The academic definition of a bubble

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The Reserve Bank of Australia does it again. Identifying the issue… brilliant analysis of it… pointing exactly to the crux of the problem…

Their topic this time was the Australian housing bubble. But before we quote Luci Ellis, head of financial stability at the RBA, you need to understand the way Central Bankers speak. They talk around issues, with hypotheticals used as metaphors, and metaphors used as hypotheticals. This way, they can rarely be pinned down as being wrong. (US central banker Ben Bernanke has broken rank on this particular side of things.)

Now the description of a central banker’s language may sound like a politician’s. But there is a crucial difference. A politician uses obfuscation to hide the emptiness in what they are saying. Central bankers use it to hide the elephant in the room. That’s why people spend so much time analysing each word of the board members of central banks.

When someone at a CPA conference asked Dr Ellis if the lower rental yields housing investors were getting had consequences for house prices, she began her groundbreaking admission with a straightforward answer:

“The short and simple answer is – yes. If rental yields are very low, investors are buying properties without really thinking about the rental yield.”

And this is where we go wishy washy:

“Buying an asset just because you are expecting the price to rise in the future, well that is actually the academic definition of a bubble. So that would be undesirable and be seen as a problem.”

Boom. There you have it, the Australian housing market is a bubble. The head of financial stability at the RBA says so. In as plain English as you will get. And if we’ve ever heard a central banker predicting a crisis, this is it.

Counterfeiters Counterfeit – Surprise!

Dan discussed the general nature of central banking on Thursday:

“What’s the difference between a thief and a counterfeiter? A thief takes what is not his without another’s consent. A counterfeiter passes off as genuine that which he knows to be a fraud. Or, in simpler terms, one is a politician and the other is a central banker.”

He was right in a surprising amount of ways. The RBA has actually managed to counterfeit, not only its own currency, but the currencies of other countries as well. Yes, money attracts certain types of people and central banking deals with money as its core business. What do you expect?

A Sovereign Enron

Well it looks like the Greeks didn’t get away with it after all. The European commission is onto them. Hiding your debt and deficit is only a temporary solution, as former Enron advisor Paul Krugman would know. He, of course, advocates turning debt and deficit to your advantage. Simply claim it’s beneficial. Keynesians across the board will no doubt rejoice that Greece’s 2006-7 debt and deficit figures were actually higher than official figures originally claimed. More stimulus!

To find out what the increased figures will actually be, we will have to wait a few more days. In the meantime, Greek bondholders should shake in their boots.

The Irish are shaking in their bhrógs. That’s one of three Gaelic words we remember from our Irish primary school. The country is up a proverbial creek without a paddle. And the only thing up for debate is in fact whether or not they do have a paddle. “We will paddle our own canoe” the Irish Finance Minister told The Independent. Again, where the country is paddling around everyone knows.

Even the ratings agencies are downgrading Irish bonds. They usually arrive at the party very, very late. Fitch was the latest to downgrade, changing its rating to A+. Yes, in sovereign debt world, A+ is bad. Go figure.

The reason for the recent turmoil is that Ireland has committed a rather large amount of money to bailing out its various banks. But now a rumour about retail investors leaving Irish banks has begun circulating. Those can of course be dismissed with some in depth statistical analysis done by our old friend from above, the able Finance Minister:

“Ireland is an island and in any island people tend to stay with their local bank.” Yes, what a brilliant analyst. We really love this guy. But he goes one better: “Ireland will do what it has been doing in recent years…”

Oh dear.

Tasmanians to the Tea Party

As a Daily Reckoning reader, you’ve probably heard of the Tea Party in the US. Well it seems the media in Australia has taken the same disdain as the American media:

ABC (the Aussie one) reports that “Tea Party politics are the politics of paranoia, of distrust and constant fear.” The amusing side of this is that the media is usually perceived as the one who promotes those particular emotions. Without them, you wouldn’t need government to “protect” you.

