does the current situation in aus remind anyone of ireland circa 06

old_aussie

What are you going on about OP, the inflation rate in Australia is 2.65%

Yeah, don't come here and drag Australia down like Ireland, with the Irish attitude that if times get a bit tough just move somewhere else.

http://www.rateinflation.com/inflation-rate/australia-inflation-rate.php

ballooba

Jumpy wrote: »

But in the major cities there is currently a huge requirement for housing.
Sydney has a major lack of housing at present.

That's a topic of considerable debate. It's certainly not clear and is definitely played up by the real estate industry. Excess of credit is certainly more likely than shortage of property.

Mahatma coat

A LOT of the construction work being carried out at the moment is Government Funded, whats New is the Levels of Destruction this time, there will be a decent growth in constructin in a few months here, especially in Renovation, which may alieveate the situation somewhat, but if the People cant afford to Pay, then :eek:

mikom

old_aussie wrote: »

Yeah, don't come here and drag Australia down like Ireland, with the Irish attitude that if times get a bit tough just move somewhere else.

Yep, that's why we left dear old Ireland to the English when things got tough......

mel.b

Doc wrote: »

There are a couple of differences in how housing is built here that should also be taken into account.
In Ireland a developer would by a large site and build the same house over and over again and then sell them at a profit to the public. Most new houses built here are not done like that. A person tends to buy the land first and then build there house. True there are areas where you buy from a developer who then builds you’re house but the house is only built when there is a buyer there for it already.
House prices are rising but one thing you won’t get here that you have now at home even if they do fall is the ghost estates that are in Ireland. I think it is the lack of housing that is pushing up the price here and the use of land. I live in a suburb on the edge of Melbourne CBD and I am amazed at the fact that there are so many bungalows with gardens in my area. If it was Dublin these would all be two story terest houses or a developer would have bought the house and put flats on it.
When a house comes on the market near the city there is always high demand
for them. Currently I can’t see a reason why there would be a dramatic drop
in house prices.

While i agree that the majority of house building is done differently in Oz (house and land purchased as you mentioned) i am starting to see a shift towards developments more like ireland. In my home town, 100km from Melb, there is an 'estate' being built of at least 20 units and none of these were sold before they were built ( and the great majority are still sitting unsold, although they are not finished yet) and there at least 13 one off houses for sale that have been built without a buyer first.

Mahatma coat

thats the thing tho, Location Location Locartion

For $100K you could get a fair lot 'Land' in the outback, or a tiny parcel Near a city, most Aussies want to live near the cities, hence the artificial scarcity of an abundant resoursce.

ballooba

Mahatma coat wrote: »

thats the thing tho, Location Location Locartion

For $100K you could get a fair lot 'Land' in the outback, or a tiny parcel Near a city, most Aussies want to live near the cities, hence the artificial scarcity of an abundant resoursce.

Have you been reading the CommBank presentation?
http://www.commbank.com.au/about-us/shareholders/pdfs/2010-asx/Australian_Residential_Housing_and_Mortgages_slide_pack_9_Sept_2010.pdf
http://www.smh.com.au/business/cba-raises-eyebrows-on-global-roadshow-20100914-15avx.html
http://www.abc.net.au/news/stories/2010/09/24/3021480.htm
http://www.henrythornton.com/article.asp?article_id=6153
http://www.moneymorning.com.au/20100910/has-commonwealth-bank-deliberately-misled-investors.html
http://www.moneymorning.com.au/20100913/what-does-the-commonwealth-bank-have-to-hide.html

mandrake04

^ Eddie Hobbs

raymann

old_aussie wrote: »

What are you going on about OP, the inflation rate in Australia is 2.65%

Yeah, don't come here and drag Australia down like Ireland, with the Irish attitude that if times get a bit tough just move somewhere else.

http://www.rateinflation.com/inflation-rate/australia-inflation-rate.php

god, im having full on 06 flashbacks. i remember being sat there in the middle of the celtic tiger with prices for everything just rocketing and people on the news saying, inflation is at a record low.....

it just seems like all the same mistakes that ireland made. over reliance on property, check, crazy banks, check, politicians egging it on, check. if it does burst then you end up with exactly the same as ireland, a super expensive, uncompetitive, indebted economy with busted banks.

ballooba

raymann wrote: »

god, im having full on 06 flashbacks. i remember being sat there in the middle of the celtic tiger with prices for everything just rocketing and people on the news saying, inflation is at a record low.....

Yep, there was commentary in recent weeks that the measure of inflation used does not accurately reflect household costs. It excludes food an energy for instance.

Diamondmaker

I agree with similarities and have "felt" many similar indicators over my last 3 plus years here.

Im in the construction sector and have experienced rocketing salaries purely due to a lack of decent bodies to work.

Housing is now unaffordable to the average punter in the area that suits where they would like to live or near work.

Immigration driving up house prices and rental demands

There is a huge obsession with 2nd and 3rd home and investment properties. I know many people with investment properties and they are all losing money on them. This is not an issue so long as you can service this debt and this is not a major problem right now, should unemployment take further increases many leveraged people will have to panic sell causing possible bubble bursting.

Developers and economists are talking of a "levelling" of prices not a crash...hmmmm

Record bank profits

Constantly rising inflation

Over dependence on 1 or 2 sectors. Dont forget it only takes mineral inflation to go so far and Canada or another country can steal all the business or China can just pop itself. Its gonna happen sooner or later.

Average guy in the vox pop whinging they cant afford basic household requirements.

Not an analysis just purely a few observations and I regulalry feel things are like 06 at home and Im just sort of lookin in from some where else while many around me spend like there is no tomorrow.

I have no vested interest in things going wrong as a PR it would only harm me but I really cant help the feeling.

raymann

im really starting to think this is the case now. this isnt how you run a successful economy long term. its how you drive one into the ground.

FreeAnd..

Pretty comprehensive overview...http://www.nakedcapitalism.com/2011/02/deep-t-australian-banking-system-on-unstoppable-path-to-collapse-or-government-bailout.html

Deep T: Australian Banking System on Unstoppable Path to Collapse or Government Bailout

Yves here. This long and informative post on the pending train wreck in the Australian financial system might seem to be too narrow a topic for most Naked Capitalism readers, but it makes for an important object lesson. Australia managed to come out of the global financial crisis largely unscathed because its banks did not swill down toxic assets from the US (chump quasi retail investors were another matter) and it benefitted from the commodities boom.

Nevertheless, one might think its bank regulators might see what happened abroad as a cautionary tale. Mortgage debt took center stage in the crisis, and Australia is in the throes of a serious housing bubble. Yet as this post describes, the regulators seem asleep at the switch as to one of its major drivers.

...
...

raymann

this doesnt bode well for australia:

http://video.ft.com/v/772837551001/Why-Jim-Chanos-is-short-China