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The dud Kangaroo bounce thread


sancho panza

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On 17/10/2018 at 12:17, sancho panza said:

They have a model. It says the flls coule be 30% but thats too big a figure. So theyve halved it.

The model is wrong. They fall by 50%. And thats assuming Chinas does not implode.

If China implodes then theyll be down ~70%.

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drip,drip,drip

Prices now may fall 20%

 

https://www.theguardian.com/australia-news/2018/oct/18/australians-told-property-prices-could-fall-another-15

Property prices in Sydney and Melbourne are on course to fall 20% and the risk of crash “cannot be ignored”, according to a significant rethink on the direction of the market by one of Australia’s most high-profile economists.

Shane Oliver, chief economist at AMP Capital, had expected the peak to trough fall in the two biggest cities to be 15%.

But a cocktail of factors including poor affordability, reduced credit, a tougher refinancing environment for existing borrowers and a fall in foreign buyers has forced him to revise his forecast downwards.

“Starting about a year ago it seems the tide has turned against property prices,” Oliver wrote on the AMP website on Thursday.

“Property prices in Sydney and Melbourne are likely to see top to bottom falls of around 20% as credit conditions tighten, supply rises and a negative feedback loop from falling prices risks developing.”

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  • 2 weeks later...
On 26/10/2018 at 01:32, darkmarket said:

Looks like those bank shorts are in the money already.

I kept my powder dry for other targets but if you have any ideas for really overblown Aussie stocks DM then I'll gratefully receive them.

 

The downward march continues

https://www.globalpropertyguide.com/news-significant-drop-in-auction-rates-set-alarm-bells-ringing-for-major-australian-housing-markets-3588

'Australia’s once red-hot housing markets including Sydney and Melbourne are witnessing a slump as a major decrease has been reported in auction rates.

Only 44% of the listed residential properties were sold at auctions in Sydney during the week ending October 20 - the lowest preliminary clearance rate in a decade, according to real estate portal Domain. Experts predict that the auction rates will drop further.

Not only auction clearance rate, but the total amount changing hands also has dropped significantly. The dollar volume of auction sales was AU$160 million (US$113.50 million) at the weekend compared to AU$484 million (US$343 million) on the same weekend a year ago – a drop of about two-thirds.

Home prices have dropped nearly 6.3% from their peak in Sydney. 

“I think this is what we are going to see for Sydney for the rest of the year. The slowing nature of the auction market suggests the downturn has yet to hit a peak with further price softening ahead,” Domain’s senior research analyst, Nicola Powell, said. 

Auction clearance rate in Melbourne was also below 50% for nearly 1000 properties. 

Experts are blaming tightening underwriting norms for the slowdown in the market. 

Damian Collins, managing director of Momentum Wealth in Perth, was quoted as saying that the lending constraints imposed on the banks by regulators was having far greater impact than first thought.

“People just can’t borrow what they used to be able to and I think the government will have to allow the banks to loosen their credit otherwise Sydney and Melbourne could see significant falls.”'

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39 minutes ago, sancho panza said:

I kept my powder dry for other targets but if you have any ideas for really overblown Aussie stocks DM then I'll gratefully receive them.

 

The downward march continues

https://www.globalpropertyguide.com/news-significant-drop-in-auction-rates-set-alarm-bells-ringing-for-major-australian-housing-markets-3588

'Australia’s once red-hot housing markets including Sydney and Melbourne are witnessing a slump as a major decrease has been reported in auction rates.

Only 44% of the listed residential properties were sold at auctions in Sydney during the week ending October 20 - the lowest preliminary clearance rate in a decade, according to real estate portal Domain. Experts predict that the auction rates will drop further.

Not only auction clearance rate, but the total amount changing hands also has dropped significantly. The dollar volume of auction sales was AU$160 million (US$113.50 million) at the weekend compared to AU$484 million (US$343 million) on the same weekend a year ago – a drop of about two-thirds.

Home prices have dropped nearly 6.3% from their peak in Sydney. 

“I think this is what we are going to see for Sydney for the rest of the year. The slowing nature of the auction market suggests the downturn has yet to hit a peak with further price softening ahead,” Domain’s senior research analyst, Nicola Powell, said. 

Auction clearance rate in Melbourne was also below 50% for nearly 1000 properties. 

Experts are blaming tightening underwriting norms for the slowdown in the market. 

Damian Collins, managing director of Momentum Wealth in Perth, was quoted as saying that the lending constraints imposed on the banks by regulators was having far greater impact than first thought.

