[recession we had to have]

tor, on 15 December 2011 - 02:21 AM, said:

Nice- & makes a great hat too

[tor]

Max Carnage, on 15 December 2011 - 02:51 AM, said:

Ha! Funny.

We have a shortage of shares too. The proofs are all there:
- High prices (historically and relative to other countries).
- Government regulation.
- People who would own more or better shares if they could afford to.

I think his argument boils down to "if there is any unrequited demand for anything there is a shortage of that thing".

Which is fine as a statement.

But about as useful as tits on a bull.

[The Claw]

You are all a bunch of time-wasting clowns.

I posted a very good article which covers much more than just housing and nobody comments on the article. You just want to stir me and make fun of me.

[tor]

The Claw, on 15 December 2011 - 03:40 AM, said:

You are all a bunch of time-wasting clowns.

I posted a very good article which covers much more than just housing and nobody comments on the article. You just want to stir me and make fun of me.

No you posted a bunch of bollocks and then had a link.

Who is going to go and read a link at the end of a bunch of inane comments?

[Max Carnage]

I read it. Apparently we need to get rid of the luxury car tax too, because that's causing a shortage of luxury cars.

[Peachy]

The Claw, on 15 December 2011 - 03:40 AM, said:

You are all a bunch of time-wasting clowns.

I posted a very good article which covers much more than just housing and nobody comments on the article. You just want to stir me and make fun of me.

I, for one, read the article and found it interesting.

[ummester]

The Claw, on 15 December 2011 - 03:40 AM, said:

You are all a bunch of time-wasting clowns.

I posted a very good article which covers much more than just housing and nobody comments on the article. You just want to stir me and make fun of me.

I guess there is some truth in that. See, you can get how things work:) Why don't you get how the whole housing supply thing works?

In this other thread I raised the question about how many houses there are in OZ ATM? I don't know the answer, perhpas you do.

But, we have 22mil people that live, on average, 2.5 people per house. That means 900k or so houses are required. Almost 300k are for sale ATM (150k in capiatls) and quite a few are also available for rent. Water consumption in most capitals shows about 10% unoccupied at any given time. I don't know but these overall kind of stats don't really show a shortage to me.

I agree the govt and devs have choked and srtroked to help keep demand high - but that is bubble demand, it would be higher than normal anyway.

Tulips become very cool and everyone wants one, so more than normal are needed. Extra supply is produced but that supply is deliberately constrained to keep demand high. If tulips didn't become so cool in the first place, demand stroking wouldn't be required but since they are cool, everyone is trying to work out how to maximise profits with them.

Or perhaps this way - a silly bunch of books called the Twilight series were recently written, we didn't really need films about them but hey, people demanded more of something silly so now they make silly films too and the people who make the films are trying to split 'em up and maximise ticket sales.

[staringclown]

The Claw, on 15 December 2011 - 03:40 AM, said:

You are all a bunch of time-wasting clowns.

I posted a very good article which covers much more than just housing and nobody comments on the article. You just want to stir me and make fun of me.

As a time wasting clown I resemble that remark.

I enjoyed the read claw. I do think the choking argument does apply here in canberra. I don't know enough about the rest of the country anymore as I've been here nearly 10 years but as a keen prosper member do believe land banking to be a real phenomena.

I did read this piece yesterday and it argues that the shortage argument has been used before in a lot of places. It hasn't previously affected house prices but it has affected rents.

Quote

The housing shortage
This is probably the most popular argument used by the bubble deniers. The story is that as Australia is suffering from a chronic deficit of properties to shelter a growing population, so demand is greater than supply, leading to rising housing prices.

The problem with this argument is it can’t explain why prices started to rise in 1996 and skyrocketed from 2001 onwards. Annual population growth between 1996 and 2005 registered at approximately 1%, taking off between 1.5% and 2% from 2006 onwards. (Fundamental supply and demand issues explain rent prices, not housing prices, which is why rents have increased from 2006 onwards).