In America, the media isn’t getting a free ride with their slanderous ways.

“Four billboard trucks bearing the message “Stop the Liberal Bias, Tell the Truth!” began circling the Manhattan headquarters of ABC, CBS, NBC, and the New York Times on Friday. The trucks will do so for eight hours every weekday for the next four week…”

Huzzah!

And in a sad turn of events, it’s time to sympathise with Tasmanians. If you didn’t know, Tasmania is the atoll just south of Melbourne. More importantly, the Sydney Morning Herald reports “Tasmanians to be forced to connect to NBN under new laws.” The odd part is that the government still handed out consent forms to be returned to them.

A paranoid, distrustful and constantly fearing observer would point out that this is a rather intrusive display of force. The opposition recons the NBN “depends on compulsion and the elimination of competing technologies”. On radio, the Tasmanian Premier did a brilliant job of rebutting the opposition’s stance: “This certainly isn’t compulsion in fact it’s a benefit for householders.”

(Editors blood begins to boil.)

Yes, aboriginal children must be phased into white society for their benefit, heretics should be tortured to save their soul and “Broadband macht Frei”. It’s not compulsion. In fact it’s a benefit…

Currency Wars

All across the world, trade disputes and currencies wars are being mentioned. But today, let’s focus on the Yuan.

China is an odd place. When you go, everything is backwards. The illegal markets are full of Chinese stall owners who speak every language fluently in several different accents. But try a conversation with the concierge at a hotel and you have no chance.

So conventional thinking doesn’t work. That’s why you should open your mind to the following hypothetical which Chinese Premier Wen Jiabao described in Brussels:

“If the yuan is not stable, it will bring disaster to China and the world… If we increase the yuan by 20% or 40%, as some people are calling for, many of our factories will shut down and society will be in turmoil.”

And turmoil ain’t good for a ruling party. So can you expect the Chinese to budge their currency any time soon? Nope. And like one of those Chinese finger traps, the harder you pull, the less they will give.

Keynes aging rapidly

Generational shifts dominate investing. But they happen so slowly it’s difficult to generate sizeable profits from them. In much of Asia, the concept is that the younger generations support the old. In the west, the young live off the old and the old live off their savings. But those savings are destined to come up short, which is why the young have to supplement them with taxes and contribute (involuntarily) to the pool of savings.

This has led to a strange situation in the west, where the economic system is based on future and past productivity instead of current income generation. This is a profound change. The intertemporal nature of the way the western world’s economic system is structured poses some serious issues, which have not been as relevant until now. Some basic assumptions of modern mainstream economics were not conceived with this economic structure in mind.

For example, consider the Keynesian assumption that lower interest rates spur consumption. With less interest earned on deposits, people will go out and spend, claims the theory. But what about those living off their savings, and those who intend to do so? (Just about everyone in the west.) If they see their retirement plans going up in smoke because the return on their savings is being diminished, what will they do?

You have seen what Europeans think of having to delay their retirement. It’s not an acceptable concept. This would imply that savers may be inclined to save more, not less, when interest rates fall. They would be willing to lower present consumption to make up for the shortfall in their retirement funding as a result of lower interest rates. Figures show savings rates rising across the western world despite rates on deposits at ridiculous lows.

That is why monetary policy has been so ineffective. But it hasn’t stopped Bernanke from trying. More on that below.

Schiff’s Humpy Portfolio

Congratulations to the world’s stock markets. As reported all across the media, markets had their best September in 71 years! At least the US did, with the Dow up 7.7% and the S&P 8.8% for September.

Now, a while back, Dan Denning floated the idea of a Humpy portfolio. Subscribers pitched in with what they thought should be added to the list of garden shed investments. Fuel, rice, toilet paper, tinned food and condoms* were favourites. The idea was that the humpy portfolio would be full of things with real value, as opposed to paper investments and cash.

