Bill Maher's latest New Rule

[Heracles 417]

Now your predicted a fall in prices? C'mon, man. If Aussies are so rich, and real demand so high, then you ought to believe that housing prices would rise, no?

US had about a 30% correction, even more in some places. The 5% is a worst case scenario. My gut says they will actually rise.

[w¡n9Nµ7 §£@¥€r 123]

If housing prices were based on fundamentals (income and interest rate), you'd not need a 32k grant for first time buyers.

http://www.demographia.com/dhi.pdf

New York City 7.0

London 6.9

Sydney 8.3

Melbourne 7.1

San Fran 8.0

Victoria, Canada 7.4

Most affordable is Fort Wayne, IN (1.9). Is that a good thing then?

NYC's prices have weather the crises quite well too.

NYC's crash is just starting. The correction in the tri-state started in the exurbs and is moving inwards. Epicenter today is Hoboken/Jersey City and Manhattan is beginning to see the effects as well.

As you may know (or not), not all regions move concurrently.

Also, as you may know (or not), not all regions have the same fundamentals. The median income of people who are current or prospective home buyers in Manhattan are generally much wealthier than those who are the same in Central Jersey. A multiple of 3.5 times median income may mark the point of price stability in (say) Edison, NJ while the Manhattan market may find it can sustain 5 times, maybe even 6.

But it is generally understood that 8.3x is unsustainable.

[mRx 16]

Now your predicted a fall in prices? C'mon, man. If Aussies are so rich, and real demand so high, then you ought to believe that housing prices would rise, no?

US had about a 30% correction, even more in some places. The 5% is a worst case scenario. My gut says they will actually rise.

There's that unfettered optimism.

I don't really see a fall until the subsidies stop. Of course, the RBA could try to further combat it by lowering rates.

The US correction still has some dropping to do. Incredibly low interest rates, mortgage re-adjustments, and housing subsidies are attempts to reflate the bubble.

A good comparison is the 90's depression in Japan. They went to through 10 green shoots and housing prices inevitably dropped 80%.

[Heracles 417]

You guys also realize that a lot of the housing boom is occurring because the government is rationing the land. They don't want to end up like some US style metro area, which just builds further and further out. Something quite common in Canada too. Unlike Americans, we learn from others mistakes and adjust our strategy accordingly.

Sorry guys but your younger distant cousin is kicking your butts and badly. Like I said in another thread to Gary, his equivalents there would have a $500k house, earn about $80K, have a new G8 or equivalent (which costs $45k there), a few jet skis, a boat for fishing with the buds and possible a holiday house in Queensland. He would also receive a good 6 weeks paid leave a year and live in a decent area. Not your typical run down older suburb. We're pals so they are more than happy to teach you guys a thing or two. Unfortunately you have to ask for it and we all know that goes against US pride. Australian's learn from Canadian who learn from the Brits, who lean from Australia and so on. They complement each other.

Edited August 12, 2009 by haza

[Heracles 417]

Stuff like this is why Maher calls Americans stupid. Many here clearly believe the US is still the envy of the world, even though you lost that title a good 30 years ago. Naturally, many have hardly left their county let alone traveled abroad to other developed countries. These are the same type of people speaking up at these town meeting against health care and claim Obama is destroying his medicare.

Edited August 12, 2009 by haza

[w¡n9Nµ7 §£@¥€r 123]

Assuming a standard 20% downpayment, the starting mortgage balance on a 500K house will be 400K.

In which fantasy world is it smart for someone making only 80K to take out a 400K mortgage?

[Heracles 417]

Assuming a standard 20% downpayment, the starting mortgage balance on a 500K house will be 400K.

In which fantasy world is it smart for someone making only 80K to take out a 400K mortgage?

Dude that is starting salary. Actually all of my friends and cousins who dropped out of high school at 16 and run their on trade business are making well over $120K. One guy I know has about 7 houses throughout the country and looking at buying another in CA. Also has 4 high end sports cars. He is actually making more than a lot of people I know in the US with who have ivy league BA & MA . He also does not owe the $100k+ they owe on their student loan debt.

Edited August 12, 2009 by haza

[w¡n9Nµ7 §£@¥€r 123]

Assuming a standard 20% downpayment, the starting mortgage balance on a 500K house will be 400K.

In which fantasy world is it smart for someone making only 80K to take out a 400K mortgage?

Dude that is starting salary. Actually all of my friends and cousins who dropped out of high school at 16 and run their on trade business are making well over $120K. One guy I know has about 7 houses throughout the country and looking at buying another in CA.

Stop changing your stories.

This is what you said. This is what I responded to.

like I said in another thread to Gary, his equivalents there would have a $500k house, earn about $80K

You clearly said a Gary-equivalent would make 80k and have a 500k house.

Are you now saying that was bull?

[Trumplestiltskin 5,791]

It was a guess?

[Heracles 417]

Are you now saying that was bull?

If Gary worked for himself which he is clearly capable of he would be on an excess of $120K. He could also buy a trailer to sell hot food at town fairs and earn another $40k. $80k was a base (minimum).

You haven't been there so I understand it's hard to fathom. Remember Australia has a skilled labor shortage as they don't allow illegal immigrants to setup shop as they see fit. Now if gary was a welder or a brick layer, forgetaboutit, he could earn $2 a brick. A few years ago Brick layers in QLD were earning up to $1K a day. We build our houses with brick and not vinyl siding.

My cousin who is an electrician for BHP out at their mines is earning $250K.

Edited August 12, 2009 by haza

[w¡n9Nµ7 §£@¥€r 123]

Haza, I don't have trouble fathoming people making big bucks. We both live in parts of the US with some of the highest median incomes. You know that.

What I have trouble fathoming is an intelligent person can believe that it is wise for someone making 80K to take out a 400K mortgage. It clearly is not and yet you (earlier) alluded to it being so. You've since (seemingly) retracted, but that's just your MO.

[Heracles 417]

You have to live somewhere. If his wife is working too they would easily top $100k. At $100K they could pay it off in 10 years. Remember you have zero property tax there.

Americans have never been proactive, it's not in American's nature. Maybe the country has to totally fail and be surpassed by China before people wake up and smell the coffee. As I have said time and time again before, you will never hear people disusing the merit of any program on the basis of whether it is constitutional or not. Nor will the fate of the country be decide by a 'Xyz v Def ' supreme court ruling.

Edited August 12, 2009 by haza

[Heracles 417]

Matt and AJ take note

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Housing, jobs bolster consumer sentiment

Chris Zappone

August 12, 2009 - 11:00AM

Buoyant house prices and low unemployment rates pushed consumer confidence higher in August, underscoring the hope that the worst of the global downturn will not affect Australia

The unemployment rate remained at 5.8 per cent in July, unchanged from June, in a sign flexible work arrangements are allowing workers to cling to jobs while demand for goods and services slumps. In the US and the UK, the jobless rate is hovering just below 10 per cent. In some countries, including Spain, it is significantly higher.

The weighted average for Australian capital city home prices rose 4.2 per cent in the June quarter, according to the Australian Bureau of Statistics, defying the global trend of real estate asset deflation triggered by the financial crisis.

http://business.theage.com.au/business/hou...90812-ehku.html

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Edited August 12, 2009 by haza