2007 was the first time since 1950 that the population increased faster than the number of dwellings. If the housing shortage argument was correct, housing prices should’ve started to rise from around 2006-2007 onwards, not 1996. The historical data shows that there is no correlation, let alone causation, between population growth, dwelling supply and housing prices.

According to the 2006 ABS census data, there were 830,376 unoccupied dwellings during the time the survey was taken, out of a total of 8,426,559, or 10% of the dwelling stock. Unfortunately, no indication is given to the status of the vacant properties (derelict, holiday house, undergoing sale, renovations, speculative vacancy).

The Melbourne-based organisation Prosper Australia performed an innovative study of vacant properties using water usage figures. Applying a conservative methodology, it was found that almost 45,000 properties were lying vacant in the areas under study, and extrapolated across Melbourne, 61,000 properties were lying vacant for more than six months. This gives credibility to the idea that speculators are withholding properties from the market to capture capital gains rather than rental income.

Australia’s peak housing body, the National Housing Supply Council, had to include the homeless, caravan park residents, those sleeping rough and couch surfers into their figures in order to arrive at an undersupply of dwellings.

This is reminiscent of every other country affected by a housing bubble whose experts and authorities claimed that rising housing prices were caused by a housing shortage.

[Bernard L. Madoff]

Quote

However my understanding of the problem is that poorer Sydney-born people are being forced-out by a flood of rich immigrants. They suffer A SHORTAGE as a result of the immigrants.

Thats hilarious. The price of Real Estate in the nations poorest burbs/towns all went to the moon some with well over 20% price growth in one year, must be rich immigrants...

http://www.news.com....9-1225845061248

Quote

Nation's poorest suburbs (state, suburb, mean taxable income)

NSW Callaghan, Newcastle University $27,388
VIC Glenaire, Hordern Vale, Johanna, Lavers Hill $31,023
VIC Tresco 32,910
NSW Cunninyeuk, Dilpurra, Kyalite, Mellool, Moolpa, Stony Crossing, Tooranie, Wetuppa $33,726
VIC Nyah West $33,793
QLD Glen Aplin $33,806
WA Karlgarin $34,054
NSW Bland, Quandialla $34,211
VIC Barmah, Lower Moira, Picola, Picola West $34,247
VIC Lake Tyers, Nowa Nowa, Waiwera $34,359

Go on type them into: http://www.domain.co...x?mode=research

Alice Springs has a median of $452K and in 2003 recorded a 30% gain, those damn rich immigrants again?

You poor deluded chap. You are going to go off your tree when it dawns on you that your fundamental thesis is utter dogsh*t. When that happens have a Scotch and yell c'est la vie. We'll be happy to chat rationally then and not treat you like the kid on the 'special' bus.

[Bernard L. Madoff]

Blowing Away Bubble Deniers

A snippet from the link

Quote

The housing shortage

This is probably the most popular argument used by the bubble deniers. The story is that as Australia is suffering from a chronic deficit of properties to shelter a growing population, so demand is greater than supply, leading to rising housing prices.

The problem with this argument is it can’t explain why prices started to rise in 1996 and skyrocketed from 2001 onwards. Annual population growth between 1996 and 2005 registered at approximately 1 per cent, taking off between 1.5 per cent and 2 per cent from 2006 onwards. (Fundamental supply and demand issues explain rent prices, not housing prices, which is why rents have increased from 2006 onwards).

2007 was the first time since 1950 that the population increased faster than the number of dwellings. If the housing shortage argument was correct, housing prices should’ve started to rise from around 2006-2007 onwards, not 1996. The historical data shows that there is no correlation, let alone causation, between population growth, dwelling supply and housing prices.

According to the 2006 ABS census data, there were 830,376 unoccupied dwellings during the time the survey was taken, out of a total of 8,426,559, or 10% of the dwelling stock. Unfortunately, no indication is given to the status of the vacant properties (derelict, holiday house, undergoing sale, renovations, speculative vacancy).

