Don't you need to be smart to be a real professor ?
No, apparently that's not a requirement of the esteemed University of Western Sydney.
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Don't you need to be smart to be a real professor ?
Was that 40% fall against something more stable like the US$ or gold ? Or just against the yen which increased its buying power over the last 2-3 decades ?What are your thoughts on the following analysis by Keen? Do you reckon he has a strong argument here? I know you realise the Demographia survey is flawed yourself, so I guess you must believe his other argument is the clincher - i.e. that we will have a 40% fall because Japan had one? .
Lending will get easier in the future. Your '6 months into a global credit crunch' statement however is just one of your typical strawman arguments. I don't think many people said lending would be easier in 6 months.
But then again he's not really a professor at the moment, he just associates with them.No, apparently that's not a requirement of the esteemed University of Western Sydney.
And where exactly is the 'in 6 months time' part?
Seriously TF, are you going all out to misrepresent the truth? Do you need me to remind you which part of your strawman argument I was refuting?
You know very well that I don't expect the next surge in property prices until 2010-2011.
Lending will get easier. Nobody said it would happen in 6 months.
By the way - is it your position that lending will never get easier? Or do you concede that I was right when I said lending will get easier in the future?
I think the optimism over the medium term needs to be tempered. Even if we assume the US doesn't go in to recession and stop buying stuff from China who, in turn, ease off buying stuff from Oz it seems to me that:
*the property boom of the last decade has been fueled by credit availiability and low credit costs, not income growth (I'll exclude Perth from this but in part)
*for the disconnect to continue and property price growth to be maintained ad infinitum, easy money needs to remain or continue to get easier.
*increased credit availability has been a function of (a) increased competition driven largely by the non-bank sector, (b) increasing LVRs and (c) decreasing serviceability benchmarks.
*the non-Banks can't loss lead anymore
*credit is retightening
*the mortgage insurers are getting nervous so the banks can't as easily offload the risk
*interest rates are going up due to liquidity issues and the driver of same (sub-prime crisis) is far from over.
*today's move by the NAB will be the first of several over the next few weeks.
If the future buyer of your property can't borrow (in relative terms) as much as you could when you bought the thing, what happens?
Easy tiger. Read slowly.
I was saying that 6 months into a credit crisis you were suggesting that one of the future moves to keep house prices up would be a more flexible credit.
That is, that you made the comments 6 months into a credit crisis.
To be fair you didn't put a date on it but given it was in the context of your strong/good growth for 08/09 thread, I think it is reasonable to assume you were referring to a similar timeframe.
Did you have some other time frame in mind, perhaps.
Actually, I'm not sure what you expect. We know what you said a year ago and you have been good enough to clarify that you didn't mean to say "strong growth" in 08/09, rather "moderate" or "good" growth.
As far as 2010/2011, last time we spoke we were referring to last years prediction of a "construction boom" in 2010/2011. Is that still happening or are we now saying general resi boom in 2010/2011 followed by a construction boom or is it in conjunction with?
See above.
I expect, as a matter of certainty, for the sun to cool and the earth to die in the future.
Everything else is about probabilities given the data.
So, since you ask, given an unprecedented collapse in the global financial markets, the loss of securitisation as a funding mechanism, a paranoid apra, a global recession, which of the following would I consider more likely in the next three years:
a)pre-June 2007 credit appetite is quickly reinstated
b)banks hold the risk ground they've taken back for a while (< 6 months) but then revert to pre-June 2007 standards
c)banks hold the risk ground they've taken back for a couple of years
d)banks retreat further and stay there for 2-3 years, inching forward in some areas but pulling back behind the scenes.
..based on the facts available today, I'd go with (d).
BTW, at the time and in response to your view around "good growth" in Sydney, I pointed out (gently...I was more patient back then):
To be fair you didn't put a date on it but given it was in the context of your strong/good growth for 08/09 thread, I think it is reasonable to assume you were referring to a similar timeframe.
Did you have some other time frame in mind, perhaps.
Actually, I'm not sure what you expect. We know what you said a year ago and you have been good enough to clarify that you didn't mean to say "strong growth" in 08/09, rather "moderate" or "good" growth.