“People just can’t borrow what they used to be able to and I think the government will have to allow the banks to loosen their credit otherwise Sydney and Melbourne could see significant falls.”'

Damian Collins could win cunt of the day thread and day he chooses with such talk.

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31 minutes ago, Sugarlips said:

Darwin down 53% from peak, back to 2009 prices with 8.5% rental vacancies and a population exodus that shows no sign of stopping

nah, she’ll be right mate :0

https://www.abc.net.au/news/2018-11-08/real-estate-property-prices-housing-institute-inpex/10476166

From the article.And let's remember this is the start of the unwind........heaven help the Ozzies-my family living there included, when she blows..

"I bought my first home in Palmerston in 2015 for $520,000," Ms Paton said.

"I saved up a lot of money for my deposit and it's all gone, essentially."

"It makes me feel really sad because you put hard work into your home and my home is actually depreciating in value, it's going down."

 

At the height of the INPEX boom Darwin and Palmerston had a rental vacancy rate below 1 per cent.

But the number of vacant homes and apartments has also risen.

"Across the greater Darwin region, vacancy rates have increased to just under 8 per cent — but in Darwin's heavily populated northern suburbs that number is even higher at 8.5 per cent," Mr Killian said.

He warned Darwin may not be at the bottom of the market yet, with more pain on the way for home owners.

"We are still seeing more people leaving the Territory and more vacancies coming back into the marketplace," Mr Killian said.

35 minutes ago, Sugarlips said:

Darwin down 53% from peak, back to 2009 prices with 8.5% rental vacancies and a population exodus that shows no sign of stopping

nah, she’ll be right mate :0

https://www.abc.net.au/news/2018-11-08/real-estate-property-prices-housing-institute-inpex/10476166

Worth also noting that a lot of the far eastern buyers will have the option to walk away if it all goes kaboom.Go to thailand or somewhere else...

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Oz is insane.

There's no wider economy - its just commodities and property speculation. mainly fed by the cash from commodities.

The OZ finance systems is like US subprime, UK endowments and pensions, all rolled into one and cranked up.

All regulated by Dave, from the pub, who's good mates with someone down the court house.

 

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On 08/11/2018 at 13:31, sancho panza said:

Worth also noting that a lot of the far eastern buyers will have the option to walk away if it all goes kaboom.Go to thailand or somewhere else...

Pressure on the banking and shadow banking system in China seems relentless now. I'm keeping an eye for signs they're able to force sales of properties in Australia to repay loans extended in China.

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1 hour ago, darkmarket said:

Pressure on the banking and shadow banking system in China seems relentless now. I'm keeping an eye for signs they're able to force sales of properties in Australia to repay loans extended in China.

MMMh tasty.

It's odd - as a homeowner in Australia I should be worried.  But I'm just wanting a real fucking crash to expose all the gurus and pollies who have fucked up.  Need to make sure I have plenty of beans in the cupboard tho.

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6 hours ago, wherebee said:

But I'm just wanting a real fucking crash to expose all the gurus and pollies who have fucked up.  Need to make sure I have plenty of beans in the cupboard tho.

It's really a disaster of a political class you have, I hope a few of them who've been speculating with their own money too learn a few lessons.

Much respect for your objectivity too, pity there aren't more with that viewpoint.

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On 10/11/2018 at 12:07, darkmarket said:

Pressure on the banking and shadow banking system in China seems relentless now. I'm keeping an eye for signs they're able to force sales of properties in Australia to repay loans extended in China.

One of the features of supposed cash purcahses in the UK is that they're funded with foreign mortgages and thus appear as cash but aren't.It really could create a void if foreign mortgages start getting foreclosed.

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On 10/11/2018 at 07:39, spygirl said:

Oz is insane.

There's no wider economy - its just commodities and property speculation. mainly fed by the cash from commodities.

The OZ finance systems is like US subprime, UK endowments and pensions, all rolled into one and cranked up.

All regulated by Dave, from the pub, who's good mates with someone down the court house.

 

Oz is defo in the running for the poster boy of this debt deflation

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4 hours ago, sancho panza said:

One of the features of supposed cash purcahses in the UK is that they're funded with foreign mortgages and thus appear as cash but aren't.It really could create a void if foreign mortgages start getting foreclosed.

The UK does seem exposed to the same risk. Could work out a few ways but I don't see any good ones for the highly leveraged.

