Shareswatch Australia

337 responses so far ↓

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• 301 Anon // Nov 4, 2009 at 2:14 pm

  The problem with the housing bubble is if prices go down how does this align with everyones theory of rampant inflation.
  If inflation rockets real assets like houses will rocket too. Look at the basket case Zimbabwe and real estate prices.
  Check to see how real estate has historically performed in high inflationary environments — it has done quite well in these environments (even outperforming equities).
  Perhaps Greg maybe right and we only have a slight correction. But as Ralph mentioned if the government doesn’t prop up housing its basically an election death sentence.
  This is why its difficult to invest when there is too much Government intervention — they are a rogue element !
  Anyways just listing the bull cases for property prices. I personally would never buy a house at these levels and I suffer hyperventilation when I look at the sale price.

• 302 Ralph // Nov 4, 2009 at 2:20 pm

  Pete -- all good points.

  You can’t escape the conclusion that if house prices and wages keep rising at current rates, there’ll be a massive divergence. I can definitely imagine the median house price cracking $1m before wages break the $100k barrier.

  I can also see people devoting increasingly larger amounts of their net income to housing. It probably won’t be uncommon for people to spend 60-70% of their income on rent and/or mortgage repayments. It will just become the accepted thing to do. Prices might keep increasing to a point where home ownership is out of reach for the majority of the population.

  It then genuinely becomes a social issue -- we’ll have to see the development of shanty towns. Just like there is in Mumbai or Rio. Where else will the poor live? We’ll have to see if the government of the day is comfortable with that sort of situation. If they are, house prices to the moon!

  Ned -- unfortunately, I think you may be right. Pretty much everyone expects a government bailout when the $hit really hits the fan. The precedent has been set. The banks know it’s there. And the public will vote the government out if the cash handouts and subsidies don’t come. I’m just waiting for the day when the PM or treasurer comes out and says that the bailout is needed to stop house prices from falling.

• 303 Ned S // Nov 4, 2009 at 2:42 pm

  Are you telling me that you don’t think Krudd would act to mitigate a crash Pete? (Which doesn’t have that much to with “trust” as such -- More just a case of pigs do what pigs do and butterflies do what butterflies do.)

• 304 Greg Atkinson // Nov 4, 2009 at 2:55 pm

  I have given up applying any logic to what is happening. I honestly did not expect the housing market to get a boost via the home buyers grant and if you had said to me in mid 2008 that the Government would respond to a financial crisis by encouraging people to take on debt (i.e. home loans) I would not have believed you!

  So what could the Government do next year when faced with an election? Anything to get re-elected I would guess

• 305 Ned S // Nov 4, 2009 at 3:01 pm

  Yes, there’s some “moral hazard” issues about at the moment Ralph. But I’m wondering to what extent government intervention should be factored in as part of the new normal in investing. Rudd certainly seems to reckon intervention has an essential place in it all.

• 306 Ralph // Nov 4, 2009 at 3:39 pm

  Ned, that’s what’s so worrying about this. In choosing where to put your money, you have to try to second-guess government policy moves -- probably more so than in the past. And lately, they’ve been cancelling handouts all over the place.

  Take a look at solar panels and pink batts. Solar panel companies were given a day’s notice that the rebate would be culled. Similarly for the dodgy johnny-come-lately pink batts installers -- given a day or so’s notice that the handout would be reduced from $1600 to $1200. Businesses had made decisions in the expectation that those programs would run to their conclusion. At the very least, the government had not given an indication that the rug was about to be pulled.

  Now before any of you call me a socialist, I don’t for a second believe that businesses that rely on government handouts are sustainable. Nor should they expect subsidies to continue ad infinitum. But it just goes to show how arbitrary it all is.

  Further, the fact that the first home buyers’ boost is still going strong speaks volumes for the government’s intentions. While other elements of the economy can be sacrificed, house prices are sacrosanct. Even the schools cash splash has been wound back a fraction. Perhaps they are making some room in the budget to put some more money into real estate? The FHOG would be probably the only stimulus that is immune from tweaking (unless you call an increase a tweak).

