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Australian Housing Crash


Jimmy123

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We must all be mugs then because there is evidently a bubble in.........

 

Equities, Bonds, Oil, Commodities, Gold & Real Estate - so where do you park your money ? - in the bank ? - oh no, that's right, there is a bubble forming in them too and anyway inflation is going to kick in and your paper money will be worthless.

 

Might go buy some good fertile acres in a good rainfall belt - but I heard there is a bubble in soft commodities too.

 

Fact is, we are all too scared to be in and too scared to be out - maybe we are all "dancing" with the Grim Reaper.

 

Cheers,

Duster.

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if they had surveyed those who owned or were buying their property then 100% would say there is no bubble

 

those they surveyed must have been "aspiring" buyers

 

if you have looked at www.doctorhousingbubble.com and other such USA sites over the last 5yrs the warning was there.

In the USA housing had always been a traditional conservative regime where 30yr fixed loans were the norm. Then came the "financial engineers" who managed to develop ways to amplify money even more . The classic symptom for me was the californian market where sellers were demanding that potential buyers submit their "resumes" before they would be allowed to view the property, The Seller "power" was too great caused by too many "eligible" buyers.

 

The correct answer to the survey was "Forever" if you consider the evidence of the Govt response and interventions in the market over the last 30yrs - yet only 7% got it right.

 

Inflation is the only certainty in our financial system.

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Inflation is the only certainty in our financial system.

 

It's the only way the present financial system can survive, deflation (which is a good thing) will not be allowed to persist - that means fiat must be debased constantly, which equals inflation.

 

Until the Sh*t hits the fan of course and that is only a matter of time.

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"They want to send their children to the best schools and think property here is cheap compared to the big cities in China, where you don't get freehold ownership over land, just a 99-year lease."

 

Most people don't realise that the idea that Australia has some of the world's most expensive housing markets is based largely on a single report, Demographia International Housing Affordability Survey.

 

The Demographia International Housing Affordability Survey only samples 265 markets and if you look more deeply at the 265 markets you'll note the survey doesn't really take many European and Asian markets into account (it pretty much focuses on the "English" speaking countries)

 

If the survey took Asian countries and more of Europe into account, Australia would not rate quite so highly.

 

I'm not saying Australia is cheap or undervalued, but Australia isn't as expensive as the press makes out.

 

Cheers

Matt

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Most people don't realise that the idea that Australia has some of the world's most expensive housing markets is based largely on a single report, Demographia International Housing Affordability Survey.

 

The average over time with regards to housing afford-ability is approx 3 times the average wage, it's now floating around 9 times in places like Melb and Syd, even if you take into account dual incomes your looking at a 30% overpricing (and that is weak argument as I doubt folks are on the same incomes).

 

Spruik if you wish, but at some point they will return to the mean.

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Spruik if you wish, but at some point they will return to the mean

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Hi Mungo---so correct unfortunately, just do the addition:

 

 

Down here in deepest WA: AVERAGE full time weekly wage $35,000 and thats being generous.

 

2x average wage = GROSS of $70,000 PA.

 

Being ultra generous lets say deposit required is only 15%.

 

Starter House--average $450,000

 

Mortgage required:$382,500

 

Maximum a prudent bank would lend is $210,000

 

Swinging in the wind $172,500

 

MISSION IMPOSSIBLE

 

Add on: 1 unplanned pregnancy, interest rate rises over the next year of 1%

 

Result: A tragic STATISTIC.

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