Stop talking down the market!

By Leith van Onselen

As an economist, few things peeve me off more than when a commentator blames the current malaise in the property market on people “talking down the economy”, rather than an objective analysis of the facts.

A classic display of this was exhibited yesterday by Terry Ryder, the founder of In an article appearing on Property Observer, Ryder blames so-called ‘doomsayers’ for talking Australia into recession and fires a missile at the Housing Industry Association (HIA) for supposedly wrongly portraying the housing market as being in a quagmire [my emphasis]:

We are infested with politicians, industry associations and business leaders who seem determined to talk us into a recession…

There is no greater example of the problem than the housing sector. This is the industry that has shot itself in both feet and is now pointing the gun at its head.

If insanity is defined as repeating the same mistakes while expecting different outcomes, then the Housing Industry Association is the craziest bunch in the nuthouse.

For years the HIA has been trying to extract concessions from government by pumping out “crisis” media statements on an almost-daily basis. We have an affordability crisis, a housing shortage crisis, a red tape crisis, a taxation crisis – the HIA has talked down its own industry day after day. Even positive data has been twisted into a tale of pessimism.

Australians are out there buying homes and investment properties again – and markets are rising. But they’re not building new homes, they’re buying existing ones. Why would anyone want to build when the HIA keeps telling them the industry is stuffed and their products are too expensive?

If the housing market is rising, why has the RP Data-Rismark home price index fallen for 6 straight weeks to be down -2.1% this year?

And if buyer demand is recovering, then why does the latest Australian Bureau of Statistics (ABS) housing finance data show the number of housing finance commitments (excluding refinancings) tracking near decade lows?

Anyone examining the data objectively would struggle to form the view that “Australians are out there buying homes and investment properties again – and markets are rising”.

Ryder then tears the HIA apart for claiming that the housing construction industry is contracting:

Now they’re saying the residential building industry is descending into recession. “New home building has collapsed,” says managing director Shane Goodwin. “We’re on the brink of recession … the worst conditions in decades.”

The only thing that’s collapsed is common sense and sound judgment at the HIA.

They should be selling the benefits of building new homes. They should be highlighting the areas in Australia where the economy is strong and business is good.

An objective analysis of the facts shows that new home sales in March collapsed to their lowest level since 1994, running at roughly half the level of 2009-10, despite the existence of generous state government incentives (which have since expired in Queensland and will expire mid-year in Victoria):

And the number of dwelling approvals in Australia have been falling for two years and are approaching GFC lows:

As H&H writes this morning, what the nation needs is coherence, not excessive gloom or Panglossian spin.

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Unconventional Economist
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  1. That article was a complete joke. Here’s his justification for why the market’s recovering;

    ‘There are many such places. I get around the country a bit, and I’ve recently visited plenty where business is brisk for builders – including Gladstone in Queensland, the Hunter Valley in NSW, Whyalla in South Australia, Ballarat in Victoria and Toowoomba in Queensland.’

    Need I say more? He forgot Port Headland, Kalgoorlie…….

    • A friend of mine is in construction in Ballarat (mainly commerical though) and he said residential property has been frantic since Bailleu killed the First Homebuyer construction grant… if you can’t get your contract signed before July 1st then you miss out on about 15 or 20 grand (as I recall?).

      It’s true that Ballarat is one of the fastest growing cities in the nation presently but it’s only because Melbourne people are being pushed further out – there isn’t much actual industry or work in Ballarat itself. The V/line train is just over an hour to Melbourne which many people in the Eastern suburbs would easily travel every day – from all accounts the morning trains are packed to the rafters with suits headed to Melbourne every day.

      It’s a bit like the Home Counties and the commuter belt around London – although being the newest suburb of Melbourne probably doesn’t impress the locals…

      • Yes, in my discussions with one builder in Vic they are absolutely flat out now as buyers rush to get that extra grant – but the builders also know that post 30th June the contracts will dry up and so will the work 6 months after that unless the market picks up. I don’t think it will pick up in Victoria unless employment receives a local boost from somewhere.

      • That’s quite different to what’s going on in the big smoke. The volume builders are cold calling feverishly, including those who had quotes done over six months ago……’how did you go with that quote’?!

        The regional grant was worth more though.

    • Ok the author of the whining complaint is a guy who owns a website that profits when the market is going gangbusters and people are enrolling at $180 per month.

      Nuff said.