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  • 2 weeks later...
On 11/11/2018 at 18:52, darkmarket said:

The UK does seem exposed to the same risk. Could work out a few ways but I don't see any good ones for the highly leveraged.

What is the risk ?   Cash purchases means there is no outstanding money owed (in the UK) ?  The full amount of the property was handed over and paid for.  But sure there might be a load of unsellable property to a market that no longer exists.  But hey, it was good while it lasted right ?

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2 hours ago, Sugarlips said:

Priceless and oh so true, well worth your time:

Why Oz House Prices are going to fall by 75%

https://www.xyz.net.au/house-prices-going-fall-75/

Sage words

 

'The first reason I’m certain that this is it is the Taxi Driver Indicator, which I just mentioned. It’s a classic indicator of a bubble top among serious investors. It’s when everyone is talking about an asset class. This happened with cryptos in December last year, with tech stocks in 2000 and gold in 1980. When everywhere you go people are talking about a given asset class, then everyone is all-in. People who would have bought, or have the capacity to buy, have. The moment arrives when there are no new marginal buyers to keep pushing up the price, and when that happens, confidence begins to erode. It’s only a matter of time before the panic, the freefall and the blood ensue.

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3 hours ago, sancho panza said:

Sage words

 

'The first reason I’m certain that this is it is the Taxi Driver Indicator, which I just mentioned. It’s a classic indicator of a bubble top among serious investors. It’s when everyone is talking about an asset class. This happened with cryptos in December last year, with tech stocks in 2000 and gold in 1980. When everywhere you go people are talking about a given asset class, then everyone is all-in. People who would have bought, or have the capacity to buy, have. The moment arrives when there are no new marginal buyers to keep pushing up the price, and when that happens, confidence begins to erode. It’s only a matter of time before the panic, the freefall and the blood ensue.

It’s called a shoeshine moment

There is a well-known – though likely apocryphal – anecdote from the end of the roaring 20s. It involves Joseph P. Kennedy, US ambassador to the UK from the late 1930s to mid 1940s. Before he entered the civil service and politics, he had made a name (and a fortune) for himself as a businessman and investor. On Wall Street he inter alia ran the Libby-Owens-Ford stock pool with a number of Irishmen, a loose association of investors pooling their resources and dedicated to manipulating the hell out of Libby-Owens-Ford stock by deftly using insider information to their advantage.

Today he would be deemed a criminal, but at the time his activities on the stock exchange were perfectly legal and he was widely admired for being a wily operator. Rightly so, we should add.

As the story goes, Kennedy realized several months before the crash of 1929 that he had to get out of the market. What made him realize it was this: In the winter of 1928, he decided to stop to have his shoes shined before going to his office. When the shoe-shine boy had finished, he suddenly offered Kennedy a stock tip, without having been solicited to do so: “Buy Hindenburg!”

Kennedy is said to later have told people that he sold off his stock market positions shortly thereafter, as he was thinking: “You know it is time to sell when shoeshine boys start giving you stock tips. This bull market is over.”

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On 30/11/2018 at 13:13, Sugarlips said:

Priceless and oh so true, well worth your time:

Why Oz House Prices are going to fall by 75%

https://www.xyz.net.au/house-prices-going-fall-75/

Have to say this article has been playing over and over in my head in the 24 hrs since I read it  and I think it's because it highlights the following,that's rarely discussed,even in internet cellars like Dosbods,that the worst exposure is where you'd least expect it.

'Received wisdom would suggest that the risk would be most pronounced for the poorest and youngest Australians. That’s not the case, however. Martin North from Digital Finance Analytics has been doing some sound empirical research on the Australian housing debt supernova, and he’s uncovered that the highest levels of mortgage stress are among the most affluent postcodes. His research has also found that about one quarter of Baby Boomers, themselves on the cusp of retirement, have mortgage debt, mostly from investment properties they bought after leveraging up on the paid-for family home.

 

Oops.

It turns out the people who are most at risk are the ones who benefited most from the initial widespread housing bubble boom from about 1999 to 2006. It made them overconfident, and rather than sit on their windfall or sell and downsize to enjoy their unearned winnings, they doubled down.

And they seem to be having their ‘Oh shit!’ moment right

about

now.'

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Wolf chipping in

https://wolfstreet.com/2018/12/01/update-on-property-price-declines-sydney-melbourne-australia/

Update on the Housing Bust in Sydney & Melbourne, Australia

by Wolf Richter • Dec 1, 2018 • 16 Comments

This is not exactly slow motion anymore.

