Sydney Property Bubble

[greengiraffe]

I will not be draw into the debate of the definition of a bubble.

I am merely watching the drama as there are simply too much at stake for all interested parties.

I just want to add that Australia is simply too big a continent. There are simply too many dynamics at work here.

I am glad that I have an opportunity to learn. Just like the latest China stock market experience.

Attempting to draw conclusions to me is futile as modern economics simply has too many dimensions - u solve one problem only for another problem to crop up.

GG

Frankly i dont think GG nor these "no it's not a bubble" faction dont know its a bubble. Difference is they dont think its going to burst soon. IMHO most people can see a bubble, but irrational exuberance and policy inactions, and sometimes macro interest rate moves like now in Australia and US post dot com means nobody can predict with certainty when a bubble will burst. Jeff Vink, buffet and more predicted dot com bubble burst 3-4 years in advance and julian Robertson famously been bearish but gave up 4 months before the bust.

Irrational exuberance was used by Greenspan in dec 1996, 8 months before AFC, 52 months before dot com bust

Leverage and foreign investors are different yet highly correlated. They are correlated by rising prices. With more leverage, prices go higher and foreigners come in, with foreigners coming in more locals leverage up

The problem with these commentators is that they look at numbers and statistics and DD/SS but forget what drives these number in a bubble: psychology

Asset price rise is not always bad. It is a symptom of economic growth. But it cannot be the other way round nor in a worse case, cause economic competitive loss

Singapore is successful in deflating property prices after 7/7.5/8/whatever rounds of tightening. It dropped 4% in 2014 and probably >4% this year and affordability hasn't improve? Author obviously doesn't live here. That said, until asset prices revert to normalised trajectory, people wishing for reversal of policy in next 12 months should move to HK to continue their dreams instead.

HK on the other hand is half hearted in policy and chinese flood of money. Thats why it failed and australia should learn from the difference. Like i said i wouldn't want to be a HKer living in HK.