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Nightmare Vision Of Impending Property Crash

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http://www.theage.com.au/money/investing/nightmare-vision-of-impending--property-crash-20140213-32kl2.html

American economist and demographer Harry S Dent jnr says there is a bubble in Australian house prices and we should brace ourselves for a spectacular collapse starting this year.

Have US experts missed the point about Australian property?

For more on Harry S Dent jnr's property predictions read David Potts in Weekend Money, with the Sun-Herald and Sunday Age.

Dent is in Australia to speak at seminars and to promote his book, “The Demographic Cliff”. He says that house prices are unsustainable and will fall by at least 27 per cent in Sydney and Melbourne over the next several years.

Your real estate is so high it has to come down.

Dent told Money in a video interview that the trigger for the collapse of Australia's house price bubble will be the bursting of the Chinese house bubble.

Read more: http://www.theage.com.au/money/investing/nightmare-vision-of-impending--property-crash-20140213-32kl2.html#ixzz2tJG2OI68

Dent says Sydney and Melbourne property markets are being held up by foreign buyers and that cannot last forever.

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“China has a bubble [in house prices] that makes Australia's look like nothing,” he says.

“I think China's bubble is going to burst and I cannot see any way that Australian property prices can keep going up," he says.

If his forecasts do not come true it will be because governments “wave the magic wand and kick the can down the road again”.

Read more: http://www.theage.com.au/money/investing/nightmare-vision-of-impending--property-crash-20140213-32kl2.html#ixzz2tJG7GLAX

The Reserve Bank of Australia and most Australian economists say there is no bubble in Australian house prices. But Dent is sticking to his guns.

“Nobody in real estate development or government can afford to say that 'we have got a bubble',” he says. “They will always say it is not a bubble”.

But what of our special factors - we are a very large country with a unique economy and most of the population concentrated in a few conurbations - don't they count against the general rules for bubbles and their ending. Dent says he has studied every bubble in history and every time a bubble comes whether it is in tulip bulbs, gold, stocks or housing they are always described by those on the inside as being different, and unlikely to burst.

“I am saying that China has the biggest [bubble] and that is going to trigger [the bursting of] your bubble. Your real estate is so high it has to come down in the next few years."

Read more: http://www.theage.com.au/money/investing/nightmare-vision-of-impending--property-crash-20140213-32kl2.html#ixzz2tJGFsrPp

There is a video in the link.

Predicts bubble will burst later this year.

Edited by cool_hand

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Well, as far as land is concerned we all know Australia is the one country that is severely lacking in that asset /sarcasm

Sarcasm understood, but how much usable building land with reliable water etc. does it have available? I honestly don't know the answer to this btw, I'm hoping someone here might.

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Sarcasm understood, but how much usable building land with reliable water etc. does it have available? I honestly don't know the answer to this btw, I'm hoping someone here might.

I'd be interested to know too. Google earth displays a lot of green, which is the limit to my knowledge.

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The presenters looked like shock and awe.

But of course it's different this time.

Harry has a get out clause:

If his forecasts do not come true it will be because governments “wave the magic wand and kick the can down the road again”.

Well guess what Harry, that's exactly what they've been doing here for the past 5 years and partying like it's 1999.

And they will keep on doing it, whatever the social costs and economic consequences.

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But what of our special factors - we are a very large country with a unique economy and most of the population concentrated in a few conurbations - don't they count against the general rules for bubbles and their ending. Dent says he has studied every bubble in history and every time a bubble comes whether it is in tulip bulbs, gold, stocks or housing they are always described by those on the inside as being different, and unlikely to burst.

"I am saying that China has the biggest [bubble] and that is going to trigger [the bursting of] your bubble. Your real estate is so high it has to come down in the next few years."

Another trick is for VIs to deny the bubble completely.

Not a nightmare to me. The nightmare is younger people taking on ever more debt, and older VIs smiling back and saying that's just the normal way of things.

Was just re-reading an old paper (mid 90s) about Japan real-estate. Sounds similar to what I've read about the young in Australia cities, having to buy miles and miles out if they really want to own, where prices are lower.

New entrants into the job market, for who housing is priced out of reach, waste many hours commuting in and out of the remote suburbs, or live in tiny rooms that hardly befit the image of the Japanese as the richest people on earth.

Kiting profits is 'fun' and easy whilst prices are rising. Yet real estate prices in Japan cannot continue rising in real terms. Even after a major market decline, a great part of its value is artificial. Any adjustment that releases supply could send prices plunging further. They could fall 90 percent and still be high by world standards.

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Sarcasm understood, but how much usable building land with reliable water etc. does it have available? I honestly don't know the answer to this btw, I'm hoping someone here might.

768,685 km2

Don't ask me what that is in relation to football pitches or Wales, but it's 4.5x the size of the UK's habitable area.

http://www.human.org.au/wp-content/uploads/2009/06/werefull_final.pdf

Edited by Eddie_George

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Was just re-reading an old paper (mid 90s) about Japan real-estate. Sounds similar to what I've read about the young in Australia cities, having to buy miles and miles out if they really want to own, where prices are lower.

I would be interested in reading that if you can upload a scan or give us a link.

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I would be interested in reading that if you can upload a scan or give us a link.

It's in a book, so it would have to be a scan of the two pages. I'll see if I can work my scanner and pm you a link later.

Although it's old info now, Japanese young still facing painfully high housing costs, and younger people world over, in most areas that have desirability for jobs, really being challenged with house prices. Older property-interests wanting them to take on excessive debt to buy, or rent from the other property-interests.

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It's one reason I didn't stay in Australia; it has a worse bubble than the UK.

