House prices
freeride76 wrote:Any of the bears on here: DonW, Kaiser, etc etc still seeing a big property price fall in 2023?
My take is the very, very mild correction is over now and it's up, up and away once the RBA ceases this tightening cycle.
Yeah FR as I stated earlier I didn’t factor in ~450k new arrivals in 2022, 2023 and 2024 (that’s each year - not total). Albo and crew are doing their best to avoid the natural flow of things. Pure manipulation.
But what reason is there for the RBA to drop rates? Everything’s still gangbusters. IMO they shouldn’t have paused last month - that just fed the fever.
Macro forces will still play a part and if the credit event erm… eventuates, then the RBA might stop tightening as a balancing act because the banks will increase rates on their own
Also your reference to the paid 3.8 mil in 2017, sold for 37mil in 2023 is a double edged result (without accounting for improvements). On one hand, yes, it does demonstrate a ridiculously strong market. But it also proves we’re in an almighty bubble.
Funny thing is- everyone said the biggest sufferers out of the rate rise would be the ones who bought in last 12 months (bought at low rates that were then increased). What about all the ones buying now, who have 6or 7% straight off the bat? Nobody seems to give a shit, or there’s still a hell of a lot of $ sloshing around
If you made $20 mill today without bonds stocks or real estate investments, would that be like $20 000 in 20 years? If so set for life lottery is a rip off.
And making a block buster movie as a main actor or.producer or robbing a bank today won't be worth crap shortly.
kaiser wrote:Also your reference to the paid 3.8 mil in 2017, sold for 37mil in 2023 is a double edged result (without accounting for improvements). On one hand, yes, it does demonstrate a ridiculously strong market. But it also proves we’re in an almighty bubble.
Funny thing is- everyone said the biggest sufferers out of the rate rise would be the ones who bought in last 12 months (bought at low rates that were then increased). What about all the ones buying now, who have 6or 7% straight off the bat? Nobody seems to give a shit, or there’s still a hell of a lot of $ sloshing around
Still not convinced we're in a bubble.
Considering population increase and wealth at the upper ends, where's the pop?
Me neither.
God only made so much coastal real estate and with Aus on the edge of Asia and massive demand for it continuing I can't see any demand destruction.
If at some stage in the future a government pulled up the proverbial drawbridge with overseas investment and/or immigration or maybe a serious change in negative gearing and CGT, maybe then.
Reason Australia is believed to be in a property bubble is (1) house prices relative to other economic and financial indicators like gdp per capita and median/mean income, (2) house price appreciation over the past decade or two and relative to inflation (real house price growth), (3) other measures of affordability like mean/median loan pmts relative to incomes, etc, all point to it.
We’re supposedly in a fairly unprecedented housing affordability crisis you know!
But whether we see just a mild correction which has already taken place or an outright bursting is a different question.
One thing I’d mention is it’s not in the personal interest of our politicians to see their property (or share) portfolios fall in value, regardless of if there is a whole generation staring down the barrel of being locked out of property ownership.
Our economy is managed in a way that maximises growth in economic and financial output and wealth. In other words, the priority is (real/inflation-adjusted) economic growth and asset price appreciation.
*read in a pirate’s voice*
970% capital appreciation. In 6 years. When that can be normalised, a bubble it be… (improvements aside)
Supposed to only double every 7 years, don’t you know.
YArrrrrrrrr.
Poor young Australians, their goose has been cooked:
The Aussie Economy Is Broken - A Thread
— Tarric Brooker aka Avid Commentator 🇦🇺 (@AvidCommentator) April 25, 2023
Over the past few weeks I've been going through demographic breakdowns of consumption and income growth.
I came to the conclusion that the normal consumer economy (real wages growth > increased spending > economic growth) is cooked.
1/
Still no excuse for losing their logs, tho
Here's a link to some pertinent artwork, hi boomers ;)
https://en.wikipedia.org/wiki/Saturn_Devouring_His_Son#/media/File:Franc...
and the original
At least surfboard shapers seem to be getting alright money for the tremendous work these days..It was only 2006 when i bought a new Jim Banks for $600 and some friends thought i was getting ripped off. (havent they been around 500-600 for 20 years?)
