"House prices could fall by more than 40 per cent" - Are you kidding?????

Discussion in 'Property Market Economics' started by Scott O'Neill, 6th Feb, 2020.

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  1. Scott O'Neill

    Scott O'Neill Active Member

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    I saved this article 12 months ago so I could compare these outrageous claims to the actual results.

    Quoting this "40% crash" was a man named Lindsay David, the founder LF Economics. Needless to say, his numbers were a little off.

    Since this article was written, Sydney and Melbourne's house prices have grown by 7.9% and 8.2% respectively.

    These types of articles are designed to sell papers but unfortunately many people can be influenced to make important financial decisions based them. As always, do your own research!

    Property ‘bloodbath’ could see house prices fall 50 per cent
     
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  2. willair

    willair Well-Known Member Premium Member

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    [​IMG]
     
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  3. sash

    sash Well-Known Member

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    50% is extreme...but parts of Sydney fell up to 18%.

    Some areas have not fully recovered but are close...others have come back up to 2017 peaks.

    Bear mind...Australia has not ever had a 40% fall across the board..but in some areas houses have sold 40% under the market. Examples would be some areas of Gold Coast...Townsville...Cairns..Perth...Darwin. It can happen in some parts Sydney/Melbourne if the economy tanks.
     
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  4. Foxdan

    Foxdan Well-Known Member

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    I think some context is needed here if you want to judge a prediction with the advantage of hindsight.

    After that prediction, the lending criteria was loosened and allowed people to borrow more. This provided a much softer landing and prevented a higher level of panic selling.

    Interest rates were also dropped which alleviated some pressure on people facing the IO cliff.

    if you don’t have the above two factors, his prediction could have been a reality if panic set in amongst the general community.
     
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  5. albanga

    albanga Well-Known Member

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    Good point and throw in labor government and it could have been a different story.

    However speak to the educated and they will say it simply would never happen because regulators would 100% jump in, exactly like we saw. They did this at 10-15% though and not 40.

    So reality is it is a ludicrous prediction and didn’t account for any intervention what so ever.
     
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Not the first time he's been wrong, suspect it won't be the last time.
    Lindsay David predicts real estate bubble will pop end of 2017
     
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  7. Trainee

    Trainee Well-Known Member

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    the problem is selling the whole prediction as a package without explaining how the moving parts can lead to different outcomes.

    The extreme predictions need multiple things to happen (or not happen). Eg the US would have collapsed into depression if the government had not supported it, and if people had lost faith in treasuries.

    The analogy is that someone gets a heart attack will die if doctors at a hospital refuse to save him. But its reasonable to think that doctors will try to save him. Then the prediction changes to the doctor will try but fail to save the patient. But thats a different scenario with a lower probability of happening.
     
    Last edited: 6th Feb, 2020
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  8. Perthguy

    Perthguy Well-Known Member

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    I questioned the dire predictions by Lindsay David and Philip Soos. Anyway, Lindsay joined to make a single post about me questioning their credibility.

    Considering their 100% failure rate in predicting catastrophic Australian property market collapses, I do question their credibility.

    "The Crash" has been called... end of 2017.

    That thread got so heated the moderators had to shut it down. Still no crash.

    For a while Martin North was the new Lindsay David, media darling of the impending crash. What happened to old Marty? Is he still around?
     
    Last edited by a moderator: 12th Apr, 2021
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  9. albanga

    albanga Well-Known Member

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    Where are all our PC pessimists for that matter?? A few very loud people around these here parts are unsighted of late.....
     
    Last edited by a moderator: 12th Apr, 2021
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  10. Perthguy

    Perthguy Well-Known Member

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    Don't know but I sometimes wonder that too. Since the heated thread in 2015, I have plugged along investing significant funds into the property market. From my point of view it is paying off and I am happy with my decisions and performance of my investments.

    In that time quite a number of trolls/bullies have agressively explained to me how wrong I am. I know some were banned. More recently they weren't so rude/relentless but have still all but dissapeared. I sometimes wonder how they are going and if they are as happy with thier choices as I am.

    Last weekend I got stuck into another project at a rental property after the tenant left at the end of Jan. Projects like this keep me happy even if I am an "unsuccessful investor" according to a frequent on this forum. :cool:
     
  11. albanga

    albanga Well-Known Member

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    Well done mate that’s awesome!
     
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  12. MTR

    MTR Material Girl Premium Member

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    Surely .....This is groundhog day
     
  13. Perthguy

    Perthguy Well-Known Member

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    Another year, another prediction of a catastrophic housing market collapse. Business as usual really. :D
     
  14. TMNT

    TMNT Well-Known Member

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    Opinions are like................... everybody has one!
     
  15. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    If property prices followed what all the chicken littles have said for decades it would cost $65,000 to buy a house in the major capital cities. I recall I was told Sydney was over valued when we looked at our first home for that price.

    I'm still trying to find why they say this considering they cant short the property market. And it must not do that much for their resume as an economist.
     
  16. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member

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    I have first hand client experience of how this sort of thing sidelines people.

    We have approx a dozen stale pre approvals in the Sydney 1 to 1.5 upgrader market that will never come to fruition........by the time we wait for the data to show the market has bottomed, we are working with sales from 90 to 120 days ago, and with tight stock and very low volumes growth is anything but linear.............

    ta

    rolf
     
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  17. frankjeager

    frankjeager Well-Known Member

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    i remember reading these articles, it did give me pause but i am happy with my decision to settle last june on a property we were negotiating on for a month or two. at that time i was happy with our purchase price although there was still a lot of articles such as the one in OP.

    it would cost another 10-15% if we were to buy it today
     
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  18. kierank

    kierank Well-Known Member

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    I think forecasters would be better off making their “predictions with the advantage of hindsight” :D.
     
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  19. MC1

    MC1 Well-Known Member

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    Martin north is still pushing his youtube channel but seems to be losing traction. Would be interesting to know how many sold property listening to his constant doom and gloom and now would struggle to get into the same property with price rises and a different lending landscape
     
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  20. Perthguy

    Perthguy Well-Known Member

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    I wonder how many people delayed purchasing because of his doom and gloom and now can't afford what they could have. He was a media darling for a while but I haven't seen him lately. 60 minutes was all over this without any thought of the harm it might cause.
     
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