Australian Politics Forum - ASIC warns of "property bubble"

Bam Gold Member Offline Australian Politics Posts: 21905 Gender:	Re: ASIC warns of "property bubble" Reply #15 - May 19^th, 2015 at 8:45am innocentbystander. wrote on May 18^th, 2015 at 7:20pm: Hope it doesn't burst just yet, I'm trying to sell my McMansion. Good luck with the sale. I hope you get a good price.
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Bam Gold Member Offline Australian Politics Posts: 21905 Gender:	Re: ASIC warns of "property bubble" Reply #16 - May 19^th, 2015 at 8:49am longweekend58 wrote on May 18^th, 2015 at 11:50pm: Bam wrote on May 18^th, 2015 at 9:43pm: I would much rather there was a warning and something bad didn't happen, than something bad happened with no warning. because that changes the outcome in any way??? Have you ever been married? Thought not.
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ImSpartacus2

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Re: ASIC warns of "property bubble"
Reply #17 - May 19^th, 2015 at 10:37am

longweekend58 wrote on May 18^th, 2015 at 11:48pm:

Bam wrote on May 18^th, 2015 at 6:38pm:

The overheating of the property market has been going on for some time. Hockey should have acted in the last Budget to curb the property market by cutting or abolishing CGT concessions and perhaps doing something about negative gearing. He didn't.

This Budget will be seen as a lost opportunity to rebalance the economy. At present, much of the economic growth in Australia - what little there is of it - is false growth fuelled by a massive property-based Ponzi scheme. If it collapses, we're going to have a deep recession. This is why Hockey needed to act now. If he acted now, he could have avoided the worst of it by letting the market down gradually.

Another year of unchecked growth in the property market, and who knows what could happen? If the property market is indeed a bubble and it were to correct itself within the next 14 months, the Liberals could be going to the next election just after it happens and they would get smashed at the polls. And it would end forever the idea that the Liberals are sound economic managers.

Hockey and the Liberals haven't done nothing at all, however. They have cracked down on foreign investment, including the forced divestiture of one property, just for show. But I feel they are scapegoating foreigners here. It's the CGT concessions that are the problem. They are no longer in the national interest for several reasons: the CGT concession is putting upward pressure on property prices, causing difficulties for the RBA which wants to stimulate the rest of the economy, and starving the rest of the economy of much-needed investment funding. Get rid of the CGT concession, and the economy would be better balanced than it is now because funds will be invested where they are most needed - in businesses and infrastructure.

and what did labor do about this.

NOTHING

but you dont criticise them. do you?

but we've been hearing about this 'bubble' nonsense for 20 years now.

Oh Dear!!! These people can't think beyond Labor v Liberal. You know Longy you have a mind of your own and it is permissible to think for yourself even though your conclusions might cause you to disagree with your favourite team.

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longweekend58

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Re: ASIC warns of "property bubble"
Reply #18 - May 19^th, 2015 at 10:39am

Bam wrote on May 19^th, 2015 at 8:49am:

longweekend58 wrote on May 18^th, 2015 at 11:50pm:

Bam wrote on May 18^th, 2015 at 9:43pm:

I would much rather there was a warning and something bad didn't happen, than something bad happened with no warning.

because that changes the outcome in any way???

Have you ever been married? Thought not.

au contraire, twit. 36 years married, 4 kids, 4 grandkids.

u????

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AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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longweekend58

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Re: ASIC warns of "property bubble"
Reply #19 - May 19^th, 2015 at 11:09am

ImSpartacus2 wrote on May 19^th, 2015 at 10:37am:

longweekend58 wrote on May 18^th, 2015 at 11:48pm:

Bam wrote on May 18^th, 2015 at 6:38pm:

The overheating of the property market has been going on for some time. Hockey should have acted in the last Budget to curb the property market by cutting or abolishing CGT concessions and perhaps doing something about negative gearing. He didn't.