  2. Sebastionbear

    I read the article this morning, and thought yeah, he “gets around a bit” – with blinkers on!

    Then I went to his website and it dawned -unpaid advertorial.

    • There needs to be some kind of penalty for “talking the market up” in the first place.
      It does not help that everyone in banking and finance expects bailouts from the taxpayer when the crash comes.

      • thomickersMEMBER

        let me guess… the hedge funds will get all the blame for the recession even though they have the least voice but the most skin in the game they play.

  3. In my Melbourne suburb, houses are not selling or are taking a long time to sell, and there is excess rental stock; not my words, but my RE’s.

    As far as gloom is concerned I think it’s more reality than gloom.

  4. Now, housing spruikers can be broadly divided into 2 groups – those spruiking existing houses (like Terry) and those spruiking new ones (like HIA)

    The more division amongst spruikers, the better it is for everyone else. So let’s not pick sides :p

  5. Once upon a time articles like that were taken seriously by the main stream media.

    Once upon a time – as in yesterday.

    • Ha ha. I had to read this one twice, but then I got it. Yes, I totally agree.

  6. Cognitive Dissonance

    Comment edited by TP: you may disagree with someones assertion, but please dont call someone a liar. Makes you look like an oxygen-starved troll and is against our comment rules.

    In the Hunter Valley builders are not busy at all, quite the opposite.

    I imagine he will wear down the seat of his pants or the carpet in his office before the soles of his shoes.

    • Hmmm Perhaps you are being are little harsh on Cognitive Dissonance Prince. Although I agree people should not be called a liar I would add the clause – unless there was evidence to back it up. In this case there is certainly good reason to think that Terry Ryder might be aware that the market is falling but knows that it is of direct financial benefit to himself to talk it up. Although I believe historically people who deliberately mislead others for their own financial gain are called fraudsters which I like better. Personally if I was going to call the property market spruikers anything it would be vastly more colourful than liar or fraudster, but I’ll refrain from doing so for now in public.

  7. JunkyardMEMBER

    This reminds me a bit of the Chris Joyce blog someone linked to yesterday, where he was blaming the RBA “jaw-boning” for the low new home starts.

    What I’m seeing is the first signs of capitulation from these spruikers. A bit of panic is starting to set in, as realisation is dawning… somewhere. I expect their commentary to be come increasingly absurd from this point.

    Anything to avoid discussing the ugly truths of a massive asset bubble.

    • Does anyone know how the media was reacting in the US and other countries when house prices first started falling? I think it would be interesting to see the different tactics used to keep the market up as the environment changes

      • Cognitive Dissonance

        People got called “terrorists” or “enemy combatants” the offices they worked in got referred to as “compounds”

        • DrBob127MEMBER

          What a good read, that article could easily have been written about Australia’s current housing market

          • In the uk all the home owners, estate agents, mortgage brokers went “lalalalalalalakalalala no problem lalalalalalalakalalala” and the new home buyers (that’s me) went “too expensive not buying”
            I rented for 5 years in London spending close to £25K in “dead money” as my colleagues said.
            Last year I brought a property 2 bed, in a modern apartment block (it’s 5 years old) Thames facing, 30 minutes to Docklands where I work, if I purchased in 2007 brand new it would have cost me £220k, it was on the market for £240k, I got it for £170k. That money spent renting doesn’t seem so dead to me.

          • My friends bought a 2-br townhouse on the outskirts of Bristol for 200K pounds.. I visited them shortly afterwards and I was thinking, thats a bit too pricey!

      • darklydrawlMEMBER

        Many sensible (and ultimately correct) commentators warning about the housing risks in the US Market were actually (literaly) laughed at on-air by others and were treated rudely and as idiot. Some could read the writing and got very wealthy from it, but most of them figured that housing could ‘never go down’…

        of course those chickens are long home and roosted…

        • Mining BoganMEMBER

          Peter Schiff is the famous one. The bozos actually laughed at him.

          I’m too lazy to find the youtube for you lot. Reckon you would have seen it anyway.

    • What I’m seeing is the first signs of capitulation from these spruikers.

      I agree. The tone on EDIT:Trollnest has become increasingly shrill and personal too. Today’s RP indicies have been published and they show further price falls. It feels like a tipping point is close. I think the fact that the double-strength RBA rate cut didn’t shift the clearance rate has really disappointed and annoyed the bulls.

