Professor Sepius nefas claims Property Burst this year!

[tcocaro]

Thought you guys might be interested in an article i came across......



Professor Sepius nefas of the aclaimed University of nunquam in nuto has claimed in a newly published report that the Australian property market is about to collapse under its own weight.

Citing clear comparisons between the Australian property market and that of Japan we are expecting property falls in the maginitude of approximately 40%.

Population growth as claimed by those supposedly in the know usually backed and working in collusion with groups such as UDIA and HIA will not be sufficient to hold the property market up.

This is because wages are not keeping pace with inflation and is becoming less as a total percentage of total debt required to purchase a home. It is expected Governments will sit idly by and allow a bubble to form, do nothing to rectify and finally once and for all give the doomsayers their wish of armageddon especially after they were so close during the GFC.

Like minded industry experts with vast personal experience trading and investing in property such as Steve Keen have aplauded the report as vindication of his views he has held for more than 5 years now that THIS YEAR property prices will fall dramatically. It has been claimed that Professor Keen is so sure this time that he has printed "I was right" T-shirts in the thousands and now selling them online (credit card payments accepted).

Also recent events in Greece will leed to the sky rocketing price of souvlakis, creating a knock on effect to goat farmers, their income and purchasing power falling leading to massive falls in coal export for Australia.

So the writting is on the wall people, because it happened there, here and everywhere, because wages are not sky rocketing and population growth isnt enough and because of the insulation debarkle and Peter Garett refusing to resign... property prices will finally fall... and not just fall but plumet.

-- by Timothy "fed-up" Cocaro

 

[mary&mat]

Really??? People still need somewhere to live..

I still don't see it happening but will be grateful for insights from others more economically versed than I....

 

[alexlee]

Good joke, tcocaro.

Professor Sepius nefas of the aclaimed University of nunquam in nuto
Sepius nefas, nunquam in nuto is latin for 'often wrong, never in doubt'.

 

[aussierogue]

Where did he get his professorhip? The back of a cornflakes packet...

funny - good work!

 

[tcocaro]

So is that were Keen got it?

Where did he get his professorhip? The back of a cornflakes packet...

funny - good work!

 

[random]

Thought I'd tone this down as it really wasn't meant as d'day stuff but more in a question format than anything. Like many others I have a lot riding on things right now so I can't afford to kid myself.
But put it this way , I just can't see how in atleast b/c of our prices alone , some sort of correction isn't inevitable. I reckon we'd be crazy not to take a correction into account with any of our ventures and setups over the next few yrs and if it doesn't happen well , ya gonna be even better off aren't ya so nothing to lose being safe really.

Cheers

 

[urbanprospector]

i totally agree with the article

ps. is no housing shortage in australia . that is a fact . count stock and times it by average per person housing and we have too freeking many .

credit is drying up again due to piigs .

i sold in 2008 same place sold this feb 90k less .one st off beach in scarborough w.a. that drop is also after it was rezoned from 16 villa's to 57 units . one reason i put down to this is the lack of credit for development


Random .. the rest of the world didnt cope with prices 4.5 times wages

oh and all those places had the property spruikers spouting shortage

 

[tcocaro]

The intent of my post was not to trivialise the issue but hightlight the failings of the same argument I am hearing over and over again.

They are recycled, I just read an entire thread where the EXACT same reasonings where provided just over a year ago before, during and after the GFC. How can the same issues, same correlations and same comparisons apply today? How? Easy because "THIS TIME" I am right.. no sorry your still wrong because your not seeing things for what they are.

If you claim the property market is going to fall for long enough you will eventually be right. The problem is are you really right? if you 100 claims prior were all wrong.

Further more ones decision making process cannot be so black and white, property will always be bought and sold the issue is where you buy, what you buy, whats your time horizon and what your expecting as a return.

If your investment decision is NOT to buy property then what is your game plan? To sit around wait for a fall an buy property "cheap?". This strategy fundamentally makes little sense because it main assumption is based on one you dont beleive, that prices will once again raise up and beyond todays prices after the fall (in order for you to make any money). Further more price falls realistically are never large in real dollar terms, they are paper falls based on inflation together with some real falls, so if prices fall by 10% over 3 years this could simply mean real prices simply didnt move.