So with markets posting a record performance, how would a humpy portfolio compare? US investment legend Peter Schiff reports on his improvised one, based on commodity markets:

Rice is up 10%. “That box of Uncle Ben’s [rice] in my cabinet,… beat the S&P for the month of September.”

Corn is up 12%. “A box of … popping corn beat the Dow in the month September.”

Soy beans are up 9.5%. “Beat the S&P and the Dow.”

Orange juice: 13%. “That Tropicana orange juice in my freezer did better than the Dow and S&P in September.”

Sugar is up 19.3%. “The sugar in my kitchen cabinet beat the S&P.”

Cotton is up 17.5%. “My jockey shorts outperformed the Dow in the month of September.”

Oil is up 11%. “That means that jar of motor oil in my garage did better than the Dow.”

Copper is up 10%. “The copper plumbing in my basement did better than the Dow, even though it was a record September.”

Silver is up 13%. “Those silver coins that are in a jar in my bedroom beat the Dow.”

Schiff summarises:

“Now I ask you, given this, do you think stocks really went up in value in the month of September? Or is it more likely that the dollar lost value? And because the dollar lost value, the price of everything went up, including the price of stocks…”

Relating this to the Australian context, consider the Aussie Dollar is reportedly overvalued by 27%. Maybe you should brush the cobwebs off your humpy and start filling it.

Deflation, Inflation and Hyperinflation

Considering commodities and gold are on a roll, it pays to revisit the old inflation story. And let’s just put it out there: The US is in the exact scenario for hyperinflation, or at least high inflation, to develop. From what we recall, the following things point to hyperinflation. A structural and sizeable deficit, a nutter at the head of your central bank who is willing to print money, an economy reliant on government spending, foreign debt, rising prices and … did we miss anything?

* “humpy” is the Australian term for a garden shed and this is not a reference to the condoms

Until next week,

Nickolai Hubble.
The Daily Reckoning Week in Review

Nick Hubble
Nick Hubble is a feature editor of The Daily Reckoning and editor of The Money for Life Letter. Having gained degrees in Finance, Economics and Law from the prestigious Bond University, Nick completed an internship at probably the most famous investment bank in the world, where he discovered what the financial world was really like. He then brought his youthful enthusiasm and energy to Port Phillip Publishing, where, instead of telling everyone about The Daily Reckoning, he started writing for it. To follow Nick's financial world view more closely you can you can subscribe to The Daily Reckoning for free here. If you’re already a Daily Reckoning subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Daily Reckoning emails.
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78 Comments on "The academic definition of a bubble"

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Peter
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If you guys believe that this is the definition of a bubble then I don’t want to see another gold article on here because you definitely aren’t buying that for the yield!

Biker
Guest
Ellis: “Buying an asset just because you are expecting the price to rise in the future, well that is actually the academic definition of a bubble. So that would be undesirable and be seen as a problem.” Peter is correct. She’s either waffling, or _most_ non-dividend investments are bubbles. If the definition IS correct, bullion is probably the greatest speculative bubble of all. Dividends and rents at least provide income along the path to capital gain! Frankly, it’s a p*ss-poor definition… and I’m surprised you used it, Nic. While it appears to attack property investment (smack-on-the-hand); it actually delivers a/an… Read more »
Stillgotshoeson
Guest
Gold is bought for the preservation of wealth, not the creation of it. Most investors in Gold see it as a store of value. Not as a money making investment. When Joe and Jane investor jump on the Gold wagon too because they see the price going up, up and away causing it to race away even more on a speculation wave then yes that is when it has turned from a store of wealth to a speculative creator of wealth and that is the time to get out of Gold because it will then, as in the past, go… Read more »
Biker
Guest

Agreed. That’s not the point.

Comments made in respect to Nic’s article do not attack the principle of gold as an investment. It’s Ellis’ definition that is dismissed as highly questionable… .