This Budget will be seen as a lost opportunity to rebalance the economy. At present, much of the economic growth in Australia - what little there is of it - is false growth fuelled by a massive property-based Ponzi scheme. If it collapses, we're going to have a deep recession. This is why Hockey needed to act now. If he acted now, he could have avoided the worst of it by letting the market down gradually.

Another year of unchecked growth in the property market, and who knows what could happen? If the property market is indeed a bubble and it were to correct itself within the next 14 months, the Liberals could be going to the next election just after it happens and they would get smashed at the polls. And it would end forever the idea that the Liberals are sound economic managers.

Hockey and the Liberals haven't done nothing at all, however. They have cracked down on foreign investment, including the forced divestiture of one property, just for show. But I feel they are scapegoating foreigners here. It's the CGT concessions that are the problem. They are no longer in the national interest for several reasons: the CGT concession is putting upward pressure on property prices, causing difficulties for the RBA which wants to stimulate the rest of the economy, and starving the rest of the economy of much-needed investment funding. Get rid of the CGT concession, and the economy would be better balanced than it is now because funds will be invested where they are most needed - in businesses and infrastructure.

and what did labor do about this.

NOTHING

but you dont criticise them. do you?

but we've been hearing about this 'bubble' nonsense for 20 years now.

Oh Dear!!! These people can't think beyond Labor v Liberal. You know Longy you have a mind of your own and it is permissible to think for yourself even though your conclusions might cause you to disagree with your favourite team.

Ive heard this 'bubble' story for decades now. It is an old, old story and I see absolutely NONE of the signs of a bubble which is prices that explode and people spending far, far more than they can afford. What we see is nothing more than housing increasing in price at a good rate and people continuing to buy and sell just as they always have. and we continue to have housing shortages therefore demonstrating the lie of the 'bubble' story.

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AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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rhino

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Re: ASIC warns of "property bubble"
Reply #20 - May 19^th, 2015 at 11:42am

Bobby. wrote on May 19^th, 2015 at 7:33am:

rhino wrote on May 18^th, 2015 at 10:34pm:

Bobby. wrote on May 18^th, 2015 at 7:41pm:

Quote:

the corporate regulator warning there are signs of a dangerous property bubble in Sydney and Melbourne.

You see -

sir Nail was right.

even a broken clock is right twice a day. Im sure toenail can be right once in 20 years.

Have faith

i prefer logic and commonsense. But thats just me.

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tickleandrose

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Re: ASIC warns of "property bubble"
Reply #21 - May 19^th, 2015 at 1:08pm

Property bubbles or not, this increase in property prices seen in Capital cities esp in Sydney and Melbourne is not a good news for future of Australia.

1. Higher Proerty prices means higher interest rate repayment. And unlike rent payments, this money does not readily circulate back into the economy. Higher repayment also decreases amount of money the people are able to spend on other sides of economy which are more productive.

2. Properties - especially residential properties are very low tech type of investment. I remember, we used to have a distant family friend whose family was heavily involved in the textile industry. He for a time, tried to upgrade and improve, he bought the latest machines from Europe, and had be best technicians working for him. But he could not survive and nearly went bankrupt. So, he gave that up, and went and bought up land around the Essendon Airport, and the further Western Suburbs. He got so contruction company to put in roads, lights, and on sold the subdivisions, and made tens of millions without much effort. ---> Originally, he thought he can sell the blocks for 150K, but end up averaging 250K+. But ultimately, he said, he fears for the future of Australia economy, because property trading and development are so low tech. (He ended up moving his operation to Vietnam where he is doing very well).

3. The prices will continue to go up, because of banking practices in Australia. For example, if someone were to walk into a bank, with a commercial idea. Even if its a good idea, and the person have a good earning, they may be able to fund him via commercial interest rates, and at a less amount...(e.g. a person earning 100k, may be able to get 200 to 250k - at commercial rate). However, if the same person is to go in for a loan for a residential home, then the same person could get at least 400k to 500k at much lower interest rate. So in reality, if a person want to get into business, he/she would realistically have to play the real estate game first.

