a running list of warnings

The housing crash we had to have: A Gen Y perspective on the bubble

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by Matt Ellis So bubble mania has finally hit the mainstream. The housing bubble question has landed squarely at the feet of the Prime Minister and his treasurer, and only 10 to 15 years late… What a relief it is then to hear our fearless leaders assure us that there is no bubble, endless house […]

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Greybeard and the Hipsters

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It has been so long since the last recession 1990-91 that anyone who experienced it in business or the workforce is an old white guy – they are at best in their late 40’s and the beard sprouts grey. Let me give you some human insights, hipsters. Recession is like drought – a money drought. […]

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Melbourne and Sydney are in housing oversupply

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by Lindsay David If I were an Australian central banker, politician, bank economist, or even a negatively geared property investor, I’d be telling you Australia has a chronic housing shortage, which is responsible for our sky-high housing prices. But as an independent macro researcher, the data tells me otherwise. The best method to determine whether […]

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The rent ratchet mumble of the BBQ landlords

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Rents always go up – don’t they? The 1.2 million negatively geared Australian tax payers whose property expenses exceed their rental income think so. Their cunning plan is to patiently wait while the rent ratchet turns their negative cash flows positive and net income losses into profits. If house prices stabilise at current levels – […]

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Oh look! A baby swan!

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Australia desperately needs an alibi – a Black Swan event – to nominate as the tipping point that ended the land bubble. Government is rigid with fear about the political consequences of being blamed for the turn. Whoever presides over the shift will earn a page in history and make lifelong enemies of a swathe […]

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Selective US deflation

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Westwood Capital, a US finance firm, have a slide set out trying to pretend all is well with the US property market. I can’t recommend their thesis of US housing shortages and rent hikes, but perma-bulls might enjoy being stroked. Dross. Except slide 12 which breaks US BLS inflation components into Housing and All Items […]

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Soos and Egan – Australian Property Chart Pack

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  By Philip Soos and Paul D. Egan This chart pack presents the latest statistics for 2014, updating the dataset provided earlier last year. When adjusted for inflation and quality, housing prices have boomed nationwide since 1996, hitting a peak in 2010, before undergoing a slight fall and rise. On current trends, a new, higher […]

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Schroders: A-REITs will cost you

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Schroders has a paper out on Australian real estate investment trusts (REITs) A wolf in REIT’s clothing that should have every RE executive checking the polish on their shoes. David Wanis is as dour as a parson, predicting a ~1.6% return for each of the next three years. His assessment is based solely on the […]

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ASIC ignores reports of mortgage fraud by lenders

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  by Paul Egan & Philip Soos- Co-Author’s ‘Bubble Economics: Australian Land Speculation 1830 – 2013’   Exuberant household credit growth over the last twenty years has a sinister dimension: the likelihood of widespread predatory lending and bank fraud. Every developed country, including Australia, has laws to regulate and hopefully prevent predatory lending, defined as providing credit […]

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Negative Equity – Australia’s Wall of Pain

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Recent stress-testing of Australian banks by the Australian Prudential Regulation Authority showed they would survive, though their capital would be sorely tested. This analysis did not take into account an important feedback loop: the erasure of the equity of heavily mortgaged borrowers. The AFR reports an AMP study: AMP Capital’s head of credit markets Jeff […]

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