Share on Facebook Share on Twitter Share on Reddit + - Will Australian property repeat the Irish crash? By Houses and Holes in Australian Property, Featured Articleat 12:15 am on September 24, 2018 | 135 comments From Martin North: Share on Facebook Share on Twitter Share on Reddit + - YOU MAY ALSO BE INTERESTED INLast rort of the specufestorsVia Domain: The expenses of landlords whoBanks dodging capital crisis with negative equity fiddleMacquarie has dug into the bank's negative equityAussie property sales plunge to multi-decade lowsBy Leith van Onselen Domain economist, TrentCoreLogic: Months of housing supply at decade highBy Leith van Onselen CoreLogic's Quarterly Comments Jacob September 24, 2018 at 12:44 am I suppose if the economy tanks, the braindead ALP could cap the unemployment rate at the current 11% (unacceptably high) by putting a massive tax on each 482 visa while simultaneously changing the law to allow rich foreigners to buy Aussie houses legally. That would keep house prices as high as possible while lowering the unemployment rate. doctorX September 24, 2018 at 5:09 am that never worked anywhere. The reason why unemployment goes up is reduction in jobs not who gets the jobs. Tax on foreign workers visas would make foreigners more expensive than domestic – in a recession people with mortgages work for anything Allowing foreigners to buy would not make much difference – it was legal for foreigners to buy in US, Spain, Ireland, … but it made things even worse. In a slump market foreign investors are first to sell because for them the property is just money that is disappearing at fast rate Jacob September 24, 2018 at 6:15 am USA probably has 10x as many houses as Australia and is nowhere near as foreign-born as AUS. Of course, rich Asians can influence the Aussie real estate market a lot more than the US real estate market. If foreigners were allowed to purchase Aussie houses from 1 Oct 2018 onwards, the house prices would probably go up again. It is a tap that can be turned on and off. The reason why unemployment goes up is reduction in jobs not who gets the jobs. Oh dear. People turn 21 in Australia every day and they are not given jobs because bosses can import 45 year olds with 20 years of experiences and pay them $2/day. So the unemployment rate is now 11% while the unemployment rate in Britain is at a 40 year low because Theresa May kicks out foreign “students” after they complete their “studies”. fitzroyMEMBER September 24, 2018 at 7:58 am Jacob is certainly correct about locals who have newly graduated kiwikarynMEMBER September 24, 2018 at 8:06 am NZ media is running an expose on the foreign student visa scam – https://www.stuff.co.nz/national/crime/107073384/the-big-scam-the-tip-of-an-immigration-scam-iceberg I dare say the situation is exactly the same in Australia. [email protected] September 24, 2018 at 8:51 am You’re a smart doctor, DoctorX! St JacquesMEMBER September 24, 2018 at 9:27 am And with a diving currency (AUD) it is disappearing doubly fast than it appears to be. 10 % drop plus drop in currency OUCH ! drsmithyMEMBER September 24, 2018 at 1:10 pm So the unemployment rate is now 11% while the unemployment rate in Britain is at a 40 year low because Theresa May kicks out foreign “students” after they complete their “studies”. Indeed. What’s particularly staggering is how dramatic the impact of this policy change was. You can nearly pick the day it came into effect ! https://tradingeconomics.com/united-kingdom/unemployment-rate nexus789MEMBER September 24, 2018 at 1:12 pm That’s a good observation and no new buyers (investors) will enter a market with declining asset prices. Also in both Spain and Ireland temporary workers left as the debt driven jobs in the FIRE sector dried up. This also flowed in supporting service jobs. Once the decline accelerates I don’t anything will slow or stop it. Robert September 24, 2018 at 1:58 pm What’s particularly staggering is how dramatic the impact of this policy change was. You can nearly pick the day it came into effect ! Late November 2012? Hey, wait a minute… rj2k000MEMBER September 24, 2018 at 12:56 am Australia Seasoned Insider Gives In DEPTH LOOK ! https://www.youtube.com/watch?v=L6Hg86SZ2Ag Hooksey September 24, 2018 at 2:26 am @rj2k000 How do you have time to watch a Mike Martins post that is 1hr20min long and still refer us to it at 0200hrs today! Whew! That Aussie guy says he has been watching the market since 2008. That hardly makes him a “Seasoned Insider” I purchased my first block of land in 1972 for $1900 and have been watching the market off and on since then. People I meet haven’t heard of the “Tulip Bubble”, Poseidon Bubble etc. and think that what has happened to the Aussie market is normal. It’s not, and will correct eventually. Ever heard of the “Carrington Event” of 1859 (or so)? Now that is something to worry about! boomengineeringMEMBER September 24, 2018 at 6:44 am Similar here Hooksey, paid mine off (house) 1975, Didn’t stop me losing the lot (11) after the 89 crash though. rj2k000MEMBER September 24, 2018 at 12:19 pm Long stints of programming need a decent rest in between and at the end, hence spare time i don’t actually want to do any work. Usually need a decent vege out after gym late at night. Doing repetitive production work during the day gives a ton of utube time too. Utubes with less detail i play at 2x speed. Clive September 24, 2018 at 1:13 am Martin North is the Bullshit Terminator – living tissue over a metal endoskeleton of logical analysis. He absolutely will not stop, ever, until the bullshit artists are dead. Hasta la vista rent seeking bubble blowers. Aaron September 24, 2018 at 6:59 am 🙂 ResearchtimeMEMBER September 24, 2018 at 7:37 am I saw a lot of Eire before it crashed, and had family as big constructors… its massively different set of circumstances than Oz. I doubt it will drop much at all. The AUD will take most of the shock. Peachy September 24, 2018 at 7:44 am Yuh, that pesky Euro…. St JacquesMEMBER September 24, 2018 at 8:03 am Yeah, Eire and other PIIGS don’t have their own money, so when the credit stopped, the cash just ran