The main issue is that with property we are not talking about a highly liquid highly volatile market. Prices for the vast majority of time for the vast majority of market segments will be relatively stable. For this reason the battle between boom and bust is a futile one.

Like my numerous posts prior the aim is to take todays information and apply it "TODAY" for your investment decisions. Personally I think if your decision is to completely avoid the market on a beleif its so unstable is just wrong. Do the major stock trading companies shut up shop during a crisis? does the major property developers say ok... for the next 2 years we will sit it out? or do they simply say ok, lets purpone this development, lets avoid higher risk developments, lets change our lending arrangements etc etc... but STILL DEVELOP.. i.e. maybe develop 1 site rather than 10.

its all a question of what to do rather than not to do..

However if you wish to still make business decisions based on some airy fairy notion that it "happened in Japan and therefore can happen here" or the 100 other irrelevant statements when deciding whether or not to buy a single house in NSW or not, then be my guest but I will think you will find yourself never doing anything and never making a single dollar.

Thought I'd tone this down as it really wasn't meant as d'day stuff but more in a question format than anything. Like many others I have a lot riding on things right now so I can't afford to kid myself.
But put it this way , I just can't see how in atleast b/c of our prices alone , some sort of correction isn't inevitable. I reckon we'd be crazy not to take a correction into account with any of our ventures and setups over the next few yrs and if it doesn't happen well , ya gonna be even better off aren't ya so nothing to lose being safe really.

Cheers

 

[tcocaro]

There is no housing shortage? this is based on what exactly? How do you think prices are going up in the first place? This statement is just plain wrong.

"count stock and times it by the average per person" what hocus pocus formula is this? Stock?? as in available stock?? what average per person???

Heres a challenge your earning $50k a year with a family of 3 and two cars and you work in the city and looking for a property.. go buy one let me know how you go. Oh hang on, you cant because why? Oh thats right to expensive, why is that? because everyone in your shoes have bought there already, pushed the prices up due to limited stock pushing you further and further out from the city which leads to you competing with a larger and larger pool of people for property in the fringes and so on.

Demand and supply. I would love to hear your theory on why prices are going up in the first place? oh maybe its us developers who all get together over a coffee and say lets just raise prices to some random figure??? or is it because ummmm what exactly??? its SUPPLY!! but the ignoramus amongst us go to realestate.com.au and say but look there are so many!! oh please!! theres lots of ferraris at the car delearship but i dont see em flying out the door....

The property you refer to in "scarborough" please provide an address. I will disect your argument to peices if you do this but i think you wont. Off the bat if your claim is even true then what price was it bought for? more than it was worth? I have seen so many wanabe developers go to an investment seminar get all hyped up buy any development site out there, run out of money and have to sell for whatever price. Your example is anectodal at best..

Furthmore look at your example of suburb? Redcliff etc are all much more volatile markets given the product being more for 2nd homes, holiday homes etc. Find me something showing a 90k drop in a year in ALL OF BRISBANE metro.. theres a challenge.

"credit is drying up again due to piigs . " - what on earth does this mean!

sigh.. your arguments sound like those a drunken man over a bar says to his mate...

i totally agree with the article

ps. is no housing shortage in australia . that is a fact . count stock and times it by average per person housing and we have too freeking many .

credit is drying up again due to piigs .

i sold in 2008 same place sold this feb 90k less .one st off beach in scarborough w.a. that drop is also after it was rezoned from 16 villa's to 57 units . one reason i put down to this is the lack of credit for development


Random .. the rest of the world didnt cope with prices 4.5 times wages

oh and all those places had the property spruikers spouting shortage

 

[Player]

Even a broken clock is right twice a day

Thanks for your insights TC.

To those that eventually consider they might be right (when is another matter), I guess they operate from the premise that...........even a broken clock is going to give the correct time twice a day.

 

[tcocaro]

The fact you read this as a genuine article and not as the spoof it clearly was amazes me... The fact you treated it as genuine explains more that you would think and reafirms my beleif that this arguments is like religious dogma i.e. a "beleif" based argument rather than one based on rational argument.

