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The Trouble With Buyers' Strikes Is...

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The much-touted Australian buyers' strike:

http://www.smh.com.au/business/house-buyers-strike-a-nogo-says-getup-20110506-1eazw.html

FYI calling something a "fizzer" over here doesn't mean what you might think it means at first glance.

House buyers' strike a no-go, says GetUp!

Chris Zappone

May 6, 2011 - 2:11PM

The buyers' strike of Australian property sought by a tax reform group last month has proven to be a fizzer, precisely because some people don't like the idea of lower house prices.

Online activist group GetUp! decided not to pursue a strike of home purchases to protest at the lack of affordability in the housing market because its own members did not like the idea.

"While the issue of housing affordability is clearly an issue that resonates with plenty of people, GetUp! members don't support a boycott campaign," wrote Kelsey Cooke, online community co-ordinator for GetUp! late last week.

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"Over the course of the last couple of weeks, we surveyed a random segment of our membership to gauge support - only 10 per cent strongly support the campaign, and more than half the surveyed members opposed this campaign altogether."

But with home prices wilting, auction clearance rates sinking and a wave of housing stock flooding the market, a strike on home purchases would make placards and bullhorns at Saturday morning auctions irrelevant, one analyst said.

In the year to April, the stock of houses and units coming on the market has jumped 69 per cent to 367,500 properties, according to property analysis group SQM Research. Over the same period, the flood of stock available in Melbourne has soared 105 per cent to 43,500. In Sydney, the number rose a more moderate 54 per cent to 33,400.

With those kinds of numbers, SQM managing director Louis Christopher said a buyers' strike was unnecessary.

"There is definitely a decline occurring," he said, blaming 2010's four interest rates rises which have pushed up the average rate for a home loan to about 7 per cent.

"That's too much for many home buyers and would-be home buyers," Mr Christopher said. "The reason 7 per cent is too much is because of our highly geared market."

RP Data Rismark said the national city median dwelling price was $455,000 in March.

First home buyers have stepped back since the end of the boost to the First Home Owners Grant in 2010. The share of first-time home buyers had dropped to 14.9 per cent in February, the lowest ratio since June 2004, and just half of the peak of 28.5 per cent in May 2009 when the federal government offered incentives to draw in first-time buyers.

National home prices on a quarterly basis sank 2.1 per cent in the March quarter - the biggest decline since RP Data Rismark began collecting the data in June 1999.

Mr Christopher predicts the market will fall 5 to 10 per cent over the next year and a half, on the official Australian Bureau of Statistics measure.

By some measures, auction clearance rates have fallen into the low 50 per cent range in Melbourne and Sydney this year, well down from the highs of 80 per cent last year, during a period of historically low interest rates and the after-effects of the government's First Home Owner Grant boost brought in during the financial crisis.

To date, Melbourne’s auction listings for May have averaged 683 a weekend, up 24 per cent on the 20-year average for the month, the Real Estate Institute of Victoria said.

"Due to the high volume of auctions and cautious market there will be a lot of negotiating when vendors' price expectations are not realised, as has been the case with two out of five auctions this year," REIV spokesman Robert Larocca said.

Lending for housing increased at 6.6 per cent in the year to March, the smallest gain in the history of the RBA data series, which began in 1976, according to data released by the Reserve Bank last week.

The home buyers' strike, the brainchild of Prosper Australia, a little-known group that supports tax reform on land, garnered 7000 votes on the GetUp! campaign forum, rocketing to the top of the list of proposed issues after it was introduced in mid-March.

GetUp!'s decision not to pursue the campaign was unsurprising, Prosper's David Collyer said.

"The buyers' strike is a call for direct economic action; GetUp! is a lobbying/political campaigning site," he said.

"They rarely lobby for economic change; [they] instead push for issues that struggle for funding. One day it will be recognised that economics is central to all such issues."

Read more: http://www.smh.com.au/business/house-buyers-strike-a-nogo-says-getup-20110506-1eazw.html#ixzz1LYixNs85

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The strike is doing quite well on it's own isn't it? Don't they have a Facebook page or something with thousands of members. And Aussie property looks to have tipped over the edge too, it might even be working?

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This makes me laugh. From a quick google, these appear to be a bunch of middle class champagne socialists, presumably many of whom own their own houses.

OF COURSE MOST OF THEM DON'T WANT PRICES TO FALL!!!

I would say articles like this do prove one thing - the australian buyer's strike must have got a few members of the establishment rattled. I hope the UK version can have the same impact.

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This makes me laugh. From a quick google, these appear to be a bunch of middle class champagne socialists, presumably many of whom own their own houses.

OF COURSE MOST OF THEM DON'T WANT PRICES TO FALL!!!

I would say articles like this do prove one thing - the australian buyer's strike must have got a few members of the establishment rattled. I hope the UK version can have the same impact.

Uk strike has been countering along for months with no discernible effect.

Prices will be driven by macro factors as they always have been.

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Uk strike has been countering along for months with no discernible effect.

Prices will be driven by macro factors as they always have been.

Depends how you define 'discernible effect' I suppose?

Prices lower than when it started?

Fewer transactions than when it started?

Of course then we can get into causality and as I'm sure you appreciate, neither of us can know how much if any of an impact it has had. But to confidently proclaim it has had no impact just makes you appear ignorant tbh.

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There was a debate about this when the Facebook HBS Group was first set up - some people mistakenly interpreted it at a very concrete level in terms of it being about getting people to withdraw from the market as buyers, in the same way that workers strike. That is only part of the story. It is also very much about drawing people's attention to the fact that there is, in effect, a very large Home Buyers Strike in action now - property sales transactions are down by 50% or so. This then gives an opportunity to make people aware of alternative understandings, analyses, and discourses about the property market and houses prices that counter the VI discourses of house prices only ever go up, never crash, that rising and booming house prices is good news, etc.

You could say HPC provides this but it has, over the years remained pretty much a talking shop. The Facebook HBS Group, as I understand it, has a focus about spreading the word. ...... and I always go on about using Newspaper wbsite Raders Comments facilities fopr doing this as it allows us to reach a very large audience across the country at no cost, and takes no more time and effort (or resources) than posting comments here on HPC.

When this was first debated on HPC some argued that there is no point in having a more proactive group as the market is determined by economic fundamentals. I responded by pointing out that the view that markets, including the property market, are solely determined by economic fundamentals is about 30 years out of date in regards economic theory and empirical evidence. It is now widely accepted that the discourse environment play a crucial role in determining the movement and behaviour of markets. Economic fundamentals and the discourse environments interact in complex ways, of course. Whilst small groups can't really hope to target and influence economic fundamentals directly they can effectively target and have a significant impact on the markets discourse environments. See the following, very old thread I started on discourse and action for a brief explanation and pointers to references for more in-depth material:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=30244

There are very good grounds (theoretical and empirical) for arguing that the HBS Group can/could have a significant impact. on the discourse environment. The VI's have certainly made good use of dominating the discourse environment - but we can challenge that.

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  • 277 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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