Business Spectator - Analysis of Australian Property Market - Part 3

TF

You are absolutely right. There is no point trying to predict the path of property prices because you just can't. I think I'll give up on this property investing idea and focus on counting the notes I keep under my bed. At least then I won't have to worry about the shame of taking a calculated risk and being proved wrong.
 
Try re-reading my quote. You know it's you, don't you ;)

"...yes the actual 'boom' part may hit in 2010, 2011, but growth will still be strong in 2008-2009."

Hi TF,

You know very well that you've taken that quote out of context. Again! We've been through this before. That quote is part of a response to FHB, where FHB first said something like this:

FHB: I think there might be a boom in 2010, 2011, but what if values drop in the meantime?

And I replied (although it was not what I saw as the most likely scenario), that sure, there may be a boom in 2010, 2011 (as FHB suggested) but in the meantime I saw growth, not values dropping. (By the way, this is borne out by the latest RPData and Residex stats that show Sydney house prices on the rise again).

Would you care to quote the whole thing TF, and not just the small section out of context. You know, include the part where FHB first suggested the 2010/2011 boom, not me! I notice for that particular quote you didn't provide a link. Didn't want people to read the quote in context, eh?

Very duplicitous of you TF. But then you do have form in that area!

Cheers,

Shadow.
 
Hi TF,

You know very well that you've taken that quote out of context. Again! We've been through this before. That quote is part of a response to FHB, where FHB first said something like this:

FHB: I think there might be a boom in 2010, 2011, but what if values drop in the meantime?

And I replied (although it was not what I saw as the most likely scenario), that sure, there may be a boom in 2010, 2011 (as FHB suggested) but in the meantime I saw growth, not values dropping. (By the way, this is borne out by the latest RPData and Residex stats that show Sydney house prices on the rise again).

Would you care to quote the whole thing TF, and not just the small section out of context. You know, include the part where FHB first suggested the 2010/2011 boom, not me! I notice for that particular quote you didn't provide a link. Didn't want people to read the quote in context, eh?

Very duplicitous of you TF. But then you do have form in that area!

Cheers,

Shadow.

Try google: shadow boom 2010, may be add the unamed forum...:rolleyes:
here are some of your best quote that come up:
QUOTE (Shadow @ Jan 21 2008, 10:18 AM) *
Tell you what Count...
In 6 years time let's see who is closer to the truth...
My prediction: Sydney median will be close to $1M
Your prediction: Sydney median will be close to $360K (Ed Karan's 40% haircut laugh.gif )
Are you up for the challenge?

QUOTE (Shadow @ Jan 21 2008, 10:09 AM) *
Do you honestly believe that if you took a typical Sydney median priced house and plonked it down in the middle of Manhattan, or Central London, that it would be less expensive than the same block in Sydney. Not a chance. Same goes for putting that same house down in the middle of Moscow, Seoul, Tokyo, Hong Kong, Paris, Milan, Rome, Dublin etc. Do you realise what a media house looks like in those cities... shoebox!

Considering what you get for your money, Sydney property is very good value. That is one of the reasons why prices are still on the way up. And they have some way to go. Within the next 5-6 years, the Sydney median price will be $1M+.
May be that was another much more bullish Shadow...
 
Try google: shadow boom 2010, may be add the unamed forum...:rolleyes:
here are some of your best quote that come up:

May be that was another much more bullish Shadow...

Hi Boz, I don't see anything in those quotes about a boom in 2010...
 
Hi Boz, I don't see anything in those quotes about a boom in 2010...

OK, 1m$+ in 5-6 years starting from january 2008, let's see, we are in middle 2009 and around 4.5 years to go, so no boom for the next 1.5 year (and price steady since your quote), I guess you are saying that in 2012 and 2013 we'll have 40%+ increase each of these years?
 
Hi TF,

You know very well that you've taken that quote out of context. Again! We've been through this before. That quote is part of a response to FHB, where FHB first said something like this:

FHB: I think there might be a boom in 2010, 2011, but what if values drop in the meantime?

And I replied (although it was not what I saw as the most likely scenario), that sure, there may be a boom in 2010, 2011 (as FHB suggested) but in the meantime I saw growth, not values dropping. (By the way, this is borne out by the latest RPData and Residex stats that show Sydney house prices on the rise again).

Would you care to quote the whole thing TF, and not just the small section out of context. You know, include the part where FHB first suggested the 2010/2011 boom, not me! I notice for that particular quote you didn't provide a link. Didn't want people to read the quote in context, eh?

Very duplicitous of you TF. But then you do have form in that area!

Cheers,

Shadow.

Yes, yes and when you said "strong growth" in 08/09 you meant moderate.

Care to change that to something else now?

And when in December 2007 you said "I expect this massive boom is just round the corner, and in fact that the preliminary growth phase has already begun in several cities..." you meant a period more than four years away, clearly not a couple of years

Obviously, "just around the corner" is a relative concept.

And when you stated "I expect the next real surge in prices to occur around 2010-2011", that wasn't indicating your view of the timing of the boom either.

