Australian housing market – property Bubble & Banks, 2018 Insights

May 2018. Observations of Australia’s crazy credit fueled housing bubble from a top international investment manager with a short position in australian banks.

20 thoughts on “Australian housing market – property Bubble & Banks, 2018 Insights”

  1. The Australian Government is bending it's citizens over a barrel so that they can all be rooted up the arse (ass) by overseas investors with money and FAKE IMMIGRANTS TO WHOM WE GIVE HOUSES. You dumbFuck Australians.

  2. Australians do not even own their river water now… We love our Governments…
    See post by: Jayme Capurso Sept 2018:
    "The Australian government have sold our country to the highest bidder bit by bit, Australia is owned by overseas money and alienated the majority of the people who live here, we don't own any of it and can't afford to live where we grew up. Our cities are already becoming empty buildings owned by landlords who live in another country pushing the average aussie to the desert fringes….And our politicians get a fat pension for their short sightedness".

  3. What wasn't mentioned in this video is the governance problem that exists in Australia. Australian governments of both persuasions are highly susceptible to influence. Even the Institute for Public Affairs (a conservative think tank) admitted that Australia is a nation of rent seekers. This means that the government no longer governs based upon what is best for the country but instead makes decisions according to the wishes of the rent seekers. In relation to the housing market, government policy has been heavily influenced by the Housing Industry Association and the banks – both of whom have benefited greatly from the housing boom (though not for much longer). Indeed, the banks influence is so great that the current liberal government didn't call a Royal Commission until they received permission from the banks. It is almost certainly this same influence that has caused the weakening of the regulatory bodies that are supposed to govern the banks. ASIC funding is such that they can't afford to prosecute the banks in court so they instead have this ridiculous concept of "Enforcable Undertakings" where by punishments for misdemeanors are negotiated with the banks seemingly gaining the upper hand in all negotiations. This is akin to a wealthy individual, who has been proven in court to have murdered someone, negotiating a fine with the judge and so as to avoid a jail sentence.

    For example, in the CBA money laundering scandal, the CBA were potentially liable for tens of billions of dollars in fines but managed to negotiate a $750 million fine. The size of the fine was determined based purely upon the politics. It had to be big enough so as to allow the government to say that this is the largest fine in Australian corporate history and pretend that they're being tough on the banks however, when compared to the CBA's $10 billion yearly profit, it is a drop in the ocean. Doubtless, the CBA company directors still dine at the finest restaurants in Sydney after each board meeting – probably enjoying three course meals washed down with several bottles of Penfold's Grange Hermitage.

    The point however is that governments cannot govern for the good of the country when they are subject to influences from such powerful lobby groups. Members of parliament, like the members of the judiciary, should be forced to demonstrate that they have complete independence from the entities they are governing. Banks can make submissions to the executive on policy however no MP or minister should ever feel in anyway bound to having to make decisions in accordance with the submission. The MP's/minister's priority should be the good of the country and if this means going against the bank's wishes, then so be it.

  4. Silly American thinks he can short the Aussie housing market. The downturn arrived last year, we are already half way through it, tell me why haven't we seen a crash yet?
    So what if we lose 10 or 20% in the next year, we've had 20% growth every year the last few years. We just go back to 2016 prices and then things take off again. The correction has been good for buyers. In 10 years your house will more than double in value.
    First home buyers get a $30k tax break, no capital gains tax for everybody! Best property market in the world! Dont listen to this guy unless you're flipping houses in the next 2 years. Americans don't understand our market.

  5. Obviously the credit system is bad but I think negative gearing will be the catalyst, which was not mentioned much in this video. There's a lot of upper middle class people (and others, of course) with investments in property. Once they flee (because of a lack of capital gains from property, labor wanting to scrap negative gearing – who is likely to win the next election, the tightening of credit from the RC and potential rising interest rates), I'd expect it crash quite rapidly. Labor will screw renters over so they can lower housing prices. I don't mind but the renters are in for it.

  6. In Australia, the banks are partly to blame for giving loans that cannot be serviced in a higher interest rate market along with Negative Gearing plays a part of the problem in Australian housing affordability. But also consider that as whole sale loan rates increase, rates will rise independent of the Reserve Bank increases and people will not be able to repay the mortgages. House prices will drop, investors will pounce and house prices will stabilize. Mean while with immigration (new comers) into Victoria alone continues at app. 1000,000 per year the demand for rentals continues and in turn stabilizes or creates an increase in rental costs. Once the unions achieve wage parity to C.O.L ( in Australia real time wages have been going down for over a decade), affordability will increase putting pressure on competition and driving house prices up again.

  7. whats the name of the guy being interviewed? on a side the commbank branch manager cold called me for a mortgage this week they must be getting desperate

  8. A house next door to my parents place recently sold for 30% less than it went for in 2007 here in Perth, West Australia. In the same time house prices in Sydney have probably doubled. And all through the doom and gloom we have heard about in WA for the last 10 years compared to over east, I have been consistently busy with work, easily making 20% more than I would on the east coast. Even so I still feel the property market here in the west is slightly overvalued, although definately nothing crazy like the east coast.

  9. There are some realities that will not be changed. New house prices will not come down because they cannot be built for less, unless you think you can pay all the tradies less. The actual cost of building a house is higher these days. Also the government is selling land (here in Canberra) for $1,000 to $1,200 per square metre, They have seen an increase of more than 200% in government revenue in the last 5 years because of their rip-off land prices and much higher stamp duties, and increasing Land Tax! With land prices like this the price to build a house cannot come down. On top of this they are forcing people to get water tanks (and the associated plumbing), and now forcing people to get solar panels on new houses. This is not called affordable housing. That lie came and went. So prices will not crash, but they could stay flat for a long time.

  10. Negative gearing, a government back strategy to create wealth..for some while banks rub their hands together and are going long on all these mum and dad investors

  11. Not sure about aussie banks, but be careful shorting Canadian big banks. Many a short have been burnt. They have a oligopoly and can maintain fat margins regardless of the environment due their conservative nature.

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