Property Bubble

[Tim]

This is interesting, it suggests research indicates we are in a long term property bubble

http://www.macrobusiness.com.au/2013/09/the-history-of-australian-property-values-redux/

 

[Aaron_C]

Cool. Bubble is the new buzz word these days.

 

[Tim]

This is more along the lines of a bubble within a bubble. The buzz word of a bubble now is IMO premised on fundamental factors used for measuring value of property but against a backdrop of a 5.5% since 2010 (nat av) drop in property values since their last peak

 

[Tim]

Also the only 'bubble' I see which is not really a bubble at all is Sydney, but the concept of a bubble within a bubble by using history is interesting

 

[BMW]

It would be interesting to compare taxes on new houses from pre 1970 to today. I'd imagine some of the rise in the index would have to do with more red tape in new housing construction, pushing up the price of existing housing.

 

[Crabnet]

It would be interesting to compare taxes on new houses from pre 1970 to today. I'd imagine some of the rise in the index would have to do with more red tape in new housing construction, pushing up the price of existing housing.

Not just red tape. Previously taxpayers subsidised new housing estate support infrastructure but we changed over to user pays system so developers recoup the cost of local roads etc. from the buyer.

Let's say we cut red tape by allowing people to build wherever they want.
Would that mean the jump in price of rural land when it's rezoned residential could be reduced?

So if we subsidised infrastructure and abolished land use restrictions might a block price be reduced by $100,000 or more.
Would that price fall flow on to existing property?

 

[BMW]

Not just red tape. Previously taxpayers subsidised new housing estate support infrastructure but we changed over to user pays system so developers recoup the cost of local roads etc. from the buyer.

Let's say we cut red tape by allowing people to build wherever they want.
Would that mean the jump in price of rural land when it's rezoned residential could be reduced?

So if we subsidised infrastructure and abolished land use restrictions might a block price be reduced by $100,000 or more.
Would that price fall flow on to existing property?

Interesting, didn't consider infrastructure costs. was more thinking along the lines of Basix, stamp duties and increased approvals etc.

 

[Shahin_Afarin]

My 2 cents - there are certain areas and property types (particularly in Sydney) which will plateau in comparison to other stock on the market. A lot of investors moving away from Sydney metro stock because the numbers dont add up. On the other hand there are plenty of developers and builders in the Sydney market making it impossible for the part time developers to get in on the action.

 

[Deltaberry]

... is interesting

To be honest, the only interesting thing is how much $$ is in the bank account.

 

[The Fence]

Replace Property Clock, with Property Bubble.

12 oclock = swimming in bubbles and floating nicely

Where Syd is now.

Same thing really.

 

[Tim]

To be honest, the only interesting thing is how much $$ is in the bank account.

Or invested in stock!

 

[Shadow]

This is interesting, it suggests research indicates we are in a long term property bubble

http://www.macrobusiness.com.au/2013/09/the-history-of-australian-property-values-redux/

For the past few years, Macrobusiness have been predicting an inevitable house price crash from 2010 levels, and a decade of nominal house price declines.

Instead, house prices are booming.

Macrobusiness have been consistently wrong about house prices, and about pretty much all the other doom & gloom nonsense they have peddled for the past few years.

 

[Deltaberry]

When macrobusiness predicts there's a boom, I'm selling out of all property.

 

[hobo-jo]

Instead, house prices are booming.

Price Index of Established Houses; Weighted Average of 8 Capital Cities; via ABS:

Jun-2010 149.8
Sep-2010 148.1
Dec-2010 148.8
Mar-2011 147.3
Jun-2011 145.8
Sep-2011 143.1
Dec-2011 142.3
Mar-2012 142.3
Jun-2012 143.2
Sep-2012 142.9
Dec-2012 145.9
Mar-2013 147.0
Jun-2013 150.5

So they have just edged above mid 2010 levels on a national basis (using RP Data index only Sydney is back above earlier peak)... yes the few months since June (via other data providers) suggest prices are still growing strongly in some cities, but not sure I would call it boom territory (yet).

 

[Aaron_C]

Where do I buy the average house across 8 capital cities?

 

[pieman]

Also the only 'bubble' I see which is not really a bubble at all is Sydney, but the concept of a bubble within a bubble by using history is interesting

Wtf are you on about

 

[tambourineman]

SpeAking of bubbles - anyone else notice the similarities in these two articles :

http://m.propertyobserver.com.au/trends/housing-bubble-give-me-a-break-michael-matusik/2013092965340

And

http://m.smh.com.au/business/the-economy/rba-nothing-happening-here-move-along-20130930-2unp7.html

The section on 'property bubbles' is word for word the sAme and I don't think either credits the other although I suspect Pascoe is the author.

 

[hobo-jo]

Where do I buy the average house across 8 capital cities?

I agree, at any time there may be suburbs (or even particular types of property within a suburb) crashing, booming & everything in between (which make up the city medians). However if I were to make a broad statement that "prices are crashing" I would get laughed off the forum.

Perhaps Shadow should include particulars (suburb/property types) when he makes such wild claims in the future

 

[Deltaberry]

Where do I buy the average house across 8 capital cities?

In Darwin. Trust me.

 

[turk]

However if I were to make a broad statement that "prices are crashing" I would get laughed off the forum.

QUOTE]

I suppose it comes down to ones definition of a crash


Price Index of Established Houses; Weighted Average of 8 Capital Cities; via ABS:

Sep-2008 128.5 hobo-jo predicts 15-20% price drop over several years

Sep-2009 134.8 hobo-jo continues to predict this 15-20%price drop

Sep-2010 148.1
Sep-2011 143.1
Sep-2012 142.9
Jun-2013 150.5

We would now need a 32% crash to be 20% off the Sept 2008 price.