Maybe you can sign up for the University of nunquam in nuto im sure they will accept you with open arms..

i totally agree with the article

 

[urbanprospector]

There is no housing shortage? this is based on what exactly? How do you think prices are going up in the first place? This statement is just plain wrong.

"count stock and times it by the average per person" what hocus pocus formula is this? Stock?? as in available stock?? what average per person???

Heres a challenge your earning $50k a year with a family of 3 and two cars and you work in the city and looking for a property.. go buy one let me know how you go. Oh hang on, you cant because why? Oh thats right to expensive, why is that? because everyone in your shoes have bought there already, pushed the prices up due to limited stock pushing you further and further out from the city which leads to you competing with a larger and larger pool of people for property in the fringes and so on.

Demand and supply. I would love to hear your theory on why prices are going up in the first place? oh maybe its us developers who all get together over a coffee and say lets just raise prices to some random figure??? or is it because ummmm what exactly??? its SUPPLY!! but the ignoramus amongst us go to realestate.com.au and say but look there are so many!! oh please!! theres lots of ferraris at the car delearship but i dont see em flying out the door....

The property you refer to in "scarborough" please provide an address. I will disect your argument to peices if you do this but i think you wont. Off the bat if your claim is even true then what price was it bought for? more than it was worth? I have seen so many wanabe developers go to an investment seminar get all hyped up buy any development site out there, run out of money and have to sell for whatever price. Your example is anectodal at best..

Furthmore look at your example of suburb? Redcliff etc are all much more volatile markets given the product being more for 2nd homes, holiday homes etc. Find me something showing a 90k drop in a year in ALL OF BRISBANE metro.. theres a challenge.

"credit is drying up again due to piigs . " - what on earth does this mean!

sigh.. your arguments sound like those a drunken man over a bar says to his mate...

retired at 36 dont drink .

credit drying up due to piigs = .. portugal ,ireland ,italy ,greese and spain . all suffering sorverign credit risks of default .so inter bank lending will freeze up again or the cost of borrowing will rise . like the bond yeilds of the above countries .. combined they are up for 500 billion due before year end .
wait and see . picked this s/market top aslo recorded .

13/15 hastings st i sold 545k .is 16 identical villa's i been watching sales .
3700 m2 total land area , after i sold zoning upped to r160 .
scarboough is very close to the city one of the closest beaches infact look up scarbourough yourself .not second homes .suburb been around since the 50s .

sold in daglish prior to that be hard pressed to get the same price today and we talking upper end market very close to city.

the 50k challenge ain't going to happen . so demand drops off . get it.
seen the recent data on home loans .. dropping real fast .that coupled with the harder availability of credit that's already happening here due to deposit requirement and some with overweight loan books .. the europe situation will only make it worse .

i'll let the drunk in a bar comment go this time .

 

[urbanprospector]

The fact you read this as a genuine article and not as the spoof it clearly was amazes me... The fact you treated it as genuine explains more that you would think and reafirms my beleif that this arguments is like religious dogma i.e. a "beleif" based argument rather than one based on rational argument.

Maybe you can sign up for the University of nunquam in nuto im sure they will accept you with open arms..

p.s i realised the sarcasm .. but i think some need a shot of reality around here it is a real estate forum ... p.s still own outright as all those place owned outright .

so you chat on a property forum as you like property and all the people here say good things .. same could be said for you then hey i chat on many varied investment sites . gathering info . for my investments .. not just hang about one where its all positive.
the basically personal attack demonstrates to me that what i posted worries you and you dislike any opinion that differs from or challenges yours ..

 

[tcocaro]

please provide a single quote from me taken from my numerous posts which says "i like property" or "property is great" or "i think prices will go up" or anything which may indicate my view one way or the other... The thing is i dont have one.. i see property as a business thats all.. if the market crashed tommorow with price falls of 40% i will simple adjust and see how i can take advantage of the ensuing hysteria.

