An oldie but very relevant some of the US commentators will now be eating humble pie
obviously they dont double every 10 years in HollandfoundationMember@foundationJoin Date: 2005Post Count: 1,153
Nice article, thanks Bardon. I'm a big fan of Shiller. Have you seen this chart from his US real home price data?
Here's the same data with the equivalent Australian data (from Nigel Stapledon) overlaid:
Cool, huh? I got the chart from discussion here:
Believe me, Australia is not that different from Amsterdam. Or the US. What most people see as long term trends are actually not so long-term, going back only so far as the beginning of the recent unsustainably fast growth in debt:
Cheers, F. [cowboy2]
If you look at the middle chart you could put a straight line through the AUS peaks since 1950 (ignoring the bad part) and therefore would expect eaca peak to be higher in value, if you go for the duration (include the bad part) it does not paint a good picture and I should sell up now at the lofty heights we are in. Maybe its diffrent this time (ha ha) and since the 50's we have had not only debt growth, stronger population growth, growing disposbale incomes and a growing intention to invest in property for wealth creation ?. Yes this corelates with debt growth and there is now a question mark on this continuing in the short term. But already there are new players entering the finance markets in US and UK its early days I know and there is creaatinly a good chance that the prices of houses in oz might not go up but with the shortage of supply they shouldn't go down either ?
I watch the US closely and I cant make up my mind who is responsible for the current mess is it a case of irresponsible lending or irresponsible borrowing?
The guys doing the lending have made good money done the deal and the borrowwers were not under duress when the ysigned up is this wrong ? Sure they have packaged them up and on sold but again is that wrong? buyer beware including those buying sliced and diced debt packages.
Wtaching sky buisness last night and there is a US talkabck show and this lady came on she has a few properties she thought there combined income was going to be 210 a yer it was 160 and next year it will be 110 she is selling and dropping price to such an extent tht she will be in negative equity. Who is wrong here the lender or the borrower ?
Dont you just love the US. this is my current favourtite viewing
Also back the oz chart John Edwards of Residex the Koala Bear says the the average yield during that flat period in the early 1900's was 25 %, so if we dont get capital growth we will get income growth so its okay eh then right ?foundation wrote:Believe me, Australia is not that different from Amsterdam.
This statement I would disagree with.
I used to go to the "Dam" in my youth admittedly not to buy houses back then it was the most liberal country in Europe and had the least laws. The coffee shops were awesome and they had many products that were in high demand, night club scene was very good as well, the flight was about 30mins to get there we used to go there for long weekends it was also a good venue for bucks parties to.
The dutch soccer hooligans were also of a very high calibre and they were the only ones that could take on the pommie hooligans made excellent viewing and the build up was a major inspiration as well.
Ah the good old days.foundationMember@foundationJoin Date: 2005Post Count: 1,153
"John Edwards of Residex the Koala Bear says the the average yield during that flat period in the early 1900's was 25 %"
Well, John Edwards is a fool then. House prices from 1900 to 1930 averaged around 3x the average annual wage. 25% yield would put average rents at 75% of the average annual gross wage, which is clearly rubbish. Stapledon puts real rents only a fraction above today's level.
Cheers, F. [cowboy2]