• 307 Pete // Nov 4, 2009 at 10:28 pm

  Anon:

  If inflation rockets real assets like houses will rocket too. Look at the basket case Zimbabwe and real estate prices.
  Check to see how real estate has historically performed in high inflationary environments — it has done quite well in these environments (even outperforming equities).

  Yes indeed. The factor that makes this ‘different’ is debt. Simply, high inflation = high interest rates. In fact, ludicrously high interest rates. No-one will be able to afford the interest payments to keep the bubble afloat.

  However, people who own their own home have a huge advantage.

  Now just need to ask ourselves, is our property bubble fueled by debt or people who ‘own’ the houses? If you ask me, i’d say most of them don’t technically own their houses at all -- the banks do.

• 308 Pete // Nov 4, 2009 at 10:40 pm

  Ralph:

  I think you might have missed my sarcasm in my previous post. The sarcastic bit was me suggesting house prices doubling from here (apologies for my low form of wit).
  The median DINK (double income no kids) wage would not even be able to afford to live in the median house if they doubled.

  Who is going to buy the houses in that case? No-one would want to. Plus you shouldn’t need to be a DINK household to afford a home -- many people are not.

  Ned:

  Are you telling me that you don’t think Krudd would act to mitigate a crash Pete?

  Touche!

  I don’t think Rudd can mitigage a decline in the ‘growth’ (in real terms) of the property bubble over time. Now, I am keen to emphasise “real terms” and “over time”, because he may be able to prolong the bubble. All he’d need to do is introduce the FHOG again, this time with 50K bonuses and people would be all over it.

  But…the more he tries to keep them up, the more he is taking away from the rest of the economy to support a bubble. It is sustainable in the short-term. It is not sustainable in the long-term. All it would take is a significant shock to our economy to bring things to ‘crisis levels’ again. How about a global shock that significantly reduces global credit availability? How would he fund stimulus then?

  Property bubble expects infinite growth -- with finite (debt-fueled) capital.

  Plus, I don’t think we should pretend that the Gov. really has a clue as to what they are doing at any given point. They have proven themselves to be economically illiterate and political deceptive.

• 309 Pete // Nov 4, 2009 at 10:48 pm

  Ralph:

  Even the schools cash splash has been wound back a fraction. Perhaps they are making some room in the budget to put some more money into real estate?

  My ‘guess’ is that the Gov wants to be able to say that all their calculations or ‘forecasts’ in the budget were actually better than predicted.

  That will be an avenue for them to say that the stimulus ‘worked’. Even though it is just less spending that intended.

  They realise that the Liberal Party is continually going on about debt. So it wouldn’t surprise me if the Gov wanted to punish them for it a bit by reducing it (in the short-term).

  Kinda makes an election easy if you can say that everything you did was good (“look at the figures”) and everything the Opposition said was wrong (“look at the figures”).

  Even if it is horse crap.

  Election may be coming soon if the ETS doesn’t pass in December? (double disolution)

  And their strategy may be less of a “keep people happy” strategy than a “but we’re nowhere near as bad as those guys!” strategy.

  Personally I hate that I voted for Rudd, but I hated Howard more. Lesser of two evils? I wouldn’t vote for Hockey, and voting for Turnbull seems a bit strange. But I won’t vote for Rudd again.

  Sorry for the triple post guys!

• 310 Ned S // Nov 5, 2009 at 9:27 am

  I guess when it boils right down to it, Rudd seems to reckon that Aussie house prices are fundamental to the health of the banks Ralph? So given that he has no desire to be bailing out banks, he’s stuck with ensuring house prices don’t crash. (Where “don’t crash” isn’t necessarily the same as being a “great investment” of course -- But in these uncertain times, I can see the attraction in being crash protected. )

  So that is one point. But the other (and possibly more important one I was trying to make) is that housing would seem to me to be much more affordable than it was when interest rates were much higher. The market has been reset to something like 2004 levels of affordability perhaps?

