The Great Australian Property Swindle
#151
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Re: The Great Australian Property Swindle
Steve Keen doesn't have a vested interest, that is, he's not an economist who works for Westpac, Commonwealth, NAB, etc who HAVE a vested interest in keeping optimism high because they rely on consumers borrowing more debt. Keen might perhaps want to make a name for himself by making far out predictions but I don't see Keen pushing books or public appearances or meeting/greeting the media. He gives the impression to me that he's just an economist because of the love of it, he doesn't embrace celebrity.
What I have learned is that the Australian press is the most dodgiest on the planet, on par with a communist country!
FYI Amazulu, check this out. For those who said Australian banks are prudent and far superior to those silly US and European banks ......... well, the cat is out of the bag. NAB and Westpac needed massive US Fed money to keep solvent during the GFC. This info has only just been released by the US Fed and yet the Aus Govt and authorities kept it secret until now. How *****ing embarassing - we've all been duped and hood winked!!! (except me of course !!) This is just the tip of the iceberg in the Great Australian Swindle.
http://www.smh.com.au/business/nab-w...202-18i58.html
http://www.moneymorning.com.au/20101...-revealed.html
#152
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Re: The Great Australian Property Swindle
I think its reasonable to anticipate that property investors and estate agents have a bigger vested interest, and will naturally talk up the market. Beware, the media too have a vested interest in propping it all up as long as they can, they need to keep the advertising coming in, and justify their pretty property supplements.
In many cases they will genuinely believe their own hype until well into a crash and it becomes completely undeniable.
That was the experience here in Ireland anyway, - It started with talking up, then denial that a crash was happening. Then when it was irrefutable, every vested interest was bottom picking, - saying that it has "bottomed out now" or is just about to bottom out, - get in before it takes off again. Meanwhile, a few years later, - there's still no bottom in sight......
In many cases they will genuinely believe their own hype until well into a crash and it becomes completely undeniable.
That was the experience here in Ireland anyway, - It started with talking up, then denial that a crash was happening. Then when it was irrefutable, every vested interest was bottom picking, - saying that it has "bottomed out now" or is just about to bottom out, - get in before it takes off again. Meanwhile, a few years later, - there's still no bottom in sight......
I think (Perth) we're at the stage where people think we've just hit a 'pothole', as the press like to call it, and the market will bounce back to 10% gains in no time. Trouble is, the economy is run out of stimulus fumes and mining is the only thing that is going well. Retail, manufacturing, tourism have all hit 'potholes' and China is a basket case waiting to implode.
I watch the RE market in Perth closely and my gut feel says come June - Sept next year, the realisation will set in that the market is not going to turn anytime soon. Real Estate agents will have to get their clients to lower prices if they want to make a sale and stay in business. It's all going to get nasty but takes a while for reality to set in as you astutely said!
#153
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Re: The Great Australian Property Swindle
Google "Mahon Tribunal". Plenty of that in Ireland.
#154
Re: The Great Australian Property Swindle
. NAB and Westpac needed massive US Fed money to keep solvent during the GFC. This info has only just been released by the US Fed and yet the Aus Govt and authorities kept it secret until now
http://www.smh.com.au/business/nab-w...202-18i58.html
http://www.moneymorning.com.au/20101...-revealed.html
The USA bank is essentially a major rural (farming ) bank not really into hybrid housing loans.
Is it not just access to credit when none was available ?
Westpac is more of a mystery as the article says.
#155
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Re: The Great Australian Property Swindle
The pertinent issue from my understanding is that the Aussie banks required a bailout from the Fed, implying that their investments were not as prudent as they espouse them to be, regardless of whether the distressed assets were within Australia.
#156
Re: The Great Australian Property Swindle
I don't take the opinion of any 'one' view, I DYOR - do your own research.
Steve Keen doesn't have a vested interest, that is, he's not an economist who works for Westpac, Commonwealth, NAB, etc who HAVE a vested interest in keeping optimism high because they rely on consumers borrowing more debt. Keen might perhaps want to make a name for himself by making far out predictions but I don't see Keen pushing books or public appearances or meeting/greeting the media. He gives the impression to me that he's just an economist because of the love of it, he doesn't embrace celebrity.
What I have learned is that the Australian press is the most dodgiest on the planet, on par with a communist country!
FYI Amazulu, check this out. For those who said Australian banks are prudent and far superior to those silly US and European banks ......... well, the cat is out of the bag. NAB and Westpac needed massive US Fed money to keep solvent during the GFC. This info has only just been released by the US Fed and yet the Aus Govt and authorities kept it secret until now. How *****ing embarassing - we've all been duped and hood winked!!! (except me of course !!) This is just the tip of the iceberg in the Great Australian Swindle.
http://www.smh.com.au/business/nab-w...202-18i58.html
http://www.moneymorning.com.au/20101...-revealed.html
Steve Keen doesn't have a vested interest, that is, he's not an economist who works for Westpac, Commonwealth, NAB, etc who HAVE a vested interest in keeping optimism high because they rely on consumers borrowing more debt. Keen might perhaps want to make a name for himself by making far out predictions but I don't see Keen pushing books or public appearances or meeting/greeting the media. He gives the impression to me that he's just an economist because of the love of it, he doesn't embrace celebrity.
