Comments on: Reserve Bank of Australia Cannot Manipulate Interest Rates to Control an Economy

By: Pete

Pete — Sun, 13 Dec 2009 09:40:40 +0000

The main reason why Australia’s property sector is grossly unaffordable to the average taxpaying Australian, is due to Federal government policy that allows mega rich forigners to purchase Australian residential property, thus escalating house prices. Until this law allowing foreign nations to purchase residential property is removed, a large number of Australian’s will be denied the Australian dream. The Australian dream will become the Foreigners’ dream, at our expense, courtesy of our Federal government. Interest rates are a minor threat, when compared to the mega rich forigners. Afterall, we cannot purchase land in their countries, but the lame Federal government allows forigners to buy our land. In short, we are mugs.

By: etch

etch — Thu, 10 Dec 2009 03:37:05 +0000

http://www.elliottwave.com/single-issues/gmp/European-Real-Estate-Mania.aspx?code=cg

By: etch

etch — Thu, 10 Dec 2009 03:30:34 +0000

http://www.elliottwave.com/single-issues/ff/0810FF_Special_Report_End_of_the_Mania_Era.aspx?code=cg2

By: cb

cb — Thu, 10 Dec 2009 02:50:39 +0000

PuntPal, my vague sense is that the shortage claim is based on a declining ratio of new home starts relative to population growth. Not sure if any more precise measurement is available, but rising rental could be taken as sufficient enough justification for interpreting the declining ratio as being indicative of a worsening housing shortage.

But I am somewhat puzzled. Are you saying that the estimated shortage number is decreasing? That would be contrary to what would be implied by the falling ratio in question, so there seem to be a few wires crossed in the debate, which would need to be cleared up to make any headway, in either direction, with the argument.

By: jazzwoman

jazzwoman — Thu, 10 Dec 2009 01:30:09 +0000

I am only new to these subjects – just getting started to “get the hang of it”.
Once I am ready I will participate in your written-word-fight! As for now you are all too clever for me!
(Especially Puntpal and cb: I really do enjoy reading your comments and learning from it- so thanks).
Now I have a question: Dan Denning referred to a report he has written 2004 – about the house bubble bursting in the USA. He was a bit early on this but knowing what we know today utterly awesome to read. Did you read this report aswell?
According to Dan Denning there are 6 Domino stones – once starting to fall hardly to stop and “wumm” the bubble might burst.
As I said I am new to all this but as far as I am concerned I think we in Austrlia are pretty much into Domino Number 3. Or do I see this wrong?

By: PuntPal

PuntPal — Wed, 09 Dec 2009 21:39:57 +0000

So what is the figure at now PF – it was 200K a year ago and now its only a 50K shortage of homes?

Have we really built that many homes?

What about when the oldies move to the coast to retire or into homes, what will supply look like then?

What about interest rates – surely that will force some cohabitation – how do they project that over at Rismark, especially considering mortgages are at a full time high?

These are the questions the bulls wont answer – they just say we have a shortage and then expect people to accept it…some people, the dumb ones, do just accept it…I dont!

By: Peter Fraser

Peter Fraser — Wed, 09 Dec 2009 05:12:21 +0000

cb – the myth is a myth.

By: PuntPal

PuntPal — Wed, 09 Dec 2009 03:23:56 +0000

bb – i thought distillery was awesome too. He has been banging on about Australia’s idiotic housing policy for a long time. You are spot on…the housing miracle that allowed us to dodge a recession is a sham and with Dubai, Greece etc.. you can already see what 2010 is going to be like.

GB – totally agree with your view on China. I think when they stopped building roads that are not needed, they will turn their attention to forcing the Chinese people to buy the things that the yanks wont buy anymore. Like you said, this will help Chinese manafacturers, but hurt Australian companies hoping to ride the China boom all the way through 2010

By: PuntPal

PuntPal — Wed, 09 Dec 2009 03:16:41 +0000

cb – here is how demand will dry up.

Stimulus wears off, banks tighter lending flows through to smaller loans (and rising interest rates do this anyway) so house prices dip. Those 190,000 young couples that have been duped into the housing market since the FHBG boost realise that rates, maintenance etc… add up and after not having a night out in 3 months, decide to move back home and rent their place out.

As I have been saying, we have so many spare bedrooms and people were beggining to use this in 2008 when the GFC hit. I saw in my area the number of bedrooms available to rent rise from 300 to 500 in a matter of 3 months. When this happens across the nation, then all of a sudden that 50,000* shortage of houses that apparently exists will evaporate.

* it was meant to be nearly 200,000 shortage, but the housing spruikers realised that lie was too big to sell even to the most naive and stupiud public going around, so they settled on 50,000 coz its round and sounds realistic. In March 2010, they will be talking about the 20,000 shortage in houses and in June there will be an oversupply. This is how weak the shortage argument is

By: PuntPal

PuntPal — Wed, 09 Dec 2009 03:03:15 +0000

cb – I dont want any favours for mates that have specualted on houses…they should get what happens when you place a bad bet…you lose out, big time! If you read my post, I clearly say it is the owner occupiers who were forced into the market coz they wanted stability for their families (remember, the Aussie Dream).

But we decided to turn houses into an asset class and my point is that the speculators and investors are more to blaime than the people that are buying one house and one house only