out. Not like Oz, here the RBA-Megabank complex will whirr into action to support asset prices, and the more inflated the more they’ll whirr into action…..so much so it will aggravate the downward pressure on the AUD, so housing might not lose that much in AUD terms (though, 10 % in Sydney is already looking likely in the coming year), in USD terms, the crash could be large, inflation will spike, retail, services, housing construction would tanks….so yeah, it will look less like Eire and more like friggin Argentina as everyone tries to dump Aussie dollars for other currencies, gold, whatever and inflation spirals since we import nearly everything. DanMEMBER September 24, 2018 at 9:12 am RBA has maybe two 25 bps rate cuts left in its armoury, it missed the opportunity to cut and force some deleveraging, now its out of ammo. Currency depreciation is going to cause more problems than it solves for our consumption led economy – petrol and energy prices, food prices, imported goods prices likely to skyrocket. Good for exporters but that is mostly mining, not a big employer. flawse September 24, 2018 at 9:43 am St J re looking more like Argentina – That’s my reasoned GUESS as well. Although I go for Venezuela – our social cohesion is going to break down very quickly (JMO) Spalding September 24, 2018 at 10:36 am I wonder if we could get a double-whammy: The RBA swings into action and the AUD begins to rapidly depreciate. Consequently, foreign investors panic and sell their Australian property holdings, causing the bottom to fall out of the housing market anyway. I guess it depends on the prevalence of foreign ownership of Australian. Djenka September 24, 2018 at 10:31 am You got Martin North very incorrectly. He’s not some sort of public educator or justice warrior, neither he’s emotional about anything. This is what makes him very credible. Have you noted that he’s never told *anyone* that he(r) is an _idiot_? (unlike other analysts) GavinMEMBER September 24, 2018 at 12:48 pm He did call them bullsh!t artists on his live stream the other day. Solar September 24, 2018 at 11:03 am Lol at all the nuthuggers. Lets not forget that your new crash hero stated that a 40%+ crash only has a 20% chance of eventuating and that “My best call would be in the region of 15-20% from top, over 2-3 years…” Put it back in your pants….tards rj2k000MEMBER September 24, 2018 at 1:14 am How would you cope, financially, if you lost your job or got sick and couldn’t work? http://www.abc.net.au/radio/programs/am/mortgage-stress—how-much-financial-breathing-room-do-you-have/10280650 Why are so many West Australians under mortgage stress? http://www.abc.net.au/radio/perth/programs/focus/mortgage-stress/10264282 Hugh PavletichMEMBER September 24, 2018 at 2:08 am … CONSIDERING THE 2007 IRISH EXPERIENCE …THE MASSIVE RISKS OF MULTIPLE STRETCH … CENTRAL BANK OF IRELAND RESEARCH … The unweighted average median multiples of its metros in 2007 was 4.7, which crashed to 2.8 in subsequent years … putting all its Banks to the wall and requiring bailouts of in excess of 70 billion euro … about $NZ109 billion. Currently the average Median Multiples for the Australian and New Zealand metros overall are about 5.9 and 5.8 respectively … refer … Demographia International Housing Affordability Survey: All Editions http://www.demographia.com/db-dhi-index.htm Research by the Central Bank of Ireland found high lending multipoles was the greatest problem (more so than loan to value ratios) … and subsequently imposed a general mortgage cap of 3.5 times annual household income. A year earlier the Bank of England had capped at 4.5 times annual household income … Mortgage Measures | Central Bank of Ireland … access extensive background research via link … https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures A helpful television discussion about the 2007 Irish experience … Prof. Bill Black & Vincent Brown – Ireland’s Bank Guarantee … Youtube https://www.youtube.com/watch?v=t7zd5dRILBw Hugh PavletichMEMBER September 24, 2018 at 9:49 am Why are the Aussies clueless about the structural differences of, for example, the normal Texas housing market and the abnormal California one ? Exposing Australia’s housing crisis | 60 Minutes Australia … h/t GF … Part 1 https://www.youtube.com/watch?v=smPR0s2W-Ck&feature=youtu.be Part 2 https://www.youtube.com/watch?v=BbFvwYVfwq0 Back early 2010, I wrote about the critically important differences of the strangled California housing market and the open and normal Texas one. For housing bubbles to form, scarcity or perceived scarcity is essential … finance (in all its forms … equity … bubble equity … debt) is just the fuel. Remarkably … the Australian 60 Minutes team appears to be unaware of these ‘basics’ … read on … Housing Bubbles: Jumbo Mortgages = Jumbo Problems … Hugh Pavletich … Scoop New Zealand News http://www.scoop.co.nz/stories/WO1003/S00019.htm Why is the Australian 60 Minutes team ignorant of normal Texas housing markets … such as Texas (check out the Annual Demographia Surveys) ? flawse September 24, 2018 at 9:52 am I think thee are some fundamental differences between Ireland and Australia and they centre around our resources. We are willing to sell these off holus bolus to try to maintain some sort of (short term) stability. We are also willing to sell off any and all key businesses. If I understand it Ireland also indulged in this practice. I’m not too sure how much of our resource industries remain to be sold off. There have been numbers quoted that more than 90% of it is already gone. We have a fair bit of farmland the Chinese would be interested in but you have to sell a lot of acres to get a Billion dollars! So, in my view, direct comparisons with Ireland don’t hold a lot of water. That said, perhaps we’ve sold already off most of the meaningful resources and are now at the pointy end. Once the crumbling starts we don’t have an ECB backing our economy. So that will make a huge difference to any possible recovery path. Just thinkin’! Hugh PavletichMEMBER September 24, 2018 at 11:33 am Andrew Bydder: Housing crisis is all about land and how councils regulate it | Stuff.co.nz https://i.stuff.co.nz/waikato-times/opinion/106901970/is-it-a-housing-or-a-land-crisis OPINION: Which is worth more: a million-dollar section with a $100,000 house or just a million-dollar section? The answer is the million-dollar section and the reason is capitalisation. Anyone buying the section wants to put a big flash house on it, not a small, simple one. A $100,000 house isn’t going to cut it, so the buyer will have to spend $10,000 demolishing it before building their dream home. The section was undercapitalised…. Read more via hyperlink above … Tony September 24, 2018 at 1:42 pm @flawse holus bolus… u a fan of a certain history podcaster and his american mate? 