The Melbourne-based organisation Prosper Australia performed an innovative study of vacant properties using water usage figures. Applying a conservative methodology, it was found that almost 45,000 properties were lying vacant in the areas under study, and extrapolated across Melbourne, 61,000 properties were lying vacant for more than six months. This gives credibility to the idea that speculators are withholding properties from the market to capture capital gains rather than rental income.

Australia’s peak housing body, the National Housing Supply Council, had to include the homeless, caravan park residents, those sleeping rough and couch surfers into their figures in order to arrive at an undersupply of dwellings.

This is reminiscent of every other country affected by a housing bubble whose experts and authorities claimed that rising housing prices were caused by a housing shortage.

Australian banks have lent conservatively

This is one of the more ludicrous defences made by the bubble deniers. Our mortgage debt stands at $1.2 trillion, or 90 per cent of GDP. If personal debt is included as well, as some analyses do, it totals 100 per cent of GDP. A report by the Bank of International Settlements shows that a ratio above 85 per cent becomes damaging to the economy.

I love logic and facts.

[staringclown]

No severe Aust housing shortage: analyst

Quote

Australia's housing markets are not suffering from a dramatic property shortage, a senior property analyst says.

UBS head of real estate and contractors research John Freedman says the fall in house prices experienced this year indicates demand is not outstripping supply.

The Housing Industry Association and developer lobby groups such as the Urban Taskforce estimate a shortage of 200,000 houses in Australia but Mr Freedman challenges that figure.
"I think that maybe there's an undersupply but I don't think there's this 200,000 house undersupply in Australia," he said at a media briefing.
"I think prices would still be going up if that was the case - I just don't buy that.

Instead, Mr Freedman suggested there was an undersupply of affordable housing in some areas.

Mr Freedman said the estimates of housing demand relied on assumptions about population growth and takeup of housing.

"I don't doubt that (housing supply) is reasonably balanced in most markets but I think if you had the sort of numbers that are quoted by some people in industry ... we wouldn't be talking about house prices being down three per cent for the year," he said.

He said it was possible to use population and housing data to make a case that there was a shortage.

"I don't get that feeling when I go out there into Australia and travel around (new housing) estates."

[tom]

Quote

"I don't doubt that (housing supply) is reasonably balanced in most markets but I think if you had the sort of numbers that are quoted by some people in industry ... we wouldn't be talking about house prices being down three per cent for the year," he said.

I don't think that is true.

You can have a shortage and still prices can fall in the same way we have not had a shortage compared to other developed countries and prices have risen here. I am not one to cast aside the logic I have clung to for years now just because it has become convenient to do so.

It comes back to affordability. If the parameters for this change, credit tightens, unemployment rises etc prices fall whether we have a shortage or not.

If we could not afford our own housing stock tommorrow people would move back in with the folks, people would share houses even families and pretty soon we would go from any perception of shortage to a perception of oversupply.

In 2007 we could collectively afford all our housing stock at those prices. In late 2009 with affordability "improvement" measures like the FHOB we could more than afford it. In 2011 it appears we cannot and people are making moves. Add in a bit of UE as 2012 kicks off and I think people will start to see supply for what it is. Don't worry about how many are getting built or how many we have. Worry about how we can collectively afford our own housing stock. This is key to its price short term.

Longer term worry about how much it costs to make new ones and from affordability v costs of production we will work out over time how many people will live per dwelling ultimately governing our standard of living.

[staringclown]

tom, on 19 December 2011 - 01:46 AM, said:

If we could not afford our own housing stock tommorrow people would move back in with the folks, people would share houses even families and pretty soon we would go from any perception of shortage to a perception of oversupply.

In 2007 we could collectively afford all our housing stock at those prices. In late 2009 with affordability "improvement" measures like the FHOB we could more than afford it. In 2011 it appears we cannot and people are making moves. Add in a bit of UE as 2012 kicks off and I think people will start to see supply for what it is. Don't worry about how many are getting built or how many we have. Worry about how we can collectively afford our own housing stock. This is key to its price short term.