Stillgotshoeson
Guest
“The short and simple answer is – yes. If rental yields are very low, investors are buying properties without really thinking about the rental yield.” And this is where we go wishy washy: “Buying an asset just because you are expecting the price to rise in the future, well that is actually the academic definition of a bubble. So that would be undesirable and be seen as a problem.” Nothing questionable about the comment. It is bang on the money. (no pun intended) Many property investors buy property to get a steady/reliable income stream, they intend to hold the property(ies)… Read more »
Biker
Guest

I don’t mind her suspect comment at all. It works _for_ us.

If the RBA is talking down property returns they’re less likely to raise rates; and far more importantly, they’ll further deter naifs from construction.

The current downturn in construction works for us. Rents _will_ rise; inflation _will_ decrease debt; and taxation concessions in the form of two very large cheques (again) make (our) property very worthwhile.

You can wish it down, as Keen tried, but ultimately supply and demand mean your original comment (Flat) is likely to be the WCS. ;)

Stillgotshoeson
Guest
Not arguing, just putting a “Melbourne” / Eastern Australia perspective Most of Australias population is on the Eastern side along with most of the property, things that are effecting you are having less effect on us and vice versa. There was an article in the Herald Sun ealier this year saying Melbourne had 20 something suburbs join the million dollar suburb list, average price of a home a million bucks +.. some of these suburbs have had spectacular growth and “investors” have bought here on the presumption that this spectacular growth would continue and were happy with only 2.5% Gross… Read more »
Biker
Guest
I accept that explanation. Thanks. There’s little doubt we’ve (mostly all) accepted that Melbourne and Sydney prices are very high. I find it hard to believe a mate’s home is worth $8 mil, despite his location and views; and I’ve no idea whether the long-term market will see growth in that segment, or if it can even be sustained. Perth has a number of similar markets. We’d agree that this is not the norm, while accepting that anyone who enters that arena without doing the math is foolhardy. Note I didn’t say ‘without researching the market’. I don’t think these… Read more »
Lachlan
Guest
Gidday fellas. I’ve been thinking “flat” recently also…based on not so much the supreme bubble navigating skills of our masters but simply on the fact that things are just SO much worse(eg Foreclosuregate in USA) in other important places. I’m sure we’ll see a lot more borrowing and spending here which may devalue homes in real terms while maintaining nominal values. Then I suppose a failure by govs to maintain sufficient employment (not endorsing the principle) in the most overheated areas could cause a problem if only an isolated one. SAR hit 70c intraday Shoes… I only scooped a few… Read more »
Stillgotshoeson
Guest
I think we will see an average decline (Melbourne at least) of around 20% If I was to be bold and to presume the real estate market in a share market theme.. The share market dove 54% at it’s worst but yet some shares have thrived, some stayed the same. Picture the Real Estate as different cities/suburbs as sectors/shares and we will probably see some “shares” suburbs still rise and some stay about the same and some more still correct quite sharply. Despite what you may think of me.. a flat period is my desired position to see. Income to… Read more »
Pete
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You’re spot on as usual Shoes. You have far more patience than most have with those two. Especially having to explain the same basic fundamentals over and over and over… +100 for consistency and determination. I think many of us bears (being a bear isn’t bad like it is made out to be) consider the demise of the housing bubble to be a foregone conclusion. Its just a matter of when. On that note, cheaper international credit (AUD carry trade, QE funny money from the US) could give another short leg to the bubble. We’ll see I guess. ANZ have… Read more »
Stillgotshoeson
Guest

Comment by Pete on 11 October 2010:

Finding a cure for cancer would be more likely than the longevity of the Australian economy.

Viralytics? (Spelling) VLA Are working on that and making good progress.. A stock to watch ;)

Biker
Guest

Pete: “I think many of us bears (being a bear isn’t bad like it is made out to be) consider the demise of the housing bubble to be a foregone conclusion. Its just a matter of when.”