😛 xpjsx September 24, 2018 at 5:33 pm ” I’m not too sure how much of our resource industries remain to be sold off. There have been numbers quoted that more than 90% of it is already gone ” Oz has been running regular trade surpluses for a while now. I wondered how this can be when we still need massive amounts of foreign capital to grow ie we have trade surpluses and at the same time perpetual current account deficits. I have to figure that foreign money funds the mines that create the surplus and then the money just flows back overseas with us skimming a little bit for taxes. I’m not saying anything new but it just hit home to me how much of our mining sector must be foreign owned. reusachtigeMEMBER September 24, 2018 at 6:32 am No ErmingtonPlumbingMEMBER September 24, 2018 at 7:32 am Did you utter that “No” curled up naked in the fetal position Reusa? ResearchtimeMEMBER September 24, 2018 at 7:39 am Reu. is correct on this one… the two are not even remotely similar. Eire had little immigration other than Baltic workers in construction who left after the bubble bust. And it had the Euro! I doubt Sydney will even lose 10% RubiconMEMBER September 24, 2018 at 7:54 am Love your alternate hadle 3d1k, as well as your alternate facts. ‘Research’ makes it sound like you are actually well read & knowledgeable about the subject matter in question and not just a paid troll. Good to see that you’ve expanded your paid activities to more than just the minerals council. Peachy September 24, 2018 at 8:00 am Yikes, insecure much? It’s all 3ds-under-the-beds here these days. Suggestive of weakly-held bear-beliefs. Faith faltering? Just as some good bearish news is finally being reported? Man up. fitzroyMEMBER September 24, 2018 at 8:01 am Some of RT’s posts and links have been first rate and some less so. Keep an open mind. This call I think is a “less so” moment. I’ll go withMartin North. bcnichMEMBER September 24, 2018 at 8:36 am RT I think the falls will be the same but over a longer period Ireland was in the Euro so they didn’t have a currency to deflate The same in Japan the yen rose into their crisis AUD falling to 40 to 50c will cushion our falls QE into banking As house prices fall 20 to 40% initially and RBA starts QE watch the cash pour into stock market, share buy backs etc It’ll be ground hog day after watching US and Europe The gov will bail out the banks after bond holders and shareholders take a trimming reusachtigeMEMBER September 24, 2018 at 8:38 am Losers on all blogs and forums love to call “troll”, “astro-turfer” etc etc when they can’t handle alternative views to the local circle-jerk! Some of the best contributors to the comments here have been shut down because the weak of mind couldn’t cope with their alternate views. The best one was Shadow. That carnt was spot on. Legend. Peachy September 24, 2018 at 8:49 am Shadow was indeed a legend. As was his, erm mate, BearTrap. They were 110% right, guaranteed. But I don’t remember them being on this forum! We do have M North here – he is the latter-day Ed Karan! Comical Doc Wilson September 24, 2018 at 8:55 am Ireland had precisely DOUBLE migration/pop growth rate per capital as Aus currently does, right up to 2007 at circa 3%. Aus is currently around 1.4% https://www.google.com.au/search?ei=gBmoW73gCYyD-QbGx62gCQ&q=ireland+population+growth+rate&oq=Irepopulation+growth+rate&gs_l=psy-ab.3.0.0i7i30k1j0i13k1j0i7i30k1j0i7i5i30k1l2.3787.7397.0.83220.127.116.11.0.0.0.555.2195.2-2j2j1j1.6.0….0…1c.1.64.psy-ab..6.6.1396….0.th–ugkSXl8 [email protected] September 24, 2018 at 9:10 am Many burbs in Sydney, especially condos, have already lost 20% so wait till next year, byddy boy…..HE HE HE HE Solar September 24, 2018 at 9:54 am “Losers on all blogs and forums love to call “troll”, “astro-turfer” etc etc when they can’t handle alternative views to the local circle-jerk! Some of the best contributors to the comments here have been shut down because the weak of mind couldn’t cope with their alternate views.” ↑ THIS https://imgur.com/a/1fg3stz Weaselslapper September 24, 2018 at 11:24 am Shadow and Beartrap could be trying to post here but not getting past the spambot filter. Andrew September 24, 2018 at 11:28 am Genuinely curious if Rubicon could answer the question who would be paying Researchtime to leave comments about there not being a significant housing crash in Australia and why the payer would think that leaving semi-optimistic comments on MB would have any bearing on the market? Solar September 24, 2018 at 12:04 pm @ BCNICH “I think the falls will be the same but over a longer period Ireland was in the Euro so they didn’t have a currency to deflate The same in Japan the yen rose into their crisis AUD falling to 40 to 50c will cushion our falls QE into banking As house prices fall 20 to 40% initially and RBA starts QE watch the cash pour into stock market, share buy backs etc It’ll be ground hog day after watching US and Europe The gov will bail out the banks after bond holders and shareholders take a trimming” Your sequencing is wrong. Deflating the AUD is not the means to saving housing. It is the consequent effect AFTER stimulus measures are implemented eg rate cuts, QE. A floating sovereign currency allows greater flexibility in regards to introducing stimulus measures, something the EURO couldn’t provide in the case of Ireland. Pfh007MEMBER September 24, 2018 at 2:10 pm Researchtime is not 3d. Shadow hasnt been sighted for