Australian / UK Housing Bubble, 1996 here we come [with charts]...

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straight's picture
straight
Status: Silver Member (Offline)
Joined: Aug 25 2008
Posts: 103
Australian / UK Housing Bubble, 1996 here we come [with charts]...

Why i think Australian median house prices may well hit $130k, down from present $400k.

http://www.moneyweek.com/investments/property/uk-house-prices-will-plummet-look-at-this-scary-chart-14664.aspx

http://www.rba.gov.au/ChartPack/graphical_summary.pdf [pg.7]

I have cut and pasted from the above articles.

 "Let's start with one of my favourite charts, and one I'm extremely fond of posting, Dr Jean-Paul Rodrigue's Manias and Bubbles."

 bubble graph

 

 

 

 

 

 

 

 

 

 

The Chart below shows UK, London and Scotland House prices.  Hmmm...

 

 uk house prices

 

 

 

 

 

 

 

 

 

 

 

I cant link the chart of Australian house prices, so please open http://www.rba.gov.au/ChartPack/graphical_summary.pdf and go to page 7, what do you think of the top right chart of established house prices?

Over here in Australia it feels like we are behind the rest of the world and their economic woes... these charts suggest otherwise, we look to be at about the same spot on the housing bubble chart.... on the edge.

What do you think?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Australian / UK Housing Bubble, 1996 here we come [with ...

Tell this to the people here.

I post comments on news feedback items and you constantly see people here talking things up still

They try and say that it's in the Australian mentality to own a home bla bla bla.

Then there's the myriad of real estae agents talking things up as well

On top of this you have an idiotic government holding back on land releases and throwing money to first home buyers (I feel sorry for them, they think they are getting an easy ride into the housing market).

Sometimes I feel like a lonely voice telling people that they are buying into a bubble but it often falls on deaf ears.

Thanks for those charts - as wonderful as this site is it is Amercian centric (and fair enough - I'm not complaining) but it is nice to get data that's parallel to the Australian situation.

Your 100% correct on Australia lagging behind the rest of the world.  i tell people here that we have only just started to see the layoffs - I mean look, when a company like bonds fires 1800 odd workers it's big news - wait till it really gets rolling :-(

I have pinned up on my desk at work a chart on history of home values (I think someone here posted it up) and people stop and look at it and smile and walk off. In the past two weeks however, I've had a few requests to make a copy of it! The penny is starting to drop.

One lady sitting in another cubical said she was thinking about buying another property but was a little unsure due to the financial situation - others told her it will come good again. I got glares and comments when I said it isn't coming good.

Australia has cruised along for years on the massive amounts of wealth it has in the ground - butthat isn't going to save it for what's coming (hmm - what's already here).

We are starting to see utility prices increasing and state governments jacking up prices.

New Zealandhas a distinct advantage I think. It has plenty of food and a government that will not throw money at the problem and is telling the people the truth. Kiwi's als know how to go without for long term gain in the end - something that I think Australian's have lost having been basked in wealth for so long...

:-)

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Australian / UK Housing Bubble, 1996 here we come [with ...

Thanks for those charts - as wonderful as this site is it is American
centric (and fair enough - I'm not complaining) but it is nice to get
data that's parallel to the Australian situation.

 

Can I suggest you join  http://groups.yahoo.com/group/roeoz/ ?

Mike 

jdownie's picture
jdownie
Status: Bronze Member (Offline)
Joined: Apr 7 2008
Posts: 58
Re: Australian / UK Housing Bubble, 1996 here we come [with ...

I think you're right, keep in mind the Australian dollar though, nominal house prices could remain high if the dollar continues to lose value.

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Australian / UK Housing Bubble, 1996 here we come [with ...
jdownie wrote:

I think you're right, keep in mind the Australian dollar though, nominal house prices could remain high if the dollar continues to lose value.

I can't see the prices staying high long term.

Australia still faces the same baby boomer problem most other countries are facing - that says to me that house prices must fall in time.

Australia also has house prices considered to be the most overpriced in the world, surely that must come to bare as well.

Someone was telling me the other day that the UK was looking to pull billions out of the commercial property sector to pay debts back in the UK, that surely must make an impact.

What I don't know is how exactly all these factors and others work in conjunction because quite frankly I'm only just leaning about economies etc but these things just don't 'feel right' with me - they are a disconnect to use Chris's term.

jdownie's picture
jdownie
Status: Bronze Member (Offline)
Joined: Apr 7 2008
Posts: 58
Re: Australian / UK Housing Bubble, 1996 here we come [with ...

What I mean is it's not the 'value' of houses staying high, it's the dollar losing its value that makes the 'price' of houses high. To wit, inflation.

The Australian dollar, along with all fiat currencies, has lost much of its value since 1996.

The disgraceful policies of the government in pushing down interest rates, will only debase the dollar further, but maybe that's the plan.

I personally think the government is utterly clueless about monetary policy, not to worry, we have a Goldman Sachs man at the RBA running the show!

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