Poor old Pete. How many _years_ now predicting a busted Oz economy?
+100 for wishin’ and hopin’. ;)

Lachlan
Guest

The bubbles get harder to pop (in nominal terms) as the level of market manipulation increases so the debate over Oz property could end with a fizzle. But the same dynamic ensures gold will shine brighter than it has for generations ;

Biker
Guest

Well, gold could produce a few bubbles if it sinks, too, Lachlan. ;)
Makes no difference to us if it goes to $2K/oz. However it appears to make a _big_ difference to some here, if property rises. What might that tell us?

Possibly the most interesting aspect of the comment Ellis made in respect to property is not _what_ she said, but _why_ she said it… and in the context of RBA spokespersons, why _she_ said it… . :D

Lachlan
Guest

Of course if Benny doesn’t go nuclear in November like he promised then we can all resume ultrabear status ;)
place ya bets

Lachlan
Guest

My bet…Benny didnt devalue the USD to this point just to give up now.

Biker
Guest

But remember, they’re stuck in a rut, in a global economic war which does not favour the US at all. In that scenario, gold _should_ rise.

Is the US kangaroo edward?! It certainly appears it may be. How do you lift out of mire that deep?

Whatever happens north of us, we should count our blessings we’re well south of them… . :D

Lachlan
Guest
This is a limiting factor with AUD gold BP. Our commodity dollar is attractive esp while things are so sick elswhere and with cheap USDs on the flow. But like Shoes I’d prefer to live longer with some stability and moderate investment outcomes…you know rather than having a sack full of 20K USD denominated gold while fending off zombies with my boom stick…or living in Greece with hyper debt and nothing to show for it (no commods) etc etc. You just got to be thankful for what you get in this world even if its not run by perfect Austrian… Read more »
Biker
Guest
“Considering history…we’re not so badly off here.” True. But some of those places are cheap to visit… and live in, months at a time. Before too long, your kids will be adults, independent, living all over the place… and you’ll find you can live like a king in a series of places-great-to-visit-but-you-wouldn’t-want-to-remain-there…! Back in the late 60s, there was a TV program (probably in B & W) titled “You Can’t See Round Corners”. Viewed it at a time when life seemed pretty bleak. If some fool had predicted my future at that point-in-time, I’d have laughed him off the stage.… Read more »
Stillgotshoeson
Guest
I have a “target” that I think Gold WILL reach.. it may go beyond that but I care not a drot.. IF I am right and it reaches my limit, I will close out my positions and not ride it “to the top” so to speak.. I may leave 1 open after taking all my profits off the table.. I have a speculative that I bought at 1.2 cents a share but they are not expecting to be gold producers until 2012. Capital at risk is less than 1% of my portfolio.. neither here nor there in the scheme of… Read more »
Stillgotshoeson
Guest

Comment by Biker

“The really sad thing about this great site is its sustained, murmured undercurrent of bleakness. So many folk waiting for some cataclysmic event to rescue them from pessimism and negativity…”

Umm.. That’s what a reckoning is all about… of course this site is about doom and gloom and negativity.. not for wishing for it, but bringing it out in the open for people to be prepared for it and not be foolish with their money and choices.

Biker
Guest

Wishing you happier days then!~

Steve
Guest

The day of reckoning is fast approaching!!!!

And no Biker this is not pessimism and negativity..

It is Positivity and optimism

Biker
Guest

Well, good for you, son!

Told mum the good news, yet?!

Steve
Guest

have you sold any of your properties yet Biker?
Now that they have lost 5% of their value I am sure you will be quite willing to keep the price the same right?

Biker
Guest
Jeez, I hate meself sometimes, but you do set yourself up, Steve. OK… here’s your dilemma: The planet collapses in upon itself, millions (not counting the elephantine economies) are ruined, but you get your Bondi pad for $150K. Can you live-with-the-guilt?! ;) All the ‘Positivity and optimism’ that set off a series of Oz-sh*ttering economic GFCs that won you your six-bedroom penthouse on the beach, I mean… . But look, if it makes you happier while you’re waiting, good for you. Could happen, but if it doesn’t, your folks will leave you a Sydney home worth $12 mil or so,… Read more »
Steve
Guest

Can you live-with-the-guilt?
No guilt here mate!!!