4. The government also have policies which are inflationary - e.g. capital gains tax discount, and negative gearing (which does not apply to most other business), which made properties more attractive form of investment. But then, one can not really blame the government, because since the GFC, mining boom have ended, manufactoring is going down the drain, retails and services sectors are not doing well. If we do not prop up the property market, then there will be a real recession. Which is why the one of the first stimulus measures are for properties. The question is: how long can we continue doing this before the cookie crumbles.

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longweekend58

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Re: ASIC warns of "property bubble"
Reply #22 - May 19^th, 2015 at 1:53pm

tickleandrose wrote on May 19^th, 2015 at 1:08pm:

Property bubbles or not, this increase in property prices seen in Capital cities esp in Sydney and Melbourne is not a good news for future of Australia.

1. Higher Proerty prices means higher interest rate repayment. And unlike rent payments, this money does not readily circulate back into the economy. Higher repayment also decreases amount of money the people are able to spend on other sides of economy which are more productive.

2. Properties - especially residential properties are very low tech type of investment. I remember, we used to have a distant family friend whose family was heavily involved in the textile industry. He for a time, tried to upgrade and improve, he bought the latest machines from Europe, and had be best technicians working for him. But he could not survive and nearly went bankrupt. So, he gave that up, and went and bought up land around the Essendon Airport, and the further Western Suburbs. He got so contruction company to put in roads, lights, and on sold the subdivisions, and made tens of millions without much effort. ---> Originally, he thought he can sell the blocks for 150K, but end up averaging 250K+. But ultimately, he said, he fears for the future of Australia economy, because property trading and development are so low tech. (He ended up moving his operation to Vietnam where he is doing very well).

3. The prices will continue to go up, because of banking practices in Australia. For example, if someone were to walk into a bank, with a commercial idea. Even if its a good idea, and the person have a good earning, they may be able to fund him via commercial interest rates, and at a less amount...(e.g. a person earning 100k, may be able to get 200 to 250k - at commercial rate). However, if the same person is to go in for a loan for a residential home, then the same person could get at least 400k to 500k at much lower interest rate. So in reality, if a person want to get into business, he/she would realistically have to play the real estate game first.

INterest rates are related to risk. Home loans are not considered huge risks as they are secured against generally appreciating assets. A business - especially a new one - is considered a much higher risk as the risk of actual loss of capital is reasonably high while for housing, it is quite low.

4. The government also have policies which are inflationary - e.g. capital gains tax discount, and negative gearing (which does not apply to most other business), which made properties more attractive form of investment. But then, one can not really blame the government, because since the GFC, mining boom have ended, manufactoring is going down the drain, retails and services sectors are not doing well. If we do not prop up the property market, then there will be a real recession. Which is why the one of the first stimulus measures are for properties. The question is: how long can we continue doing this before the cookie crumbles.

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« Last Edit: May 19^th, 2015 at 2:17pm by longweekend58 »

AUSSIE: "Speaking for myself, I could not care less about 298 human beings having their life snuffed out in a nano-second, or what impact that loss has on Members of their family, their parents..."

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Sir lastnail

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Re: ASIC warns of "property bubble"
Reply #23 - May 19^th, 2015 at 8:58pm

rhino wrote on May 18^th, 2015 at 10:34pm:

Bobby. wrote on May 18^th, 2015 at 7:41pm:

Quote:

the corporate regulator warning there are signs of a dangerous property bubble in Sydney and Melbourne.

You see -

sir Nail was right.

even a broken clock is right twice a day. Im sure toenail can be right once in 20 years.

The same mor.ons like yourself were in denial right up to 1 second before the irish housing bubble burst but don't let common sense stand in the way of your fantasies. Fueling the bubble longer with more and more debt just makes it burst harder and longer.

Now what were they paying for tulip bulbs before the tulip bubble burst ? Cheesy

LOL

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In August 2021, Newcastle Coroner Karen Dilks recorded that Lisa Shaw had died “due to complications of an AstraZeneca COVID vaccination”.