What I have learned is that the Australian press is the most dodgiest on the planet, on par with a communist country!
FYI Amazulu, check this out. For those who said Australian banks are prudent and far superior to those silly US and European banks ......... well, the cat is out of the bag. NAB and Westpac needed massive US Fed money to keep solvent during the GFC. This info has only just been released by the US Fed and yet the Aus Govt and authorities kept it secret until now. How *****ing embarassing - we've all been duped and hood winked!!! (except me of course !!) This is just the tip of the iceberg in the Great Australian Swindle.
http://www.smh.com.au/business/nab-w...202-18i58.html
http://www.moneymorning.com.au/20101...-revealed.html
http://www.theaustralian.com.au/nati...-1225964999015
I might sell my house and buy one.
#157
Re: The Great Australian Property Swindle
If you look into the American bail out ,every bank had to take credit loan irrespective of whether they needed it or not , the majority were not distressed borrowers. This was to "protect " the confidence in the banking system (IMO it failed on that score )
#158
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Joined: Mar 2009
Posts: 1,412
Re: The Great Australian Property Swindle
Regarding the mortgage to income multiples discussed above, the below linked figures from the British Bankers Association paint a very different picture.
http://blogs.thisismoney.co.uk/2010/...age-wages.html
Also the statistics from the council of mortgage lenders....
http://news.bbc.co.uk/2/hi/7711689.stm
http://www.cml.org.uk/cml/media/press/2771
They state that the average LVR was 75% which would make sense as the dataset would be skewed away from the minority FHB segment. If that skew were more pronounced in Australia then the LVR would be even lower, we also don't have a figure for new mortgages in Australia as opposed to refinancings.
Have a listen to this...
http://www.thepropertypin.com/viewtopic.php?f=4&t=34741 (more user friendly version of below link)
http://www.wlrfm.com/DesktopModules/...963&portalId=6 (from 15 mins in, Monetary Advice and Budgeting Service)
FYI, podcast is from 2009, things have deteriorated considerably as you can imagine.
http://blogs.thisismoney.co.uk/2010/...age-wages.html
Also the statistics from the council of mortgage lenders....
http://news.bbc.co.uk/2/hi/7711689.stm
http://www.cml.org.uk/cml/media/press/2771
They state that the average LVR was 75% which would make sense as the dataset would be skewed away from the minority FHB segment. If that skew were more pronounced in Australia then the LVR would be even lower, we also don't have a figure for new mortgages in Australia as opposed to refinancings.
http://www.thepropertypin.com/viewtopic.php?f=4&t=34741 (more user friendly version of below link)
http://www.wlrfm.com/DesktopModules/...963&portalId=6 (from 15 mins in, Monetary Advice and Budgeting Service)
FYI, podcast is from 2009, things have deteriorated considerably as you can imagine.
Last edited by Steve2009; Dec 4th 2010 at 2:43 am.
#159
Re: The Great Australian Property Swindle
I have not been on this website for ages and it seems the same topic keeps cropping up. Australian house prices are overvalued, but i believe this is location specific and ozzies are catching on to this. Why on earth would you buy a house in a 15k radius of any major city when 30k out you get a lot more house in a less congested area with infrastructure beginning to be built. Yes house prices are going to fall but i think the real people going to be effected are the ones who have taken on a huge morgage within the 15k radius. For those that are renting, $400 dollars a week does not exactly get a palace. $400 x 52 = 20800. Then stay the minimum of two years in oz to "really give it a go" you have just wasted 41600 of your hard earned money. If your thinking of selling your house to make a quick buck think hard, you roll the dice and take the chance. If it goes down good, but if it goes up well its the chance you take.
This forum has seen countless "bubble burst" prophecies over the past few years. We were told it would all go belly up in 2008... then 2009... then 2010. The timeframe stretches with each new failed prediction, and the armchair pundits are running out of recycled arguments.
Yes, Australian property is overvalued and we are long overdue for a price correction. Will it come in the form of a crash or a gradual decline? I don't know, but I'd be surprised if we saw the same type of disaster that wrought havoc in the US and UK. Australia has no equivalent of the US sub prime timebomb, or the UK's banking crisis. When the correction arrives, it will be most likely due to other factors.
The people with overpriced property and potential negative equity will not be the folks who bought cheaper, older houses in the outer suburbs. They'll be the folks who bought new or near-new houses in desirable, rapidly growing inner suburbs, and paid top dollar for the privilege.
