Here some news that will warm the cockles of the trolls here.

[QXD]

Unless the world economy recovers within the next 6mths, and the US starts overspending again, YES, I expect the bubble will burst.

http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1063597/1/.html

Australia facing housing bubble warns investment guru
Posted: 16 June 2010 1151 hrs
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SYDNEY - Australia is facing a "time bomb" housing bubble that will be set off by rising interest rates, US investment guru Jeremy Grantham warned in a report published on Wednesday.

Grantham, who correctly predicted the financial crisis a year before it hit, said Australian house prices needed to fall 42 percent to reach the long-term trend.

"You cannot possibly miss it," he told The Australian newspaper. "The price of housing typically trades about 3.5 times of family income and in a bubble it goes to six or 7.5 times.

"Australia is having one now. You are at near 7.5 times family income... which suggests you are twice the size you should be."

He said Australian prices, which have been rising for more than a decade, needed to slide 42 percent to return to the long-term trend.

Grantham, co-founder of global investment company GMO who has made a career out of identifying speculative bubbles, said British house prices were also over-inflated, The Australian said.

Australia's central bank has raised interest rates six times since October -- off five-decade lows -- to head off inflation, increasing pressure on home-owners.

Grantham said if Australian housing did not return to the normal multiple of family income, "it will be the first time in history".

"Sooner or later, the rates will go up and the game is over," he warned.

-AFP/sf

 

[Dodomeki]

Unfortunately some asshole is unable to pay you an immediate visit.

 

[fishbuff]

....

"Sooner or later, the rates will go up and the game is over," he warned.

-AFP/sf

i wont hold my breath for a 40% price reduction. 10-15% perhaps.

but those that have cash, get ready for mortgagee sales.

 

[Ash007]

i wont hold my breath for a 40% price reduction. 10-15% perhaps.

but those that have cash, get ready for mortgagee sales.

Waiting for this mortgagee sales mate. If anything is going to happen its going to be next year or 2012. If not, then prices is going to remain as it is.

 

[neddy]

Unless the world economy recovers within the next 6mths, and the US starts overspending again, YES, I expect the bubble will burst.

"Sooner or later, the rates will go up and the game is over," he warned.

-AFP/sf

1. It will take a severe downturn to burst the bubble. States like QLD and WA are most at risk because of the volatile commodity market.

2. Does this person know what he is talking about. He is probably a seagull (fly in, shit on the people, fly out)

3. The RBA just announced that the people who are holding the largest loans are those who are able to repay them. So, they are not as worried about properties because we do not have a sub-prime or "return property to bank by posting key" cases to quickly turn things sour. People will generally hold out because even after a firesale, they are still liable for the loans (unlike America)

 

[Aussie Prick]

1. It will take a severe downturn to burst the bubble. States like QLD and WA are most at risk because of the volatile commodity market.

2. Does this person know what he is talking about. He is probably a seagull (fly in, shit on the people, fly out)

3. The RBA just announced that the people who are holding the largest loans are those who are able to repay them. So, they are not as worried about properties because we do not have a sub-prime or "return property to bank by posting key" cases to quickly turn things sour. People will generally hold out because even after a firesale, they are still liable for the loans (unlike America)

I have been telling you this for years, and now this well known fund manager has said it. Some cities in Australia are at 9X the average income - clearly unsustainable. Australia is quoted "as the most unafforable in the world". Even if prices dont collapse, its a bad thing for Australia's economy as your service staff, waiters, policemen, etc will face ongoing housing stress and just pass the costs onto you, the consumer.

So you may think you can just sell your property for a capital gain but with your ever increasing costs and inflation - you;ll just be handing the gains back over the long run.

If you are lucky, you will have a modest correction; one that does not leave the younger generation out, and one that reinvigorates your economy. Or maybe you may just be the first nation in the history of capitalism to escape market forces.

 

[axe168]

Unless the world economy recovers within the next 6mths, and the US starts overspending again, YES, I expect the bubble will burst.