  Pete, you say it is not sustainable. Well all I can say to that is that Rudd seems to reckon it is his job to ensure it is sustained -- He isn’t a big believer in letting “free markets” do their thing (unless that thing happens to be what he wants) as you’ve also obviously observed. And he would roll around on the floor laughing at any suggestion that Australia might be a “better place” if he didn’t do such things. As would the RBA and Treasury.

  They exist to direct and control and to intervene and manipulate (and extract taxes) for the greater good as required, is their take on things. And the GFC has very strongly reinforced that view of their roles in their minds.

  So that fundamental shift in emphasis and willingness to actively involve themselves in markets on the part of policy makers has to be factored into investment decisions very heavily nowadays -- It was always extremely important of course. But now it is even more so. Which makes the outcomes of something like Henry’s review even more important nowadays than it may have been in the past. Rock on Chrissy -- I can’t wait to see what pressies Uncle Ken has put in my stocking.

• 311 Ralph // Nov 5, 2009 at 11:21 am

  Yeah, I’m not voting for Rudd either. He’s a major disappointment. If push comes to shove, I reckon Turnbull, Hockey & co would continue with real estate bailouts. They’re in this game up to their eyeballs as well. They’d just sacrifice other stimulus measures. So we’d have no new school halls and no pink batts, but we would have a booming real estate bubble.

  I also think that Rudd will call an early election. I can’t see the ETS getting up (and rightly so in its current form). But of course the real risk for Rudd is that the economy starts to tank as the stimulus wears down, including house prices coming off the boil. I reckon he can’t credibly announce new stimulus at the moment because everyone thinks we’re back to boom times. He’d make Whitlam look like a miser and the coalition would have him for breakfast. And he knows he can’t survive a house price crash. What a bind to be in! So he has to call the election before the $hit hits the fan. This is what he’s really worried about -- the ETS is just propoganda.

  Poor Rudd -- he showed such promise but will end up being seen as a very ineffectual PM with absolutely no courage.

• 312 Ralph // Nov 5, 2009 at 11:29 am

  Ned -- good thoughts. It certainly will be interesting to see if Rudd comes bearing gifts this Chrissy. Gee, I hope not. But I suspect that he might not be able to help himself.

  Overall, I think Pete’s right in that the real estate bubble is unsustainable in its fundamentals. What we don’t know is Rudd’s level of desperation and/or stupidity. If he’s as desperate and stupid as I think he is, I think we’ll see him try to keep the bubble going until he can get re-elected. What other choice does he have?

  At the moment, we could be looking at a slim Christmas for the retailers, based on underlying desire to deleverage, stimulus wearing off and higher interest rates. Alternatively, if Oz racks up the credit cards again for a big Christmas spend (please, yes please!), retail might fall in a heap right after Christmas. So Rudd could stimulate going into Christmas or he could save the world with a bailout in the new year.

  Did anyone mention moral hazard? They should name a horse ‘moral hazard’ and enter it in the 2010 Melbourne Cup -- would be an unbackable favourite. The TAB would have to suspend betting!

• 313 Ralph // Nov 5, 2009 at 11:32 am

  By the way, check out the number of posts for this thread -- currenly 322! I came late to it, but this is a cracker! And it’s been a great discussion too. You must be proud, Greg!

• 314 Ned S // Nov 5, 2009 at 12:56 pm

  I think it goes deeper than simple politics and the desire to be re-elected Ralph. In that a significant correction in actual house prices (more than 20% maybe? -- I don’t know the “magic number” but would certainly hope policy makers have been diligent enough to take some steps to find out by now???) would put the banks at risk and that cannot be allowed to happen.

  Bank failures are very, very bad news of course. With the tax payer getting to bail out the banks aka the UK and US. Way better to not let the rot get into the banks in the first place. So keep housing ticking along.