My point is simply this, you trot out the same tired lists/arguments to support your preferred outcomes that (a) a correction won't happen and (b) a boom is just over the horizon and then don't seem capable of revisiting your hypothesis to come to an understanding of why your arguments fail to deliver.

Hell, as the world capital markets were going to pieces you struggled to even mouth the R word in the context of the US and still endeavoured to make the very odd argument that Australia would be immune.

You're smarter than that and I'm sure if you could address your selection bias you would have more luck.

You might just have to run the risk of being less popular here.
 
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Shadow, i dont know why you bother mate, some people on this forum are desperate to validate their own inactions. I copped similar flack in the coffee lounge, talking about the benefits of dollar cost averaging in the stock market. Where by if you are an investor, with a long term view point, and you were happy to invest in the stock market at much higher levels, then you should be estatic at lower levels. I was accussed of being a lier, of having no idea what im talking about, that the only way i could make a small fortune is to start off with a big fortune etc etc.
Only time will tell.
Hopefully you have put your money where your mouth is over the years. If so, then your views successful or otherwise will translate into your own direct benefits, very different from some of the armchair opinionists out there, both on this forum and that regularly appear in the news.

Someone on this forum stated it in better words than i can:
Mr Steven Keen if you are so great, then where is your wealth:
Oh i forgot, you just express views, you dont put your money where your mouth is (expect to sell your PPOR and hit the rental market), so Mr Fantastic, given the number of years you have been working, just what have you been doing to create your own income stream??????????

But you have the nurve to lecture others?????
 
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Shadow, i dont know why you bother mate, some people on this forum are desperate to validate their own inactions.

Thanks chilliaa,

You are absolutely right! People like the gloomers who posted above, seem to be so devoid of their own ideas, and so persistently negative about the future, that they immediately jump on anyone with a positive outlook and launch into character assassination mode. Or else they pedantically nitpick posts from years ago, taking small snippets of conversation out of context so they can say 'Ha - you were wrong about that!' :rolleyes:

I don't claim to be right all the time. Like just about every economist and analyst out there, I state what I think might happen. Sometimes I get it right and sometimes I get it wrong. I've yet to meet anyone who can predict the future with 100% accuracy as the gloomers seem to expect me to do!

I have yet to see the gloomers actually address any of the points that I made in my Business Spectator articles. Instead they have resorted to mud flinging, nitpicking and silly comments like 'I could easily debunk everything Shadow says, but I can't be bothered'. This has been the response from the gloomers both here and on the other forum where Boz and Token Funder/Yossarian usually hang out.

Oh well, I guess they need something to keep themselves amused, and if nitpicking my old posts and preaching Doom and Gloom is what keeps them happy, then who am I to stand in their way. :D

Cheers,

Shadow.
 
I don't claim to be right all the time. Like just about every economist and analyst out there, I state what I think might happen. Sometimes I get it right and sometimes I get it wrong. I've yet to meet anyone who can predict the future with 100% accuracy as the gloomers seem to expect me to do!

Shadow.

Shadow, what's your take on the growing net foreign debt to gdp ratio?

Why is Australia becoming more reliant on foreign funds to finance Australian commerce, property prices, and lifestyle?
 
Thanks chilliaa,

I don't claim to be right all the time. Like just about every economist and analyst out there, I state what I think might happen. Sometimes I get it right and sometimes I get it wrong. I've yet to meet anyone who can predict the future with 100% accuracy as the gloomers seem to expect me to do!

I have yet to see the gloomers actually address any of the points that I made in my Business Spectator articles. Instead they have resorted to mud flinging, nitpicking and silly comments like 'I could easily debunk everything Shadow says, but I can't be bothered'. This has been the response from the gloomers both here and on the other forum where Boz and Token Funder/Yossarian usually hang out.

Cheers,

Shadow.

OK, you are right,
I was getting too personal nasty on you, (my excuse was that I was attacked for putting word in your mouth), my response in this thread was just a warning to reader that have not a good knowledge of the economy, fundamental and data about your one sided view post....I should have put a complete response but I don't have the time.
In any case you have been addressed in a special thread, can't put the link here but just google: shadow response thread ;)
many responses are a bit like your original post with not much data to back up and one sided ;)
In any case I just say that you might be right about debt, Steeve Keen is also right but I think he fail to see that the debt bubble in australia could go along for years before the economy couldn't take anymore (unlike US and UK).
I am not a property bear bug, I think that if you have plenty of money property is one of the best way to preserve it. But on the other hand I believe it is going to be much much more hard and risky to increase your wealth in taking on more debt and sit down watch your money grow...

EDIT:
about the 99% of LVR It was just a number to point out that you won't have 1m$+ homes in short time without a more loose credit standard (subprime kind of loans).
 
Yawn..
Shadow, can you please pinpoint a year and date of the next boom so I can invest accordingly? :rolleyes:

Well, I can make a prediction, as many people have done. I might get it wrong, so please don't take this as financial advice and invest accordingly, okay? :D

The boom will begin... in Sydney... at 5:17pm... on Thursday 7th... of February... 2013.

By 'boom' I mean annual growth of 15-20%. We will of course experience moderate to strong growth in advance of the boom. :D
 
Shadow, what's your take on the growing net foreign debt to gdp ratio?