You may be correct.. We should never under-estimate the public FEAR.. it can rock the boat and cause it to sink.. Whatever the circumstances, we have to ask ourself - the "Supply and Demand" factor ;

a) Are we building enough houses - supply?
b) Will the demand of housing come down - demand ?
c) Where do migrants live when they arrive Australia ?
d) Are we creating jobs ?
e) What's our economy in the next 1-5yrs ?

If you are positive on the above, I recommend you to buy.. If pessimistic, do not buy.

 

[QXD]

You may be correct.. We should never under-estimate the public FEAR.. it can rock the boat and cause it to sink.. Whatever the circumstances, we have to ask ourself - the "Supply and Demand" factor ;

a) Are we building enough houses - supply?
b) Will the demand of housing come down - demand ?
c) Where do migrants live when they arrive Australia ?
d) Are we creating jobs ?
e) What's our economy in the next 1-5yrs ?

If you are positive on the above, I recommend you to buy.. If pessimistic, do not buy.

I believe my post below hints at what I am looking for before I pounce.

When I look at how prices are jumping up in Perth, I'm glad I bit the bullet and picked up an investment property late last year.

Now just relax and watch it pay itself off...

One more recession in 5 years time and I can retire liao...

 

[redbull313]

Yup thats the way the cookie crumbles. The sis in Sydney tells me nowadays a million A$ is not alot of money anymore and they dont know how they can retire with 2 kids.

She is telling me they need at least A$3-5 million to retire and lead a decent life now in Sydney. Ten years ago their goal was 1 million now its not enough.

I am so glad I am living it up here where my money will be enough to take care of me and my family for a LONG LONG time.

 

[axe168]

Yup thats the way the cookie crumbles. The sis in Sydney tells me nowadays a million A$ is not alot of money anymore and they dont know how they can retire with 2 kids.

She is telling me they need at least A$3-5 million to retire and lead a decent life now in Sydney. Ten years ago their goal was 1 million now its not enough.

I am so glad I am living it up here where my money will be enough to take care of me and my family for a LONG LONG time.

Ok lah.. you tell me when can I go over to US ? I may be on the run again after cashing out the money.. is US better or Canada ? please advise

 

[Aussie Prick]

Yup thats the way the cookie crumbles. The sis in Sydney tells me nowadays a million A$ is not alot of money anymore and they dont know how they can retire with 2 kids.

She is telling me they need at least A$3-5 million to retire and lead a decent life now in Sydney. Ten years ago their goal was 1 million now its not enough.

I am so glad I am living it up here where my money will be enough to take care of me and my family for a LONG LONG time.

Well that's because Sydney is more expensive to live in than New York.

Not bashing Australia - its just the facts.

http://www.abc.net.au/news/stories/2008/03/18/2192181.htm

Sydney more expensive to live than NY: report

 

[IWC2006]

Well that's because Sydney is more expensive to live in than New York.

Not bashing Australia - its just the facts.

http://www.abc.net.au/news/stories/2008/03/18/2192181.htm

Sydney more expensive to live than NY: report

aiya, this is a old 2 years news and is largely using the property price as a comparison (also, at a time when Aussie dollar was very strong against USD).

However, once u compare renting or buying a apartment in Manhattan vs Sydney inner city you'll see the differences. Units in Manhanttan are freaking small, old, dirty and dangerous, Sydney still have decent size units. In NY you are also expected to work longer hours thus you can't really live in far away suburbs as you would do in Sydney.

 

[Aussie Prick]

aiya, this is a old 2 years news and is largely using the property price as a comparison (also, at a time when Aussie dollar was very strong against USD).

However, once u compare renting or buying a apartment in Manhattan vs Sydney inner city you'll see the differences. Units in Manhanttan are freaking small, old, dirty and dangerous, Sydney still have decent size units. In NY you are also expected to work longer hours thus you can't really live in far away suburbs as you would do in Sydney.

Look, I dont want to bash Australia. I think Sydney is a nice city - but in my opinion I just dont think Sydney should be more expensive to live in than New York. And now look at this latest statistic - now the housing is more expensive than New York and London. I have seen some very nice new buildings in New York, and sime very tiny, modern flats in London. The article claims eqivaluent housing units comparing Australian Cities to other World Cities.

