information on Australian Property Bubble
http://en.wikipedia.org/wiki/Australian_property_bubble
http://en.wikipedia.org/wiki/Australian_property_bubble
Australian Property Bubble WIKI
- Thread starter shail
- Start date
Yawn...........
A lot of words for something that does not exist....there is no bubble.
http://www.somersoft.com/forums/showthread.php?t=52798
http://www.somersoft.com/forums/showthread.php?t=64640
http://www.somersoft.com/forums/showthread.php?t=64715
ANZ Property Outlook says Australian house prices are not overvalued and that the measure of house price to income ratio is a flawed measure of affordability.
A lot of words for something that does not exist....there is no bubble.
http://www.somersoft.com/forums/showthread.php?t=52798
http://www.somersoft.com/forums/showthread.php?t=64640
http://www.somersoft.com/forums/showthread.php?t=64715
ANZ Property Outlook says Australian house prices are not overvalued and that the measure of house price to income ratio is a flawed measure of affordability.
A lot of work has gone into that Wiki page and the majority of updates have been by one person only. So there are obviously some true believers out there. It seems a bit strange to me to have a Wikipedia page for something that hasn't really happened. You can only be 100% sure that something was a bubble in hindsight.
How soon we forget...... Glenn Stevens unprecedented March 2010 appearance on Ch 7's Sunrise program re property overheating.
Makes me wonder about the cork moving up as well as down....
If China gets through its growing pains and continues on its merry way (including its navy
), and Australia retains favorable status for foreign capital, what is the gubmint going to do as housing gets foreign financed past 10x household income? Is the RBA governor just going to keep jaw boning and Julia fiddling, while the mother of all bubbles is inflated further?
No I don't. But it isn't impossible.
Brisbane prices have gone up 200% in the last 10 years.
Wages 40%.
Bank Foreign funding >100%.
If other developed nations struggle to achieve 2-3% GDP growth, and Australia is doing 4-5% on the back of China, then even more foreign capital will find its way here. That will open the doors for non bank lenders and competition will be full on again....lo docs, no docs, LVRs will all loosen.
And what will the govt do as a lack of housing stock and loose credit drive median prices to ever higher multiples of median wage and household income.
Will the RBA justify raising rates if inflation is under 3% for everything other than housing?
But really, I raised the scenario to make the permabulls think more carefully. They believe there's no bubble and there won't be a crash.
OK, let's accept that. But then let the permabulls ponder what action the govt might take in the case of house price growth tripling again over the next 10-15 years while wages rise 40%.
Perhaps cobble together a strategy called "affordable housing" where they get investors to build houses and rent them to tenants at below market rents in exchange for some huge (small) tax deductions
Banks/lenders could be cajoled into some kind of "shared equity" scheme whereby the borrower only gets to tip in a % of the house mortgage costs and the bank stumps up the rest, in exchange for some (most) of the CG on sale.
I'm not saying these ideas would work (much) mind you.
(What's that you say?....They're already doing that? ) But at least the govt. of the day could be seen to be doing something. IMO, attempting to artificially hold back an entrenched real estate cycle with its booms and busts, is equivalent to going down to the local beach to try to hold back the tide with a stick.
IMO, attempting to artificially hold back an entrenched real estate cycle with its booms and busts, is equivalent to going down to the local beach to try to hold back the tide with a stick.
OK Prop, boom or bust ahead?
I think two important factors are the home ownership % and the mix of house types change as housing in Australia becomes less affordable. I think Australian property prices can hold up simply with these factors changing.
Below is a chart showing ABS data showing proportion of renters versus owners pretty constant between '95-'05 at around 28% renters. Compared to 57% in Germany, 46% in France, 40% in Japan, 35% in the US. Australia has one of the highest % of home owners in the world.
Over the same period there has been a real change in the % living in seperate houses in favour of townhouses and apartments.
-------------------------------1995/95---2005-06
Separate house-----------------84.7%----72.3%
Semi-detached, Town house -----7.9%-----15.2%
Flat, unit or apartment-----------7.4%----11.5%
Makes sense to me first people are priced out of houses but would rather but a townhouse, apartment then rent. When priced out of purchasing they rent.