They paid 500 or whatever but the banks was the funnest board i ever rode.
His agent firstly gave me a semi used demo which i paid half price for but it was too thick by a fraction and long by an inch too much but the next one ripped and ive never had a board as good since..but it didnt like going right.
Anyway my point i see some surfers whinging (like last year one said)surfboards should be $300 - $400 but how the hell are the shapers supposed to buy a house or pay rent and have a family?
Maybe $300 in Bali 15 years ago. not in Australia now..
2006 was tough, was watching the WA shapers I knew compete with the new mass produced offshore boards coming into shopping centre surf shops, while mining boom inflated the cost of living (and housing) hard.
Yeah thats right firewires started coming out around then from memory and seemed to have died off in popularity..I only had one i liked (mostly went good at waves like lefties and other gracetown easy waves)but even that slid out in 6 foot + hollow west oz reefs...just too boxy rails i think.then i started getting too fat too so sold it.
Might have killed myself on it if i took it to west sumbawa or deserts.
It was stuff like Jack's iirc that were retailing in the $300s at that time, conventional construction - forgive me if I've got the brand wrong. That was close to materials costs!
OK housing, Byron, AirBNB:
https://www.abc.net.au/news/2023-04-27/recommendation-byron-bay-60-day-h...
It must've been a big council meeting today!
freeride76 wrote:Any of the bears on here: DonW, Kaiser, etc etc still seeing a big property price fall in 2023?
My take is the very, very mild correction is over now and it's up, up and away once the RBA ceases this tightening cycle.
short term dead cat bounce. Real crash will occur with a worldwide recession. Watch the USD start to tank into the end of this year.
OK Don, you've been very consistent in calling this crash.
freeride76 wrote:Me neither.
God only made so much coastal real estate and with Aus on the edge of Asia and massive demand for it continuing I can't see any demand destruction.
Agreed. I can’t see it coming. And if there is a bit of a downturn they will throw more money on it. But in saying that I am noticing some good, affordable deals that come with some flexibility. Coastal strip is still crazy but there are some not bad prices when you move little but more inland (that probably doesn’t work for Byron as inland is as as ‘sexy’ as the coast).
I'll be interested to see how this goes.
Ridgeline behind Lennox Point sold in 2021 for 14 million.
Now up for sale again less than 2 years later.
https://elderslennoxhead.com.au/real-estate-boom-lennox-head-property-se...
flollo wrote:freeride76 wrote:Me neither.
God only made so much coastal real estate and with Aus on the edge of Asia and massive demand for it continuing I can't see any demand destruction.
Agreed. I can’t see it coming. And if there is a bit of a downturn they will throw more money on it…..).
Plus 200,000 immigrants per year.
Yes, and if there is global recession people from other countries will fight like crazy to get here. I work for a global business and the appeal of Australia is incredibly strong. Many dream of coming here, even if it’s to work on a project for few months.
If anyone knows cheap places to rent or buy land on oz keep it quiet. Unless its in the middle of Simpson desert.
Kirra zero rent - park the Van life Van or even hatchback (for the poorer types) in a carpark spot along the point. View is dreamy but long days in a tiny stinking hot living room with smelly gear and grumpy girlfriend eyeing off airconditioned apartments with a pool enjoyed by those with more $$$s and prospects - not so much.
donweather wrote:freeride76 wrote:Any of the bears on here: DonW, Kaiser, etc etc still seeing a big property price fall in 2023?
My take is the very, very mild correction is over now and it's up, up and away once the RBA ceases this tightening cycle.
short term dead cat bounce. Real crash will occur with a worldwide recession. Watch the USD start to tank into the end of this year.
What's the basis for your opinion?
And if the USD tanks, would that mean assets take off? It seems at times recently they have had an inverse relationship to me.
velocityjohnno wrote:And if the USD tanks, would that mean assets take off? It seems at times recently they have had an inverse relationship to me.
Well, it depends on the context. If AUD follows USD and it tanks but China maintains the strength of its currency (as they do) we will get many Chinese millionaires looking for bargains (from their perspective) in Aus.
