Comments on: The Words ‘Strong’ and ‘Economy’ Don’t Seem to Quite Fit In

By: Ashley Groome

Ashley Groome — Mon, 06 Jul 2009 05:28:11 +0000

I learned a long time ago, that even with the best spreadsheet jockeys crunching the numbers – the market is driven by Ego, Hype, Panic and Greed – irrational and (usually) insane. But that is the way it goes. No matter how bad things get there will always be some greedy or gullible enough, to be sold the proposition that the world is flat and the the sky is (actually) falling AND they need to get in or get out quick – in oder to best leverage blah blah…

Forget about Phillips curves this and output gap that – its all (or at least mostly) nuts. Don’t believe me – take a look at the American ecomony.

By: etch

etch — Sat, 04 Jul 2009 06:30:54 +0000

thanx for reply Yorkie ,,
so if was an affordable 3 times average income back in the seventies ..wat present calculation is it now 2009 ?

7-12 times?

i feel like buying an investment property NOW

as i feel i have missed the boat many,many,many times over last 7-10 years
actually i fear for me 2 children aged 19 & 17 that when they are ready to shift out ,,houses will be so un-affordable it will like England or new york etc etc just out right unafordable & have to rent

& i keep hearing stories the houses will go down but they still go up
especially with huge immigration coming into australia

it does not /cannot make sense houses will go down…..

the average 20-25 ks house from CBD will go to $5-700ks

as in SYDNEY

before they go down 15% or watever.
to predict they may go down to year 2000 etc prices level is nothing short of hallucianry
& then wat ????????????????? still missed a bigger boat
any opinons contrary ..welcome

By: Yorkie

Yorkie — Thu, 02 Jul 2009 15:44:34 +0000

etch you presume inflation will effect all things equally. It doesn’t and never has. Did house price inflation over the past 10 years equate to the same level as general inflation – No. Its quiet possible if inflation does start to head up it will be driven mainly from consumer items food, energy, taxes and the like. What inflation does is help flush out those investments that offer a poor yield. Because inflation fighting is done by rising interest rates any area of the economy that relies of BIG leverage and has very poor income yields will get re-priced. On any measurement Australian housing is very expensive I can’t see it remaining that way in an inflationary enviroment. Real estate did well during the 70s during the high inflation period because it wasn’t overpriced, it had good rental yields and was an affordable 3 times average income. This time it really is different for housing because housing prices are different.

By: etch

etch — Thu, 02 Jul 2009 12:49:52 +0000

so……..if its possible to be entering a hyper-inflation period ..whenever that occurs

wont house prices rise even more?
etch

By: Lachlan

Lachlan — Thu, 02 Jul 2009 11:08:42 +0000

Poor Kris. Done in by a suckers gap