I could poke fun but I wont, so you might want to have a look at this two week old article:

http://www.dailytelegraph.com.au/mo...han-world-cities/story-e6frezc0-1225872954360

Sydney homes more expensive than world cities

THE average Sydney house is more expensive than its equivalents in London and New York, a comparison of real estate in the world's biggest cities has found.

Here is another article: Darwin has more expensive housing than New York or London too.

http://www.heraldsun.com.au/news/br...-york-and-london/story-e6frf7jx-1225873141675

Darwin property more expensive than New York and London

 

[neddy]

You may be correct.. We should never under-estimate the public FEAR.. it can rock the boat and cause it to sink.. Whatever the circumstances, we have to ask ourself - the "Supply and Demand" factor ;

a) Are we building enough houses - supply?
b) Will the demand of housing come down - demand ?
c) Where do migrants live when they arrive Australia ?
d) Are we creating jobs ?
e) What's our economy in the next 1-5yrs ?

If you are positive on the above, I recommend you to buy.. If pessimistic, do not buy.

Look at the stats from Melbourne Institute.
40% of Aussies have no debts
34% have a mortgage debt.

Meanwhile, more resources projects are re-starting, esp with high metal prices.

 

[Ash007]

Look at the stats from Melbourne Institute.
40% of Aussies have no debts
34% have a mortgage debt.

Meanwhile, more resources projects are re-starting, esp with high metal prices.

and the remaining 26% have credit card debt?

 

[neddy]

I have been telling you this for years, and now this well known fund manager has said it. Some cities in Australia are at 9X the average income - clearly unsustainable.

..............

If you are lucky, you will have a modest correction; one that does not leave the younger generation out, and one that reinvigorates your economy. Or maybe you may just be the first nation in the history of capitalism to escape market forces.

I think Australia has the secret formula from Japan and did something right.

Japan 200% of GDP deficit is not worrying anyone. And no one seems to get worried over hot money in Aussie properties & driving Aussie resources. Someone need to tell US and the G20 that part of the economic stimulus money ends in Aussie properties.
However, stopping the economic stimulus will set US and Europe into a deep recession as demand disappear. With secondary effects on exporting countries. And it will be GAME OVER for hot property prices. Australia cannot be twice lucky ... or can it?

 

[axe168]

Look at the stats from Melbourne Institute.
40% of Aussies have no debts
34% have a mortgage debt.

Meanwhile, more resources projects are re-starting, esp with high metal prices.

Knn.. I'm one of the 34% with debts..

 

[Ash007]

Knn.. I'm one of the 34% with debts..

I got car loan. Same?

 

[Aussie Prick]

I think Australia has the secret formula from Japan and did something right.

Japan 200% of GDP deficit is not worrying anyone. And no one seems to get worried over hot money in Aussie properties & driving Aussie resources. Someone need to tell US and the G20 that part of the economic stimulus money ends in Aussie properties.
However, stopping the economic stimulus will set US and Europe into a deep recession as demand disappear. With secondary effects on exporting countries. And it will be GAME OVER for hot property prices. Australia cannot be twice lucky ... or can it?

The main difference there was the banking system. The Australian banking system is sound - and underwriting standards in Australia are/were much tighter than in Japan in the 1980s-1990s.

Again, I think we have a different definition of luck. Interest rates are set to do only one thing in the next 10 years - go up - and that is a worldwide trend. Reading into your own Australian politicians and Australian Urban study reports, the current housing situation is causing an entire younger generation to be displaced, and for the workforce employed in the services sector to pass along the increased costs onto the consumer.

That to me is not "lucky" at all. If you were "lucky", you would have inflation at 1.5%, the RBA at 2.5% for an extended period, unemployment bouncing from 5-7% and property gains at 5-10%% per year, the government increasing housing supply to meet demand, an end to extreme commoditiy price volatility.

Right now on paper, unfortunately, the figures are screaming the word "bubble"

But then again, maybe the first nation to defy history is in fact Australia. I wonder what Adam Smith would think about that.

 

[neddy]

I got car loan. Same?

See my pics.