years…..even in the Bull Pen 🐂. Probably retired after making a fortune selling his range of Bear2Bull hormones after the RBA and APRA went full bubblicious in 2012. Anyone making comparisons to Ireland needs to identify the natural resources and other goodies that the Irish refused to sell after the GFC in vast quantities. Anyone doubting the RBA commitment to Bubble-time clearly hasnt been listening to the RBA. https://theglass-pyramid.com/2017/02/17/rba-watch-luci-and-the-platypus/ They will double down damn the consquences in a heart beat. QE for Home Buyers! https://theglass-pyramid.com/2018/06/14/crystal-balls-when-will-aussie-house-prices-crash/ Peachy September 24, 2018 at 6:40 am They might have to dust off and re-introduce the government guarantee of Australian bank liabilities…. Djenka September 24, 2018 at 10:35 am Mortgageative easing? buying up all the bad mortgage loans? Probably more likely than significant currency debasement. haroldusMEMBER September 24, 2018 at 10:51 am Did someone say Debaser? https://www.youtube.com/watch?v=PVyS9JwtFoQ Matt September 24, 2018 at 6:52 am Posted in links but relevant here: Interesting for the Newcastle market. Lots of the usual puff from Fairfax about no bubble and no worries, but mention of 2000 new units surprised me (even seeing how many cranes are out) https://www.theherald.com.au/story/5643782/developers-say-newcastles-big-ticket-apartment-projects-safe-from-national-housing-slide/?src=rss Arrow2MEMBER September 24, 2018 at 8:22 am I love it. Newcastle has completely different banks to the rest of the country, is exempt from APRA and has excised itself from the Royal Commission. Therefore the reasons behind the downturn elsewhere don’t apply! Seriously though, there is scope for an MB article about contagion if Syd /Melb falls to the regions. Two forces: fleeing Sydney money keeping regions up vs credit restrictions operating nationwide (dragging on everything). Who wins? Perhaps regions go up this year, but next year…..? bcnichMEMBER September 24, 2018 at 8:38 am When RBA starts QE $ into stock market Just follow history (recent) US EU etc flawse September 24, 2018 at 9:58 am bcnich – so mining stocks a big buy? I’d love to say Agriculture but I’m an old farmer/Ag Econ. Matt September 24, 2018 at 12:20 pm They don’t call it god’s country for nothing! I don’t see upside (maybe my bias showing). Spillage over from Sydney has been a huge factor but I think this stops with price drops. If people are under water (or struggling with repayments) then nothing in the regions will help them. DanMEMBER September 24, 2018 at 1:08 pm The beaches are better tho. azxylon September 24, 2018 at 9:38 am And quite a few of these new “developments” are not what you would call quality builds. And btw, “peak hour” road congestion in Newcastle is now from 3pm through to past 7pm week days. And just about impossible to find a park in Newcastle CBD and inner suburbs after 6pm any day of the week. Oh, the vibrancy!!! Suggest Reusa sets up a branch office here. Plenty of action if the personals sections of the local rags are anything to go by. Matt September 24, 2018 at 12:36 pm Was it you that posted the photos of the boarded up shops? This city certainly has issues. Interesting to see unit prices in the next 12mo michael francis September 24, 2018 at 7:54 am Great stuff. 80% falls. Im going to post that right now on the Property Forum websites. (PS If you never see any of my replies again, you know what happened.) Peachy September 24, 2018 at 8:02 am What? Another young bear got tired of waiting for the crash and lost religion? Bullion Baron September 24, 2018 at 8:16 am Anyone care to provide cliffnotes or at least explain the clickbait video title? I’m presuming even North doesn’t think a single phone call would drop prices by 80%… Peachy September 24, 2018 at 8:25 am It’s a reference to the phone cal which demanded that the Irish government guarantee its private bank liabilities. To save (ostensibly) European bondholders. GavinMEMBER September 24, 2018 at 12:51 pm 80% if the Government doesn’t play ball and bail out the banks (which would include foreign investors) which would plunge the economy here into a depression. My own take on this is to emulate Iceland, you’ll endure short term pain, but the recovery will be much faster. Unlike many of the PIIGS in Europe which are still sandbagged with debt and struggling under austerity. Government here will chicken out and bail out the big 4. DreadnotMEMBER September 24, 2018 at 8:30 am The RBA can never hold a gun to the Australian Parliament, it is a creature of the Australian government and will implement policy and actions proposed by parliament in a crisis. The ECB is not a creature of the Irish government which is subject to the bond vigilantes. So the question for Australia is, will parliament, in a crisis, sanction the same old solution of saving the banksters/fraudsters (moral hazard) or do something different like save the economy and the defrauded without resort to moral hazard (Not an option is to allow the economy to collapse into a depression). Djenka September 24, 2018 at 10:39 am In our case this would mean holding the gun to own (.gov.au) temple. DreadnotMEMBER September 24, 2018 at 2:00 pm Ya. Normal Australian policy and practice. yogiman September 24, 2018 at 8:31 am Two important differences: 1. Ireland did not have a currency it could devalue. 