn't Catherine Cashmore's fault nor is it Steve Keen's fault and yet you've turned it into an attack on them.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Shadow
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Evil Mouzealot Specufestor

Dr Watson
5 Dec 2013, 02:48 PM
This isn't Catherine Cashmore's fault nor is it Steve Keen's fault and yet you've turned it into an attack on them.
I simply pointed out that it could result in an 'own-goal' for them. Not sure why you perceive that as an 'attack' on them personally?

Are we no longer allowed to challenge the views of any bear?
Edited by Shadow, 5 Dec 2013, 03:15 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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Dr Watson
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Shadow
5 Dec 2013, 03:15 PM
I simply pointed out that it could result in an 'own-goal' for them. Not sure why you perceive that as an 'attack' on them personally?

Are we no longer allowed to challenge the views of any bear?
They have got nothing to do with this issue. Leave them alone. The ABS and the MSM should be in the crosshairs.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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