Land is actually limited because of issues of water, etc., but land is carefully released for development by the states to limit the supply. 20, 30 years ago what where single blocks for family homes are subdivided 2,3 or 4 times or more. Australians are paying more and more for smaller and smaller homes.

On top of that you have something of a cult of property - and the amateur landlord - a bit like the UK. Property becomes seen to have an almost magical quality, laden with 'value'.

I don't have figures here - no time to search - but property which was cheap as chips in the 80's is now enough for people to retire off. Oz population is always growing, there will always be a banal 'supply and demand' argument to prop up these prices, and lure the gullible, but to me it looks like something is amiss.

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It's one reason I didn't stay in Australia; it has a worse bubble than the UK.

Land is actually limited because of issues of water, etc., but land is carefully released for development by the states to limit the supply. 20, 30 years ago what where single blocks for family homes are subdivided 2,3 or 4 times or more. Australians are paying more and more for smaller and smaller homes.

On top of that you have something of a cult of property - and the amateur landlord - a bit like the UK. Property becomes seen to have an almost magical quality, laden with 'value'.

I don't have figures here - no time to search - but property which was cheap as chips in the 80's is now enough for people to retire off. Oz population is always growing, there will always be a banal 'supply and demand' argument to prop up these prices, and lure the gullible, but to me it looks like something is amiss.

A home from home then.

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Sarcasm understood, but how much usable building land with reliable water etc. does it have available? I honestly don't know the answer to this btw, I'm hoping someone here might.

A lot of it isn`t useable due to problems getting water supply as far as I am led to believe, basically the building and infrastructure already there is all they will probably get?

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A lot of it isn`t useable due to problems getting water supply as far as I am led to believe, basically the building and infrastructure already there is all they will probably get?

Water Hasn't stopped the Egyptians building thousands of luxury hotels in the red seas area Sharm-el-Sheik.

https://maps.google.com/maps?q=sharm+el+sheikh&ll=27.911002,34.330044&spn=0.029504,0.066047&oe=utf-8&client=firefox-a&hnear=Sharm+el-Sheikh,+Qesm+Sharm+Ash+Sheikh,+South+Sinai,+Egypt&t=h&z=15

  • See any rivers?

  • See any rain?

  • See all the palm trees?

  • See the swimming pools?

If you look at that satellite image to the north you will also see agriculture.

All made possible through the age old technology of desalinization plants. If you live in OZ then you can even get solar powered ones.

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I have a cunning plan to build a sea canal from Adelaide to Darwin with a new residential development in the centre of the land, consisting of a development of deatached luxury housing units along radiating "fronds" from the main canal, to be be named "the Octopus". Fresh water will be provided by desalination of the sea water in simple open air evaporation tanks in the summer sun. I already have the backing of the Sheik of Dubai and David Beckaham, but there may be a limited number of opportunites for a select group of investors to participate. No previous investment experience necessary.

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It's one reason I didn't stay in Australia; it has a worse bubble than the UK.

Land is actually limited because of issues of water, etc., but land is carefully released for development by the states to limit the supply. 20, 30 years ago what where single blocks for family homes are subdivided 2,3 or 4 times or more. Australians are paying more and more for smaller and smaller homes.

On top of that you have something of a cult of property - and the amateur landlord - a bit like the UK. Property becomes seen to have an almost magical quality, laden with 'value'.

I don't have figures here - no time to search - but property which was cheap as chips in the 80's is now enough for people to retire off. Oz population is always growing, there will always be a banal 'supply and demand' argument to prop up these prices, and lure the gullible, but to me it looks like something is amiss.

Ah, that must be the infamous 'reno' my uncle keeps banging on about. He moved out to Melbourne eight years ago (it's been so unbearably hot this summer that he and his Ozzie wife are seriously considering selling up and coming here. Equally stupid bubble over there and a favourable exchange rate make it more attractive.

I told him there may not be much of the UK left to buy in that's not been washed away.

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If his forecasts do not come true it will be because governments “wave the magic wand and kick the can down the road again”.

........And they will keep on doing it, whatever the social costs and economic consequences.

Only until the public begin stringing them up from lamp posts........ :ph34r:

Edited by anonguest

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I was watching Come Dine with Me OZ the other day.

Assuming TV provides a broad cross section of Ozzy 30+ women .....

I can understand why most blokes would want to leave Oz. Very quickly.

The words: rough ar5e, man faced, crocodile-skinned trollopes sprang to mind.

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Water Hasn't stopped the Egyptians building thousands of luxury hotels in the red seas area Sharm-el-Sheik.

https://

maps.google.com/maps?q=sharm+el+sheikh&ll=27.911002,34.330044&spn=0.029504,0.066047&oe=utf-8&client=firefox-a&hnear=Sharm+el-Sheikh,+Qesm+Sharm+Ash+Sheikh,+South+Sinai,+Egypt&t=h&z=15

  • See any rivers?

  • See any rain?

  • See all the palm trees?

  • See the swimming pools?

If you look at that satellite image to the north you will also see agriculture.

All made possible through the age old technology of desalinization plants. If you live in OZ then you can even get solar powered ones.

Similarly in places all over the world. Don't some areas (admittedly tending to be with smallish populations) without much rainfall rely a lot on imported water using tankers/bottled water etc. Then there's piped water.

Edited by billybong

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Similarly in places all over the world. Don't some areas (admittedly tending to be with smallish populations) without much rainfall rely a lot on imported water using tankers/bottled water etc. Then there's piped water.

But in Oz they have not moved far into the interior away from the coasts, technology or not? I think the conditions are just too harsh.

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