2. It was relatively easy for anyone living in Ireland (skilled, semi-skilled or unskilled) to move to another country. bcnichMEMBER September 24, 2018 at 8:43 am Yogi I agree on currency (see above comments) Q What will all the Indians (who are the ones buying the homes on Melb Syd fringe) do when they are in negative equity for a decade A they can either fly home direct one way with air India or the Thai airways flight via Bangkok they can stop over night and have a pad Thai for dinner on way home They’ll drive past the bank throw their keys at the bank and leave their cars in the car park at mc Donald’s at the airport if they can’t sell the car AshentegraMEMBER September 24, 2018 at 9:12 am bcnich suggests a useful adverse departure index: the number of cars abandoned in airport car parks. The condition they are left in would provide an insightful sub-index as not all would be clapped out bombs. Audi A4’s will be a snip at the auction houses soon. [email protected] September 24, 2018 at 9:49 am Yogi, me mate, did Perth, Darwin, Nth QLD and other towns had their own currencies they could “devalue”? Call me curious. Solar September 24, 2018 at 9:57 am Stupid comment. How much is Perth down from peak? ~12% over four years! And lets not forgot the common denominator in all those cities you listed – transient employment boom from the resource industry. Tard! TimMEMBER September 24, 2018 at 1:39 pm @ solar – Yes and Perth managed to fall that far with the credit taps welded open. With very low interest rates. Calling every other poster a “tard” doesn’t add inches to your dick. The inches you have to worry about will be up in you before you even know it. Solar September 24, 2018 at 1:59 pm Nah mate, the inches are well and truly embedded in the depths of you tards. Have you enjoyed the reaming the Oz housing market has given you tards over the past 15 years? Your prolapsed anus must be in a real sorry state by now. ….oh, but not to worry right? Cos a massive nominal crash is coming to save the day! Martin North said so! LMAO TimMEMBER September 24, 2018 at 2:08 pm Settle down Nathan. Solar September 24, 2018 at 2:17 pm Oh and not everyone on here is a tard. Prime tard list – Brenton Treibs rj2k000 Timmeh Arrow2 yourself plus many more Tards can usually be identified by the conclusive bold statements they post; brainless comments that are posted reflexively anytime someone posts something contrary to their ‘crash’ view. They usually just parrot the typical bear arguments they’ve read in some article (or watched on youtube) with no thought as to whether they actually apply in the current situation. Another typical tard behaviour is annualizing daily movements in an index to extrapolate an annual trend. Looking at you lswhcp TimMEMBER September 24, 2018 at 2:42 pm Got it. Tards = Everybody else. Smart money = Trollar, plus any other envoys/refugees from PropertyScat. Pretty cute that you put your crush at the top of the list. Not that there’s anything wrong with that. Solar September 24, 2018 at 2:46 pm “Tards = Everybody else. ” As I’ve mentioned several times previously – you tards often have trouble reading carefully or paying attention. Ps. You should probably go see a doctor for that prolapsed anus. Its a disgusting look TimMEMBER September 24, 2018 at 2:55 pm Come on mate, don’t waste your time on no tards. I’m sure you’ve got some empty rentals you could be installing shower cams in. You know, for when the booms starts up again in a few weeks. Not all FIFO’s are old fat guys, you know. Solar September 24, 2018 at 3:01 pm Weak ass reply. Another typical tard behaviour is assuming ppl must have investment properties if they dont share the crashtard view. Tard TimMEMBER September 24, 2018 at 3:15 pm You’re a serial troll (and not a very capable one), who got some of Brenton’s hot sauce in his eye and now is doomed to hang out forever on a forum you don’t like with people you despise, having to change your handle every few weeks……if only your crush would see you aren’t like all the other investors. Solar September 24, 2018 at 5:06 pm You seem to keep mentioning brenten, are u his bf or something? You do make a good couple, both of you are prime examples of clueless tards locked out of the property market such that you’re only hope is to keep wishing for a housing ‘crash’ TimMEMBER September 24, 2018 at 5:33 pm Ahem, He made into your edgy meme. Remember? https://imgur.com/a/1fg3stz Solar September 24, 2018 at 5:44 pm LMAO! Its a good meme isn’t it? It is amusing and true on so many levels. poorboy brenten is the epitome of tardness, that is why he has a special place in that meme. However from reading the comments here it seems we have some serious competitors to the tard throne. The stupidity exhibited by triebs and yourself really is next level stuff! Solar September 24, 2018 at 5:54 pm Here’s a new one just for you – https://imgur.com/a/RaAbYFI Edit- woops, my apologies….brentn is the girly one wearing the yellow shirt. Look at his despair over house prices! footsore September 24, 2018 at 9:07 am Yes we are are different, because all countries are, but the similarities should keep any decent policy maker awake at night. For the few who haven’t read it, here’s an article by the author of ‘The Big Short’, Michael Lewis, on the Irish bubble and its fall out. The similarities are very frightening. https://www.vanityfair.com/news/2011/03/michael-lewis-ireland-201103 Solar September 24, 2018 at 11:14 am Key difference you bears overlook – Ireland – Euro Australia – AUD footsore September 24, 2018 at 1:04 pm The AUD will make a difference, I just don’t think that it will make as much of a difference as many imagine it will. The Japanese had the Yen, a supremely more powerful and useful currency than the AUD, that didn’t stop their bubble from unleashing chaos and suffering across their society. Where we differ from the Japanese is that they have a diversified and functional economy. We have construction and dirt. We won’t be Ireland, but we won’t come out the other side of a crash in the same shape as America or Japan have managed to. Solar September 24, 2018 at 1:14 pm We also have loose immigration restrictions compared to Japan. And a mass of wealthy Chinese looking emigrate and/or get funds out of China EVINMEMBER September 24, 2018 at 2:33 pm Key difference in the build up was Germany needing low interest rates and Ireland with exploding growth (of everything but especially house prices) needing much higher rates to constrain explosion of debt. Obviously interest rate policy from ECB was set to maximise benefit to the core of the EU….and rates were artificially constrained with the result that we accelerated into the crash with people getting 30 year tracker mortgages at ECB +0.6-0.9%. The cheap money was not a policy decision made in Ireland but in Frankfurt it