In Greater Sydney, Australia’s largest housing market, the housing bust, after a terrific housing bubble, is gaining momentum. In November, according to the CoreLogic Daily Home Value Index:

  • Prices of single-family houses dropped 9.2% year-over-year.
  • Prices of “units” (condos) fell 5.5%;
  • Prices of all types of dwellings combined fell 8.1%;

The overall index for Sydney, after dropping 1.4% from the end of October to the end of November, is now down 9.0% from its peak in September last year:

Australia-home-prices-Sydney-2018-11-30.

Over the past four weeks, potential sellers – seeing the condition the market is in and hoping for better times – have slowed putting their properties on the market, and the number of new listings over the four-week period has dropped 9.3% from a year ago to just 7,743 properties, the lowest for this time of the year since 2011, according to CoreLogic. However, total listings(new listings plus previously listed properties that haven’t sold yet) rose to 31,859 properties, the most for this time of the year since 2011. The pileup of total listings is happening due to plunging sales volume. CoreLogic:

This indicates that although fewer new listings are hitting the market, the stock that is currently listed is taking much longer to sell and overall listings are mounting as a result.

These potential sellers are going to try to outwait the downturn, which they assume is just a brief dip. This chart shows the total listings for 2018 (black line), compared to prior years (top blue line = 2011 via CoreLogic):

Australia-Sydney-listings-2018-11.png

Greater Melbourne, the second largest housing market in Australia, has been lagging behind Sydney by a couple of months in the development of its housing bust. Its peak occurred in November 2017. But by now, the bust is well on its way. According to the CoreLogic Daily Home Value Index:

  • Prices of single-family houses dropped 7.6% year-over-year;
  • Prices of “units” fell 1.7%;
  • Prices of all types of dwellings combined fell 5.8%.

Australia-home-prices-Melbourne-2018-11-

While new listings in Melbourne fell 5.6% from a year ago, to 9,714, as potential sellers are holding back putting their properties on the market in hopes for better times, total listings jumped 19.3% from a year ago to 38,730, the highest level since 2012, and higher than 2011 — highlighting “the difficulty in achieving sales currently,” CoreLogic pointed out (the black = 2018, chart via CoreLogic):

Australia-melbourne-listings-2018-11.png

CoreLogic notes:

Overall as the housing market weakens and properties take longer to sell, the total volume of stock listed for sale is increasing. Encouragingly in terms of mortgage stress and potential arrears we are not seeing a significant dumping of new stock onto the market. If anything, in Sydney and Melbourne vendors are realizing that it is an inopportune time to sell and fewer vendors are now listing. Of course, this is not to say things can’t change and it is expected that total listings will continue to climb and selling homes will take longer.

In the other capital cities, property prices were mixed in November, compared to a year ago:

  • Brisbane, Queensland: +0.3%
  • Adelaide, South Australia: +1.4%
  • Perth, Western Australia: -4.2% and are down 14% from their peak in 2014, following the mining bust.
  • Darwin, Northern Territory: -0.8%; prices have been on the decline since the peak in 2014.
  • Canberra, Australian Capital Territory: +4.0%
  • Hobart, Tasmania: +9.3%

The sharp downturns in Sydney and Melbourne can be blamed on the confluence of several factors:

  • An onslaught of supply from the construction boom;
  • A crackdown on the banks’ mortgage shenanigans that were exposed in the media and eventually by the Royal Commission investigation;
  • Tighter credit availability;
  • Very stretched housing affordability following years of price gains that formed one of the most magnificent housing bubbles the world has seen;
  • And the sudden reluctance of speculators to pile into the market – including non-resident Chinese investors. They’re getting hammered by the morale-crusher of sinking prices, higher mortgage rates for investors, and a crack-down on interest-only mortgages. Chinese buyers are having to jump over the additional hurdle of tighter capital controls in China.

And this is happening even as GDP has grown 3.4% compared to a year ago, and as the unemployment rate – at 5.0%, the way Australia measures it – is at the lowest level since 2012. So these are still the good times. This housing bust has not been caused by waves of people losing their jobs. Any future weakness in the economy will only add to the housing bust.

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2 hours ago, Noallegiance said:

May 'greater' London follow suit.

I do hope May is sacked next week and all hell breaks loose, we really need some of what the Aussies are getting, apart from the top end prices are slowly rising in any half decent area.

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