USD likely to tank against most other countries. I wouldn't be surprised if we see AUD back up in the 80-90 cent mark in 2024 and beyond.
Based off early 2021 90 low, I note DXY has attained a 50% retracement from Sept highs thru to this year's Feb/Apr lows so there's a bit of a crash, but you probably mean longer term. If we are to enter a global recession, is it not true that money flees to the prettiest horse in the glue factory, USD and UST's in particular? Ie pushing demand for them up, and thus prices up relative to everything else? In this recessionary context, what would change to offset this? Bitcoin, Gold, Yuan, SDR's, hell even AUD - what is big enough to do this as a flight to safety, which usually occurs in/before recessionary times?
I've always seen things as like a body and circulatory system, when things are nice and warm money (blood) flows out the the extremities and you get things like Aussie mining explorers and loans to the Argentine govt happening. When things get cold and recessionary, the flows go back to the core which is London and to a much greater extent, NY and the US and UST's in particular. What is bigger that can take over the 'core'? And since UST's are yielding better now, there is scope for capital appreciation (falling yields inverse to this). Anyway not financial advice, just my 2c and imagining a construct of how things flow.
Nice one VJ, I appreciate your much more sophisticated take (others too, especially GSCO).
donweather wrote:USD likely to tank against most other countries. I wouldn't be surprised if we see AUD back up in the 80-90 cent mark in 2024 and beyond.
I hope so - Isurus wetsuits will become cheap again!!!
garyg1412 wrote:donweather wrote:USD likely to tank against most other countries. I wouldn't be surprised if we see AUD back up in the 80-90 cent mark in 2024 and beyond.
I hope so - Isurus wetsuits will become cheap again!!!
Ha ha that was my first thought new 4/3 wetty.
Worth a listen, might taste like acid for some of the anti-US crew here, but when I hear his points on size and scope of stuff like the Eurodollar system, I cannot disagree
If I had a USD for every time everyone's called the end of the USD over the last 20 years... Do they run their country poorly? Financially, yes. But it remains.
And while I am here, this one is good too: 'Why the Fed is Shrinking its Balance Sheet'
Maybe his last point about the boomers shifting their average investment stance would tie in with what Don is saying?
Agree on the cheap money of the last 15 years enabling some mad shit.
And imagine if Powell goes hawkish next meeting...
velocityjohnno wrote:Worth a listen, might taste like acid for some of the anti-US crew here, but when I hear his points on size and scope of stuff like the Eurodollar system, I cannot disagree
https://www.youtube.com/watch?v=LiR54FPQiCs
If I had a USD for every time everyone's called the end of the USD over the last 20 years... Do they run their country poorly? Financially, yes. But it remains.
your taking advice from an American on whether the USD may tank? I can’t imagine any yank advocating that their currency is going to tank. They love the fact they are a global currency. BTW I didn’t say the USD wouldn’t remain a global currency. I just said it’s not going to dominate like it has over the last 10-15 years. It will devalue.
velocityjohnno wrote:And while I am here, this one is good too: 'Why the Fed is Shrinking its Balance Sheet'
https://www.youtube.com/watch?v=hpwWwTUPXtU
Maybe his last point about the boomers shifting their average investment stance would tie in with what Don is saying?
Agree on the cheap money of the last 15 years enabling some mad shit.
And imagine if Powell goes hawkish next meeting...
I do like what he has to say in this video more. Makes complete sense. Ask yourself this. If the capital in the US financial sector is drying up by a third and the U.S. has Fck all to export what’s that going to do to their currency?
velocityjohnno wrote:Worth a listen, might taste like acid for some of the anti-US crew here, but when I hear his points on size and scope of stuff like the Eurodollar system, I cannot disagree
https://www.youtube.com/watch?v=LiR54FPQiCs
If I had a USD for every time everyone's called the end of the USD over the last 20 years... Do they run their country poorly? Financially, yes. But it remains.
Commend
Old made Peter does some great videos eh. Gets so much info so succinctly into 6 or so minutes. Some of it I don't understand but I mostly follow.