  8. Leith, thanks for this brief but interesting post.

    It’s really reminisicent of Johnny Howard (‘doomsayers’) and Jeff Kennett (‘un-Victorian’); if you talked about the damage that Kennett was doing – particularly to regional Victoria – he would accuse you of not being patriotic to Victoria (somehow). Although the fact that he lost the election in 1999 almost purely on losing seats outside of Melbourne tends to suggest that regional people knew they were being ignored and had a gutful.

    I agree that it isn’t helpful to ‘talk down’ about a market it also isn’t good karma to be encouraging people to buy buy buy when obviously there’s a price retreat in full swing (as per Leith’s chart). I’m sure there’s plenty of people on wafer thin equity out there already regretting that ‘buy now or forever miss out’ marketing rubbish over the last three years without adding more poor unfortunates to the pile…

  9. I do like this paragraph though.

    “For years the HIA has been trying to extract concessions from government by pumping out “crisis” media statements on an almost-daily basis. We have an affordability crisis, a housing shortage crisis, a red tape crisis, a taxation crisis – the HIA has talked down its own industry day after day. Even positive data has been twisted into a tale of pessimism.”

    They’re like a welfare organisation. I’m surprised they aren’t advertising on TV with images of builders with flies in their eyes and distended bellies.

  10. russellsmith55

    I’d to see a graph charting house prices against the power of positive thought. Maybe Terry Ryder read ‘The Secret’ and wants to use it save the housing market?

    Whoops… the housing market doesn’t need saving, I’m doing it wrong… I mean everything is fine!

  11. Cognitive Dissonance

    The uncomfortable fraud that sits behind claims that people are talking down a given market is that the person doing the claiming are also openly admitting that it is about how people ‘feel’ about something and not what people ‘think’ about something that is doing the driving of a given market.
    During the initial stages of a Bull market it is the ‘thinkers’ that do the entering, in the middle part it’s the ‘thinkers are doing the leaving and the ‘feelers’ that doing the entering.

    A resent example, Facebook, the ‘thinkers’ and the ‘feelers’ are obvious, you can still even feel embarrassed for the poor saps that bought into the IPO at the going price.

    And Gold, no matter how much bad press this barbaric metal receives the metal digs in its heels and will not listen.

  12. Down here in the Featival state, SA, it certainly “is different”..

    My suburb, stock on market is ‘constant’ at 300-312 for past one year atleast. One developer started a building frenzy (close to 100-125 townhouses) last october and not much have sold, they dont appear on but appear on their own website. They will be ready for ‘moving-in’ in a month’s time. I see atleast 30-50 units/townhouses/villa constantly appear and disappear on, I go for walks and ‘check’, most of these appearing-disappearing stocks are not inhabited, which means they are looking to get out. Now, to beat it all, a brand new ‘shopping-mall’ is being constructed in the suburb which boasts of 100 elegant units only for the discerning few (English is a crap language, and i have forgotten what ‘Discern’-ing means!)

    The suburb had 3 existing cafes. One of them, a cafe underneath our apartment block, is up for sale for more than year now. The only clients i see there are construction workers. Now, four new cafes have opened up withing 100 mts of this….

      • Sounds like Hackam or Reynella? There’s a lot of frantic building going on down there – I heard they have ripped up a lot of vineyards to make way for estates.

          • Oh right – sounds more like next door to that Uni SA campus in the other direction (I went there for a month once – tried doing a postgrad degree in something I hated! Thank God I pulled out before I got whacked with the fees).

            I drove past that area last year and they were building frantically near the Pooraka Markets, used to be totally undesirable once. My how times change.

  13. The market can inflate from people talking it up, so why is it any less valid that it can go down from being talked down?

    I concur, Leith: aside from the fact that fundamentals will force whatever they will force, the one-way discussions we are all supposed to have is frustrating. Yes, a little more “Adult Conversation” being tolerated is a good thing.

    heck, we should even point out that if the notion if poor fundamentals is valid, then talking something down can assist to lessen the ventral impact of a boom turning into a bust -ie. it’s a moral service.

    Too many act as if the status quo can and must be proliferated at all costs, as if it can it necessarily can be saved by simply having enough faith. Well, I’m all for the right faith in the right person and/or notion, but blind faith is just silly self-deception.