clearly is a reasoned policy decision in the case of Australia which makes it all the more myopic and inexcusable given the recent reference examples open to them to consider. fisho September 24, 2018 at 9:33 am Martin asks the question? Should the government prop up Aussie banks if they are failing? As much as I hate the idea of Public money being used to prop up Private lending, I don’t believe that we have any real choice in the matter. My question for Martin would be: What is the primary product of the Sydney basin? I don’t know the answer myself, however whatever it is one thing is certain is that it’s an intangible. Some might even go so far as to say Faith in the future is the most important product of the Sydney population, it’s what is rewarded, it’s what is traded in, it’s the commodity that is most leveraged, yet in reality it is the most fragile of all products. My reason for pointing this out is that this Sydneysider net product (faith…belief in the future) is foundational to the Sydney economy, if this faith is ever really challenged it’s not just 1 in 10 jobs that are at risk rather 8 out of 10 jobs within the local economy derive their value from this faith in the future and the cash-flow that underpins this stupidity. Remove the cash-flow and you’ll see the stupidity boil over. Ideally in a recession industries that compete outside the bubble see an incredible increased value and they grow while the layers of stupidity unravel, however in Sydney’s case I’m not sure that much exists beyond the stupidity. I’m not sure that anything good will rise from the ashes. flawse September 24, 2018 at 10:05 am Absolutely spot on! What does the Sydney basin produce? The question that nobody asks in relation to immigration or real estate. The answer of course is ‘damned all’ In particular it produces NOTHING that is not Real Estate related. Of course we will then have a big problem with our ‘culturally diverse’ Sydney population. haroldusMEMBER September 24, 2018 at 10:53 am “damned all” Language! We are not a pack of stevedores. flawse September 24, 2018 at 11:38 am 🙂 True!!! As a young bloke, back in the day, I’d have got pulled up for that sort of language! boomengineeringMEMBER September 24, 2018 at 11:48 am Fisho/ Flawse What does Syd produce? Too true, thought of that for years seeing all the old factories pushed down for housing wondering if it all becomes housing then where are the jobs. Some old machines I repair eg Hobart mixers ( made a new bronze worm wheel (for gearbox) made in Sydney would be the best in the world, told a client to buy a second machine while I repaired his, ysk, it over heated after 20 mins and didn’t have the planetary action that made the Hobart very user friendly. Relevant StakeholderMEMBER September 24, 2018 at 12:26 pm Natural gas? jimbo September 24, 2018 at 12:45 pm Is that because of the curries RS? The Claw September 24, 2018 at 10:14 am What is it we do here? Why are there so many people here? What do we do? Why do we need so many more people each year? What do we do? These are very important questions to answer. I don’t think many people would like the answers. fisho September 24, 2018 at 11:19 am Dangerous questions especially when you realize we’re all part of the problem. who here would really prosper if the local Sydney economy collapsed? I suspect as much as some of us might be able to raise our hands and scream ME, this analysis ignores many of the external costs that would flow on as a consequence of Economic collapse. Would our kids have jobs? Would some low life unemployable be hopping over our fence every day to steal anything and everything? Would we actually be able to grow those few industries where real advantage was created by the recession? – I have grave doubts on this exact point – our universities are simply not producing graduates with the right skill sets (because that’s not what the local economy has rewarded over the last 50 years) bolstroodMEMBER September 24, 2018 at 11:30 am We have a Real Estate PM, who luckily is a Happy Clappy Chappy, who’ll keep the faith, belief, credit in our RE heaven, otherwise known as the Sydney Basin. He is of the Shire, a gun for hire, when it gets dire he will light the fire… on the bonfire of our Vanities and other renovations. fitzroyMEMBER September 24, 2018 at 10:24 am I suspect you are right Fisho. But bugger ’em. No one will bail me out. Burn the bondholders! https://www.irishtimes.com/business/financial-services/burning-bondholders-could-have-saved-the-state-9bn-1.2513067 Too much moral hazard! fisho September 24, 2018 at 11:00 am Bit like a junkie wanting the cops to bust his low life thieving dealer only to discover that he is still a junkie. [email protected]! now what? fitzroyMEMBER September 24, 2018 at 11:16 am Anything you can get your hands on?…. Selling kisses to sailors?? https://www.independent.ie/business/irish/finally-were-burning-the-bondholders-as-they-pay-to-loan-money-35929608.html fisho September 24, 2018 at 12:53 pm Just to be clear, I believe Sydney would adjust but it wouldn’t be with a quick sharp reset accompanied by labour reallocation to real value growth industries, That’s not waht will happen because these “real value” industries just don’t exist anymore. Over the decade frame 1992 through 2002 we saw the Sydney job market discovering it’s real external value, however it was all quickly replaced by the Mining boom forever followed by the credit boom and housing boom. It took a decade to just begin to see the growth of a skilled human capital centered growth engine. And it’s worth pointing out that it was only a decade prior (early 80’s) that the life was kinda stomped out of Sydney Manufacturing, so there were still a lot of residual manufacturing skills within the labour pool. It’s a very different situation today, it’s not simply a matter of resurrecting the near dead, it will be a case of building these valued industries of the future from scratch. For those that have never done it, think for just a moment about: what’s required to build a $1Bpa gross revenue business from nothing? Try doing the sums assuming 10 years