Why is Australia becoming more reliant on foreign funds to finance Australian commerce, property prices, and lifestyle?

Hi Winston,

The topic of Australia's debt to GDP ratio is covered in item 5 in the article above.

Cheers,

Shadow.
 
Shadow, what's your take on the growing net foreign debt to gdp ratio?

Why is Australia becoming more reliant on foreign funds to finance Australian commerce, property prices, and lifestyle?

Hi Winston,

The topic of Australia's debt to GDP ratio is covered in item 5 in the article above.

Cheers,

Shadow.

Quite funny! I don't think Shadow got the question, he might need to google about foreign liabilities. In his point number 5 just talk about australia debt which is a different thing (and by the way the RBA speach of september 2007 is outdated with the GFC caused by too much debt coming up in the meantime...).
In any case the foreign debt doesn't effect directly home prices in AU$, so it is not an economic knowledge you have to have to invest in property. But you would want to know about it if you live in singapore, Japan or a different country.
Anyhow I also give lots of importance on foreign debt, specially in driving currency movement in the long term, you don't find much info on the internet but I have a nice chart for you WW
country net foreign assets.gif
notice how NZD and Australia are related to Iceland :eek:
WW, I recommend you to read at RBA website a very interesting read on the comparison about AUS/ US net liabilities.
 
Boz, maybe I should have been more inclusive and said net foreign liabilities.....which your graph illustrates the alarming extent of.

Over 25% of funds lent to Aussies are now sourced from foreign wholesale.

Our asset prices and businesses are now more exposed to the availability and cost of foreign funds than ever before.

And as this dependence climbs, the % of gdp that is sent off shore to pay interest, grows.....leaving less to circulate for welfare, industry etc.

Australian miners' growing dependency on foreign capital and outright purchases (see partial list below) is a sobering reminder that we are now very much living off equity (selling farm and mine), because we cannot generate cash flows adequate to fund our business or std of living.

Minmetals on Oz Minerals
Chinalco on Rio
Hunan Valin Iron and Steel Group on Fortescue Metals Group
Shougang by stealth buying up Mount Gibson Iron Ore

Shenzhen Zhongjin Lingnan Nonfemet and PT Aneka Tambang Tbk on Herald Resources Ltd
MCC Mining on Cape Lambert Iron Ore Ltd
China Shenhua Group and China Coal Energy, Yanzhou Coal Mining on Aussie coal mines.
Haoning Group on Brockman Resources Ltd

IMHO, without the carry trade, Australia would not have had the recent property boom, because cheap ample supply of domestic credit did not exist.
 
Interesting that the more anyone reads about real estate-share market booms they only occur in free market economies,and on that fact alone even with all the doom and gloom around Australia will come out of all this mess a lot better than others,if the media -government-soap box wackers stopped sending out confused facts about the state of all markets the mindset of investors would change overnight,,willair..imho..
 
Boz, maybe I should have been more inclusive and said net foreign liabilities.....which your graph illustrates the alarming extent of.

Over 25% of funds lent to Aussies are now sourced from foreign wholesale.

Our asset prices and businesses are now more exposed to the availability and cost of foreign funds than ever before.

And as this dependence climbs, the % of gdp that is sent off shore to pay interest, grows.....leaving less to circulate for welfare, industry etc.

Australian miners' growing dependency on foreign capital and outright purchases (see partial list below) is a sobering reminder that we are now very much living off equity (selling farm and mine), because we cannot generate cash flows adequate to fund our business or std of living.

Minmetals on Oz Minerals
Chinalco on Rio
Hunan Valin Iron and Steel Group on Fortescue Metals Group
Shougang by stealth buying up Mount Gibson Iron Ore

Shenzhen Zhongjin Lingnan Nonfemet and PT Aneka Tambang Tbk on Herald Resources Ltd
MCC Mining on Cape Lambert Iron Ore Ltd
China Shenhua Group and China Coal Energy, Yanzhou Coal Mining on Aussie coal mines.
Haoning Group on Brockman Resources Ltd
Yes, but I am not too worried about net foreign liabilities now. I was very very very worried last october after Lehman bankrupt and the world credit freeze and the AU$ was falling like there is no tomorrow (and as I said before I think the money swap with US saved Australia and NZ from imploding like iceland). I also remember a speach from Costello a few years back he wasn't worried about as those money from overseas were fuelling GDP growth and not debt bubble or improductive investment, but I am not that sure anymore and he might had bad data as definetly most of household debt come from those money coming from overseas.
I think the solution is political with policies more towards helping more savings and reducing speding

IMHO, without the carry trade, Australia would not have had the recent property boom, because cheap ample supply of domestic credit did not exist.
It is not the carry trade, the carry trade is because Australia always had higher interest rates then most of the rest of the major countries. If Australia had lower interest rates carry trade wouldn't exist. A country like Australia would get lower interest rates when you have less people ready to pay higher rates to borrow money. You get that with a lower inflation and less incentive to get into debt (like deducting interest rates from taxes), pretty much when a country live within their means.
 
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