Housing bubble in Australia
#16
BE Enthusiast
Joined: Nov 2009
Location: Dullsville
Posts: 672
Re: Housing bubble in Australia
How to spot a bubble - from Robert J Shiller, professor of economics, Yale.
http://dealbook.blogs.nytimes.com/20...e-next-bubble/
Sharp increases in the price of an asset like real estate or dot-com shares check
Great public excitement about said increases check
An accompanying media frenzy check
Stories of people earning a lot of money, causing envy among people who aren’t check
Growing interest in the asset class among the general public check
"New era” theories to justify unprecedented price increases check
A decline in lending standards check
7 out of 7, I'd say we're looking bubblyicious
http://dealbook.blogs.nytimes.com/20...e-next-bubble/
Sharp increases in the price of an asset like real estate or dot-com shares check
Great public excitement about said increases check
An accompanying media frenzy check
Stories of people earning a lot of money, causing envy among people who aren’t check
Growing interest in the asset class among the general public check
"New era” theories to justify unprecedented price increases check
A decline in lending standards check
7 out of 7, I'd say we're looking bubblyicious
Last edited by pomtastic; Feb 3rd 2010 at 8:56 am. Reason: tidy text
#17
Devil's Advocate
Joined: Feb 2008
Location: Mandurah
Posts: 2,269
Re: Housing bubble in Australia
How to spot a bubble - from Robert J Shiller, professor of economics, Yale.
http://dealbook.blogs.nytimes.com/20...e-next-bubble/
Sharp increases in the price of an asset like real estate or dot-com shares check How so? ABC has recently published the figures and no sign of "sharp" increase
Great public excitement about said increases check
Debateable
An accompanying media frenzy check
Debateable
Stories of people earning a lot of money, causing envy among people who aren’t check Thats always true the world over
Growing interest in the asset class among the general public check
"New era” theories to justify unprecedented price increases check Where are these theories and what unprecedented rises?
A decline in lending standards check
Hardly, banks are much stricter now although Aus always was pretty good on not doing sub prime type stuff
7 out of 7, I'd say we're looking bubblyicious
http://dealbook.blogs.nytimes.com/20...e-next-bubble/
Sharp increases in the price of an asset like real estate or dot-com shares check How so? ABC has recently published the figures and no sign of "sharp" increase
Great public excitement about said increases check
Debateable
An accompanying media frenzy check
Debateable
Stories of people earning a lot of money, causing envy among people who aren’t check Thats always true the world over
Growing interest in the asset class among the general public check
"New era” theories to justify unprecedented price increases check Where are these theories and what unprecedented rises?
A decline in lending standards check
Hardly, banks are much stricter now although Aus always was pretty good on not doing sub prime type stuff
7 out of 7, I'd say we're looking bubblyicious
Hardly 7 out of 7 we'll see though.
#18
BE Enthusiast
Joined: Nov 2009
Location: Dullsville
Posts: 672
Re: Housing bubble in Australia
Sharp increases in the price of an asset like real estate or dot-com shares check How so? ABC has recently published the figures and no sign of "sharp" increase
Australian house prices increased 5.2% in 3 months, Sept to Dec 2010, Preliminary numbers from Australian Bureau of Statistics (ABS).
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
Great public excitement about said increases check
Debateable
Anecdotal evidence only: all I’m hearing is boom, boom, boom, prices are gonna go up from every Tom, Dick and Harriet I speak to.
An accompanying media frenzy check
Debateable
House prices rises make headlines here while stock market rallies make the business pages only.
Stories of people earning a lot of money, causing envy among people who aren’t check Thats always true the world over
Growing interest in the asset class among the general public check
"New era” theories to justify unprecedented price increases check Where are these theories and what unprecedented rises?
“It’s different here” is my fav.
A decline in lending standards check
Hardly, banks are much stricter now although Aus always was pretty good on not doing sub prime type stuff
So how comes 45% of first home buyers in the last 18 months are struggling with their mortgage repayments? How comes 1 in 4 of all mortgages will suffer severe mortgage stress if rates go up by a tiny bit more, despite historically low interest rates? How comes Australia has one of the highest debt to income ratio in the world?
http://www.canberratimes.com.au/news...4/1739606.aspx
http://au.news.yahoo.com/thewest/a/-...tress-hits-wa/
http://www.brisbanetimes.com.au/quee...ml?autostart=1
http://seekingalpha.com/article/1800...debt-obsession
Australian house prices increased 5.2% in 3 months, Sept to Dec 2010, Preliminary numbers from Australian Bureau of Statistics (ABS).