Can you live with the guilt of putting your fellow countrymen in the position you and your baby boomer mates put them in?
I don’t think you gave 2 F&^%s about them haha
It was all ME ME ME

Biker
Guest
“Now that they have lost 5% of their value I am sure you will be quite willing to keep the price the same right?” As usual, you aren’t able to imagine our situation. Put it this way: If the Sydney market fell 40%, your folks would immediately sell their home, right? Nope? Why not? The ‘value’ just fell 40%! I imagine you running about, in panic, shouting “Sell! Sell! SELLLLLL!!!” Seriously, I accept that it’s difficult for you to comprehend. We live in different worlds. I never expected _anything_ for free. I never needed anything to crash. I never needed… Read more »
Biker
Guest

“Can you live-with-the-guilt? No guilt here mate!!!”

HaHaHa… . You can’t even tell when your leg’s being pulled.

(Nah, this is cruel. Don’t need it. I quit. You win!~ :D )

Steve
Guest

If the Sydney market fell 40%, your folks would immediately sell their home, right? Nope? Why not? The ‘value’ just fell 40%!

No they wouldn’t sell?
Why because its a home to live in not an “INVESTMENT”
It wouldn’t make any difference if it fell 40% in value or gained 40% in value.

Biker
Guest

Yeah, OK. Told ya, you won! Can’t compete with your intellect, Steve.
Whatever works for you, mate. Good luck.

Steve
Guest

“I never expected _anything_ for free.”

Ohh please Biker that statement was too much….
It really proves the FACT YOU ARE FULL OF SH*T

You are one of the biggest socialist around

*Negative gearing???
Biker Pete’s response: “I never expected _anything_ for free.”

*Making some other poor bastard pay over 2 times the amount for what you paid for the same thing in REAL TERMS
Biker Pete’s response: “I never expected _anything_ for free.”

You are clown sometimes mate honestly

Biker
Guest

Hey, I told you you’d won this argument, Steve.

In fact, you just proved it, right here:

“…YOU ARE FULL OF SH*T”

You’re SHOUTING, you’re swearing, you’re winning… .

Gavin R. Putland
Guest

Lending to individuals for housing investment at 17-month low: http://blog.lvrg.org.au/2010/10/lending-for-housing-investment-at-17.html .

Biker
Guest

Interesting graphs, Doc!

I imagine that, examining reduced construction, “…a fall in construction indicates … a restriction of future supply”?

Can’t quite see how you conclude that it means “a fall in present demand…” You’d surely have to include at least three other variables?

Ned S
Guest
Steve, one thing that might assist you to get a bit broader perspective on your thoughts that Australians should not be allowed to buy ‘investment’ property is some figures: Total value of Oz housing = $3.5 trillion 30% of Aussies rent (and have done for the last 50 years) So total value of Oz rental housing [worked on 30% of $3.5 trillion] would be $1.05 trillion if tenants lived in similar value accommodation to property owners My hunch is that they don’t and I don’t know the details but would chuck out a guess that they could live in stuff… Read more »
Ned S
Guest

Hey Biker, I know you didn’t get answers to too many (any ?) of the questions you took to that last meeting, but if you have an electronic copy that doesn’t include your personal specifics you can flick me of the questions themselves even I’d appreciate it. As you’ve previously said, even ‘knowing the right questions to ask’ is a very good start. And I doubt I do! :)

Ned S
Guest

Pete’s back? IF it’s the real original Pete, I wonder if he’s still chastising his Mum for buying a house that maybe went up 20% rather than stocks that are still down maybe 33% ? Still, as they say, ‘past performance is no guarantee of future performance’. G’day anyway Pete. Although I’m still not putting money on that suggestion you made to Steve that Oz housing could go down by 70% ? (more even???), just yet! ;)

nv
Guest

Proving that baby boomers truely are generational tapeworm is this article where the generational tapeworm baby boomers in the UK are even taking the f$%^#ing lawn when selling their homes, Door knobs too.

http://www.dailymail.co.uk/property/article-1319419/Theyve-taken–x-x-lawn.html

Let’s hope this ‘house stripping’ trend doesnt go in the direction of the first wooden fleet.

