Excel­lent pre­sen­ta­tion on Scribd on Aus­tralian hous­ing

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This pre­sen­ta­tion was noted by a blog mem­ber today. Take par­tic­u­lar note of slides 21–20 which com­pare the bal­ance sheets of US and UK banks to that of one Aus­tralian bank, the Com­mon­wealth.

How to Profit From the Com­ing Aussie Prop­erty Crash (and Bank­ing Cri­sis)

Also a quick note that the site’s server crashed this morn­ing and had to be restored from back­ups. Sev­eral blog com­ments were lost, includ­ing some from new mem­bers. These records of these new mem­bers might also have been lost, so if that applies to you, please rejoin and resend your com­ment.

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  • rhk

    The graph com­par­ing his­tor­i­cal infla­tion with house prices is mis­lead­ing.

    The 2 lines pretty much mir­ror each other … until the early 1990s’.
    This is when the Global econ­omy fully emerged and China became a defla­tion­ary force on the world.

    The CPI is no longer a good proxy for infla­tion.

    If it was … and house prices are in a mad spec­u­la­tive boom… then there would be a large gap between the cost of build­ing a new house and the price of an already exist­ing house… ( In NZ that is not the case ) 

    A bet­ter graph would be one com­par­ing money sup­ply growth and build­ing cost infla­tion with house price growth.

    I believe that home prices are not as over val­ued as peo­ple think… but that over the last 30 yrs peo­ples incomes have declined hugely… in real terms ..( mea­sured in terms of money sup­ply growth )

    I don’t see any kind of crash… Off the cuff maybe 20% down in nom­i­nal terms… 40% down in real terms.. over a few yrs.

    I don’t think Aussie banks are as exposed as the USA banks are. In USA it was com­plete mad­ness… ( liar loans.. for god sakes)

  • Wel­come aboard rhk.

    I haven’t made much com­ment on this par­tic­u­lar anti-bub­ble argu­ment, but per­haps now is the time: a spec­u­la­tive bub­ble is prob­a­bly eas­ier when it’s not new assets that are being shuf­fled, but exist­ing ones. Build­ing homes in new areas–or even new homes in old areas–is riskier in terms of expected price appre­ci­a­tion than buy­ing and sell­ing exist­ing houses in an estab­lished area.

    BTW, please note–as some repro­duc­tions of this pre­sen­ta­tion have not–that I did not put this pre­sen­ta­tion together, and I don’t know who did do it. But I thought that espe­cially the com­par­i­son of bank assets between the USA and Aus­tralia was worth shar­ing.

  • Wow, check our this lat­est fore­cast by the OECD:

    http://www.smh.com.au/business/property/home-loan-rates-tipped-to-hit-86–20100526-wegh.html

    Very rem­i­nis­cent of their fore­cast for the con­tin­u­ing global eco­nomic growth just prior to the onset of the GFC 🙂

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  • Mar­co2

    @gaday (#105)

    My friend, you don’t post much, but when you do, you often have some­thing valu­able to say.

    The more I read your posts, the more I find that com­mon-sense is some­thing miss­ing among a whole lot of peo­ple who should know bet­ter.

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