to go from $0 revenue to $1B What cash needs to be maintained year on year to fund your growth? What margins are necessary to make this growth even possible? Is it even imaginable that you can achieve this growth while simultaneously training new staff? Ok so lets see what number sequences get us there year 0 = $0 1=$5M 2=$10M 3= $20M 4=$40M 5=$80M 6=$160M 7=$320M 8=$640M 9=$1280M wow it only took a decade to grow a significant business IF our revenue doubled every year, year in year out for 10 years straight. Now try to figure out how much money is typically required to design/develop the products necessary to generate $100M pa revenue? (what percentage of last years revenue was that (greater than 100% you say….hammm how does that work, especially within an economy that’s going through it’s own liquidity crises?) How do you fund this growth, assuming that you have the right product, and the right pool of skilled labour? Bottom line: is Catch 22 ….you’re economy can’t actually make this transition while in a recession. fitzroyMEMBER September 24, 2018 at 6:18 pm You make far too much sense. Burn the bond holders!!! flawse September 25, 2018 at 6:16 am Well said fisho – just two add two things (which I know you realise) There are two further problems 1. The right pool of skilled labour. The structure of our education system is completely stuffed. Because of the structure of the economy now, and idiocy in educational bureaucracies and teachers unions, we now have an education system that is facing 180 degrees from anything productive. It’s taken three generations to get to here and it will take longer than three generations to get back. 2. Trying to raise the cash which you rightly emphasise. We have been running CAD’s for 60 years. This is going to come with a collapse in the currency (odds are). It’s almost guaranteed that most of your technological machinery (and the cars utes tools etc) necessary to construct run this business is going to be imported so that is now going to be very costly. Generally speaking we are like Gary Larson’s ‘car load of idiots’ driving straight into a brick wall. Al September 24, 2018 at 9:43 am Initially thought this was a bit over the top based on the title, but watched it and it was very educational. A very important message for general public to understand – tax payer funded bank bailouts bail out creditors (London, Wall St, Zurich, Frankfurt, etc.) and leave the country. To get this message across, similar to how most people now undestand ‘first home owner grant’ was really a ‘vendor boost’, this needs a good name for what it really is. As it definitelly not only bailing ‘OUR’ banks out. What is even more shocking these credit counterparties have been though private debt bombs and housing bubbles before and clearly understand the risks, but still insist on sticking AAA rating to our banks. So there is only one conclusion to make – all this triple AAA rating is, is our tax payer capacity to bail out London and Wall St. They are expecting it and counting on it. flawse September 24, 2018 at 10:28 am We have massive external debts that have to be paid – like $1Trillion ($1,000,000,000,000) That’s going to be a lot of printed A$ in the hands of people who don’t want them any more. Best solution will be to just sell the whole country to the Chinese who still have about USD3T (as near as I last read) EVINMEMBER September 24, 2018 at 2:42 pm Worth looking at the research done into who these unsecured creditors were… commentary at the time focussed on the fact that most (not all) of the major banks had gotten out of the unsecured debt and had sold at a discount to a variety of groups who were willing to make a punt on the Irish government bailling out secured and unsecured alike……the message that was really hard to swallow was that the billions being pulled out of education, health, aged care etc was being channeled into windfall gains for hedgies and speculators in London, Frankfurt, Zurich and NY…..who had in many cases just bought the unsecured debt at massive discounts. [email protected] September 24, 2018 at 10:07 am Solar, Perth dropped a L O T M O R E than 12%! Lot of their mansions and houses are listed for less than 50% since their boom. Darwin is even worse and other mining towns like Morandah ere virtually unsaleable. Hope you’re not in debt or you will learn the same way as all the other speculator/masterbators [email protected] September 24, 2018 at 10:44 am https://www.mortgagebusiness.com.au/breaking-news/12681-analyst-warns-of-housing-market-wildcards Solar September 24, 2018 at 10:47 am We are taking about the median price across Perth. Not individual suburbs or houses! What kind of retard are you?? From the latest ABS 6416.0 – Median Price of Established House Transfers (Unstratified) – Perth Peak- $552k Jun 18 – $500k [email protected] September 24, 2018 at 11:00 am https://www.msn.com/en-au/money/homeandproperty/units-are-now-selling-for-a-loss-at-twice-the-rate-of-houses-and-it-may-indicate-investors-are-willing-to-take-the-hit/ar-BBNzWVi#image=4 Solar, there ain’t too much sunshine in your feeble brain in you believe Perth is only down 10%. Solar September 24, 2018 at 11:05 am YouTube videos and random brea porn articles are not a credible substitute than the ABS or Corelogic figures. Keep embarrassing yourself, tard Solar September 24, 2018 at 11:07 am YouTube videos and random bear porn articles are not a credible substitute for the ABS or Corelogic figures. Keep embarrassing yourself, tard [email protected] September 24, 2018 at 11:12 am Solar, I’m writing this slowly cause you can’t read too good; https://thewest.com.au/news/perth/real-estate-house-sales-hit-new-low-in-perth-property-market-ng-b88891906z Solar September 24, 2018 at 11:18 am Lol Can you read this, tard? YouTube videos and random bear porn articles are not a credible substitute for the ABS or Corelogic figures. TimMEMBER September 24, 2018 at 3:05 pm “You can get a family home for less than $200,000 in certain areas, under certain circumstance, which is remarkable,” he said. “Don’t be frightened of this market, this is a really good