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Australian Housing Crash, Has the bubble burst?
triage
post Posted: Jun 5 2013, 07:29 AM
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This thread has been in hiatus for some time. It seems to me that in the last couple of years the status quo has not been threatened either way: there has been no crash but nor have the imbalances in our housing markets been righted. Same old same old as the yanks like to say, our main housing markets remain overpriced using standard metrics, households remain over-borrowed, and as a nation we rely too much on capital gains from our homes for our retirement wealth.

Here is a recent update on how we are travelling compared to other OECD economies. Not so good, but not as bad as our Kiwi cousins it seems, and nothing that appears to scream of an impending crash.

http://www.oecd.org/eco/outlook/focusonhouseprices.htm

But for me it is a bit of a worry that Glenn Stevens and the RBA appear to be relying on the housing sector to fill the gap when the resources investment boom comes to an end. Talk about going into a match with your key playmaker carrying an injury.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
Dave_vic_ozz
post Posted: Nov 9 2012, 01:53 PM
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In Reply To: sette's post @ Nov 9 2012, 01:34 PM

Bullish yes,

Looking at everything. Corner house close by so I can put an 8 car garrage on it that looks like a unit. Convert it to a house and flog them both off after I'm too old to care or the wife forces me to live in it. smile.gif

Never enough space. House prices doing nothing. All good.



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My comments reflect the moment in which they were posted.
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sette
post Posted: Nov 9 2012, 01:34 PM
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Dave,
Firstly welcome back.
How did you guess my previous post was about you?
I mentioned how I had missed your posts and how optimistic and reassuring they'd been....normally if i were down, I always looked for your posts as a boost.

You asked about industrial property in our neighbourhood? Will I be able to start my build there?
I see you've changed your Avatar....does that mean you'll be more bullish and optimistic than normal ?

 
Dave_vic_ozz
post Posted: Nov 9 2012, 01:07 PM
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Sette,

Can you please organise a few factories to come up cheaply before Christmas? Close to home would be good too.

Dave



--------------------
My comments reflect the moment in which they were posted.
Everything can change, and usually does, without notice.
 
sette
post Posted: Nov 9 2012, 11:51 AM
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..

 
flower
post Posted: Nov 9 2012, 10:32 AM
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In Reply To: triage's post @ Nov 9 2012, 09:41 AM

QUOTE
I've endured a real mamahuhu market, no great pain inflicted but no material gain made either



Did you realistically expect anything else as the outcome?

Even in the West the great divide between those able to afford mortgages and high rents and those who are totally excluded from decent housing widens, which is understandable since real wages for the average employee hardly increase, whilst the cost of living soars what ever any government tell us.

Only two things can happen in the end: Either ordinary wages jump at the same time the cost of living eases, OR housing falls in price until the average house becomes affordable to the average wage earner.



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Combining Fundamental comments with Fundamental charts.
 


triage
post Posted: Nov 9 2012, 09:41 AM
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This chart from goldman sachs pretty much sums up the last few years for me from an investment perspective.

Some serious crashes have been suffered and some serious gains have been made in various housing markets around the world but here in Oz where my focus has been...I've endured a real mamahuhu market, no great pain inflicted but no material gain made either. Sort of makes me question why I've bothered really... sad.gif

http://twitter.com/pkedrosky/status/266651...6920576/photo/1



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
veeone
post Posted: Sep 13 2012, 08:53 AM
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A leading international strategist says Australian house prices could fall by 15 to 20 per cent in the next 12 to 18 months.

Investec Asset Management strategist Michael Power said while Australian property prices had fallen six per cent since 2010, he expected them to fall further in the next 18 months to two years.
'We're not seeing anything like the US, Irish or Spanish property bust here,' the South African-based strategist told a business lunch in Sydney.
'But I think over the next 18 months it could go down by double digits, 12 or even 15 (per cent). A 15 to 20 per cent (fall) would be my outside downside over the entire period.'
Dr Power said according to the The Economist Property Index, Australian residential prices were among the highest in world and had long seemed particularly elevated, something which eventually 'catches up with you'.
'When you see what Australia has done (in relation to property prices) you have to ask yourselves, you may be exceptional, but how exceptional are you,' he said.

Mr Power said recent falls in retail sales across the country were another indication property prices would fall.
However unlike the devastating property bubble bursts in the US, Ireland and Spain, Australia was buffered by low unemployment, and had 'real' interest rates compared to the zero or even negative rates in some countries.
'There's more protection on the downside here than the US or Spain or Ireland property burst,' he said.
Dr Power also did not think there would be any large increases in inflation in Australia in the near future.
But, he did warn that if property prices slid then Australian banks may be affected because they had borrowed money overseas to fund local mortgages.

Australian household debt was also very high which would only get worse if housing prices fell.
'Your level of debt is one of the highest in the world as a percentage of incomes which is fine if everything is going fine but will turn against you if there's a real problem,' he said.
http://bigpondnews.com/articles/Finance/20..._20_794342.html



 
balance
post Posted: Jun 12 2012, 01:10 PM
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I note the NSW govt has doubled the 1st home owners grant to 15000 . New homes only.



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Day Trader: Lowest form of life in the known universe.
Shorter: Can limbo under a day trader.
Investor: Salt of the Earth.Sits to the right of God (Warren Buffet)
Share prices are only ever manipulated down.
Paper losses are not really losses.
Chat site posters always know better & know more than anyone about anything.
I'm 29.
The cheque is in the mail.
 
balance
post Posted: May 26 2012, 08:36 PM
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In Reply To: kiril's post @ May 1 2012, 08:42 AM

Clearly property is suffering but not far from me a new record was set a few weeks ago. Agree with Mungo, subsidies just bugger things up and are illusory in their benefit.



--------------------
Day Trader: Lowest form of life in the known universe.
Shorter: Can limbo under a day trader.
Investor: Salt of the Earth.Sits to the right of God (Warren Buffet)
Share prices are only ever manipulated down.
Paper losses are not really losses.
Chat site posters always know better & know more than anyone about anything.
I'm 29.
The cheque is in the mail.
 
 


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