I think you will find a similar undertone to all my posts that you can make money from property like any other asset class whether the market is going up or down..

p.s i realised the sarcasm .. but i think some need a shot of reality around here it is a real estate forum ... p.s still own outright as all those place owned outright .

so you chat on a property forum as you like property and all the people here say good things .. same could be said for you then hey i chat on many varied investment sites . gathering info . for my investments .. not just hang about one where its all positive.
the basically personal attack demonstrates to me that what i posted worries you and you dislike any opinion that differs from or challenges yours ..

 

[urbanprospector]

please provide a single quote from me taken from my numerous posts which says "i like property" or "property is great" or "i think prices will go up" or anything which may indicate my view one way or the other... The thing is i dont have one.. i see property as a business thats all.. if the market crashed tommorow with price falls of 40% i will simple adjust and see how i can take advantage of the ensuing hysteria.

I think you will find a similar undertone to all my posts that you can make money from property like any other asset class whether the market is going up or down..

im just waiting for the picked to pieces reply on 13/15 hastings st 6019

 

[tcocaro]

Disagreed with most of your comments and can see there is little point in discussing further but ill end with saying this..

piigs = .. portugal ,ireland ,italy ,greese and spain

do you think they have a larger or lesser affect on the world as say the UK or USA which got capped at the knees during the GFC with little direct affect on Australian property?

I really would like to know how a house purchase in Brisbane ties in with the bond yields of ireland, its a far stretch. I am not sure if sitting down and anylising the worlds bond prices, debt to gdp of PIIGS is the right way to go when deciding to buy a property in Australia. Maybe it is, but i think its way overkill for a single house.

[/U] retired at 36 dont drink .

credit drying up due to piigs = .. portugal ,ireland ,italy ,greese and spain . all suffering sorverign credit risks of default .so inter bank lending will freeze up again or the cost of borrowing will rise . like the bond yeilds of the above countries .. combined they are up for 500 billion due before year end .
wait and see . picked this s/market top aslo recorded .

13/15 hastings st i sold 545k .is 16 identical villa's i been watching sales .
3700 m2 total land area , after i sold zoning upped to r160 .
scarboough is very close to the city one of the closest beaches infact look up scarbourough yourself .not second homes .suburb been around since the 50s .

sold in daglish prior to that be hard pressed to get the same price today and we talking upper end market very close to city.

the 50k challenge ain't going to happen . so demand drops off . get it.
seen the recent data on home loans .. dropping real fast .that coupled with the harder availability of credit that's already happening here due to deposit requirement and some with overweight loan books .. the europe situation will only make it worse .

i'll let the drunk in a bar comment go this time .

 

[tcocaro]

Sorry just looked it up, your referring to WA i was referring to QLD... not prepared to reseach it sorry.. ill take your word for it.

im just waiting for the picked to pieces reply on 13/15 hastings st 6019

 

[urbanprospector]

Disagreed with most of your comments and can see there is little point in discussing further but ill end with saying this..

piigs = .. portugal ,ireland ,italy ,greese and spain

do you think they have a larger or lesser affect on the world as say the UK or USA which got capped at the knees during the GFC with little direct affect on Australian property?

I really would like to know how a house purchase in Brisbane ties in with the bond yields of ireland, its a far stretch. I am not sure if sitting down and anylising the worlds bond prices, debt to gdp of PIIGS is the right way to go when deciding to buy a property in Australia. Maybe it is, but i think its way overkill for a single house.

you will see the effect it has and remember our passing in the night . mark my words

 

[whatever123]

There is no housing shortage? this is based on what exactly? How do you think prices are going up in the first place? This statement is just plain wrong.

"count stock and times it by the average per person" what hocus pocus formula is this? Stock?? as in available stock?? what average per person???

Heres a challenge your earning $50k a year with a family of 3 and two cars and you work in the city and looking for a property.. go buy one let me know how you go. Oh hang on, you cant because why? Oh thats right to expensive, why is that? because everyone in your shoes have bought there already, pushed the prices up due to limited stock pushing you further and further out from the city which leads to you competing with a larger and larger pool of people for property in the fringes and so on.

Demand and supply. I would love to hear your theory on why prices are going up in the first place? oh maybe its us developers who all get together over a coffee and say lets just raise prices to some random figure??? or is it because ummmm what exactly??? its SUPPLY!! but the ignoramus amongst us go to realestate.com.au and say but look there are so many!! oh please!! theres lots of ferraris at the car delearship but i dont see em flying out the door....