He also looks to be living around where a mate of mine was living, with his Dad, just up the i70 out of Denver.
velocityjohnno wrote:Worth a listen, might taste like acid for some of the anti-US crew here, but when I hear his points on size and scope of stuff like the Eurodollar system, I cannot disagree
https://www.youtube.com/watch?v=LiR54FPQiCs
If I had a USD for every time everyone's called the end of the USD over the last 20 years... Do they run their country poorly? Financially, yes. But it remains.
So good. He’s got some really good stuff, I watched some other videos that were also good.
Wow, labour government didn’t take long to turn on the immigration tap.
https://www.abc.net.au/news/2023-04-29/australian-migrant-population-gro...
Distracted wrote:Wow, labour government didn’t take long to turn on the immigration tap.
https://www.abc.net.au/news/2023-04-29/australian-migrant-population-gro...
i heard these skilled migrants have to have $200,000 cash when entering cntry?
allso the muslims borrow monies from arab banks coz they don't charge interest as it is usurious and against their beliefs?
so much for a level playing field.
Parting shot from Gov Lowe?
Last month it was hoorays. How will the reaction play out this time?
Here’s one from news.com.au - ‘the RBA has smashed homeowners with yet another interest rate hike this month…’
Market is not happy Jan, 80 point pin drop on the XJO after 2:15
Greens are calling on Chalmers to overrule the rate hike. Claim ‘the RBA is out of control’
The skeptic in me (which is a big part of me) wonders if this hike is a positioning so the budget release narrative is in lock step
kaiser wrote:Greens are calling on Chalmers to overrule the rate hike. Claim ‘the RBA is out of control’
If that's what the Greens are saying, then that economist on 60 minutes the other night saying about another 6 to 7 rates rises are needed to really get inflation under control must be true.
https://9now.nine.com.au/60-minutes/what-is-sticky-inflation-and-why-is-...
https://www.news.com.au/finance/economy/interest-rates/rba-interest-rate...
The comments section gives a sense of the zeitgeist - it's divided. Confusion, pain - and opposing that, calling for more rises. Some out of malice, some out of a sense of how unbalanced things got during QE and covid stimulus printing.
"The housing market could crash by 40% and it would still be an overinflated, debt ridden hell hole. Truth is - if you made it rich by betting on it - you will sit back and pray for more leveraged funds to come your way. For everyone else - you are homeless."
Quite a few mention that immigration will keep inflation going, rents high, and support the market. It's as if that's the only thing that matters.
Meanwhile, the young one is getting requests for extra work that challenge his carpentry skills, which is good; and we concreted in a few stumps for a BBQ. #the block
It’s pretty crazy that interest rate rise only triggered a very modest market correction (if any in some areas). Even people on good incomes would struggle to get loans approved on these valuations so who’s buying?
https://www.corelogic.com.au/news-research/news/2023/corelogic-home-valu...
Launderers? Is that even a word, cos I think it's a thing.
Food for thought.
Australia appears to be looking down the barrel of an immigration-fuelled inflation breakout.
Labor is going all-in on immigration, 400k per year.
But if it continues at this pace, the current rental crisis threatens to get out of hand and, given rents feed into the Consumer Price Index, it will push inflation higher.
That will increase the pressure on the RBA to lift interest rates again.
In the words of the RBA board -
"Higher immigration "could put significant pressure on Australia's existing capital stock, especially housing, which would, in turn, manifest in higher consumer prices", it noted in its recently released minutes.
"Although higher immigration might reduce wage pressures in industries that had been experiencing significant labour shortages, members noted that the effect of a sudden surge in population growth could be somewhat inflationary for a period," the minutes said.
https://www.abc.net.au/news/2023-05-02/housing-affordability-risks-being...
100000 new immigrants expected in NZ this year :-/
It's funny Andy, its like we have the fiscal side (government) and the monetary side (RBA) at war with each other. The more the govco does to juice things, the more the RBA has to hike.
I can't help but think that if govco gives up on the immigration, the RBA can then lower rates as the housing input is no longer pumping inflation higher.
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers