7:30 report discussion on a possible housing bubble ready to burst

[b simpson]

http://www.abc.net.au/7.30/content/2011/s3219511.htm

Interesting viewing, especially the talk of RE not being totally honest regarding disclosing failed auctions.

 

[hobo-jo]

RE not being totally honest regarding disclosing failed auctions.

I have been tracking the REIV stats for over 12 months now. This time last year their unreported auctions were coming in at around 7-9% of the total held, it's creeping up toward 20% most weekends now.

 

[Ausprop]

the recent run up in melbourne prices never made any sense to me

 

[Aaron Sice]

I don't understand the east's penchant for auctions, period.....

 

[Propertunity]

I don't understand the east's penchant for auctions, period.....

Its a national pastime!
What else are you going to do in Melbourne on a Saturday?
Go to the beach? Have an outdoor BBQ? LOL

 

[buzzlightyear]

Its a national pastime!
What else are you going to do in Melbourne on a Saturday?
Go to the beach? Have an outdoor BBQ? LOL

Or even in Sydney, go the beach and get caught in an Anglo-ethnic cross fire

 

[twobobsworth]

Or even in Sydney, go the beach and get caught in an Anglo-ethnic cross fire

The sharks will get you first.

 

[Aaron Sice]

Hahahaha that's some funny sh_t right there...!

 

[BV]

The media are repeating the same story.
We all know that the premium markets plus many markets of WA and QLD are correcting so median prices nationwide will appear lower.

If interest rates climbed higher in the short term then sure, we'll have price corrections at other brackets and in other states as well but interest rates aren't moving for now.

 

[Ausprop]

I think the WA market correction has run it's course... it's been quite long grind too. Seems the WA and Qld markets led the way there. South East seems to be following now. The downward movement in WA went for about 3 years. I expect it to languish about for a further 3-9 months before kicking up. pure guesswork of course, but may prove as some sort of extrapolation for what the south east may do.

 

[Wunderbar]

Agents love their own voice. Auctions are the perfect place for them to love themselves even more.

 

[tcocaro]

The allegation is that housing research companies like RP Data tend to project positive home value forecasts because many of those who buy their research are involved in real estate - as is RP Data's research partner, Rismark.

Thats a massive statement to make without providing further details..

My issue with this statement is that I cannot find a logical reason why RP DATA would project positive value forecasts..

RP DATA clients include, valuers, banks, developers, builders, investors etc..

Lets say for instance RP DATA projected massive falls, why would any of the above listed clients then stop buying RP DATA services in reaction???

If RP DATA had a conflict of interest e.g. it was owned by some of the countries major builders or real estate agents then that maybe a reason but its not to my knowledge..

People who use RP DATA are simply looking for data not a glowing report or negative just the truth or honest advice.

I am simply struggling to find a reason why RP DATA would even care if its data or advice was positive or negative.

People can claim HIA\MBA may provide misleading advice given their obvious bias but RP DATA? makes little sense to me..

I lose interest in the rest of the report when the material\sources are some random guys view at an auction, RP DATA's competitor and the reporters say so.

My main gripe is with this report is the the swipe against RP DATA. Lastly lets say there is even a hint RPDATA falsifies data or provides incorrect analysis would you really think banks, valuers etc would keep buying their data? Makes no sense to me.

 

[hobo-jo]

The allegation is that housing research companies like RP Data tend to project positive home value forecasts because many of those who buy their research are involved in real estate - as is RP Data's research partner, Rismark.

Thats a massive statement to make without providing further details..

My issue with this statement is that I cannot find a logical reason why RP DATA would project positive value forecasts.

Your focusing your attention on the wrong partner. Logical reason = Equity Finance Mortgage (a Rismark product).

Personally though I think if anyone was to cast doubt on RPData's results it should be due to their lack of transparency. For example to come to their wage/price ratios it was recently discovered they use figures which include superannuation and other streams of income that may not be available to all.

 

[evand]

Thats why auction clearance rates are a load of BS.

Reporting of auction results is optional = BS.

Dummy bidding = BS.

Passed in on high vendor bid = BS.

Quoting low reserve price to falsely get people to the auction = BS.

Sleazy RE agent running around the room getting in bidders ears = BS.

Many more. In case you didnt get it i think the whole auction system is total BS.

In fact the whole RE system is BS. The have put themselves in between sellers and buyers and the public have bought the crap the RE's are in a position of power. Its just not true, but they have very craftily created the perception and it sticks.

http://www.abc.net.au/7.30/content/2011/s3219511.htm

Interesting viewing, especially the talk of RE not being totally honest regarding disclosing failed auctions.

 

[VYBerlinaV8]

In fact the whole RE system is BS. The have put themselves in between sellers and buyers and the public have bought the crap the RE's are in a position of power. Its just not true, but they have very craftily created the perception and it sticks.

Well said. The property I bought where no RE agent was involved was the fastest and easiest property purchase I've ever made.

A friend sold his unit last year without a RE agent. Quick and easy.

 

[tcocaro]

ok transperancy maybe one thing but they have to balance commercial secrets with openess dont they?

Also if the worst crime they have committed is using superannuation as an income stream which sits in a grey area anyway then that is miles away form the accusation of "manipulating data" for the purported purpose of making RE look good.

Most of the data rpdata is used for is simply a nice front end to title searches i.e. what was sold, when how. On the market data showing advertising history which easily shows how good/bad the market is going. Basically a pretty front end for raw data... so manilpuling what exactly?

Their advice or commentary can potentially be "manipulated" but again there isnt much value in doing so. I cannot fathom cancelling my membership to RP DATA because they start saying negative things??? why on earth would I.

To cut a long story short that report was very blaze in its accusations..

Your focusing your attention on the wrong partner. Logical reason = Equity Finance Mortgage (a Rismark product).

Personally though I think if anyone was to cast doubt on RPData's results it should be due to their lack of transparency. For example to come to their wage/price ratios it was recently discovered they use figures which include superannuation and other streams of income that may not be available to all.

 

[hobo-jo]

To cut a long story short that report was very blaze in its accusations..

There wasn't actually any accusations that I could see. The reporter suggested there was an allegation (of companies like RPData projecting positive figures), but I don't know what or who this was in reference to...

 

[Indifference]

Thats why auction clearance rates are a load of BS.

Reporting of auction results is optional = BS.

Dummy bidding = BS.

Passed in on high vendor bid = BS.

Quoting low reserve price to falsely get people to the auction = BS.

Sleazy RE agent running around the room getting in bidders ears = BS.

Many more. In case you didnt get it i think the whole auction system is total BS.

In fact the whole RE system is BS. The have put themselves in between sellers and buyers and the public have bought the crap the RE's are in a position of power. Its just not true, but they have very craftily created the perception and it sticks.

LMAO... Totally Agree!!!

Not even the ABS can manage to malign data & statistics to this level... The RE industry is by far, in a league all of its own... Which is definitely not good for anyone except... yep, you guessed it, them....

 

[hobo-jo]

The allegation is that housing research companies like RP Data tend to project positive home value forecasts because many of those who buy their research are involved in real estate - as is RP Data's research partner, Rismark.

By the way if you want a specific example of this, not RPData, but checkout APM's Twitter page and tell me they report data without bias:

April 4th: Price strike by first home buyers - good news for investors-cheap houses and higher rents

March 22nd: Housing bubble to burst? The only thing that will be bursting soon is the Melbourne and Sydney buyers market. Opportunity knocking people!

March 31st: Still a buyers market in Sydney and Melbourne But not for long Prices WILL rise

http://twitter.com/#!/ApmNews

Funny stuff!

 

[wisty]

http://www.abc.net.au/7.30/content/2011/s3219511.htm

Interesting viewing, especially the talk of RE not being totally honest regarding disclosing failed auctions.

No surprise.

For anyone interested in the bubble, I would advise people look at the US bubble. The history is a lot more sedate than people think it was.

A slow collapse (over about 2 years), then a sharper collapse (over another year) when the banks buckled, then a protracted slump. Not the "pop" that people suggest will happen here.

RE bubbles pop pretty quick, but it's not as fast as some people imagine. You will hear about it unambiguously about a year after it already happened (if at all), not Twitted out as sellers all slash prices by 40% on a Tuesday afternoon.