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Australia 75% drops

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In my experience markets always crash quicker than they run up.

On the Ozzie thread,some of the posters have been talking about the work in these mining towns drying up some time ago alongside the salaries for mining work dropping.

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Another win for Steve Keen.

Quote

Australia headed for recession next year, Professor Steve Keen says

By The Business presenter Elysse Morgan

Updated 1 Aug 2016, 4:06am

Australia's credit binge will lead to a bust as soon as next year, with house prices to fall between 40 and 70 per cent and unemployment to rise sharply, Professor Steve Keen says.

The professor famously lost a bet when he predicted a catastrophic crash in Australian house prices following the GFC and had to walk from Canberra to Mount Kosciusko as a result.

But he says, this time, he is right and does not have his hiking boots at the ready.

"We have borrowed ourselves so much to the hilt that we are now dependent on that continuing to rise over time and it simply won't," he told the ABC's The Business.

Many believe the Reserve Bank has been a steady guiding hand to the Australian economy in the years since the GFC, but Professor Keen believes it has guided the economy "straight toward the shoals" by encouraging households to borrow with low rates which has led to asset bubbles.

"They don't know what they're doing," he said.

"Our debt level according to the Bank of International Settlements, private debt level, has gone from 150 per cent of GDP to 210 per cent of GDP."

He argued that means a large part of the growth that Australia has enjoyed since the GFC, while many other countries plunged into recession, has been fuelled by a 60 per cent rise in household debt.

"Ireland did the same thing when they called themselves the Celtic Tiger and they don't call themselves that anymore," he said.

"Spain was doing the same thing during its housing bubble and we've replicated the same mistakes.

http://www.abc.net.au/news/2016-07-29/australia-headed-for-recession-next-year,-professor-keen-says/7674154

 

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Similar thing happening in the USA, a lot of the house price growth was in the oil belt region. 

China ain't building, commodities are tanking, I'm surprised it's taken this long to filter through into housing. 

The West is going to go to a situation in which people are envious of those who don't own houses.

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1 hour ago, thisisthisitmaybe said:

Similar thing happening in the USA, a lot of the house price growth was in the oil belt region. 

China ain't building, commodities are tanking, I'm surprised it's taken this long to filter through into housing. 

The West is going to go to a situation in which people are envious of those who don't own houses.

Wait until most of the city get replaced by an app.

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4 hours ago, thisisthisitmaybe said:

Similar thing happening in the USA, a lot of the house price growth was in the oil belt region. 

China ain't building, commodities are tanking, I'm surprised it's taken this long to filter through into housing. 

The West is going to go to a situation in which people are envious of those who don't own houses.

Surely you mean mortgaged?

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6 hours ago, Sancho Panza said:

In my experience markets always crash quicker than they run up.

On the Ozzie thread,some of the posters have been talking about the work in these mining towns drying up some time ago alongside the salaries for mining work dropping.

Absolutely. Its called going long and short for a reason ;)

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I quite like the idea of the new CANZUK plan (www.canzuk.co.uk) for free trade and freedom of movement between the UK, Canada, New Zealand and Australia – we have common legal systems, parliamentary arrangements and common ties as well as a common language. Its already backed by some of the candidates for the Conservative leadership in Canada and by Tony Abbott – former Australian PM.

 

Sounds like options for cheaper housing too!

 

We stress about EU freedom of movement but forget there are more British citizens living and working in Australia than in the whole of the EU combined even after 43 years of EU membership.

 We have reciprocal health care for tourism purposes with NZ and Australia – why not go the whole hog and have an EU style deal.

Probably won’t happen (unless Pauline Hanson becomes Aussie PM!) – but wouldn’t it be nice to have freedom of movement with English speaking nations Brits actually want to move to rather than Romania and Latvia. I am sure young Aussies, Kiwis and Canucks would enjoy freedom of movement to work in London as well?

Would suit me as well – as I have dual Irish/UK nationality so would get the best of both worlds!

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A few years ago, when mining was still booming, a taxi driver in Darwin told me and Mr B that the rent for his 2 bed flat was more than he'd have to pay for similar in Sydney or Melbourne. 

We later checked with an Aussie friend in Melbourne and he said it was spot on. And that was when Melbourne prices were sky high.  

 

Edited by Mrs Bear

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3 hours ago, thisisthisitmaybe said:

Keen is right on about private debt. MORTGAGE = DEBT.

article-2724894-2086E2BA00000578-762_634

No brainer really. If IRs are 15% you can borrow less. Not rocket science. I expect TPTB know that too..

Notice how both have plateaued. Hpi equals low IRs and loose money.

Edited by GreenDevil

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29 minutes ago, GreenDevil said:

No brainer really. If IRs are 15% you can borrow less. Not rocket science. I expect TPTB know that too..

The problem they've created is an every tighten noose of debt. As time passes every breath the economy takes becomes harder. With zirp/QE as they are the economy is taking it last few kicks of activity. Sentiment will evaporate just as as the bright sunlight of reality bleaches away the morning mist then its fiery heat can go to work on those most exposed.

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16 hours ago, MARTINX9 said:

I quite like the idea of the new CANZUK plan (www.canzuk.co.uk) for free trade and freedom of movement between the UK, Canada, New Zealand and Australia – we have common legal systems, parliamentary arrangements and common ties as well as a common language. Its already backed by some of the candidates for the Conservative leadership in Canada and by Tony Abbott – former Australian PM.

 

 

 

Sounds like options for cheaper housing too!

 

 

 

We stress about EU freedom of movement but forget there are more British citizens living and working in Australia than in the whole of the EU combined even after 43 years of EU membership.