opportunity to buy”. Bahaha. Yeah, BEARPORNZ FROM THE WEST STRAYAN. You don’t have to try so hard Solar. Chin up bro, Perth is going to boom again, and soon. LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLLOLOLOLOLOLO Solar September 24, 2018 at 5:26 pm Once you understand the significance and meaning of “median house price” come back and post something semi intelligent. Tards [email protected] September 24, 2018 at 12:08 pm https://thewest.com.au/business/housing-market/perth-leads-national-housing-market-into-freefall-ng-b88914143z Solar September 24, 2018 at 12:14 pm http://www.abs.gov.au/AUSSTATS/[email protected]/allprimarymainfeatures/510D8915596EEFE9CA257F1B001B0107?opendocument rj2k000MEMBER September 24, 2018 at 1:12 pm But wait, there’s more 😉 60 Minutes “Extra” Housing Segment http://digitalfinanceanalytics.com/blog/60-minutes-extra-housing-segment/ https://www.youtube.com/watch?v=T3ZrjqCQRog [email protected] September 24, 2018 at 1:41 pm She’ll be swees as, bro!…………..HE HE HE HE HE HE [email protected] September 24, 2018 at 2:11 pm Problems, what problems? https://www.macrobusiness.com.au/2018/09/ubs-bear-slashes-mortgage-house-price-outlook/ mikef179MEMBER September 24, 2018 at 2:50 pm I liked the Irsh TV Programme where they were saying that, paraphrasing, “economists agree, it will be a soft landing”. flawse September 25, 2018 at 6:18 am 🙂 Well said! alansmithy September 24, 2018 at 4:01 pm @36:20 “people die, women get bashed and children go hungry” I wonder if all these things would really happen if we choose not to bail out the banks. Lets just not bail out the banks and see what happens. I doubt any of those things will happen. Didnt Iceland not bail out the banks? what happened to them? JohnR September 24, 2018 at 6:13 pm They flourished and made the World Cup. footsore September 24, 2018 at 6:34 pm That’s what happens when you introduce austerity. Poverty is a terrible thing to suffer and it makes people do terrible things. If the banks get bailed out, and the populace is still suffering you get the double whammy of an increase in poverty and anger at those who were assisted from those who were just tossed aside. For a community to be civil the members need shelter, food, opportunity and to not see others being given the biggest free ride in history and then told that it is for their good. flawse September 25, 2018 at 6:30 am The so-called ‘austerity’ is not the problem. The problem is the previous mis-allocation and the PREVIOUS reward of those who were non-productive parasites. The return to a productive economy requires major re-allocation of resources. Much of what is now paid for would be irrelevant. When this hits, those who have the power will exploit their position to maintain their unsustainable income and lifestyle. This WILL include politicians, public servants (you can already see this in the relative wage gains), Bankers, powerful unions (teachers, waterside, CFMEU et al ), big business, Lawyers, doctors. Those who really get screwed are ordinary people – pensioners, self-employed, small business and their employees etc. The ‘Left’ as it is now constituted, despite their loud proclamations on ‘fair’ don’t give a RA about such people. Of course, neither do those exercising the power. ‘Austerity’ isn’t a choice. Austerity is the cost of what’s gone on beforehand. It’s a question of who bears the cost! footsore September 25, 2018 at 7:50 am I politely disagree, flawse. Austerity is a problem separate to what has gone beforehand. It is a choice made as a response to some thing and it is not the only option available. Choosing to do that kills what little is left of the economy. However they got to that position beforehand is irrelevant because austerity will always lead to the same outcome. Unless there is a way for an economy to grow when internal demand has collapsed, exports aren’t happening and the government stops spending. alansmithy October 1, 2018 at 11:53 pm I thought austerity is what happens when you bail out the banks at the expense of the people…So the people have to pay by the cutting of social services etc…so the bailing out of the banks is what causes the “people” to “die, women get bashed and children go hungry”..the guy in the video said the complete opposite. He said that if we DONT bail out the banks people will die and women get bashed. I thought it was the other way round….bailing out of the banks is what leads to austerity which leads to the cutting of social services etc which leads to the poor getting poorer leading to e.g. children starving, women getting bashed etc… Maybe I have it wrong? [email protected] September 24, 2018 at 5:01 pm Westpac recalling risky loans today’s AFR -1 month to find a new lender. Everything’s honky dory, ah, Solar eclipse of sanity? almagMEMBER September 24, 2018 at 9:45 pm The reason the ECB threat worked is because Ireland doesn’t haveits own currency. The better case to look at is Iceland. It’s better to let the bond holders lose money like Iceland did. Mediocritas September 26, 2018 at 1:10 pm If we’re prepared to accept short, sharp booms, then we must also be prepared to accept short, sharp busts. To do otherwise creates an asymmetry that has a habit of depending on external inputs in order to persist (international bailouts). Beyond an onerous interest burden, these inputs typically come with political strings attached, resulting in a loss of sovereignty in the receiver nation as its government is forced to implement policies pushed by external parties as a condition of bailout. Over and over again in history, this has been the case, from developing nations being “rescued” by the IMF and World Bank, through to EU nations being “rescued” by the ECB. It’s unlikely that our leaders will choose the Iceland route, even though we could easily do so as we’re in control of our own currency. Instead, I expect that Australia will end up even more under the control of the international neoliberal consensus as we run up an enormous level of government debt and put taxpayers on the hook to protect the wealth of international speculators with exposure to Australian assets.