    Part of our Adult Conversation should simply be the consideration that the status auo is not sustainable, that its proliferation is not beneficial in the long or even the medium term, and that an early “repentance” with short term pain and a period of nursing each other back to health, so to speak, is far better than not…

    My 2c

  14. The Emperor is so too wearing new clothes! *Terry Ryder stamps foot*

    What Ryder and Joye are admitting (unwittingly) is how crucial buyer sentiment is (and has been) to Australian property markets as the bubble has risen (and now deflates). If current house prices were so in the with “property market fundamentals” then whether or not the market was talked down would be largely irrelevant. If Ryder/Joye/Wilson et al truly believed house prices haven’t been super-inflated by over-exuberant buyers why would they feel the need to talk the market up?

    The GFC happened. Debt repayments can’t be put off indefinitely any more. As much as the Bulls cry about it housing market sentiment won’t reach their previous irrational highs at least until this bubble deflation has run its course.

  15. Denied fresh FHB’s to take down and feast upon, the jackals are snapping at each other. Cannibalism is next.

    Anyone publicly sceptical about the ‘onward and upward forever!’ meme was branded an apocalyptic or merely ignored.

    Steve Keen’s 2007 warning received scant coverage yet his walk to Kosciusko was splashed freely, gloatingly, by tabloid journalists who could never include the word ‘exponential’ in a story because their audience wouldn’t understand what it meant. Yet that same audience was gulled into home buying at any price and even to negative gearing at current P/E multiples – the investment strategy of a Christmas turkey.

    The spruikers have a great deal to answer for.

  16. This was a quote from the Irish finance minister in July 2008…hmmmm

    Mr Lenihan blamed the dramatic collapse in the public finances on external factors.

    “This particular mess has international causes,” he said. “We are in choppy waters. But we shouldn’t be talking ourselves into a recession. The Irish economy has very strong fundamentals,” he added.

    • Thanks for posting that quote Shay. It’s an absolute classic. I’m almost tempted to print and frame it.

    • McPaddyMEMBER

      And don’t forget the Irish PM, Bertie “the boom is getting boomier” Ahern’s speech in July 2007:

      “My message to you this morning is about confidence for the future. Confidence, in the strength of the economy that we have created together over recent decades. …

      Confidence, in our ability to rise to new challenges and to meet them together. Confidence, in our own judgement in the face of commentators and others who regularly cast doubt, not only on our future, but even on the reality of our past achievements and how we managed to bring them about. Ultimately, confidence, in the face of change and in the realisation that standing still is not an option, for any of us.

      There are those who believe that our recent successes are an illusion. That they will disappear and we will be back to the natural order, an Ireland of unemployment and under-achievement.”

      • Australian politicans should take note of how a “legacy” can be destroyed. The ex PM is a seen as nothing but a joke now.

        Ireland could really have done with a Macrobusiness equivalent back then. Although there were plenty of people warning about a bust like David McWilliams only to be shot down as unpatriotic etc…

        Sound familiar?

  17. Im a valuer located on the Mornington Peninsula, Melbourne and am seeing some very interesting sales coming through. This one takes the cake though.
    A quick search of the sales history shows that the property previously sold in February 2008 for $2.15 million and has resold in February 2012 for $1.35 million. Both times the property sold through a local agent after acceptable marketing periods. I know its only one example in the rural residential market, but I am aware of other properties that have sold well below purchase price aswell. Anyone saying the market isn’t falling really is kidding themselves. Does anyone know if there is a database anywhere that tracks properties that have sold multiple times over say 1-5 years and reports similar cases as above?

    • Good to hear real stories from the ground.

      As for old prices…sold pricesm you will likely have to pay for, vendor prices you can often get off the net.

      Eg. and

      Others will likely have comments and sites to add…

    • thomickersMEMBER shows houses with lengthy ongoing price listings…

      I know a Venus Bay property that lost 55% of its asking price after failing to sell for 2 years.

      you should keep us up-to-date around the that area.

  18. That RP Data-Rismark home price index graph is deeply deceptive, UE. I know it serves a purpose to emphasise the consistent drop, but the scale really does not do the movement justice. Are prices really moving less than 0.05% a week, as some of those data points suggest? What kind of margin of confidence do we have there?

    I’m not saying the broader point is wrong, but that needs some more context.

    • That RP Data-Rismark home price index graph is deeply deceptive, UE

      Nothing JoyeBoye does is ever deeply deceptive!

      It’s always transparently deceptive. That’s its only redeeming quality.