FYI Amazulu, check this out. For those who said Australian banks are prudent and far superior to those silly US and European banks ......... well, the cat is out of the bag. NAB and Westpac needed massive US Fed money to keep solvent during the GFC. This info has only just been released by the US Fed and yet the Aus Govt and authorities kept it secret until now. How *****ing embarassing - we've all been duped and hood winked!!! (except me of course !!) This is just the tip of the iceberg in the Great Australian Swindle.
http://www.smh.com.au/business/nab-w...202-18i58.html
http://www.moneymorning.com.au/20101...-revealed.html
http://www.smh.com.au/business/nab-w...202-18i58.html
http://www.moneymorning.com.au/20101...-revealed.html
I found nothing in either of those articles which either stated or even implied that NAB and Westpac "needed massive US Fed money to keep solvent during the GFC." On the contrary, one of the loans was used to support a US banks owned by NAB, while the other seems to have been nothing more than a means of ensuring daily cashflow of a specific currency in the face of a global shortage.
These loans were very small ($US4.5 billion for NAB; $US1 billion for Westpac) and nowhere near the scale required to rescue a major bank from financial collapse. The frenzied article at www.moneymorning.com.au ("NAB and Westpac’s Secret Bailout Revealed") is so hilariously over the top, I am surprised it wasn't picked up by the Sun or Daily Mail. The very title itself is a lie, and the article offers not a shred of evidence to justify it.
Last edited by Vash the Stampede; Dec 4th 2010 at 5:20 am.
#160
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Re: The Great Australian Property Swindle
Implicit in what you two have said is that it will be the areas within 15km of CBDs that will decline and that those in the outer ring will be fine. No man is an island. If the properties within 15km of the CBD fall then so will properties in the outer ring.
Last edited by Steve2009; Dec 4th 2010 at 5:18 am.
#161
Re: The Great Australian Property Swindle
I am talking about boutique areas; classic "des-res", not just "a place I'd feel comfortable living in."
Why? There's less demand for them in the first place. Even if they did fall, the drop would be negligible because they're not overpriced to begin with. In fact, demand for these properties might even go up, as victims of the bubble burst try to downsize.
Implicit in what you two have said is that it will be the areas within 15km of CBDs that will decline and that those in the outer ring will be fine. No man is an island. If the properties within 15km of the CBD fall then so will properties in the outer ring.
#162
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Re: The Great Australian Property Swindle
You think that these areas are a completely seperate market to others? All markets interplay, these areas are less attractive and hence relatively inexpensive substitutes for more desirable areas. They move relative to the more desirable areas. Hence why you hear from boom subscribers and real estate types about the latest fringe suburb ready to go pop. The values in these areas go up as buyers are priced out of other suburbs. And believe me, this debate about where the crash would hurt most was had in Ireland too, and it's playing out on Somersoft right now with people's perspective coloured by where they are invested.
Last edited by Steve2009; Dec 4th 2010 at 5:37 am.
#163
Re: The Great Australian Property Swindle
Sure, but they're not the only places to live. People need to be realistic and understand that they can't always have everything they want.
Of course they're not completely separate markets, and of course they'll go up in price as buyers are priced out of other suburbs. I said this myself. You're still missing (or avoiding?) the point, which is that unlike other areas, these outer suburbs are not overvalued and oversubscribed. They are terrifically affordable, and ripe with good investment opportunities. Living 30 minutes from the CBD is not a sin, and it won't kill you.
So, what's the latest "catastrophic-Australian-property-price-crash-as-prelude-to-Armageddon" prophecy? Next month? Next quarter? Next year? Next decade? They've all been wrong so far. The armchair experts in this thread can't agree, and the related poll shows that anyone's guess is as good as anyone else's.
You think that these areas are a completely seperate market to others? All markets interplay, these areas are less attractive and hence relatively inexpensive substitutes for more desirable areas. They move relative to the more desirable areas. Hence why you hear from boom subscribers and real estate types about the latest fringe suburb ready to go pop. The values in these areas go up as buyers are priced out of other suburbs.
And believe me, this debate about where the crash would hurt most was had in Ireland too, and it's playing out on Somersoft right now with people's perspective coloured by where they are invested.
#164
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Re: The Great Australian Property Swindle
Of course they're not completely separate markets, and of course they'll go up in price as buyers are priced out of other suburbs. I said this myself. You're still missing (or avoiding?) the point, which is that unlike other areas, these outer suburbs are not overvalued and oversubscribed. They are terrifically affordable, and ripe with good investment opportunities. Living 30 minutes from the CBD is not a sin, and it won't kill you.
Picking bottoms is for baboons, likewise for peaks.
Last edited by Steve2009; Dec 4th 2010 at 6:28 am.
#165
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Re: The Great Australian Property Swindle
So, what's the latest "catastrophic-Australian-property-price-crash-as-prelude-to-Armageddon" prophecy? Next month? Next quarter? Next year? Next decade? They've all been wrong so far. The armchair experts in this thread can't agree, and the related poll shows that anyone's guess is as good as anyone else's.
Perth has an oversupply of 38% of homes for sale and yet the HIA were saying that we had a shortage early this year - amazing how the perceived shortage evaporates overnight, eh?
Tasmania, Queensland and Gold Coast are also in decline - it's well and truly started, like it or not Vash! Coming to a town near you!