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
Great public excitement about said increases check
Debateable
Anecdotal evidence only: all I’m hearing is boom, boom, boom, prices are gonna go up from every Tom, Dick and Harriet I speak to.
An accompanying media frenzy check
Debateable
House prices rises make headlines here while stock market rallies make the business pages only.
Stories of people earning a lot of money, causing envy among people who aren’t check Thats always true the world over
Growing interest in the asset class among the general public check
"New era” theories to justify unprecedented price increases check Where are these theories and what unprecedented rises?
“It’s different here” is my fav.
A decline in lending standards check
Hardly, banks are much stricter now although Aus always was pretty good on not doing sub prime type stuff
So how comes 45% of first home buyers in the last 18 months are struggling with their mortgage repayments? How comes 1 in 4 of all mortgages will suffer severe mortgage stress if rates go up by a tiny bit more, despite historically low interest rates? How comes Australia has one of the highest debt to income ratio in the world?
http://www.canberratimes.com.au/news...4/1739606.aspx
http://au.news.yahoo.com/thewest/a/-...tress-hits-wa/
http://www.brisbanetimes.com.au/quee...ml?autostart=1
http://seekingalpha.com/article/1800...debt-obsession
#19
Devil's Advocate
Joined: Feb 2008
Location: Mandurah
Posts: 2,269
Re: Housing bubble in Australia
Don't get me wrong, I do not believe everything is wonderful and secure and we have nothing to worry about in Aus, but likewise as others also suggested in the "Established house prices" thread running at the moment, I don't believe we are on the verge of a fiscal collapse of the likes seen in the UK or USA.
Yes house prices may go through another correction phase, yes interest rates will probably rise, yes the dollar will weaken but not dramatically or more specifically quickly.
Its my view only, no one knows for sure - if they did they would be very rich indeed!
Yes house prices may go through another correction phase, yes interest rates will probably rise, yes the dollar will weaken but not dramatically or more specifically quickly.
Its my view only, no one knows for sure - if they did they would be very rich indeed!
#20
Forum Regular
Joined: Jan 2010
Posts: 34
Re: Housing bubble in Australia
Some interesting articles from Mike Shedlock.
Fascinating charts on least and most affordable housing in the world. Needless to say, Canada, Australia, UK and US dominate in the ‘least affordable’ category.
Least and Most Affordable Housing in the World, By Nation and City; Vancouver Canada is Least Affordable City, Australia the Least Affordable Country
Australian Housing Bubble About to Burst, Market About to Crash http://www.marketoracle.co.uk/Article16958.html
Fascinating charts on least and most affordable housing in the world. Needless to say, Canada, Australia, UK and US dominate in the ‘least affordable’ category.
Least and Most Affordable Housing in the World, By Nation and City; Vancouver Canada is Least Affordable City, Australia the Least Affordable Country
Australian Housing Bubble About to Burst, Market About to Crash http://www.marketoracle.co.uk/Article16958.html
#21
Forum Regular
Joined: Jun 2006
Posts: 200
Re: Housing bubble in Australia
The interesting fact for me is that there are a significant number of mortgages that would be defaulted if rates go up half a percent.
Therefore, if rates go up 2-3% (which they will over time) there will be huge defaults and mortgage stress. These properties could then be purchased by foreign investors (keeping prices high) but I think at least a decent correction is inevitable.
Therefore, if rates go up 2-3% (which they will over time) there will be huge defaults and mortgage stress. These properties could then be purchased by foreign investors (keeping prices high) but I think at least a decent correction is inevitable.
#22
Re: Housing bubble in Australia
Sharp increases in the price of an asset like real estate or dot-com shares check How so? ABC has recently published the figures and no sign of "sharp" increase
Australian house prices increased 5.2% in 3 months, Sept to Dec 2010, Preliminary numbers from Australian Bureau of Statistics (ABS).
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
Australian house prices increased 5.2% in 3 months, Sept to Dec 2010, Preliminary numbers from Australian Bureau of Statistics (ABS).
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
Great public excitement about said increases check
Debateable
Anecdotal evidence only: all I’m hearing is boom, boom, boom, prices are gonna go up from every Tom, Dick and Harriet I speak to.
An accompanying media frenzy check
Debateable
Debateable
Anecdotal evidence only: all I’m hearing is boom, boom, boom, prices are gonna go up from every Tom, Dick and Harriet I speak to.
An accompanying media frenzy check
Debateable
"New era” theories to justify unprecedented price increases check Where are these theories and what unprecedented rises?
“It’s different here” is my fav.
“It’s different here” is my fav.