  With my second point being that so far they have done that successfully -- A little too successfully for their own liking even? But bank failures simply could not be risked and at the time the RBA crashed interest rates and Rudd upped the FHOG and the States came on board with slashing stamp duties for FHBs they had no idea what they were facing except it looked like being VERY nasty.

  Although if an individual’s major focus is the fact that house prices are way higher than they can or wish to pay, then it easy to lose sight of the fact policy makers are playing a way bigger game in which house prices are only one element (albeit a very important one.)

  As to Chrissy pressies -- I’m thinking in terms of suggestions “Uncle” Ken Henry might have for us. With Rudd OK’ing a few of them soon. And some of them being more the “trick” than “treat” variety just maybe as well! But it still helps give investors some direction. There is a super review being carried out as well. And that’s of significant interest to me too.

  10 year plan hey Greg? Some of it could be way longer if the last one is anything to judge by. But my interest levels are high!

• 315 Ralph // Nov 5, 2009 at 1:36 pm

  That’s true, Ned. No question that a true property crash would have been catastrophic. But I would argue that if people are prepared to take risks and profit in the boom times, they should also be prepared to take the hits in the downturns. But apparently that ain’t so anymore.

  The consequence is that the government has now designated an asset class that is a rolled gold protected species because the entire economy has become so heavily dependent on lending for real estate purchases. Is that the fault of government? Partly, because they’ve encouraged real estate speculation through favourable tax treatment for real estate purchase and investment. It’s a factor of the free market, so we can’t quibble too much, but then again, the government has shaped the market such that this was the inevitable outcome.

  That doesn’t mean that investors in real estate are guarranteed windfall profits. But it does seem to mean that they are guarranteed not to take anything more than a very minor loss. You could make more money investing in gold, shares, whatever. But uninformed mum & dad investors who are told and believe that property only ever goes up would be given a secure haven to store their ‘wealth’. Perhaps.

  I accept the situation, but I think it’s a disgraceful situation. If this is the way it’s going to be, I just wish they would come out and publicly state the rules of the game rather than pretending to dance around it.

• 316 Ned S // Nov 5, 2009 at 2:44 pm

  That is the other major question one has to ask themselves now Ralph -- To what extent is the change in the way things are done, part of the new investment normal. And I think we’ve got our answer.

  The stock markets aren’t reflecting it right now -- Largely because the Americans are giving their banks every opportunity to trade themselves out of insolvency I think. (It’s really about the banks there too.) But the effects will be felt in those markets in time.

  Might be time to stop focussing so much on supposed “free markets” and thinking more in terms of what governments want us investing in and why -- Which again is what will make Ken Henry’s report so potentially informative. I hope?

• 317 Greg Atkinson // Nov 5, 2009 at 5:38 pm

  By the way Steve Keen has written an article for http://www.businessspectator.com.au conceding his house price prediction was wrong and he will be walking to Kosciusko. But like all economists who seek the limelight he says it is not his fault.

  Yes it is Steve..we live in the real world not one driven by spreadsheets alone.

• 318 Pete // Nov 5, 2009 at 6:32 pm

  Guys:
  For a Government so concerned about increasing payments to pensioners and retirees, you sure put a lot of faith in them being able to give tens of thousands of dollars worth of stimulus payments to mortgagees over the years.

  You all sing the same tune -- “the Gov. is all powerful and has guaranteed house prices”.

  Do you think the USA wanted their house prices to fall? The UK? Anywhere? They tried. If it only costs a few dollars to support the bubble then i’d have much more faith. The reality is that it will cost the economy.

  And the Libs will get some more use out of their debt truck.

  Second-guessing the Government and the actions of Mr Rudd -- in contrast to considering the fundamentals of economics -- seems like a gamble to me. But each to their own.

  And on that note I won’t be posting here for a little while. I said what I wanted to say, and tried to be helpful and provide an alternate view to the bullishness. Time for time to do its work.

• 319 Senator13 // Nov 5, 2009 at 6:46 pm

  Greg: That is actually a pretty lame excuse when you read that Keen article.