  19. A bit ironic that the Comm Bank’s ‘CAN’advertising campaign is popping up next this piece.

    We ‘can’ do it. It’s a confidence game- just borrow more. Stop being glum…

  20. Stop talking down the market!

    From Ireland:

    It’s a good time to buy house, says report, even though prices could fall further 25pc
    HOUSE prices could fall another 25pc, but despite this it is a good time for some people to buy, an analysis of the residential-property market from NCB Stockbrokers has found.

    But wait there’s more.

    Over 10pc of mortgages now in arrears – a new high
    LATEST figures from the Central Bank published today confirm that almost 78,000 residential mortgages are in arrears of more than 90 days.
    The figure compares to almost 71,000 at the end of December, and represents over 10% of all mortgages in the State.
    This compares with 70,945 accounts (9.2%) that were in arrears of more than 90 days at end December 2011.

    Please read this as it is horrifying.

    Plan to freeze part of mortgages offers hope to struggling families

    The plan will see part of the loan shelved and will be known as a “split mortgage”.
    Part of the loan will effectively be “frozen” and put to one side, meaning no repayments and no interest for an indefinite period. This would mean monthly repayments are only made on the active portion.
    It is understood that Bank of Ireland and its subsidiary ICS have already submitted proposals to the Central Bank.
    Both AIB and EBS have also confirmed to the Irish Independent that they are developing split-mortgage solutions. And Permanent TSB is understood to be developing one too.
    Under the proposals, no more than half the mortgage would be put to one side.
    The maximum amount of time that a mortgage would be split is likely to be 20 years.
    The concept of split mortgages was recommended by Department of Finance official Declan Keane last September.
    Repayment of the part of the ‘frozen’ mortgage could be made if the homeowner:
    – gets back on their feet financially.
    – Retires and gets a lump sum from their pensions.
    – Sells the house at some stage and downsizes to a smaller house.
    – Dies and the house is sold.
    – The children in the house start earning and help pay off the shelved portion.

    And some good news.

    Family’s joy as daughter buys back house taken over by bank
    AN EMOTIONAL daughter yesterday bought back her father’s house that had been repossessed by a lender — for a quarter of the boom-era value.
    It is one of the first instances of its kind where a close relative has publicly bought back a property after a bank took possession of it.
    Farmer Michael Farrelly had re-mortgaged the Co Westmeath house, which was estimated to be worth about €300,000 during the boom, and yesterday it was bought for €76,000 by his daughter Orla Mulvey at an auction in Dublin.

    • Cognitive Dissonance

      Cheers Seanm.

      Default lite

      I would encourage people to string their government along as long as possible and maintain the frozen period as the currency the loan is nominated in will be completely debauched in this 20 year time frame.

      A 50% haircut is a win win for anyone on the receiving end.

      To say nothing of ‘unintended consequences’

    • russellsmith55

      We need Deep T to tell us if any of the big 4 had been talking about the possibility of this in Aus.

  21. “As an economist, few things peeve me off more than when a commentator blames the current malaise in the property market on people ‘talking down the economy’…”

    Tell me about it!!! Boganomics par excellence.

  22. Bit off-topic:

    “20/259 Sheridan Street. Cairns Holiday Investment!!! Cash in on the tourism trade in Cairns when you are at home, then holiday yourself in your own unit in ‘Cairns Holiday Lodge’. Can it get any cheaper?”

    Er, I reckon it can!!!

    Advertised to 24 Oct 2007 – $109,950
    Advertised to 27 Oct 2010 – $79,000
    Currently advertised – $50,000

    Found two other identical ones going for $80k ($40k each). How low can it go???

    • Mining BoganMEMBER

      I remember a mate buying a unit like that in Cairns for around $45k in the late 90s. That’s where the market is. 1997.

      Cairns is a terrible place to pick. I know folk who bought their in the early 90s who would not have got their money back until the mid-naughties. Then everyone jumped on board. Now prices back in the 90s.

      Lots of people have been burnt.

      • I spent 6 wonderful months in Cairns in my youth. It’s a strange place, full of people who don’t live there. Tourists from afar, banana pickers from Innisfail, transient workers in the hospitality trade.

        When it comes to Real Estate booms though, the Cairns locals are like reef sharks. Similar to the Gold Coast, but with a shorter window of opportunity, and a zeal for making once in a decade profits.

        Places like Cairns are a real bell-weather for the end of the boom. I might start looking to pickup something cheap when the panic sets in.

    • somabluMEMBER

      Cairns and (the ugly redhead step child) Port Douglas are increasing speed towards the brick wall. At some stage they will decide to jettison the brakes for a softer hit.