As far as 2010/2011, last time we spoke we were referring to last years prediction of a "construction boom" in 2010/2011. Is that still happening or are we now saying general resi boom in 2010/2011 followed by a construction boom or is it in conjunction with?
So, since you ask, given an unprecedented collapse in the global financial markets, the loss of securitisation as a funding mechanism, a paranoid apra, a global recession, which of the following would I consider more likely in the next three years:
a)pre-June 2007 credit appetite is quickly reinstated
b)banks hold the risk ground they've taken back for a while (< 6 months) but then revert to pre-June 2007 standards
c)banks hold the risk ground they've taken back for a couple of years
d)banks retreat further and stay there for 2-3 years, inching forward in some areas but pulling back behind the scenes.
..based on the facts available today, I'd go with (d).
I criticise Demographia because of it's sponsors & it's flawed methodologies.
And on a completely different subject.....
Keen has no stats for FHB demographic, neither do I.
... can we have less points scoring and more debate.....
Keith, I thought you were astute and mature enough not to resort to puerile irrelevant digs like my 'expertise re bias' and 'smurk'....or maybe you think 'subtle put down' is something Queenslanders are too sunstruck to get.
And I prefer you refer to me as Winston. I don't use the forum as a profit centre, so have no reason for self promotion. maybe you should ask MichaelW why he dropped his surname (you know him I presume), and why several requests were made by forumites to have their identities suppressed. The derision aimed at some somersoft members on G*H*P*C might only be the tip of an iceberg if a seriously nasty depression unfolds....whether you think it possible or not, is immaterial to me, as I won't be hiding in the Blue Mountains.
If SK has any points worth debating please start a new thread (5th time I've asked ). Are the above 4 points worth debating further ?
i see a start of a "new boom" in around 2010 forming with a re-structured credit market.
This thread is aptly named for a discussion re Keen.
If you want to challenge Keen, start by critiquing his argument re the risks of Labor increasing the FHOG in this climate. And I think Keen made reasonable assumptions not dependent on non existent demographic FHB data, though you obviously feel such data was central to his thesis, or you just couldn't find a stronger straw to prod with at the time.
And while you are at it Keith et al, if you are up to attacking Keen for 40%, then you better deride Robert Schiller, who agrees with Keen that the Japanese experience is not unrealistic for Australia (Lateline).
And then you can tell us what a lightweight Roubini is (quoted below) for not having a problem with Keen's conclusions.
Australian Housing Market: Affordability Crisis Abating
Feb 5, 2009
- 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
However if I misread you then obviously on this basis you consider that Roubini has no problem with the other reports he has included.
Pete
Obviously you're here to score points & not debateWW... can we have less points scoring and more debate.....
Keith, I thought you were astute and mature enough not to resort to puerile irrelevant digs like my 'expertise re bias' and 'smurk'....or maybe you think 'subtle put down' is something Queenslanders are too sunstruck to get.
And I prefer you refer to me as Winston. I don't use the forum as a profit centre, so have no reason for self promotion. maybe you should ask MichaelW why he dropped his surname (you know him I presume), and why several requests were made by forumites to have their identities suppressed. The derision aimed at some somersoft members on G*H*P*C might only be the tip of an iceberg if a seriously nasty depression unfolds....whether you think it possible or not, is immaterial to me, as I won't be hiding in the Blue Mountains.
What are his arguments ?This thread is aptly named for a discussion re Keen.
If you want to challenge Keen, start by critiquing his argument re the risks of Labor increasing the FHOG in this climate. And I think Keen made reasonable assumptions not dependent on non existent demographic FHB data.
And while you are at it Keith et al, if you are up to attacking Keen for 40%, then you better deride Robert Schiller, who agrees with Keen that the Japanese experience is not unrealistic for Australia
(Lateline).
And then you can tell us what a lightweight Roubini is (quoted below) for not having a problem with Keen's conclusions.
Australian Housing Market: Affordability Crisis Abating
Feb 5, 2009
- 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
Roubini said: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)
Check the last bit under House Prices