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Good post, I agree with the essence (:p) of it. But money out of superannuation into homes isn't going to happen and if it did it would be highly deflationary! The worst thing to do when deflation threatens is to encourage a contraction of the money supply. What is needed is debt inflation...

Easy. You learn one simple lesson. That people are irrational herd-following large mammals that are simply waiting to be taken advantage of. Spot the bubble, sell early and you'll be in front of the herd. Spot the boom, buy early then sell early and you'll be half-way across the country before...

I thought this was interesting: Trends in the Ratio between Price and Annual Income for Condominium Apartments http://tochi.mlit.go.jp/h18hakusho/ch1_se1/setsu_1-1_eng.html I think the bubble, then the 'reversion to the mean' couldn't be more obvious. The lesson is that our income, over the...

The RBA have released new figures showing how much "water" is entering the "bucket". Enough to prevent home prices from falling below 2000 levels. Providing the number who try to take water out of the bucket doesn't suddenly rise, as it would if many people tried to sell their homes before...

Ah, but new money is required just to keep the water level from falling! Do you honestly think that these new market entrants can bring the additional $1,500,000,000,000 that is required to hold the market (bucket?) at current levels? Let alone to put more in than is draining out? Most new...

Savings comes from income. Credit available is a function of income. New migrants are equal to FHBs - the money they bring comes from income. Government grants come from income. Money from the ASX is an interesting point. Because the sharemarket is just another big bucket, precisely like the...

What's the other source? Capital gain? All capital gains are either a short term illusion or paid for by future buyers. Let me repeat that, it is a very important point (because I'm going to relate stocks of wealth to flows of income later). All capital gains are either a short term...

Bit hard to respond here sorry Willair. Yes, I saw the dotcom bust coming. I bought property instead of shares. Yes, I've been writing about the problems in the US (and here) for years. I sold all my shares in December 2006 and only recently began buying again. I've had luck along the way for...

See my previous post. You too suffer from a misunderstanding of how markets work. That's cool, I'll try to explain a few of the basics for you. My assumption would have been that people here were well aware of these, but I've now been corrected. ;) Let's start with this: 1) Money out = Money...

I have. Consistently for the last decade. :) Buffet and Munger have done pretty well over the long term too haven't they?

Okay, and who did they sell their old home to? And who did those people sell their old home to? And they? At the end of the 'chain' sits a FHB or an investor, and the amount of money they can bring is wholly a function of income. The amount of money that FHBs can bring to the market is...

Uh... no. Only if there was a buyer who had enough income to afford to buy their home for $1 million. :rolleyes:

Chuckle. I notice this doesn't seem to worry the 'old timers' much when the posts conform to their pre-existing notions. Take for example this thread. I have many years more property investing experience than the thread originator (maybe you want to ask him just how experienced he is ;), I...

Are you disputing my post (which was properly explained within itself, but not within your quote)? If so, spit it out. If not, stop sniping unless you have something constructive to add to the discussion.

Only people who are buying homes have anything to do with demand in the home buying market. What have your grandparents to do with it? Are they potential homebuyers? :confused:

Why did you structure your post as if there were 8 separate points within it? 1, 2, 3, 4, 5, 6, & 7 are merely a few of the components that make up Demand. :confused: But ultimately the demand function has to be dominated by income: I x (1+2+3+4+5+6+7) Because otherwise it doesn't matter...

But ultimately Bill, there has to be a relationship between the price of housing and the income of the people. I'd suggest that home size is a function of population and land constraints, while home price (over the long term) is a function of income? That seems a bit of a backward way to look...

Thanks for the links Gremlin. I tracked down the Klyuev (2008) econopaper which will be very informative on the model construction. Did you see this most interesting chart at one of your links? They had a real price decline of 4% for H1 2008. Interesting?

Nor are those in the USA by the looks of things: So it's cold comfort that Australian prices might only be 15% too high (I think that's hopelessly optimistic) if some of the most wealthy and populous parts of the USA have seen price declines of 40% and more in order that their overvaluation...

I was merely pointing out that one of the charts is blatantly wrong as it uses the 90+ day delinquency rate for Australian mortgages and the 30+ day rate for the USA. :confused: Check: Two ten eleven, yep, perfect!