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Housing bubble debate boils over

Housing bubble debate boils over

Old Sep 24th 2010, 8:38 pm
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Lightbulb Housing bubble debate boils over

The simmering debate about whether Australia has a housing bubble erupted again this week over a Commonwealth Bank presentation that seeks to assure global investors Australian real estate is a safe bet.

Senior Commonwealth Bank executives have travelled the world in the past couple of weeks with a presentation showing how Australian house prices, and the key price to income ratios, compare favourably with similar countries.

"Housing affordability has actually been going sideways for the last five to six years," said Craig James, the chief economist of the bank's trading arm, CommSec.

"This is something which has now been acknowledged by the Reserve Bank, so one of the great myths has now been debunked - housing is not unaffordable here in Australia."

CBA has waged its war against what it believes are housing doomsayers with graphs, numbers and international comparisons.

In its presentation, the bank rejects arguments that Australia's housing is relatively expensive compared to incomes.
(Source).

This is madness. I know CBA is the biggest mortgage lender in Australia and therefore has a vested interest in talking up the real estate market, but to claim there is no housing bubble...?

A picture tells a thousand words:





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Old Sep 24th 2010, 8:46 pm
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Default Re: Housing bubble debate boils over

Originally Posted by Vash the Stampede View Post
Not sure what everybody else can see mate but in my case its not so much "A picture tells a thousand words" as "Three pizza boxes telling me nothing at all"

It could of course just be my VPN getting the way.
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Old Sep 24th 2010, 8:59 pm
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Default Re: Housing bubble debate boils over

The CBA are also talking up the Aussie dollar being talked about on the $1.93 thread. Just a day after Bloomberg predicted it was over valued.
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Old Sep 24th 2010, 9:16 pm
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Default Re: Housing bubble debate boils over

Nothing wrong with bigging up money lending, especially when you work in a bank

and when few in your country can afford to borrow, why not spruik abroad

wise fella that craig james...
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Old Sep 24th 2010, 10:01 pm
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Default Re: Housing bubble debate boils over

Originally Posted by iamthecreaturefromuranus View Post
Not sure what everybody else can see mate but in my case its not so much "A picture tells a thousand words" as "Three pizza boxes telling me nothing at all"

It could of course just be my VPN getting the way.
I can see it. (Just FYI)
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Old Sep 24th 2010, 10:04 pm
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Default Re: Housing bubble debate boils over

Obviously the CBA need cheap (or rather cheaper) foreign funds to support the lending over here.

I suspect the CBA are now the biggest mortgage lender in Aus. (Can't be bothered to check so if that's not right)
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Old Sep 24th 2010, 10:30 pm
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Default Re: Housing bubble debate boils over

Originally Posted by MartinLuther View Post
I can see it. (Just FYI)
Thought as much. Tinypic banned as 'media sharing' by my firewall.
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Old Sep 25th 2010, 5:47 am
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Default Re: Housing bubble debate boils over

Originally Posted by MartinLuther View Post
Obviously the CBA need cheap (or rather cheaper) foreign funds to support the lending over here.

I suspect the CBA are now the biggest mortgage lender in Aus. (Can't be bothered to check so if that's not right)
There is a concerted effort going on to talk up the strength of Australian Real Estate values because - as the 4th largest offshore issuer of Residential-Mortgage Backed Securities (RMBS) aussie banks and the RBA (currently number one investor currently in these bonds as no-one else wants to buy them) would stand to lose billions if house values slipped
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Old Sep 25th 2010, 6:20 am
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Default Re: Housing bubble debate boils over

Originally Posted by mbike View Post
There is a concerted effort going on to talk up the strength of Australian Real Estate values because - as the 4th largest offshore issuer of Residential-Mortgage Backed Securities (RMBS) aussie banks and the RBA (currently number one investor currently in these bonds as no-one else wants to buy them) would stand to lose billions if house values slipped
we have a winner.
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