  He writes as if it is so obvious that the FHB’s were the reason. If it was so obvious he should have been able to predict it being the case.

  Just throwing up some observations. Please let me know if I have misread something or am way off the point…

  I don’t know if this figure is correct, but he states 171,000 people received the grant. Now in the grand scheme of things that number sounds pretty small to me. That is just a few suburbs worth of people… Out of an entire nation, for FHB’s to be the driving force behind the move I would have thought that number would need to be a lot larger? But I don’t know… It just seems on the low side to me…

  Also, as stated in the article, an 8% increase in house prices is not all that much I don’t feel either. Even an 8% decrease I would still be saying that is not much of a decline (and I expected around negative 10% in the current environment). When comparing to the double figure returns on the sharemarket 8% seems pretty tame… I’m not saying that it is sustainable, just that it is not a super high increase. On that note, I would love 8% increase per year!

  A few people have made some comments about the changing investing environment. These days, not only do we have to analyse any actual investment, we also seem to have to second guess what the Government is going to do and if it is going to pull the rug out from under us. Now to me this feels more dangerous then what we had before. Maybe it is just me… But it does feel like the Government thinks it is ok to change the rules and where the goal posts are with zero notice… Makes things harder that is for sure.

• 320 Ned S // Nov 5, 2009 at 7:03 pm

  Pete -- Do you you want to be correct? Or do you want to know what IS correct? Your call of course … ???

• 321 Greg Atkinson // Nov 5, 2009 at 7:05 pm

  Senator his excuse was lame I agree. If you set yourself up as a self proclaimed economic expert then you look like a complete dill if you don’t take into account governments at all level influence the housing market. Time for Steve keen to get some real life experience on how the economy works because the answers don’t lie in spreadsheets alone.

  I guess the people that purchased his inner city apartment are happy

• 322 Ned S // Nov 5, 2009 at 7:24 pm

  Anyway Biker, given that I held my property (bit nerve jaggling back last November wasn’t it?) -- Lots would say I was “lucky” -- YES I WAS! But one has to invest in something and I kind of like stuff I can see and touch and jump up and down on -- Plus renovate and improve and develop. Each to their own as it’s been said before.

• 323 Anthony // Nov 20, 2009 at 9:42 pm

  Hey all, great debate. I enjoy reading both sides -- I’ve learnt a lot reading these posts. It’s been a while for me (I made comments in post #20). As follow up FYI I made my decision and have since sold my unit. For me I am sleeping better!

• 324 Greg Atkinson // Jan 7, 2010 at 3:04 pm

  Anthony I actually sold my apartment in November as well mainly because I am here in Japan now. I do wonder though how higher interest rates will affect the market in 2010. Can the housing market keep heading upwards?

• 325 Stillgotshoeson // Aug 25, 2011 at 11:13 am

  Greg Atkinson // Nov 5, 2009 at 5:38 pm

  By the way Steve Keen has written an article for http://www.businessspectator.com.au conceding his house price prediction was wrong and he will be walking to Kosciusko. But like all economists who seek the limelight he says it is not his fault.

  Yes it is Steve..we live in the real world not one driven by spreadsheets alone.

  The bet was in two parts, 20% within 2 years, 40% within 10.. The 2 years ended up being incorrect, biggest reason was the FHBG..

  Whilst I do not have an opinion on whether Keen will be correct on the second part.. I would not be so eager to dismiss his comment as the ramblings of a fool.. He could well turn out to be right, or even conservative in his original “bet”. I vaguely recall a mention of him since saying that it will be higher than the 40% he first envisaged.. Might be wrong on that.. I browse through the occasional Keen article in the papers but do not follow him on his blog…

• 326 Qld House Prices // Aug 26, 2011 at 8:05 pm

  We are keeping a very sharp eye on Queensland property market. We will update our house price reports as often as possible.

• 327 Biker // Aug 27, 2011 at 6:32 am

  Worth remembering that Keen’s ramblings included predictions of 0% for Oz interest rates and 10% unemployment.

