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staringclown

Housing bubble is real – it’s just not due to pop

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An interesting variation on the standard spruik.

Housing bubble is real – it’s just not due to pop

Australia’s madly over-priced housing market seems to be holding up, despite various economists’ analyses that dwellings in Australia are 30per cent to 40per cent over-priced.

The analyses are basically right – from a historic perspective, dwellings are about 40 per cent over-priced, or even higher. But the conclusion drawn from that – expect house prices to collapse any time soon – is a long bow. There are too many forces holding prices up.

Philip Soos, of Deakin University, has done a terrific set of charts indexing housing and land values and pitting them against an array ofother figures, especially income and debt.

Everything goes berserk after about the late 1990s. Since then, we have gone heavily into debt to buy houses that cost more than ever – especially the land component.

Soos concludes – rather grimly for property owners – that on seven measures, houses prices would have to fall by between 37per cent and 57per cent to revert to the late 1990s ‘‘trough’’.

The measures are mainly house prices against inflation, income and rents.

The analysis is first rate. Housing prices are well above long-term historic trends.

Moreover, as Soos points out, the mountain of private debt, mostly incurred in housing, is a much greater threat than the molehill that is public-sector debt. The latter is well under control and historically extremely low.

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A bubble is not a bubble unless it pops. If it doesn't pop then it's just expensive or overpriced.

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A bubble is not a bubble unless it pops. If it doesn't pop then it's just expensive or overpriced.

You won't hear a argument from me. :)

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An interesting variation on the standard spruik.

Housing bubble is real – it’s just not due to pop

interesting that the section of the article talking about how there is a bubble is based on analysis by an academic whereas the "it won't pop yet" is based on the reporter's speculation. ok, it's not interesting, it's the same kind of crap journalism that takes place on a daily basis.

i don't think the journalist has any special qualifications with regards to real estate. the last time i saw mr. hull's name in the news it was for pressuring a tutor to pass international students in his journalism class and to overlook the fact that they couldn't write English at UC ("they're not going to be writing in English when they go back to China" was the "logic" employed. the fact that they were studying in australia apparently being irrelevant).

in retrospect, however, a certain "freedom" when it comes to professional ethics does make a nice match for property analysis in the australian press. one could almost say it is a requirement.

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interesting that the section of the article talking about how there is a bubble is based on analysis by an academic whereas the "it won't pop yet" is based on the reporter's speculation. ok, it's not interesting, it's the same kind of crap journalism that takes place on a daily basis.

i don't think the journalist has any special qualifications with regards to real estate. the last time i saw mr. hull's name in the news it was for pressuring a tutor to pass international students in his journalism class and to overlook the fact that they couldn't write English at UC ("they're not going to be writing in English when they go back to China" was the "logic" employed. the fact that they were studying in australia apparently being irrelevant).

in retrospect, however, a certain "freedom" when it comes to professional ethics does make a nice match for property analysis in the australian press. one could almost say it is a requirement.

Fair enough urchin. I fixed my initial post. :)/>

Given Chinese restrictions on free speech they're not going to be doing journalism when they return to China either. Perhaps we should just mail them the qualification and have done with it.

Seriously though, I'm not familiar with Mr Hull's previous work. I've been trying to wean myself off Fairfax of late. I figured he was just another property spruiker obtained from the endless pool that the MSM seem to breed. It's like "whack a mole" trying to keep up with them.

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Fair enough urchin. I fixed my initial post. smile.gif/>

Given Chinese restrictions on free speech they're not going to be doing journalism when they return to China either. Perhaps we should just mail them the qualification and have done with it.

Seriously though, I'm not familiar with Mr Hull's previous work. I've been trying to wean myself off Fairfax of late. I figured he was just another property spruiker obtained from the endless pool that the MSM seem to breed. It's like "whack a mole" trying to keep up with them.

haha, i wasn't referring to your initial post!

i don't follow him, i only remember seeing him because he attracted national attention when one of his tutors (a phd student) outed him for passing int'l students on the basis of their going back to china... but yes, he's obviously become one with the hype of msm spruiking. when evidence shows a bubble is there, represent it as an unbreakable bubble instead! (except that would mean that it isn't a bubble...)

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interesting that the section of the article talking about how there is a bubble is based on analysis by an academic whereas the "it won't pop yet" is based on the reporter's speculation. ok, it's not interesting, it's the same kind of crap journalism that takes place on a daily basis.

i don't think the journalist has any special qualifications with regards to real estate. the last time i saw mr. hull's name in the news it was for pressuring a tutor to pass international students in his journalism class and to overlook the fact that they couldn't write English at UC ("they're not going to be writing in English when they go back to China" was the "logic" employed. the fact that they were studying in australia apparently being irrelevant).

in retrospect, however, a certain "freedom" when it comes to professional ethics does make a nice match for property analysis in the australian press. one could almost say it is a requirement.

:notworthy::thumbsup::stupid::cheers:

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