Nouriel Roubini : Housing Affordability Crisis Abating

Dr DOOM, Nouriel Roubini is a respected economist who has been calling this crisis fairly acurately since 2006 according to this article....
http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html

....and is even more of a poster boy for the doomsayers than steve keen.

Today on his website I found this, which, when compared to the sites comment on US and UK property, sounds remarkably upbeat.

Appears to be in agreement of the chronic housing shortage and immigration keeping a floor under prices.


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Australian Housing Market: Affordability Crisis Abating

  • Australia's housing market softened in 2008 on the exit of speculators due to high credit costs, but an ongoing housing shortage will keep a floor under prices - especially as fiscal and monetary support for first homebuyers fortifies owner-occupier demand
  • House prices: Australia has 2nd least affordable housing market in the world (Pauletich). House prices have yet to fully correct from the housing boom and overvaluation of 2001-04 and housing rental yields remain extremely low (AMP). Average house prices have only fallen 3.3% in the year to December 2008. If Australia avoids a deep recession, falls in house prices will be limited (ANZ). If not, prices could fall 40% if they mean-reverted, 50% if reverted to pre-bubble mean (Keen)
  • Building approvals: Number of building approvals down for 13 month in a row in Dec 2008, when approvals slumped -33% y/y, lowest reading since 1980s recession. Total value of nonresidential building approvals plunged 42% y/y December
  • Housing finance: The number of loans to owner-occupiers rose 1.3% in November, while the value of loans to investors fell 6.1% in November. The number of first home buyers jumped by 17.8% as Australians took advantage of the gov't fiscal stimulus package that doubled grants to first homebuyers
  • Housing shortage: Australia is failing to build enough homes to satisfy rising demand. This "underbuild" helps explain why house prices have held up, despite poor affordability, and why residential rents have been rising at the fastest pace for two decades and keeping a floor under house prices (JPMorgan). 153k dwellings are being built annually, well below the 175k starts/yr required (Commonwealth)
  • Origins of housing shortage: Monetary tightening, prohibitive development costs, builder caution amid tighter credit conditions is capping construction activity (ANZ). Strong demand from migrants to commodities-rich West and chronic housing shortage in East to support home prices
  • Government intervention: $6.4 billion of the $42 billion stimulus package announced Feb 3 will be committed to replenishing and expanding the public and community housing stock
Feb 5, 2009

It is subscriber only, so Im not sure if the link will direct you to the correct page http://www.rgemonitor.com/344

Home page is here http://www.rgemonitor.com/index.php

Dave
 
I ignored a lot of these economists from overseas.

The local economists like Saul Estlake of ANZ are more in tune with local conditions.

Dr DOOM, Nouriel Roubini is a respected economist who has been calling this crisis fairly acurately since 2006 according to this article....
http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html

....and is even more of a poster boy for the doomsayers than steve keen.

Today on his website I found this, which, when compared to the sites comment on US and UK property, sounds remarkably upbeat.

Appears to be in agreement of the chronic housing shortage and immigration keeping a floor under prices.




It is subscriber only, so Im not sure if the link will direct you to the correct page http://www.rgemonitor.com/344

Home page is here http://www.rgemonitor.com/index.php

Dave
 
I ignored a lot of these economists from overseas.

The local economists like Saul Estlake of ANZ are more in tune with local conditions.

As do I usually, but aren't they now saying the same thing?

Shortage of houses
Immigration outstripping supply
Houses becoming more affordable = a floor under housing?


My point being if Roubini is the guy who the hpc crowd say should be listened to as he has had it more right than others before, shouldn't he then be listened to now?

Maybe he will now be lambasted as well, just like anyone with an opposing opinion seems to be.

Dave
 
Tie that article in with the new abs stats showing housing loans on the increase

and numerous newspaper reports saying the same

http://au.biz.yahoo.com/090211/2/24jfv.html

First-time home buyers made up 25.4 per cent of home loans granted in December, the highest proportion since December 2001 - the height of the last major housing boom.

last nights email from http://mineblogger.com.au/
I thought that mining was supposed to be all over, but there are many jobs available

We’re providing you with a comprehensive overview of job opportunities for industry projects and for business-as-usual.The list of opportunities is significant, again demonstrating that the industry continues to have a strong requirement for skills and large numbers of people.