  Like other punters’ predictions, even for 2011, these punts have proven wildly speculative and incorrect.

  Biker, Statendam

• 328 Ned S // Aug 27, 2011 at 6:31 pm

  http://www.propertyobserver.com.au/queensland/rba-s-glenn-stevens-pinpoints-queensland-s-imperfections/2011061550498

• 329 o'leary // Dec 30, 2011 at 2:08 pm

  It never friggin stops does it.

  The media doing whatever it can
  to distort the truth.

  Quoting private firm saying House values,
  have wait for it,
  increased in 2011.

  http://www.theage.com.au/business/property/home-values-rise-for-first-time-in-2011-20111230-1pf28.html
  (with no comments to rebuke how
  convenient! )

  But go look at The State Revenue Office data
  (each State has its equivalent).

  The actual sales result for each settled property
  settlement is there shown.

  This takes normally 3 to 6 months to show. They’re shocking truths.

  So, any figures relied upon are just that,
  unreliable and out-of-date.

• 330 Greg Atkinson // Dec 30, 2011 at 4:27 pm

  Interesting that a property guru can take a 0.1% rise and turn it into a positive trend for 2012. Sometimes the property bulls are just as bad as the property bears at making bizarre statements. I would say a 0.1% or 0.3% rise or fall means very little.

• 331 Stillgotshoeson // Dec 30, 2011 at 4:34 pm

  Greg Atkinson // Dec 30, 2011 at 4:27 pm

  I would say a 0.1% or 0.3% rise or fall means very little.

  Good chance I will be in Japan (Tokyo) in April Greg… Might have to have a beer with you…

  Statistical noise. Q on Q and Y on Y figures give a better scope of what is happening.

  Property is a different beast to track

• 332 Greg Atkinson // Oct 8, 2012 at 9:58 am

  Here is a bearish view of property prices in Australia given some media exposure recently:

  “AUSTRALIAN house prices are likely to tumble in the next two years, potentially plunging 20 per cent, an analyst at a global investment bank says.”

  Source: Property prices to hit the mat (Herald Sun)

  I suspect if the downturn in China becomes particularly nasty this analysts might be proven correct?

• 333 Frank // Oct 8, 2012 at 11:13 am

  Bearsh!t Greg, Pure Bearsh!t.

  First and foremost China will not become “particularly nasty”, thier government will simply not allow any period of negative growth as anyone who has ever been there will tell you. The westernisation of the country would be less than 1% complete.

  The Australian Property market quite simply does not have 10% of falls in it, supply and demand will ensure that. I would expect 3 very simple things to occur in the next 3 years:

  1) The people who paid $20m+ for their Hedges Avenue mansion will either hold tight or exit at a significant loss. I mean by that, that the $2.5m plus market in all capital cities has the greatest capacity to fall but limited impact on Medians

  2) Developments in outlying suburbs will see price falls and so they should. In Perth I am still astounded that people will pay $700k to live in Mindarie or Honeywood or Attwell when established houses in higher quality central suburbs are available cheaper

  3) Emergence of FHB’s and investors taking advantage of low interest rates, and 2HB’s doing the same but with significant equity will drive up demand in the $500k -- $800k market and drive prices up accordingly. This will have a positive impact on median pricing

  The combination of these dynamics will see pricing at worst stable, and at best up by 3% -- 5%. Remember a reduction in global consumer confidence will see further i/r reductions in this country and put a floor under any crash that people like Not Fooled keep praying for.

• 334 Greg Atkinson // Oct 8, 2012 at 11:32 am

  Well Frank I have been to China several times (as there earlier this year) live not that far away from it in fact and reckon anyone that thinks that the Chinese authorities have some magic levers which they can use to control the economy doesn’t quite understand how command economies work.

  But I have covered all this before in such posts as: The China property bubble and an economy hooked on growth.

  Of course back then people got hot under the collar when I even dared to suggest growth would cool in China and that prices for iron ore & cola would fall.