In the future I'd expect the % of apartments/townhouses to grow. Then the renting % proportion grow in line with other countries around the world.
Below is a chart showing ABS data showing proportion of renters versus owners pretty constant between '95-'05 at around 28% renters. Compared to 57% in Germany, 46% in France, 40% in Japan, 35% in the US. Australia has one of the highest % of home owners in the world.
Over the same period there has been a real change in the % living in seperate houses in favour of townhouses and apartments.
-------------------------------1995/95---2005-06
Separate house-----------------84.7%----72.3%
Semi-detached, Town house -----7.9%-----15.2%
Flat, unit or apartment-----------7.4%----11.5%
Makes sense to me first people are priced out of houses but would rather but a townhouse, apartment then rent. When priced out of purchasing they rent.
In the future I'd expect the % of apartments/townhouses to grow. Then the renting % proportion grow in line with other countries around the world.
Without trying to be a smart a$$, I think both. Just don't ask me when
. Property will continue to boom and bust into the future just like it always has done.Cheers for now.
They don't have to worry about this possibility - it won't happen.
Oh that's ok then, I'll just go off and read the blog on grass growing, it's spring after all.
Nice knowing y'all.
Prices will fall just as they have in the US and for many of the same reasons.
Availability of credit globally, the internet and the general perception that owning real estate can lead anyone to riches has driven prices up, they must fall.
I believe we will get all the answers to the questions you guys ask in the next two years maybe much sooner than later.
Employment will fall off a cliff when property starts to drop, right now it is still supported by false perception and equity which will disappear overnight.
Undersupply argument will turn out to be a mute point imo.
Availability of credit globally, the internet and the general perception that owning real estate can lead anyone to riches has driven prices up, they must fall.
I believe we will get all the answers to the questions you guys ask in the next two years maybe much sooner than later.
Employment will fall off a cliff when property starts to drop, right now it is still supported by false perception and equity which will disappear overnight.
Undersupply argument will turn out to be a mute point imo.
Oh that's ok then, I'll just go off and read the blog on grass growing, it's spring after all.
Just out of curiosity does employment fall off a cliff because how prices fall, or do house prices fall because employment falls off a cliff?
Is employment supported by equity? Or is property supported by equity? If it's the second one, wouldn't it be more accurate to say equity is supported by property?
I would have thought most people would have expected the "answers" to come in the last two years, but I think that just posed more questions in the end. Will there ever be an answer to a question that is not time limited? i.e. the answer in two years will be different than two years hence, so I feel it really is just an open question. However the answer 30 years ago seems to be "a lot less" than the answer from today, so I'll take my chances for the next 30 years.
Undersupply exists right up until the time nobody can borrow money and then it doesn't exist anymore, when people bunk up with each other and start leeching off their parents again. On this point I happen to agree with you.
Prices will rise for the long term just like they always have.
It is a good thing to be prepared and not to be greedy or blinkered by the herd mentality.
I don`t come here often anymore, and didn`t drop in to argue just to give my honest opinion, I dont have a crystal ball and timelines are always difficult but what I have said in the last 12 months or less is that things will begin to look very different and they no doubt have, the paradym has well and truly shifted.
I don`t come here often anymore, and didn`t drop in to argue just to give my honest opinion, I dont have a crystal ball and timelines are always difficult but what I have said in the last 12 months or less is that things will begin to look very different and they no doubt have, the paradym has well and truly shifted.
As soon as prices start to rise....its a bubble. When prices start to fall.........its an impending crash.
Maybe price fluctuations are just boring, normal market adjustments that have happened ever since Adam Smith penned the invisible hand that won't end up making people squillions or bankrupting them.
Mmm, does that mean no-one wins this argument?
And for the record, I am referring to Australia.
Maybe price fluctuations are just boring, normal market adjustments that have happened ever since Adam Smith penned the invisible hand that won't end up making people squillions or bankrupting them.
Mmm, does that mean no-one wins this argument?
And for the record, I am referring to Australia.
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