The number of employers featured this week is too long to list,
and whilst we’ve done our best to scan the industry, there will be more updates as the week progresses so remember to log in regularly.

you could certainly think that things aren't as bad as the media made out previously.

Is it a sign?
 
Well I don't like your chances of changing the **** crowd minds.....that is a rat hole I would not be going down...

But it is interesting how things are changing so quickly.....only 8 weeks ago it was all D&G...now it looks like the FHB market has turned around. Whilst, I think there are risks on the Commercial side...the low to mid end house market will strengthen this year...and really start to move next year.

So, Australia being the resilient island might come true...particularly if unemployment does not go past 6.5%!

As I always say time will tell....

My point being if Roubini is the guy who the hpc crowd say should be listened to as he has had it more right than others before, shouldn't he then be listened to now?
Dave
 
I know four true economists on that planet:
1. Adam Smith
2. Karl Marx
3. Noel Roubini
4. Myself

Rest is mechanistically following mystical indicators and economical models.
I have spent about 20 years of my life in economical modelling and the only thing I learnt that economy is not exact science. Nothing beats the intuition. And the intuition - it is just knowledge, experience and ability to analyse - filter out noise data and concentrate on that which is truly important.

You are not insured against mistakes, and even geniuses could not avoid them. Adam designed most basic theory - but he was the first.

Karl was real genius, but his drawback was that he was typical "not have" who wished death to the capitalism, therefore anything that goes beyond analysis of capitalism and goes into prediction of what future society would be is bovine excrement.

I have made my mistake - I underappreciated the sheer stupidity of recent resource bubble, as well as sheer stupidity of both Governments - past and present. Instead of suffocating the bubble with export duties and levies they allowed RBA to strangle the whole economy with interest rates.

Noel is really amasing. And his analysis is surprisingly accurate (for American).
I am impressed. The only few things he got wrong is ones I would not expect him to know. I would slightly correct him:
a. Affordability crisis is largely a myth. property prices are underpinned by idiotic planning laws that limit release of land. It is mostly fault of communists who call themselves "Greens". Another contributing factor is Australian mentality - "no one dares to get ahead of me". Developers are those who sufffer the most (how dare you build houses better than mine). Another Aussie trait - lawlessness. Corrupt Councils and anti-corruption bodies tat do nothing.
b. Americans have very foggy idea what "Australian dream" is
c. "no one dares to get ahead of me" has another ramification. It is called "landlord hatred". Sack your landlord no matter what.

Again - to shoot that accurate from a distance that long - the guy is true genius.
 
hi
I have a couple of very interesting question
and before I ask them do not get offended by my question because I have a group of analyists in my group and I ask them the same
but have you made a profit or have you got to a income level where any movement does not cause you a huge amount of problems.
now I dont ask this for you to post your net wealth
because the next question will be well post yours
but as I say as I have today its great to have a group of figures on a piece of paper but I need to make a thing call money.
now I don't wish to lose money but I like to make it
and for me before you say a person is a guru( which for me is a very funny thing in itself because a guru is simply geee you are you)
and if I am me how the hell are you going to help me
because half the people I deal with think I need locking up
put that a different post.
god old karl never made a dollar
adam not usre but maybe he was missing of the rich list or at least has not done alot for the rock as I can see.
noel well he has not light my fire as I have never heard of him
maybe bill gates has or even mr harvey might know of him but I think not.
and then their is your self.
now I would like to thank you for your contributon to the world and I would like you to a some time thank me for thanks you for your efforts because the other 3 did not make any impact on me at all.
and I know you will strive to be better then them
I hope you well and I hope that while you are out there that you will also think that at some time maybe not now but at some time you do also need to make money and think of all the train good or bad that these types of forums give you.
and for me look out osama because people must always question but they must also always keep a very open mind
 
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