Will we see another boom again?

You know I respect you BB and always look at your charts and stuff but *no* yawn. I only have to look at realestate.com.au for evidence. I know this could change etc etc but for now, I'm ok with it. I hope the boom moves out to the rest of Australia too. Wonderful if it takes its time, very slow motion, this one.

 

No doubt they will explain how gold and silver is the key in the impending doom too.

Sadly gold Barron's forget that shotguns are more valuable if what they wish for every comes true.

 

Why should I?

Your the one posting the chart and saying it is evidence, I'm suggesting it's poor evidence. Dosent mean I agree or disagree with what you were posting just that your chart was not substantial evidence to draw the conclusion you drew.

I think you'll find others agreed as well. Even @highlighter who is quite strong on bubble discussion due to Ireland experience suggested your chart was too short a timeframe to conclude anything meaningful.

Whilst your making your own charts, maybe you could make one of when you first had negative things to say about the property market and track the growth since that point.

 

I've said it before on this forum and i'll say it again, its impossible for Syd/Mel to have the same kind of bubble like here in the USA.

We just don't have the population mobility to generate such wide swings.

Its hard to understand how fluid the population is unless you've lived here.

Where are the people in Sydney going to move to Adelaide? Maybe....but not really.

 

Hit a sore point to ask for data I see

Between selling in 2010 and buying again in 2016-2017 real price growth in Adelaide would have been negative

 

No sore point, more like don't care enough to research the data, too busy making money in markets that work. But keep on reviewing your charts when they tell you to jump in let me know, in my experience they only tell you historically.

 

Well, I have lived there, and am Irish. That logic is, forgive me, total rot. Australia is not magically immune to a bubble, and population is just one of many fundamentals in a market (and it's not what causes bubble: exuberance is what causes a bubble). How do you explain Ireland's bubble? Dublin has no more "population mobility" than Australia. How do you explain Las Vegas? Pheonix? It had one of the biggest corrections if not the biggest correction in USA. Bubbles can and do happen in all sorts of cities. It doesn't take population to cause wild price swings. It takes too many recent investors jumping on a bandwagon and causing prices to rise only because prices are rising, that is literally all a bubble is.

 

exactly, when people start crowding opens and flipping properties with short holding times in months rather than years, like they are trading stocks, a bubble is definitely there. Its all just human greed at play.

The only thing that can balance out such a situation is that we get everything else inflated, like $10/l gas and $20 avocados. Either that or a big correction for property.

 

Yes, look at this new: RBA becomes a lonely rate-cut candidate on Aussie growth doubts there will be next property boom again next year for sure once the IR is lowered again.

 

Depends on whether the banks will pass it on or not.

Also much of the recent boom in Syd/Melb is due in large part on availability of IO lending to investors in terms of billions. Rate rise is the least of investor's worries. Having to go to P&I from IO and only able to fund 80%LVR vs 90%LVR is very likely to put a crimp on any boom.

The other thing is if we drop even another 25basis points, our bond yields will be on par with US 10YR or even less and there will be massive capital outflow and carry trade unwinding which will hit both AUD and drain liquidity from the financial system (ala GFC times). That will hit major local asset markets like stocks/property/bonds all at the same time.

Not to mention if RBA needs to cut anymore, its likely due to a recessionary environment like the negative quarter we had last year when iron ore went down below $50, in which case byebye to our AAA rating resulting in increased lending costs which will feedback to higher bank rates despite falling RBA rate.