Lachlan
Guest
BP I have always felt uneasy about..some..predictions which are made for hyperinflation or high inflation in the USA and for simultaneous deleveraging here in Aus. I have always believed Benny would print/inflate. And I maintain that view but I did not think he would start the process now. I felt his MO was to announce the unthinkable during the extreme stage of a crisis. Therefore I felt the QE11 would not emerge until we were well in to the start of downleg number two ie a second collapse in realestate and share values etc. But now (last two months)my observation… Read more »
Biker
Guest
Quite a few to respond to here! Will try to go back, last first… . Lachlan, few would disagree that the US is in major trouble, but no politician is likely to sanction the remedy Bonner and Co suggest (ie., let it all crash-and-burn!) Bernanke’s helicopter analogy, as humorous as it seems, was semantically preferable to the printing press imagery! Had he said “We’ll print ourselves out of this…” American political backlash might have been far greater, yet the message/impact is the same. Sorry to hear that some nice rurals have been withdrawn. Don’t worry too much about it. We… Read more »
Ned S
Guest

NV’s article would seem to highlight the poor state of the Brit economy and the inadvisability of having dealings with their financial types.

Ned S
Guest

Ah Steve, Steve, Steve … There are way bigger things have built up and are consequentially going on in this world than a few busted arsed ole baby boomers who blog on this site control. You gotta get ready to seriously COMPETE bloke! You can only hope to hide behind Ms prissy arsed Gillard’s skirts for so long. Although in the interim, having minerals could be a handy thing for the likes of me ‘n Biker ‘n your ma ‘n pa just maybe?

Biker
Guest
Interesting comment from Gillard today, Ned, re our two states leaving the others behind. Unfortunately she didn’t explain exactly how states _not_ experiencing a boom are going to be supported, nurtured and compensated. Diversification of the Australian economy was suggested ie., our current dependence on mining and agriculture is too narrow a focus. With building currently in decline, I couldn’t help but wonder what kind(s) of boost(s) might be planned for construction, our third largest industry; or ‘hire’ education, with overseas students providing another economic boost. Got me thinking that we may expect announcements on these issues soon. Don’t think… Read more »
Ned S
Guest

Our guvs in the West seem so short-sighted Biker.

New houses – Yep, I’m holding – Could very well be cheaper to buy than build come 2011 in Brissy at least is my guess. :)

Biker
Guest
Not sure about that, Ned, but things appear to be radically different over here. Take Dr Gav’s thesis on land taxes, for instance. The typical annual tax on any of our houses averages around $50.00 per year! Our cheapest ($360K) is considered too insignificant to tax at all!~ BIS S is forecasting three-year price growth in Sydney, Perth and Adelaide, with Melbourne flat, today. Claims of 20% for Perth. Seven percent per year seems modest enough to be possible, given how many projects will launch in ’11 – ’12 (unless elephants materialise…! ;) ) Whenever I spot a bargain, the… Read more »
Ned S
Guest
Stillgotshoeson
Guest

Victoria….

http://www.sro.vic.gov.au/SRO/sronav.nsf/LinkView/DA6A217C7F452EF8CA2575D20021EBE7C580F3A333F4AD44CA2575D10080AD1C

Might be in Gladstone QLD for 6 months in 2011.. Should know by months end boss reckons.

Ned S
Guest

Happy Knackers is a bit north of me of course Shoes, but if the opportunity should arise to catch up/you are in Brissy and looking for a crash pad you’ll be welcome in Ned’s humble hovel …

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