A decline in lending standards check
Hardly, banks are much stricter now although Aus always was pretty good on not doing sub prime type stuff
So how comes 45% of first home buyers in the last 18 months are struggling with their mortgage repayments? How comes 1 in 4 of all mortgages will suffer severe mortgage stress if rates go up by a tiny bit more, despite historically low interest rates? How comes Australia has one of the highest debt to income ratio in the world?
http://www.canberratimes.com.au/news...4/1739606.aspx
http://au.news.yahoo.com/thewest/a/-...tress-hits-wa/
http://www.brisbanetimes.com.au/quee...ml?autostart=1
http://seekingalpha.com/article/1800...debt-obsession
Hardly, banks are much stricter now although Aus always was pretty good on not doing sub prime type stuff
So how comes 45% of first home buyers in the last 18 months are struggling with their mortgage repayments? How comes 1 in 4 of all mortgages will suffer severe mortgage stress if rates go up by a tiny bit more, despite historically low interest rates? How comes Australia has one of the highest debt to income ratio in the world?
http://www.canberratimes.com.au/news...4/1739606.aspx
http://au.news.yahoo.com/thewest/a/-...tress-hits-wa/
http://www.brisbanetimes.com.au/quee...ml?autostart=1
http://seekingalpha.com/article/1800...debt-obsession
Last edited by Vash the Stampede; Feb 3rd 2010 at 9:37 pm.
#23
Guest
Posts: n/a
Re: Housing bubble in Australia
Australian house prices increased 5.2% in 3 months, Sept to Dec 2010, Preliminary numbers from Australian Bureau of Statistics (ABS).
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
Price Index of Established Houses ; Weighted Average of 8 Capital Cities ;
- 130.1 Dec 2007
- 124.8 Dec 2008
- 141.8 Dec 2009
However to look at another period we could consider this 12 months:
- -0.84% Jun-2008
- -2.62% Sep-2008
- -1.34% Dec-2008
- -0.80% Mar-2009
#24
Account Open
Joined: Jan 2005
Location: Brisbane
Posts: 4,298
Re: Housing bubble in Australia
Here's another graph to throw into the mix, from RP data blog.
#25
Re: Housing bubble in Australia
Here's another graph to throw into the mix, from RP data blog.
http://blog.rpdata.com/wp-content/up...al-markets.gif
http://blog.rpdata.com/wp-content/up...al-markets.gif
#26
Guest
Posts: n/a
Re: Housing bubble in Australia
Here's another graph to throw into the mix, from RP data blog.
http://blog.rpdata.com/wp-content/up...al-markets.gif
http://blog.rpdata.com/wp-content/up...al-markets.gif
US -1.38%
UK 2.80%
NZ 7.93%
Aus 5.52% (this growth would take 14 years to double in price)
Sydney price doubling for comparison:
1981 $ 78,900 doubled from $39,200 in 1977 taking 4 years
1984 $ 85,900 doubled from $43,200 in 1978 taking 6 years
1986 $ 98,325 doubled from $50,700 in 1979 taking 7 years
1989 $170,850 doubled from $85,900 in 1984 taking 5 years
1995 $196,750 doubled from $98,325 in 1986 taking 9 years
1997 $233,250 doubled from $120,025 in 1987 taking 10 years
2000 $287,000 doubled from $141,000 in 1988 taking 12 years
2001 $322,500 doubled from $170,850 in 1989 taking 12 years
2002 $387,500 doubled from $192,375 in 1994 taking 8 years
2003 $454,250 doubled from $233,250 in 1997 taking 6 years
1984 $ 85,900 doubled from $43,200 in 1978 taking 6 years
1986 $ 98,325 doubled from $50,700 in 1979 taking 7 years
1989 $170,850 doubled from $85,900 in 1984 taking 5 years
1995 $196,750 doubled from $98,325 in 1986 taking 9 years
1997 $233,250 doubled from $120,025 in 1987 taking 10 years
2000 $287,000 doubled from $141,000 in 1988 taking 12 years
2001 $322,500 doubled from $170,850 in 1989 taking 12 years
2002 $387,500 doubled from $192,375 in 1994 taking 8 years
2003 $454,250 doubled from $233,250 in 1997 taking 6 years
Here are Sydney's price doubling periods, since 1970
1970 $18,700
1975 $37,400 in 5 years
1981 $74,800 in 6 years
1988 $149,600 in 7 years
2000 $299,200 in 12 years
201x $598,400 in ? years
1975 $37,400 in 5 years
1981 $74,800 in 6 years
1988 $149,600 in 7 years
2000 $299,200 in 12 years
201x $598,400 in ? years
At 5.52% average annual growth it may be 2015 (doubling after 15 years).
Property prices are slowing down their doubling periods.... seems weird doesn't it....