Steve Keen at it again

[Newbieatlife]

http://www.propertyobserver.com.au/...e-bubble-is-bursting-steve-keen/2012050254514

just read this recent article by the legendary steve keen

kudos to him though - if he sticks to his guns long enough he probably will be right one day

 

[Peter_Tersteeg]

Every time someone listens to this guy a pixie dies.

 

[Belbo]

Every time someone listens to this guy a pixie dies.

Brilliant! Hahahahha!!!

 

[Propertunity]

I don't know why we give this guy oxygen, but he's entitled to his views.

To quote from the article:

The ABS numbers are in, and they show a 1.1% national fall over the March quarter. Sydney house prices fell 1.8% according to the ABS,.....

Fine - I have no issues with that. But what bearing does the "Sydney house price falling by 1.8%" have on any one individual who holds a house, or an investor who might be wanting to buy a house?

There is no "Sydney house". There is a Marrickville house that went up, there is a Paddington house that went down in February and back up to near record highs in March, there were places that obviously fell over that time too, so that added together, statistically there was a slight fall.

I'm not sure that trying to track house prices like the share price of a company is actually relevant. Imagine ringing your mortgage broker in the morning and asking "What is my house worth this morning? Then later that same afternoon, "What's it worth now?" ....and then again at 5:00pm - ""Now what?". That's nuts! Yet that is the exact behaviour of some media organisations / commentatrs / attention seeking economists - simply because the data is available.

People buy houses the vast majority of the time (or they should) with a minimum 5-7 year time horizon. Some buy to reno & sell and this holds certian risks because the market can move against your position while you are renovating - sometimes wiping out all your manufactured equity and at other times more than doubling it - so you look like a genius renovator on one hand or arriving at the conclusion that 'you can't make money renovating' on the other.

Spare me the quarterly house price movements. Tell me how the year has gone to date. Let me look at that in the light of the last 5 year trend and then zoom out to see a full 7-12 year cycle.

 

[Oscar]

poor pixies....

torture would have to be seeing your name card on a restaurant table right next to his. imagine that......

 

[Piper]

...and here he is again,
http://www.businessspectator.com.au/bs.nsf/Article/US-housing-bust-Australian-housing-bubble-Steve-Ke-pd20120530-US8HC?OpenDocument&src=sph&src=rot

I know he is being made a laughing stock around these traps, but I will keep an eye out for lower house prices. Am holding back on buying anything until further notice.

I am beginning to see more stress in the lower end of the market around Brissie.

With the continuing stories of job losses (some due to fudging the figures, if the rumours are correct), there will be more people having a hard time paying their mortgages, especially if they over-extended their borrowings, which appears to be the case for many people.

Very interesting times ahead.

 

[Rolf Latham]

I am beginning to see more stress in the lower end of the market around Brissie.
.

My clients are finding it hard to get decent stock at sub asking prices..........

Id guess the market sentiment has changed a little.

Im talking wtihn 20 ks of the CBD though

ta
rolf

 

[evand]

You guys can laugh all you like but don't think this down turn is over yet, or will be soon, not by a long shot.

Investment rule no.1. Don't get cocky.

Or old Jewish saying "pride before the fall"

 

[Ausprop]

this is a really OLD article! I think he is a commentator on the 'sydney' market which is in a completely different cycle to most of the rest of the country. The Perth market is really hotting up, rental market going gang busters and sale stock drying up. The cheap stuff is walking out the door and the top end is moving nicely.

 

[Belbo]

You guys can laugh all you like but don't think this down turn is over yet, or will be soon, not by a long shot.

Investment rule no.1. Don't get cocky.

Or old Jewish saying "pride before the fall"

And may YOU live in interesting times!

 

[Jhai Mitchell]

I don't know why we give this guy oxygen, but he's entitled to his views.

Spare me the quarterly house price movements. Tell me how the year has gone to date. Let me look at that in the light of the last 5 year trend and then zoom out to see a full 7-12 year cycle.

Totally agree my friend

Does he even talk about 7-12 year cycles?

 

[The Fence]

He so wants Sydney prices to come back down to where he sold out.

 

[Belbo]

Just came across this graph of how Keen's prediction of a 40% price fall is looking here -

 

[evand]

I think house prices would have followed the original downward trend of that graph if the govt stimulus wasn't implemented. You can clearly see the kick up in prices coinciding with the stimulus.

And people on here continue to bag it, the huge results if it can still be seen in that graph. And in the economy now, and in our lifestyles etc.

My feeling is Keen would have been close to being right if that stimulus wasn't so powerful. But it's all yet to play out, he might be right yet.

Just came across this graph of how Keen's prediction of a 40% price fall is looking here -

 

[evand]

The huge govt stimulus in 08 threw the 7-12 cycle out the window. If the cycle were left to purely market forces, house prices would have been trending down.

Maybe that's happening,the stimulus might have just moved the timeline by 4 years.

Totally agree my friend

Does he even talk about 7-12 year cycles?

 

[Belbo]

I think house prices would have followed the original downward trend of that graph if the govt stimulus wasn't implemented. You can clearly see the kick up in prices coinciding with the stimulus.

And people on here continue to bag it, the huge results if it can still be seen in that graph. And in the economy now, and in our lifestyles etc.

My feeling is Keen would have been close to being right if that stimulus wasn't so powerful. But it's all yet to play out, he might be right yet.

But the thing is, Keen's 40% fall predicition wasn't conditional on the government sitting on the sidelines and doing nothing to assist FHBs or support housing starts. It was categorical: Fall to definitely happen or mountain I absolutely climb. To suggest Keen's prediction 'abstracted' from near-permanent government FHB assistance (both federal and state) of varying levels since the intro of GST is tosh. He actually sold his own PPOR in the real world - not in abstraction - in anticipation that prices would collapse massively irrespective of government policy.

 

[evand]

That debate has been done to death here. The point being whether Keen was aware of the impending stimulus at the time of his sale and/or prediction.

But the thing is, Keen's 40% fall predicition wasn't conditional on the government sitting on the sidelines and doing nothing to assist FHBs or support housing starts. It was categorical: Fall to definitely happen or mountain I absolutely climb. To suggest Keen's prediction 'abstracted' from near-permanent government FHB assistance (both federal and state) of varying levels since the intro of GST is tosh. He actually sold his own PPOR in the real world - not in abstraction - in anticipation that prices would collapse massively irrespective of government policy.

 

[turk]

That debate has been done to death here. The point being whether Keen was aware of the impending stimulus at the time of his sale and/or prediction.

From memory his prediction was after the grants were announced.

 

[evand]

How good is your memory?

From memory his prediction was after the grants were announced.

 

[Aaron_C]

He's a joke but at least he's man enough to admit he's wrong.