Bill Maher's latest New Rule

[Heracles 417]

Does this look like some puny city fueled by a bubble.

[w¡n9Nµ7 §£@¥€r 123]

Queensland’s Sunshine Coast market was deemed to be the most unaffordable market ... with house prices running at 9.6 times median income. The Gold Coast market was third on the list at 8.7 times median income, while Sydney was ranked fifth at 8.3 times median income and the Queensland market of Bundaberg ranked 10th at 7.2 times median income.

Other Australian capital cities to feature on the list include Adelaide (7.1 times), Melbourne (7.1), Perth (6.4), Brisbane (6.3), Hobart (6.2), Darwin (5.9) and Canberra (5.1).

You can post all the pictures you want, present as much imagery as you like.

The fact remains that when homes cost 8.3 times median income (Sydney) or 7.1 times median income (Melbourne), they will fall. Those levels are unsustainable.

[Heracles 417]

The return of rental property

John Collett

July 8, 2009

An undersupply of housing and weak returns from other assets has put the spotlight on investment property. John Collett talks to the experts.

.....

Investors are likely to be considering re-weighting their portfolios from shares into property, says an economist for ANZ, Alex Joiner. He says they can buy in an area they know, at a good yield, with vacancy rates often only 1 per cent or 2 per cent.

.....

"For Sydney and Melbourne, I expect to see the unit median price grow moderately for the remainder of 2009, with stronger growth in 2010," he says.

.....

Over the past year Melbourne and Sydney property prices are up 3.5 per cent, according to RP Data.

.....

Also, unemployment will increase and that could put pressure on prices at the lower end of the market. It could make it harder for investors to find and keep good tenants. The Federal Government and the Reserve Bank of Australia are expecting unemployment to hit more than 8 per cent by the middle of 2010 from an unemployment rate of about 5.5 per cent now.

http://www.smh.com.au/news/home/business/m...ge#contentSwap1

Edited August 11, 2009 by haza

[mRx 16]

Haza,

Housing bubbles are not a good thing, and that's what Australia has. I also don't know why you use "high prices" as a gauge of prosperity.

Your bubble will pop soon enough, and those ridiculous prices will come crashing down. And all the Outbackers who used equity to fund consumption will be in the same shape as Americans who are upside-down on their mortgages.

House prices there are fueled by a different type of growth there. Australia didn't have the housing flip pyramid scheme the US went through. In many cities there are still housing shortages. Australians are also not spread out like people are here so growth in and around the cities has been strong. People are bidding for rents there like they do in Manhattan. We're not talking so min island either. Melbourne and Sydney are quite metro areas.

They were also smart not to buy US Treasury Securities.

The type of growth is not different. It's fueled by ridiculous subsidies (which we are now copying) and the RBA has cut rates to it's lowest in 50 years. This growth is artificial, just as ours was. The 'Ole Outback is no different. The growth in real estate prices cannot continue forever, nor will they just "taper off" as was predicted in the US housing boom.

The termination of the FHOB housing subsidy may be enough to pop the bubble. We'll see next year...

[Heracles 417]

You can post all the pictures you want, present as much imagery as you like.

The fact remains that when homes cost 8.3 times median income (Sydney) or 7.1 times median income (Melbourne), they will fall. Those levels are unsustainable.

The fact remains we could crush Jersey. Eat it up and spit it out like a seed. A seed for you Jersites to fight over as it has been graced by us champs.

The type of growth is not different. It's fueled by ridiculous subsidies (which we are now copying) and the RBA has cut rates to it's lowest in 50 years. This growth is artificial, just as ours was. The 'Ole Outback is no different. The growth in real estate prices cannot continue forever, nor will they just "taper off" as was predicted in the US housing boom.

The termination of the FHOB housing subsidy may be enough to pop the bubble. We'll see next year...

The RBA is looking at starting to raising rates again as employment is improving there. WTO already stated that Australia will come out ahead of most from this recession. Whole different ball game. We are heavily trading with China. Less than 6% of their trade is with the US. They also do not have cheap illegal immigrant labor suppressing wages or problems with health care.

