pomtastic

Exactly!! THIS IS WHAT HAS HAPPENED ALL AROUND THE WORLD - THE 'NORMAL WAY' OF THE PROPERTY LADDER!! And what were the end results of this system, eh? Property bubbles that have been popped in every country of the world except, Cananda and Australia. See, it's unsustainable!!

asprilla

pomtastic - After the event occurs, how will we know that the bubble has burst?

ABCDiamond

Noooo.... I have another 41 of MY OWN sites......

http://www.abcdiamond.isanaddict.com/

Pretty good though, sitting out in the fresh air, overlooking the swimming pool, relaxing.... doing what I live doing

ABCDiamond

as you say: except Cananda and Australia

freebo

I quite agree, but I don't see too much more house price inflation coming, quite the opposite in fact. Its not a long term strategy by any means and personally I'll not be keeping much actually in banks, but will be looking for a better yield than the 6% ish currently available.

I just happen to think that Australian property is currently a bad investment and due a correction, in real and possibly even nominal terms.

freebo

...yet

ABCDiamond

Do you know what will bring the median prices down, without property prices coming down ?

freebo

Not sure I understand your question but I expect property prices to fall in Canada and Australia just as they have elsewhere. I know that you don't and I don't suppose either of our opinions will change in the near future but that's opinions for you, everyone has one.

eugene43

No i mean sence at last to all the other crap postings I have read on the subject in other threads.

ABCDiamond

You know what I find really strange... some of the people who are certain that prices will drop accuse me of not being prepared to say what I think will happen, and others accuse me of saying that prices will not drop. I can't win unless of course I agree that will will definitely drop.

However, I am not a property price expert like some of you, and I don't really know what prices will do in the future. And I have never said they will not drop, in fact I have shown graphs etc showing that they have dropped.

The question of mine that you do not understand relates to the fact that median property prices CAN drop without property prices actually dropping.

If you need me to explain it I will, but most property price experts already understand it.

freebo

Hmmmmm, maybe you need to chill a bit

I never claimed to be a property expert but try to be economically aware and make my own judgements.

Feel free to explain your median property price vs property price, sounds interesting.

I used the terms "nominal" and "real terms" in relation to pricing and am of the opinion that property prices are likely to fall in both terms, I'm not certain of anything in the future but thats where I see the balance of probability.

ABCDiamond

Interesting answer

Chill doesn't come into it , it just seems odd that I get accused of not being prepared to say what might happen, yet also get accused of saying what will happen.

All because I am not prepared to agree with those who say it will drop.

ABCDiamond

I am not certain of anything either, but YOU are quite prepared to state that I don't expect prices to drop.

Does this graph of mine show that prices are rising or dropping...


or what about this one

ABCDiamond

Median property prices are the middle price of a range of sales.

Lets take two examples:

100 houses sell at prices between $500k and $600k, half above $550k and half below $550k
The median will be $550k.

Now, lets say a bright developer builds a load of budget priced houses, to cater for the lower end demand, and sells 300 of them for $200k, but at the same time those existing houses DOUBLE in value to about $1million each.

The median will be $200k because half the houses were $220k or under and half were $200k or over.

The median has dropped from $550k to $200k whoopee the property market has crashed....

But... the other houses have doubled in price.....
In reality property prices have increased by 100%, but the median price has dropped by 60%.

Yes, this is an extreme, to highlight without a shadow of doubt the theory of the system.

ABCDiamond

An artificial housing bubble can also be caused by building loads of new and larger houses, and causing median prices to rise even though existing housing stock doesn't actually change in value, or may even drop, as happened in Sydney.
Many Sydney houses actually dropped in value even though the median prices were going up, due to the new developments of big McMansions.