Australian Housing Myths: Responsible Lending

[ZombiedustXXX]

Oh Shit! Sorry to hear that there is a current housing bust in Australia. It just seems a waste, after the un-ignorable US housing bust.

I'm not so sure the well meaning professor quite understands that many affluent people in the US also stretched their credit to the breaking point by buying "second homes" to get rich.

I thought the US market was going to top out in late 2005, but the bubble just kept growing and growing. The rent vs. own ratio was way out of line by then in SoCal.

[tri400]

too right....people in AUS are spending 30% of their income, on average, just to buy a roof over their heads

[danielrbowles]

@tri400 JUST to buy a roof over their heads????

[cityslickeroz]

nice one steve, keep up the great work

[InvestorPaul]

excellent video

[minimumtrade]

"living in a palace, in poverty..."  ***MEGA MORTGAGE MUG***

[kiche83]

2011: February - New housing loans approved by Australian banks fall 5.6 per cent to a 10-year low in February.

2011: March - Prosper Australia launches an online campaign for a "buyer's strike" in an effort to drive down prices.

2011: April - Melbourne median home price falls by $36000 (6%) to A$565,000 in March Quarter.

2011: May - The number of properties for sale in Melbourne double.

2011: June - Number of home loans in arrears 90 days overdue, rises to 15 year high.

[DavidAKZ]

@kiche83 re June 2011 , do you have a reference thanks ?

[kiche83]

If you don't want a bubble to burst you don't create one, because bubbles always burst, it's as simple as that!

I have been waiting for this since 2007-8, i have been holding onto my deposit for a house and im eligible for the grant, but i am going to buy a house when times are GOOD! not when times are BAD! and I'm not looking for an investment either I'm looking for a place to live and start a family in the future. The current house prices do not allow me to do this and I'm a civil engineer.

[kiche83]

I'll buy a house because in 4 years ill sell it and i will be a millionaire, ill get a NEW CAR!!! SWEET!..... ooo i like that TV! swipe swipe! I'm so over work i feel stressed I need a holiday! yayy!!! im off to France i only live ONCE!....4 years later I'm bankrupt.

Sorry if i sound like a TWIT but this is what most Australians think, no one saves for anything, everyone wants everything at once! only the wealthy can do this no your average middle class. Investment is a business it can fail!

[Robonza]

I have been thinking this for a while, but what happens to the Aussie dollar and how do we proffit from it?

Do we see a temporary fast deflation and and Aussie dollar rally initially like we saw in US?

[DavidAKZ]

@Robonza Google 'Martin Armstrong' and "Outlook for the land down under "

[Robonza]

@DavidAKZ Thanks for the response. I had a quick look, and Martin doesnt seem to be saying anything original or unique. He also does not reference currencies as "pairs" eiither. This is very important in my opinion.

[DavidAKZ]

@Robonza please explain ? :-(

[Robonza]

@DavidAKZ I don't have time to go into a lot of detail, but when people talk about the "Aussie dollar" the assumption is they are comparing it to the US dollar. We all know assuming is a killer. Good analysts always detail AUD/USD. As the US dollar bleeds to death slowly it becomes less relavant, the AUD/XAU AUD/JPY AUD/CHF become more important as a reference guage when discusiing the Aussie dollar. Especially the AUD/XAU. Where this goes is important to my positions and future actions.

[harrybath]

@Robonza the only value that matters is AUD/GLD. All paper currencies are falling in value when measured in gold/silver/rice/oil/wheat/sug­ar ect In 1980 you an adverage median price home cost 70-80 ounces of gold today an adverage home cost 300 ounces of gold.

[marcey666]

get ready for the down hill ride as it gets faster

[rwbean]

Very clear explanation. Gerry Harvey and Ian Norman are of course separate people.

Book spotting: "The End of Wall Street" by Roger Lowenstein, "The Black Swan" by Taleb, "The Big Short" by Lewis, Flash Macromedia, "The Open Society and Its Enemies" by Popper and "The Da Vinci Code" by Dan Brown.

[seemoretube]

Well the data seems to indicate that the bubble popped last quarter, buckle up.