 

 We have reciprocal health care for tourism purposes with NZ and Australia – why not go the whole hog and have an EU style deal.

 

Probably won’t happen (unless Pauline Hanson becomes Aussie PM!) – but wouldn’t it be nice to have freedom of movement with English speaking nations Brits actually want to move to rather than Romania and Latvia. I am sure young Aussies, Kiwis and Canucks would enjoy freedom of movement to work in London as well?

 

Would suit me as well – as I have dual Irish/UK nationality so would get the best of both worlds!

 

Anything backed by Abbot must be wrong.  He is an extreme right wing idealogue who has no interest in you getting affordable housing.  He is very much on the nose in Australia

Edited by steve99

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12 hours ago, GreenDevil said:

Why cant we have a bit of that 75%? 

 

We cant either in Australias cities.  Prices are going up by the week with an extreme buying frenzy on all fronts.  BTL speculators are running riot UKx100 on steroids.  In Melbourne we also have 2000 people a week immigration with the cities population expanding by 1Million in the last 12 years.  Insane. Which is why my wifey and I are moving back to Blighty regardless of its faults. We have worked out that to buy a house with the amenity we want will be 1/3 the price in GDP terms than the same in Melbourne.  (not in the SE corner of course but not in the boondocks either)

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28 minutes ago, steve99 said:

We cant either in Australias cities.  Prices are going up by the week with an extreme buying frenzy on all fronts.  BTL speculators are running riot UKx100 on steroids.  In Melbourne we also have 2000 people a week immigration with the cities population expanding by 1Million in the last 12 years.  Insane. Which is why my wifey and I are moving back to Blighty regardless of its faults. We have worked out that to buy a house with the amenity we want will be 1/3 the price in GDP terms than the same in Melbourne.  (not in the SE corner of course but not in the boondocks either)

Are you leaving Oz because of HPI or high levels of immigration?

If only the UK had 1 millions immigrants in the last 12 years, rather than 4millions!

Oz and Canada sound like the biggest housing bubbles in human history!

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1 hour ago, thisisthisitmaybe said:

Are you leaving Oz because of HPI or high levels of immigration?

If only the UK had 1 millions immigrants in the last 12 years, rather than 4millions!

Oz and Canada sound like the biggest housing bubbles in human history!

It really is ethnic cleansing on an unprecedented scale, the UK and Western Europe immigration. People quote that around 300k people a year come here, and about the same number leave. About half of people leaving are Brits, so natives are effectively being replaced to the tune of 500k a year.

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The free movement between wealthy Commonwealth countries does seem to be gaining momentum. As someone who spends up to six months in the Antipodes every year, I'd certainly welcome it. Heck, I might even do a stint in a Melbourne bar earning $25 plus an hour.

However, I long gave up the idea of settling in my beloved NZ and one of the main reasons was the house prices. Hard to believe, but people downunder are even more property obsessed than Brits. Half of Auckland has been bought up by Chinese funny money too, so you have to battle with investors from all over.

If I were to settle long term anywhere I'd probably want to own a place. This is not going to happen in any English speaking country for me.

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5 minutes ago, ExiledMatty said:

The free movement between wealthy Commonwealth countries does seem to be gaining momentum. As someone who spends up to six months in the Antipodes every year, I'd certainly welcome it. Heck, I might even do a stint in a Melbourne bar earning $25 plus an hour.

However, I long gave up the idea of settling in my beloved NZ and one of the main reasons was the house prices. Hard to believe, but people downunder are even more property obsessed than Brits. Half of Auckland has been bought up by Chinese funny money too, so you have to battle with investors from all over.

If I were to settle long term anywhere I'd probably want to own a place. This is not going to happen in any English speaking country for me.

Some bankers, same establishment, same media mogul, same mind control.

 

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3 hours ago, ExiledMatty said:

The free movement between wealthy Commonwealth countries does seem to be gaining momentum. As someone who spends up to six months in the Antipodes every year, I'd certainly welcome it. Heck, I might even do a stint in a Melbourne bar earning $25 plus an hour.

However, I long gave up the idea of settling in my beloved NZ and one of the main reasons was the house prices. Hard to believe, but people downunder are even more property obsessed than Brits. Half of Auckland has been bought up by Chinese funny money too, so you have to battle with investors from all over.

If I were to settle long term anywhere I'd probably want to own a place. This is not going to happen in any English speaking country for me.

I'd happily settle in Dunedin if I could convince the wife to stand the cold.  No chinese money down there.

http://www.realestate.co.nz/2734746

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4 hours ago, ExiledMatty said:

The free movement between wealthy Commonwealth countries does seem to be gaining momentum. As someone who spends up to six months in the Antipodes every year, I'd certainly welcome it. Heck, I might even do a stint in a Melbourne bar earning $25 plus an hour.

However, I long gave up the idea of settling in my beloved NZ and one of the main reasons was the house prices. Hard to believe, but people downunder are even more property obsessed than Brits. Half of Auckland has been bought up by Chinese funny money too, so you have to battle with investors from all over.

If I were to settle long term anywhere I'd probably want to own a place. This is not going to happen in any English speaking country for me.

Rural Ireland is pretty cheap - so many empty homes on the market for years. Maybe it's not as warm as Australia but you do get close to free healthcare as a permanent resident and it's probably the one nation Brits will definitely still have full freedom of movement with post Brexit. And they do also drive on the correct side of the road! And it's only one hour away.

If CANZUK comes off - even better - but I wouldn't bank on it.

Edited by MARTINX9

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