The property you refer to in "scarborough" please provide an address. I will disect your argument to peices if you do this but i think you wont. Off the bat if your claim is even true then what price was it bought for? more than it was worth? I have seen so many wanabe developers go to an investment seminar get all hyped up buy any development site out there, run out of money and have to sell for whatever price. Your example is anectodal at best..

Furthmore look at your example of suburb? Redcliff etc are all much more volatile markets given the product being more for 2nd homes, holiday homes etc. Find me something showing a 90k drop in a year in ALL OF BRISBANE metro.. theres a challenge.

"credit is drying up again due to piigs . " - what on earth does this mean!

sigh.. your arguments sound like those a drunken man over a bar says to his mate...

Tocaro, I think you need to do some research on the effect that speculation can have on asset prices be it shares, property, tulips or oil.

Some of the arguements I hear about property going up forever are the same I was hearing about oil about 3 years ago when it reached $150 a barrel.

I had an oil speculator shake his head in disbelief about my lack of understanding in economics of supply and demand when I suggested that the $150 oil price may not hold for much longer.
Long term, I'm still bullish on oil as I am on property, but, like what happened to oil, property needs to lose some of the speculative excesses that have been built into the whole system over the past 5+ years.

The "we're different here" argument just won't help.

 

[random]

The intent of my post was not to trivialise the issue but hightlight the failings of the same argument I am hearing over and over again.

They are recycled, I just read an entire thread where the EXACT same reasonings where provided just over a year ago before, during and after the GFC. How can the same issues, same correlations and same comparisons apply today? How? Easy because "THIS TIME" I am right.. no sorry your still wrong because your not seeing things for what they are.

If you claim the property market is going to fall for long enough you will eventually be right. The problem is are you really right? if you 100 claims prior were all wrong.

Further more ones decision making process cannot be so black and white, property will always be bought and sold the issue is where you buy, what you buy, whats your time horizon and what your expecting as a return.

If your investment decision is NOT to buy property then what is your game plan? To sit around wait for a fall an buy property "cheap?". This strategy fundamentally makes little sense because it main assumption is based on one you dont beleive, that prices will once again raise up and beyond todays prices after the fall (in order for you to make any money). Further more price falls realistically are never large in real dollar terms, they are paper falls based on inflation together with some real falls, so if prices fall by 10% over 3 years this could simply mean real prices simply didnt move.

The main issue is that with property we are not talking about a highly liquid highly volatile market. Prices for the vast majority of time for the vast majority of market segments will be relatively stable. For this reason the battle between boom and bust is a futile one.

Like my numerous posts prior the aim is to take todays information and apply it "TODAY" for your investment decisions. Personally I think if your decision is to completely avoid the market on a beleif its so unstable is just wrong. Do the major stock trading companies shut up shop during a crisis? does the major property developers say ok... for the next 2 years we will sit it out? or do they simply say ok, lets purpone this development, lets avoid higher risk developments, lets change our lending arrangements etc etc... but STILL DEVELOP.. i.e. maybe develop 1 site rather than 10.

its all a question of what to do rather than not to do..

However if you wish to still make business decisions based on some airy fairy notion that it "happened in Japan and therefore can happen here" or the 100 other irrelevant statements when deciding whether or not to buy a single house in NSW or not, then be my guest but I will think you will find yourself never doing anything and never making a single dollar.

TC I toned my post down b/c at the end of the day we are all just trying to do what we think suits our markets and , I also don't think too much negativity is good for the country right now .
But no I don't stop , I'm doing two deals right now actually, if I'd left in my origional post you'd have seen that.
I'm simply saying that I personally feel that for different reasons there will be a correction and that we should allow for that within any deals we take on , not that I would stop working .
Hell people can do whatever they want good luck to them. I'm still moving too , but I am allowing for what I feel our most likely scenario will be , within the deals I'm setting up and I wouldn't touch one this yr unless that's covered is all I'm saying but hey , that's just me.

Cheers