      On the ground its really starting to look grim with this tourist season looking worse than the 2009 quiet season.

      The RE & CRE have been getting smacked over the last 3yrs. IMHO the flogging is about to start.

      The anecdotal evidence for the area is mind boggling.

      An example of typical Port Douglas business.
      An open letter from a failed business owner.

      Another restauranteur closer.

  23. ceteris paribus

    When desperate, talk your own book. When in doubt, talk your own book. At all other times,talk your own book.

    Truth and reality are never mandatory. It’s a post-modern world.

  24. Here’s a good boom and bust case study from Perth WA.

    Check out Google maps for 1 Anzac Tce, Bassendean WA 6054.

    The selling agent talked up the land sales to out of town buyers during the crazy boom period. However the selling agent also claimed to be a valuer and used this status to influence buyer sentiment. A couple of suckers payed for heavily overpriced land. check out the sales below.

    The sale price and lot sizes are listed below
    ■Lot 1 size 426sqm sold for $880,000 on the 24 February 2006 ($2065/sqm). River views.
    ■Lot 2 size 430sqm sold for $900,000 on the 24 Nov 2006 ($2093/sqm). River views.
    ■Lot 3 size 430sqm sold for $600,000 on the 21 Feb 2007($1395/sqm). River views.
    ■Lot 4 size 487sqm sold for $435,500 on the 16 Oct 2009 ($894/sqm). River views.
    ■Lot 5 size 324sqm sold for $280,000 on the 22 Aug 2007 ($864/sqm)
    ■Lot 6 size 335sqm sold for $265,000 on the 28 Aug 2007 ($791/sqm)
    ■Lot 7 size 332sqm sold for $255,000 on the 5 Feb 2008 ($768/sqm)
    ■Lot 8 size 320sqm sold for $255,000 on the 15 Mar 2008 ($796/sqm)
    ■Lot 9 size 335sqm sold for $280,000 on the 18 May 2007 ($835/sqm)
    ■Lot 10 size 321sqm sold for $280,000 on the 18 May 2007 ($872/sqm)
    ■Lot 11 size 320sqm sold for $300,000 on the 23 Dec 2007 ($937/sqm)
    ■Lot 11 size 320sqm sold for $249,500 on the 24 Oct 2009 ($781/sqm) (a drop of $50,000)
    ■Lot 13 size 338sqm sold for $300,000 on the 12 Jun 2006 ($887/sqm)

    The average land price is $768 to $937 / sqm. Lot 13 which sold in 2006 was valued at $887/sqm. Yet lot 2 land size 430sqm sold for $900,000 on the 24 Nov 2006 at $2093 / sqm.

    Other Local Area Sales Cannot Explain The High Sale Price

    Look at 8 Anzac Tce sale for $560,000 on a 1113 sqm lot ($503/sqm) on the 22 Jan 2004. Or 217 Anzac Tce sale for $185,000 on a 569sqm lot ($325/sqm) on the 17 Dec 2005 (11 months prior to the sale of lot 2 Anzac Tce for $2093 / sqm)

    Other Local Area River View Sales Cannot Explain The High Sale Price

    ■17 Ashfiled Parade, Ashfield WA 6054 sold for $900,500 on a 1051 sqm lot ($856/sqm) on the 11 March 2006. However this lot has a 2 bedroom, 1 bathroom brick and tile house insitu.
    ■43 North Road, Bassendean WA sold for $1,550,000 on a 3,594 sqm lot ($431/sqm ) in Oct 2006. However this lot has a 2 bedroom, 1 bathroom brick and tile 1932 built house insitu.
    ■31 Thompson Street, Ascot WA sold for $1,250,000 on a 1,733 sqm lot ($721/sqm) in Sept 2006. However this lot has a 1970′s brick and tile house insitu. This property is located up river and closer to Perth in a wider area of the Swan River, so is in a superior location. Yet the land value is only $721/sqm.

    There is no clear explanation why lot 1 sold for $880,000 and lot 2 sold for $900,000. Other river view property sales do not explain the high sale price. The other lots sold at 1 Anzac Tce, Bassendean do not explain the high sale price. Other land sales prior to 2006 do not explain the high sale price.

    The land site is not unique in any way or superior to other land sites.

    At the end of the day the outcomes were influenced by dodgy real estate agents and lenders accepting heavily over inflated valuations. Both parties greedy!

    Who said the banking system is not responsible for the boom and bust?