Australian housing bubble thread

Discussion in 'Economics' started by m22au, May 21, 2010.

  1. Believe that at your own peril. You are all forgetting the most important aspect of this so called 'housing bubble' in Aus. Based on supply and demand, there is still a major under supply of land/housing. Prices may pull back a little but this will be purely cyclical. The way wages are moving in line with inflation, they are steadily winding in this so called 'bubble'. I can't see house prices moving upward a whole lot more, because yes, they are expensive in real terms, but at the same time, the fundamentals supporting these prices are very real. Supply and Demand. You'll need a big set of lungs if you're holding your breath waiting for this bubble to pop.
    #41     Oct 21, 2010
  2. major risk i see is this: unusual large proportion of au lives in the cities. Nearly all new immigratio as well. There are real water issues in AU which geting bigger. Cities are not major beneficiaries of mining boom. With rare exception, there is no primary industry in cities that exports. Once tide turns around these 3/4 of au population should ask themselves what are we doing for living ?!? Shuffling papers ? Flipping property ? Upgrading ? Buying cheap in china and selling here for 90% margin? Does not seem sustainable. What do we sell to outside world? Now resources and some property to chinese and thats about it.

    When tide turns, downside is large in AU. Prices do not reflect that risk.
    #42     Oct 21, 2010
  3. Macroman is right. Our economy is too unbalanced. Banks will no longer lend to small business in australia based on cashflow or earnings. They expect you to put your house down. Guess what? The more your house goes up, the more they will lend you for your small business. This is what I mean by everything being linked to mining or property.

    There is now way too much riding on housing prices having to continually rise. Australia needs to develop other sectors for a more rounded economy - stuff where we have the talent but don't get the support. i.e biotechnology and alternative energy. Value added building materials instead of raw materials. Stuff like that.
    #43     Oct 21, 2010
  4. ha rounded economy thats a joke this is a nation obsessed with home ownership and constant rising house prices politicians will fight toothand nail to keep this thing going...but how pathetic has labor been i the topic they have lost my vote forever at least howard attemted to address it with some novel ideas i feel sorry for gen y the most their parents will live forever so no inheritance they are destined to live in a small flat never having the opp to raise kids in a house with a backyard sure if you move to woop woop but then where to work see friends and family on w/ends this tunnel vision approch by gov/community will lead to serious financial/social bottlencks in aust in the coming decades...but hey jsut kep letting the the immigrants in and keep the eggcartons going up and she'll be right in conclusion a really sub-standard standard of living expected compared to the arshole baby boomer group enjoyed the only comfort is that the baby boomers from what i gather have very underfunded super funds therfore will probaly sell en masse with a big discount to who?the cashed up gen y now that would be nice
    #44     Oct 21, 2010
  5. Claudius


    This is what the Brits and Japanese used to say to justify their property bubbles - before they popped.
    If supply shortages was the issue, then rental prices would have moved up in step with property values.
    In fact, rental prices are a much better indicator of the true long term demand-supply equilibrium value of property.
    #45     Oct 21, 2010
  6. Yeah, real estate agents always bang on about supply shortages but when you look at the actual statistics, the number of dwellings per head of population hasn't really changed in the past 15 years.
    #46     Oct 21, 2010
  7. cash holds value overtime, compared to property. 760% over 28 years is not a joke. Probably will continue to do so.

    Collect cash (if good income) and enjoy life. You will be in good company of largest AU companies with lots of cash which guarantees cash will reasonably keep value vs property. Wait for 5 minutes of weakness to buy that elusive ticket to glory:)
    #47     Oct 21, 2010
  8. ceniman


    I remember when they were calling a housing bubble back in 2003. Prices since have moved up another 50 percent plus.

    New housing construction in the last 10 years has not kept up with the massive immigration that has occurred and will continue to occur into Australia.

    People have to live somewhere.

    In comparison, USA has oversupply, with 20,000,000 unoccupied homes!
    #48     Oct 21, 2010
  9. well when i walk my dogs at night around the streets i see 2 things in my area which is a combo of flats nearthe the train and large houses a few streets back 1)flats are still selling not as quicly though2)for lease signs popping up everywhere and they are not moving?its obvious though flat sells to investor for let sign goes up conclusion a sharemarket rally as the herd rushes to property?
    #49     Oct 21, 2010
  10. Cash did 53% in same time. True, there is a tax advantage of property if owner. Not all properties moved that high however. I know for places that try to sell now for same amount of money as in 2000. Properties fell around 2006/7 around 5-10 pct which was not advertised. Rent adjusted model shows that in arouind 2007 people that bought 2003, were 35% down ! So it was good time to buy.

    Property at current prices must appreciate 5%pct p/a to break even with renting same property. :eek:
    #50     Oct 21, 2010