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Sir lastnail

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Re: ASIC warns of "property bubble"
Reply #24 - May 19^th, 2015 at 9:00pm

longweekend58 wrote on May 19^th, 2015 at 1:53pm:

INterest rates are related to risk. Home loans are not considered huge risks as they are secured against generally appreciating assets. A business - especially a new one - is considered a much higher risk as the risk of actual loss of capital is reasonably high while for housing, it is quite low.

"Home loans are not considered huge risks as they are secured against generally appreciating assets". Cheesy

LOL

So tell us why the GFC occurred ? Can't lose on property can ya Cheesy

LOL

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In August 2021, Newcastle Coroner Karen Dilks recorded that Lisa Shaw had died “due to complications of an AstraZeneca COVID vaccination”.

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Sir lastnail

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Re: ASIC warns of "property bubble"
Reply #25 - May 19^th, 2015 at 9:08pm

longweekend58 wrote on May 19^th, 2015 at 11:09am:

ImSpartacus2 wrote on May 19^th, 2015 at 10:37am:

longweekend58 wrote on May 18^th, 2015 at 11:48pm:

Bam wrote on May 18^th, 2015 at 6:38pm:

The overheating of the property market has been going on for some time. Hockey should have acted in the last Budget to curb the property market by cutting or abolishing CGT concessions and perhaps doing something about negative gearing. He didn't.

This Budget will be seen as a lost opportunity to rebalance the economy. At present, much of the economic growth in Australia - what little there is of it - is false growth fuelled by a massive property-based Ponzi scheme. If it collapses, we're going to have a deep recession. This is why Hockey needed to act now. If he acted now, he could have avoided the worst of it by letting the market down gradually.

Another year of unchecked growth in the property market, and who knows what could happen? If the property market is indeed a bubble and it were to correct itself within the next 14 months, the Liberals could be going to the next election just after it happens and they would get smashed at the polls. And it would end forever the idea that the Liberals are sound economic managers.

Hockey and the Liberals haven't done nothing at all, however. They have cracked down on foreign investment, including the forced divestiture of one property, just for show. But I feel they are scapegoating foreigners here. It's the CGT concessions that are the problem. They are no longer in the national interest for several reasons: the CGT concession is putting upward pressure on property prices, causing difficulties for the RBA which wants to stimulate the rest of the economy, and starving the rest of the economy of much-needed investment funding. Get rid of the CGT concession, and the economy would be better balanced than it is now because funds will be invested where they are most needed - in businesses and infrastructure.

and what did labor do about this.

NOTHING

but you dont criticise them. do you?

but we've been hearing about this 'bubble' nonsense for 20 years now.

Oh Dear!!! These people can't think beyond Labor v Liberal. You know Longy you have a mind of your own and it is permissible to think for yourself even though your conclusions might cause you to disagree with your favourite team.

Ive heard this 'bubble' story for decades now. It is an old, old story and I see absolutely NONE of the signs of a bubble which is prices that explode and people spending far, far more than they can afford. What we see is nothing more than housing increasing in price at a good rate and people continuing to buy and sell just as they always have. and we continue to have housing shortages therefore demonstrating the lie of the 'bubble' story.

You don't read to well do ya ??

http://www.theaustralian.com.au/business/property/property-boom-shows-signs-of-c...

Quote:

As fears grow of a bubble in Sydney’s soaring housing market, one economist says there are already signs demand for residential property is starting to wane.

UBS Australia chief economist Scott Haslem says Sydney’s record high auction clearing rates and the rapid price growth in the past three years meant the market could be considered to be in a bubble.

“The Sydney housing market does have some aspects that are bubble-like,” he said.

“The price growth and the level of auction clearing rates are consistent with periods like that.” But he expects the market to cool down in the near future, noting that property vacancy rates were moving higher, while national housing turnover had decreased in the past month, despite historically low interest rates.

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In August 2021, Newcastle Coroner Karen Dilks recorded that Lisa Shaw had died “due to complications of an AstraZeneca COVID vaccination”.

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