2020 - Will APRA be forced to intervene in the Melbourne and Sydney Property Bubbles?

I am not saying the matrix is wrong, but its one of the many, the fact that you choose it over many other matrix is highlighting your negative bias...

Here are just a few from a 2 minute search
Competitiveness Index - Countries - List

The 10 most livable cities in the world in 2019, ranked - Business Insider
https://www.cnn.com/travel/article/worlds-most-livable-cities-2019-trnd/index.html

We ranked amount the top in median wealth
https://www.google.com/url?sa=t&sou...FjALegQICRAB&usg=AOvVaw0FeQR6LU5U_8zve6ZhB6HY

I could probably dig up 10 positive stats to counter every negative stats that you can produce but let's leave it at that...

 

Ah good old shifting of the goalposts. None of these address my original points. I'm not just throwing out negative stats for negative stat's sake. Our low economic complexity vs our high wealth suggests that all of our eggs are in very few baskets. Property wealth makes up an unstainable amount of that or at least makes our economy more exposed to downturns.

1. Competitiveness Index is not interchangeable with Economic Complexity. It takes into account factors as far-reaching as environmental sustainability. See -> Global Competitiveness Report 2019

2. Australia's subjective livability is relevant how? Osaka and Tokyo are on the same list. Do I need to bring up the lost decades of Japan? Livability is not correlative to a healthy economy.

3. Re: Wealth. It seems your just scrambling to find positive articles here. Again unrelated. 52% of Australia's wealth is tied to the property. The fact that we have a high wealth population is just as much proof of a housing bubble as it is to suggesting anything positive. See -> Australia loses 124,000 millionaires due to dollar, property prices

 

Ok @Timb89 if that's the case, what's your investment and wealth creation/preservation strategy?

 

Entirely irrelevant question to the original discussion. If you can't address above points, feel free to let them stew. If I was interested in discussing my strategy I'd have posted on the "share your strategy" sub thread.

 

Okay... Looking forward to see your strategy in "share your strategy" section.

 

In the meantime, plenty of points of discussion above.

 

No the emergency is rising unemployment and a lack of inflation, rising asset prices happen to be a side effect of lowering interest rates. Although hasn’t had much of an effect in a few states so we can’t say interest rates are solely responsible, otherwise everything would be rising.

I agree we need to do more and depending on the way you look at things you could say we are at risk and have a lot of eggs in one basket. In saying that we have the luxury's afforded to a high wealth country by being able to support a ton of services.

 

I think it’s relevant because could be a case of ‘do as I say, not as I do’ - in which case, wonder if you believe the narrative you put forward. Fine if you do, but feels aggressive for what should be a friendly discussion.

 

Agree.... and at the end of the day the discussion becomes diluted and completely academic unless those participating with such views are anchoring themselves in a true a short position within the market through whatever mechanic they can find.

 

Hey @Timb89, since a few of us are genuinely interested in your strategy, please do share it with us. This thread or a new one, your choice... Don't have to be a essay, just a few sentences should be sufficient. I promise I will be respectful.

 

It's not relevant as it's a question designed to derail the topic of conversation and make direct the conversation away from difficult questions. Any answer I give bears no weight to my arguments from before unless the accusation is that I'm raising these points out of some nefarious purpose other than raising genuine causes of macroeconomic concerns.

 

Maybe one day I'll put out a prospectus.

 

To my understanding, unemployment is not at any emergency levels. Atleast not with official data. Though I do disagree with their methodology. 1hr a week of work is employed I believe? Insane. Unemployment still relatively low compared to historical. Or so the data says.

Could lack of inflation be a consequence of not including housing in the CPI? Now I understand why it's a hard metric to include as it's technically not in the consumer/rent category. But seeing as it's tied to how central banks regulate interest rates, which have an effect on house prices, I fail to understand how its truely representative of inflation in this late stage of the debt cycle.

We're gonna have to take the recession pill eventually.

 

Yes I mean “the” emergency is unemployment not being where they want it to be, not at emergency levels. I also don’t know if and how with 400k people migrating to Aus in 12months, we could keep this number low & accurately measured.

I agree we will have to swallow that pill at some stage, but see this being a few years away after the next cycle, Inflation is happening but obviously into assets.

Would you sooner we pull the reigns in now and force it, or let it continue and keep trying to fight out of it? Catch 22

 

You really don't have any do you? That's alright, no need to be ashamed of admiting it. But with so much arrogance, I thought you would have more substance. Oh well, I better move along, nothing to see here...

 

Thankyou for proving my point as to your attempt of derailing the arguments above. I can only presume they envoked so much cognitive dissonance that you resorted to an argumentative strategy that I'm pretty sure I last heard in primary school. My arguments remain in the preceding posts, I'll let them stand on their own merit.

 

I would wonder what impact the construction slow down has had on unemployment, hence why I bring up economic complexity at all. But you seem to be in agreement to our over exposure to the property market from a national economy stand point.

I'd rather pull the reigns in now, I think the more inflated the everything bubble becomes the bigger it bursts. I don't think there is any figuring in out, I think Central banks are powerless to the greater deleveraging cycle that's at play. It's a difficult situation.

 

I would say it’s had a rather large impact, plenty of jobs missing. However we seem to be rather good at the balancing act, once the pendulum swings too far one way, we swing it back the other way even harder. These bad situations creep up on us and then all the powers that be let the walls down and away we go again, lending, construction, jobs, etc.

There’s too much invested to slow it down or reign it in right now, and all though the powers that be are pulling levers, at the end of the day it’s owner occupiers and FHB that are driving it right now in some states, how do you control that? Just let it be imo.

Looking back at the last GFC or the 90s recession, there was plenty of suburbs that went through massive growth.. double digits for years, so I’d say the economy isn’t a given for property rising or falling, I’d just sooner be on the train than not.

 

What do you do? I don't think anything can be done. I think we are past the point of meaningful change from a cultural perspective.

With that said, for starters, the first home buyer guarantee is a ludicrous policy. Basically it's an apartment developers bail out fund.

I also would also suggest a commission on the rbas mandate. Lower and lower interest rest rates are not the answer.

What's your source for suburb level growth during the 90s recession? And what percentage of suburbs achieved double digit growth?

 

The higher the property values and the associated positive news flow goes, the desperate the analysis-paralysis-troll mob acts! A new thread every day under the guise of a clickbait negative headline and 'what-ifs' - all with the same objective.

Don't feed the trolls! They will go away as they always do after their desperate attempts at sowing panic! Have seen them act the same way in 2007/08, 2012 and then again in 2017. This is the latest wave.

Don't mistake these dime-a-dozen trolls with the fellow established doom & gloom(ers) for which I have a lot of respect as they are investors, have significant history and act sincerely in prosecuting their view point, even if one disagrees with them- aka sash, euro amongst others.

Remember: the more you try talking sense to them, the more fodder they have to wrap you around in a circular argument. Just let the numbers do the talking as they come thick and fast and let these trolls sail away, back to the comforts of North&Keen Muppet show echo-chambers!