Today Show this morning

K

kals

Hi all,

Not sure if this is the right place for this thread - but did anyone see the Today interview this morning with the doomsday professor from a Sydney University?

His theory is that property prices WILL soon fall by 40%. He's even sold his own home and is renting.

Now Im confident this won't be the case but it did frighten me for just a second.
 
Didn't see it, but I'm keen to find out if it was.....Steve Keen. :D

"He even sold his own home and is renting".

Now, that's the credibility of the guy right there.

He must only have been selling if his mortgage payment was higher than his intended rent. If he owned it outright, why sell?

His super is in bigger trouble than his house.

So, let me get this straight;

1. he's a highly respected economist (must be; he's on TV! :confused:),

2. but, he's the wrong side of 55 and (assuming) still has a PPoR mortgage?? :eek:

I haven't had a PPoR mortgage since 2000 when I was 39, and I suck at economics. What the hell has he been doing?
 
One needs to ask Steve Keen the question - "is he financially independent and doesn't need to work for income?"

If not, why not??

At his age, there in, ends his building wealth credibility for me.
 
Last edited:
kals said:
Hi all,

Not sure if this is the right place for this thread - but did anyone see the Today interview this morning with the doomsday professor from a Sydney University?

His theory is that property prices WILL soon fall by 40%. He's even sold his own home and is renting.

Now Im confident this won't be the case but it did frighten me for just a second.
Click to expand...


The median price in a number of bluechip suburbs in Melbourne has fallen by this amount and more. Kew for example has fallen by 45%. Those are top end properties. The first home buyer's market has however strengthened. Not sure what will happen once the grant stops though.

Regards Jason.
 
He has obviously been watching the USA market and thinks that we are on the same path as them. Well the fact is that the recession has pretty much hit the bottom now or it is near so how can prices still drop by 40%? The other thing is that Australia has a completely different housing market from the USA and we have much higher housing demands here and this will only get worse as more immigrants keep coming in by the boat loads :rolleyes: Has anyone tried to rent a home out in Sydney, if you enjoy been part of a stampede then that's what it is like, it is a frenzy, there is no housing flood here, only a shortage!
 
Oh boy, Steve is back! Right or wrong he's really annoying.:mad:

I had to laugh when Marc's first thought was Steve Keen...as is everyone elses. I wonder if that guy receives some sort of cut from every doomsay interview he does.

Don't let him get to you kal. You'll soon come to realise that Steve Keen is a popular doomsayer amongst reporters. He provides sensationalism and news when there is nothing else to talk about it.

Don't be suprised if some article along those similar lines featuring the Professor himself, pops up in Mondays newspapers.:cool:

Regards JO
 
I wish I shared the optimism of others. But once the FHBG is finished, unemployment reaches 8.5% and interest rates begin to rise, why wont house prices decrease?
 
jackstar said:
I wish I shared the optimism of others. But once the FHBG is finished, unemployment reaches 8.5% and interest rates begin to rise, why wont house prices decrease?
Click to expand...

Hi jackstar,

No-one is sayiing house prices won't decrease. I for one believe they will.

However, if you have a home valued at 400k....Can you see the price dropping by $160k in the next months?

There are going to be big drops in the FHOB price range for sure...afterall they are over-inflated now and the FHOB's were recently paying at least 5% above market value in most cases.

Prof. Steven Keen is just not a favourite on SS. Imagine if every economist was like Prof Keen. There would be a stampede of people selling their property before prices "drop by 40%." He is a sensationalist.

He causes panic amongst:

1. People that don't do their own research.
2. People that are easily influenced by negativity.
3. People that believe everything they hear on television is gospel.
4. People that love drama.
5. People that are financially uneducated.

Which = The General Population.


Regards JO
 
Hi everyone
I think it was Steve Keen - just googled him and it looked like the same guy. Interesting your thoughts on house prices when the FHOG finishes (if it does??). Im now wondering whether I should hold off purchasing until an announcement is made
Kals
 
jackstar, examine your logic. If unemployment goes to 8.5%, what will make the RBA put rates up?

