Australian housing market facing 'bloodbath' collapse: economists

Thoughts? http://www.theage.com.au/federal-po...bath-collapse-economists-20150622-ghu8a6.html

Any prediction on the results of the upcoming home ownership inquiry?

 

a bloodbath? probably not.

They will probably conclude that Sydney is overpriced, maybe something about poor FHB. I doubt they will be suggesting we prepare an army for the bloodbath?

 

who are these experts and let me guess, they liquidated their portfolios 5 years ago when the bubble was about to pop...

 

Yawn ....

 

The author is Phillip Soos - he's been saying the same thing for many years - almost as long as Keen. It's pretty safe to ignore him.

The headline should really be - 'Only two of the several hundred economists in Australia think the Housing Market is in a Bubble'

 

https://www.prosper.org.au/2013/01/16/a-plague-on-aussie-housing/

This is from January 16, 2013,well worth the read with the same explosive consequences..

 

Agreed. It's rare I read those types of articles all the way through. The home ownership enquiry may be more insightful (maybe). Hopefully it doesn't go the way of the Henry tax review

 

Actually I did read the article , but there was nothing substantive in it that made me concerned. Main reason I read it was it's in the age which does carry some credence .

Cliff

 

Agreed Keith. I wrote a blog about this on my website about a month ago. Rather than repeat it here again, I'll just post a link for brevity sake. http://www.propertunity.com.au/is-sydney-in-a-property-bubble/

 

"If it bleeds, it leads".

Motto of the media.

Me, right now:

 

There have been a few of these 'bloodbath' calls over the past few years. Here are a few headlines I recall...

"Armageddon! Bloodbath to hit Australian real estate" - property analyst Jordan Wirsz (Jan 2012)
"Australian Retail and Housing Bloodbath Coming Up" - Mike Shedlock (March 2012)
"40% upgraded to 50% bloodbath hit to house prices" - Harry Dent (Feb 2014)

So far, none of these doomsayers have been successful.

 

There will be a blood bath but in certain sectors of the Sydney market....

 

No way will there be a bloodbath. Some areas (mainly speculative areas or those that do not have good fundamentals and have shot up for no reason other than all boats rising with the tide) will be affected more than others...look for blue chips or near blue chips to hold value much better once IR goes up....exactly the same with most other non commodity asset classes eg shares.

 

Hmmmm....off the plan apartments in Bluechip suburbs......lots of potential pain in my area in the next 3 years. Where people have bought 2 brm units for 750-950...70-80sqm...1-2 garages....settling in the next 6-24 months...

 

Philip Soos is a researcher at Deakin University’s School of International and Political Studies

 

For those who are inclined -

The Home Page for the "Inquiry into Home Ownership".

The Terms of Reference are - The Committee will inquire into and report on:

• current rates of home ownership;
• demand and supply drivers in the housing market;
• the proportion of investment housing relative to owner-occupied housing;
• the impact of current tax policy at all levels; and
• opportunities for reform

The Committee will also give due regard to the aspects of the current Tax White Paper process being conducted by the Government that pertain of housing Australia.

There are also links on the RHS to -

Submissions (the only one currently on the site is the one that inspired the advertorial in The Age)
Media Releases
Committee Membership

With regards to the submission by LF economics, I did have a very quick skim read and I joked to Corey in the chat that I thought I was reading Das Kapital there for a while.

I have also since learned that the authors are associated with an organisation called Prosper Australia, who have this to say about themselves -

"Prosper Australia is a non government organisation inspired by economic justice. When wealth produced from land – the earth and natural monopolies – is the funding base for government, equality of opportunity becomes possible for all humanity. This concept was developed during the 18th Century era of Classical Economics. The theory was clarified when the self-educated Henry George wrote “Progress and Poverty”. The success of this book and the strength of his oratory prompted a world-wide movement"

In lay terms - Henry George was a socialist who proposed abolishing all forms of tax save for a tax on land. Effectively, were such a tax to be introduced it would socialise land values.

I've said a few times that economics is a matter of perspective, and that there are no lies in economics, only different versions of the truth.

Well this is certainly one of those moments. Now I know they are Georgist (so to speak) I can understand where the authors are coming from (doesn't mean I agree with them).

It is fringe economics at best.

 

Took some good info out of that article, housing shortage in QLD and WA.

 

That's the only bit that interested me also!

Sort of supports why Brisbane yields "on average" are better than what I see in Melbourne currently.

 

Thanks for the link,makes interesting reading from people that don't have hidden agendas..

LF Economics (PDF 1371 KB)