Longer term worry about how much it costs to make new ones and from affordability v costs of production we will work out over time how many people will live per dwelling ultimately governing our standard of living.

The article makes the same point further down tom. What happens to properties that can't be afforded by the populous? Do they stay unsold forever?

Incidentally, a lot of the optimistic articles RE a recovery in Q2 2012 are claiming wage growth as a driver of further price increases. I'm not seeing it. Is anyone else seeing wage growth of +4%?

Quote

The report also predicts there will be growing demand for housing out to 2029 but notes that factors such as children living at home for longer and recent growth in average number of people per household were not taken into account.

[tom]

staringclown, on 19 December 2011 - 09:38 AM, said:

The article makes the same point further down tom. What happens to properties that can't be afforded by the populous? Do they stay unsold forever?

To go down a similar path to The Claw and introduce an analogy...

In Australia if it cost $1000.00 to build a new house tommorrow, I would expect many houses to be built. We would have one for our favourite holiday destination, one for the in laws we just cannot shake and buy a few for the kids in case prices get expensive again down the track. Do we have an oversupply in that situation. no.

I would expect much housing stock to sit on the market till prices adjust, but this does not mean we have an oversupply, it just means prices have not adjusted to the new market price.

In Australia what is obscene is houses are quite unnafordable and yet we still have lots of house per person on the back of credit. Markets adjust in price to take up ovesupply / undersupply issues.

[staringclown]

tom, on 19 December 2011 - 10:22 AM, said:

To go down a similar path to The Claw and introduce an analogy...

I hope tor isn't watching...

Quote

In Australia if it cost $1000.00 to build a new house tommorrow, I would expect many houses to be built. We would have one for our favourite holiday destination, one for the in laws we just cannot shake and buy a few for the kids in case prices get expensive again down the track. Do we have an oversupply in that situation. no.

I would expect much housing stock to sit on the market till prices adjust, but this does not mean we have an oversupply, it just means prices have not adjusted to the new market price.

In Australia what is obscene is houses are quite unnafordable and yet we still have lots of house per person on the back of credit. Markets adjust in price to take up ovesupply / undersupply issues.

Yep. You know what I really find obscene though is that even if you wanted to take an alternate path. AKA Not get into debt. The system works against you. It is rigged to encourage debt.
The powers that be want you to have debt. You owe us is a powerful tool for social control. Penalise the savers in favour of the debtors. It's brilliant! Of course it won't work forever. Still I expect some new outrage to occur in the new year in response to the lobbying from the industry. Not that it will work. I just expect it based on past experience. Like pavlov's hound.

[tor]

staringclown, on 19 December 2011 - 10:46 AM, said:

I hope tor isn't watching...

It's okay, it wasn't an analogy

[tom]

tor, on 19 December 2011 - 07:55 PM, said:

It's okay, it wasn't an analogy

ha.

I started off with a story about a shortage of housing in parts of poverty striken africa and that not meaning that houses are expensive. In isolation not being able to make something because it is too expensive only means their will be less of it and then I realised I might as well talk about Australia in a hypothetical situation!

You have made me gun shy about analogies tor.

[tor]

tom, on 19 December 2011 - 11:15 PM, said:

ha.

I started off with a story about a shortage of housing in parts of poverty striken africa and that not meaning that houses are expensive. In isolation not being able to make something because it is too expensive only means their will be less of it and then I realised I might as well talk about Australia in a hypothetical situation!

You have made me gun shy about analogies tor.

at least I have a purpose

[zaph]

tom, on 19 December 2011 - 11:15 PM, said:

ha.

I started off with a story about a shortage of housing in parts of poverty striken africa and that not meaning that houses are expensive. In isolation not being able to make something because it is too expensive only means their will be less of it and then I realised I might as well talk about Australia in a hypothetical situation!

You have made me gun shy about analogies tor.

i like analogies if they explain something i have no, or limited knowledge of and don't really want to have more knowledge. the analogy stater has to be able to go into further detail and explanation or they clearly don't understand the topic.