There were fairly long periods of low interest rates or plateaus. These periods are stabilisers for anyone who has bought a house or IP. We REPAY.

With IPs I bought, in 4 years of P&I the LVR came down so much that when interest rates hit 10+%, the rents still covered the repayments. Now they're under 7%, LVR will go down again.

1998-2004 is not that long ago. In 1999-2000, rates went up & at one point I was paying 8% then with the Sept 11, rates dropped to around 5.35% [I remember I was on that for a LONG time]

That was when the +ve cf added very quickly to my net worth.

This year, I'm experiencing the same phenomenon. With 5.09%, the LVR is dropping fast. Too bad I can't find anything to buy.

KY
 
Josko,

However, if you have a home valued at 400k....Can you see the price dropping by $160k in the next months?
Click to expand...


If the right set of circumstances exist, then yes this is what will happen. No ifs no buts.

ciao

Nor
 
josko said:
There are going to be big drops in the FHOB price range for sure...afterall they are over-inflated now and the FHOB's were recently paying at least 5% above market value in most cases.
Click to expand...

not sure about this. I recently had to clear out villas - got $330k when last year they were selling for $365k and we specualted that they would be worth $400k. We sold them below cost, it's just hard to see how this can be a bad scenario for a FHB seeing as they got so much free cash and low interest rates for the foreseeable future. I see one of them has now put theirs on the rental market and it would be about cash neutral
 
Trogdor,

Yep, Im pretty sure that the sun will set tonight and rise tommorrow morning........if that's what you're getting at.....:)

I can already see the SS heretic label being printed now.

Read Jingos' post above..........already has happened in some sectors of the market.....why should any particular other sector be immune?

I think you'll find that after some critical analysis that unlikey is possibly a poor choice of word.

Go look up JT Reason in the local library. Read some of his works.

I'm not saying that it will or it won't, just that eyes wide shut doesn't cut it in the real world..........:cool: (not meaning you of course)

ciao

Nor
 
jingo said:
The median price in a number of bluechip suburbs in Melbourne has fallen by this amount and more. Kew for example has fallen by 45%. Those are top end properties. The first home buyer's market has however strengthened. Not sure what will happen once the grant stops though.

Regards Jason.
Click to expand...

The median is a useless stat.

It is the halfway price of the area, based on all sales.

So, if all the sales in an area are in the bottom 3rd of price range for the selected study period, the median drops.

A place like Kew is an area where significantly rich people live.

However, it is also where loads of wannabe's live too.

These are the people on decent incomes who can afford the repayments for the middle and lower end properties in the area.

They are mostly higher earning professionals, with high lifestyles and consumer spending. Your young doctors, law, IT, executive and so on.

In these times, they are the first casualties in these areas who will need to sell out to stay alive.

Hence, lots more sales in the lower end, and often distressed sales.

Your Richard Pratts etc are not going anywhere.

This is a hypothetical scenario (maybe true to life though), but you see what I mean about how the median might be arrived at.

Pay no attention to it.
 
BayView said:
The median is a useless stat.

It is the halfway price of the area, based on all sales.

So, if all the sales in an area are in the bottom 3rd of price range for the selected study period, the median drops.

A place like Kew is an area where significantly rich people live.

However, it is also where loads of wannabe's live too.

These are the people on decent incomes who can afford the repayments for the middle and lower end properties in the area.

They are mostly higher earning professionals, with high lifestyles and consumer spending. Your young doctors, law, IT, executive and so on.

In these times, they are the first casualties in these areas who will need to sell out to stay alive.

Hence, lots more sales in the lower end, and often distressed sales.

Your Richard Pratts etc are not going anywhere.

This is a hypothetical scenario (maybe true to life though), but you see what I mean about how the median might be arrived at.

Pay no attention to it.
Click to expand...

I think Richard Pratt is going somewhere:eek:
 
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