  But back to the property market. I see no reason why housing in Australia is somehow immune from a 10% fall which I wouldn’t exactly call a crash but rather a correction.

  Perhaps low interest rates will help prop up prices but I wonder how keen investors will be to take on debt if they believe the economy is heading into a rough patch?

• 335 Frank // Oct 8, 2012 at 2:14 pm

  Greg the Chinese Government dont need “magic levers” at the moment, they have plenty of “natural levers” instead, such as internal and external demand, population growth and urbanisation. When you visit cities such as Beijing, Shanghai or Tianjin regularly, two of which nearly have more permanent residents than all of Australia combined you see that catering for internal demand alone will not see this country grind to a halt

  You have to remember that if Chinas growth slowed to 1% in 2012/13 then they will still consume areound 50% more than they did in 2007/2008. And their growth will not slow to 1%…!

  Iron Ore prices at $180/t were artifically high and never going to last, at a more normal $120/t all miners will continue to make significant profits. They are not going to stop blasting rock, or employing people

  Do not ignore the importance of the Oil & Gas segments as fuel for Australian growth or stability in the coming 5 years with massive projects in WA, NT & QLD

  In fact the only thing that could materially damage the Australian housing market at the moment would be a return of our inept, high taxing, wasteful spending incumbent government for another 3 years. Despite their significant mismanagement of the business that is Australia none of the collapses that all-the-bears-out-there continue to bleat about have eventuated

  I think that the wider Australian Property Market is “immune” to a 10% fall off the back of no market fundamental to suggest that it is over priced in the main by 10%. Sure pockets, sectors, towns or suburbs may suffer these 10% corrections, or in the case of a suburb like Mindarie in WA 20% is not out of the realms of possibility, but you can not keep the prime real estate locations of the country subdued or declining for a decade.

  I think most investors see the rough patch in property coming to an end. It is the rough patch in shares that is of most concern.

• 336 Stillgotshoeson // Oct 8, 2012 at 2:56 pm

  http://www.theage.com.au/business/world-business/world-bank-cuts-chinese-growth-outlook-20121008-278m5.html

  http://www.theage.com.au/business/jobs-outlook-worsens-as-mining-states-suffer-20121008-278bk.html

  Well these two articles point to things not being as good in China/Asia as some would like to believe.

  There may be no crash, but real estate in Australia could easily be subdued for the next decade..

• 337 BP // Oct 8, 2012 at 7:42 pm

  Frank, those who attempt to tell us what will happen during the next decade get it _totally_ wrong when attempting to forecast even one year hence. Remember that 2012 was the year it was all going to ‘fall over’. Ask for an exact quote if you’d like to hear what my mate Shoes said would befall us this year!~

  Mine dew, we agree it’s difficult to predict events, even in the short term. We never anticipated the rents we’re now getting… or the return of the l-o-n-g rental queues for rentals we’ve listed 20%+ higher this year… or the prospect of declining 25 applications before we accepted the 26th, recently. And some owners are asking $100+ more per week than we are, for smaller, less-well located/appointed homes!! (Just call me Saint Biker! )

  Nor does anyone know what effect(s) the looming retirement of millions of Baby Boomers will have on our economy, particularly in relation to property. Yes, there’s plenty of guessing, but it’s primitive, at best. Invariably it forgets to factor in that many BBs stand to inherit millions of dollars when the baton changes hands. Will these folk buy into a volatile share market, a PM which sinks faster than a lead weight, Super returning 3.8% pa, or the fortnightly virtually tax-free dividends of property? Some will tell you they’ll make a killing in shares, but if you look back over their last ten months’ reports you’ll find they’re not only behind, but even bank interest _eclipses_ their ‘expertise’.

  Aussies don’t ‘need’ gold or silver, nor do they ‘need’ shares, but they’ll continue to _need_ shelter, which state and federal governments can’t/won’t supply in sufficient quantity/quality.

  We’re on a winner, Frank!~

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