Edited August 11, 2009 by haza

[mRx 16]

The type of growth is not different. It's fueled by ridiculous subsidies (which we are now copying) and the RBA has cut rates to it's lowest in 50 years. This growth is artificial, just as ours was. The 'Ole Outback is no different. The growth in real estate prices cannot continue forever, nor will they just "taper off" as was predicted in the US housing boom.

The termination of the FHOB housing subsidy may be enough to pop the bubble. We'll see next year...

The RBA is looking at starting to raising rates again as employment is even improving there. WTO already stated that Australia will come out ahead of most from this recession.

Ah, an increase in the target funds rate coupled with the FHOB termination on December 31,2009 should be enough to send AU real estate over the cliff. If you own a house in Australia in 2010, you are wrong.

[w¡n9Nµ7 §£@¥€r 123]

Our housing is much more affordable than it was in 2005. Our correction is well in progress. Your correction hasn't begun but it will.

Again, home prices have to reflect fundamentals (median income). When they do not, a correction occurs.

[Heracles 417]

Australia has proven the libertarian view of no government intervention wrong. Actually destroyed the theory.

The first home buyers grant in Victoria is now up to $32K. They have proven that government works and works well. They of course have a different system of government which is what helps them. No county / city rights shenanigans there. Just minimal bureaucracy and efficiency.

Our housing is much more affordable than it was in 2005. Our correction is well in progress. Your correction hasn't begun but it will.

Again, home prices have to reflect fundamentals (median income). When they do not, a correction occurs.

Median income is about $50K there. To be honest I don't know of many couples that are under $130K.

[w¡n9Nµ7 §£@¥€r 123]

A grant of 32k wouldn't be necessary if starter home prices weren't inflated beyond the reach of first-time home buyers

Median income is about $50K there. To be honest I don't know of many couples that are under $130K.

Well we're talking about Australia, not about your friends.

[Heracles 417]

A grant of 32k wouldn't be necessary if starter home prices weren't inflated beyond the reach of first-time home buyers

House prices are inflated due to a shortage. Which obviously means more and more people are buying and moving there. Not one person I know of has lost their job there. Middle of 2009 and their malls are still overflowing. When i talk about malls, I am talking about malls. None of these puny ghetto 80's US malls. You need to travel to Melbourne and Sydney. Then come back and tell me how you think they are doing. First thing you will notice is the huge cultural shock. AKA no ghettos or third world like cities.

[w¡n9Nµ7 §£@¥€r 123]

A grant of 32k wouldn't be necessary if starter home prices weren't inflated beyond the reach of first-time home buyers

House prices are inflated due to a shortage. Which obviously means more and more people are buying and moving there. Not one person I know of has lost their job there. Middle of 2009 and their malls are still overflowing. When i talk about malls, I am talking about malls. None of these puny ghetto 80's US malls. You need to travel to Melbourne and Sydney. Then come back and tell me how you think they are doing. First thing you will notice is the huge cultural shock. AKA no ghettos or third world like cities.

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

[mRx 16]

Australia has proven the libertarian view of no government intervention wrong. Actually destroyed the theory.

The first home buyers grant in Victoria is now up to $32K. They have proven that government works and works well. They of course have a different system of government which is what helps them. No county / city rights shenanigans there. Just minimal bureaucracy and efficiency.

We'll see. You can spout that Statist hyperbole all you want, but the errors will be revealed, and the bubble will burst. Just watch.

[Heracles 417]

We'll see. You can spout that Statist hyperbole all you want, but the errors will be revealed, and the bubble will burst. Just watch.

It's a bet then. I am predicting house prices will fall but by maybe 5% in 2010. Nowhere near the US's correction.

[Heracles 417]

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 weathered the crises quite well too.

Edited August 11, 2009 by haza

[mRx 16]

We'll see. You can spout that Statist hyperbole all you want, but the errors will be revealed, and the bubble will burst. Just watch.

It's a bet then. I am predicting house prices will fall but by maybe 5% in 2010. Nowhere near the US's correction.

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?