Steven Keen is back - so everything is going to be okay

Market corrections happen all the time in all cycles . Nothing new. He's been saying for over a decade Australia's RE markets will crash 60% or so. Ppl who listened to him pre booms would have collectively lost 10s or hundreds of millions of dollars.

SK is a ***** imo.

 

I have to ask you:
Do you honestly think what we're currently experiencing has happened before? With these levels of dramatic falls and low clearance rates, media hype and FEAR throughout the country? This is ENTIRELY NEW!

 

No it is not.

Seen it all before and even worse.

Like a cyclone, it will blow over and there will be sunshine.

 

Not sure if this is a rhetorical question or not...

Governments regularly intervene (for better or worse) when things get too good or too bad. Think of when the Sydney harbour bridge was built and what were the economic reasons behind it? The 90s 'Recession we had to have' was somewhat deliberate as a correction of over inflated markets.

Ever wonder why the US invaded Iraq after 911 despite knowing that their evidence was fasified? Their economy is heavily biased towards military stimulus and they were about to go into a recession that the Iraq war delayed for several years.

The simple fact is that governments do manage their economies. It's extremely predictable.

In my limited memory... 1987. 2008. It's happened before. Never quite the same way, but everything moves in cycles. Those cycles can be influenced in various ways, but they still occur. You're kidding yourself if you think the current drop in house prices wasn't expected, I'm actually surprised it took this long. You're also kidding yourself if you think prices will drop as far as Steven Keens predictions and you're kidding if you think there won't be a recovery and another boom at some future point.

 

May I ask where and when you saw this before?

 

Approximately same sheet, different cycle in history .

 

I bought my first property in 1979 (nearly 40 years ago).

You have access to CoreLogic. There has been many “cyclones” in the property market over that time.

 

I can't agree with these sentiments. Many factors are different such as the level of debt, restriction of credit, LOW interest rates, social media spreading fear throughout the market etc.

What is the same? Fear, declining prices and auction clearance rates.

 

I'd also like to add to the thread this snippet of a conversation I've had with a very reputable and WELL KNOWN real estate agent in Sydney.

 

Reminds me of my son when he was horrified the day petrol went above $1 a litre.

His response/protest was not to buy petrol until it dropped below below $1. He has given up waiting.

One’s inexperience can cause one to respond in funny ways. That is why I like using (experienced) mentors to help me through life.

 

OK. Not here to convince. Waste of time.

 

Mate I have found there are really only two paths in life. One is to be successful (at whatever it is you want) no matter what. The other one is living with a sense of entitlement, never ending excuses and constant blame of others.

Most of the successful people on the forum I suspect chose their path long ago.

 

Petrol is cheap. I recall it first broke through $1 in the early 90s (a lot of service stations had to upgrade their equipment to cope).

If fuel went up with inflation, we'd be paying about $3 per litre today.

 

Lol.. we had him on our show three weeks ago roughly and took a bet ...
Snippet -


Full episode -
Chat with Professor Steve Keen

itunes-
CryptoBabble (Jazz & Barra) by Jazz and Barra on Apple Podcasts

Cheers,

 

Most real estate agents don't understand the dynamics of investing in the market they work. In all my 35 years of buying and selling I've only met a handful that actually invest.

And, in my 35 years I've seen the market all over the place - fondly remember the late 80's when interest rates went up to 18% (24% in NZ) when I owned my first house - the boom of 2003 - crash of 2004 (that one stung me due to inexperience) - the boom of 2007 - the crash of 2009 - the boom of 2017 - the crash of 2018

As you can see from the graph - none of them are real crashes - simply stabilising for a while. Very few sell during this period unless they really really have to (ie, no equity and job loss) ... most will grit their teeth and continue on their merry way. The only people vulnerable during this time are those that are maxed out and with little equity ... or they listened to Steven Keen's fearmongering in 2010 and missed out on all the following gains.

 

So, one REA is an expert on the whole Australian market?

Are they looking to change industries if they believe the property market is in for a bloodbath?

 

If he said something intelligent, I might listen, but so far all I hear is blah, blah blah.

Agreed!

Yes! It's the normal cycle. Nothing new, move along.

Exactly!

Absolutely!

Ask yourself.....if this person is such an expert on Australian Property, why is he still working selling it?

 

Understand everything everyone is saying. The difference this time is that interest rates are at historic lows with hardly any room to go down.
US are raising interest rates.
Wages are not growing over inflation.
House price to income is as high as any OECD nation.
The million dollar question is what can the government do policy wise that can create the next boom?
Lending criteria won't get relaxed any time soon.
More incentive for FHBs?
Allow people to access super to buy houses?
Increase immigration?

 

That was the problem with Dr Steve King who around the GFC -even though he was wrong ,as work by the reserve bank and the Australian Regulation Authority clearly showed ,and history has subsequently endorsed, and that gave him a very high media coverage then any other Australian Economist at the time and now he is back..
But the strange item is there are still the true believers from what one reads that think Dr Keen will be proven right ,that he was only out in simple timing -not in fact..

Also just after the GFC he for casted Australian house prices would fall 40 percent --and unemployment would hit 20 per cent ,under Labor who knows ..

 

yes but AUD will be a buffer and drop, mining/gas is booming, mass immigration floodgates (hence demand) are still wide open, education is booming, tourism will boom once AUD drops enough.Not everything is about property