There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.
Each Saturday morning I like to share some of the ones I’ve read during the week.
Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.
Housing Bubble Is Here, Admits Former Property Cheerleader
Your Investment Property Magazine quote economic commentator Christopher Joye’s article in The Australian Financial Review where he suggests that Australia is in the midst of a housing bubble.
Joye famously took on Steve Keen in February of 2011 in a televised debate on Business Today, arguing against the existence of a housing bubble. But Joye has now claimed that Australian housing is overvalued.
“When the Reserve Bank of Australia deploys its alternative assumption – which is the more modest annual house price growth rate since 2004 of about 4 per cent in nominal terms – its model finds that Australian homes are 19% overvalued.
“This just happens to be the same result you get if you compare the house price-to-income ratio to its average since 1993. Other credible benchmarks on which to base future house price appreciation – including household income growth, the returns consumers think they will get and the rate at which rents rise – similarly imply that housing is overvalued by between 20% and 30%,” Joye said.
Joye said the Reserve Bank of Australia has dismissed the idea of a housing bubble because credit growth is low. He argued that this was a misconception on the part of the Reserve Bank.
“This is muddle–headed for two reasons: first, housing credit growth is outpacing incomes, which is the key criterion; second, credit growth is only meaningful in respect of the light it sheds on changes in the level of household leverage and the probability of borrowers defaulting,” Joye said.
While house price growth has seen a slowdown, Joye argued that this was seasonal and that prices are not cooling.
“With banks promoting the cheapest mortgage rates ever, I suspect Australia’s nascent housing bubble will get bigger,” he said.
How much do you need in super to retire? | Buying a property with a twist | Is there a good time of the year to buy property?
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
Details of this week’s show:
Cate Bakos explains why she prefers to buy in winter, rather than spring
Shannon Davis tells us what he looks for when buying a property
Chris Gray explains how you can get started in property investment without having to be rich to do so
I talk about superannuation and how much of it you will need to retire comfortably
You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.
Top 10 markets to avoid
Property Observer quoted Terry Ryder’s Oversupply Alert where he warns investors to steer clear of Brisbane’s inner city, New South Wales’ Hunter region and Queensland’s Emerald.
Here are Ryders’ top 10 markets to avoid:
- BRISBANE INNER-CITY (QLD)
- EMERALD (QLD)
- GLADSTONE (QLD)
- GRACEMERE (QLD)
- HUNTER REGION (NSW)
- MACKAY (QLD)
- MELBOURNE INNER-CITY (VIC)
- MORANBAH (QLD)
- PERTH INNER-CITY (WA)
- PORT HEDLAND (WA)
40% of Sydneysiders speak a non-English language at home – Pete Wargent
In his blog regular Property Update Blogger Pete Wargent quotes a very interesting article in the Sydney Morning Herald which puts a different spin on the concept of “foreign buyers” of property in Sydney.
The percentage of Sydneysiders who speak a community language at home has increased rapidly from 27pc of residents in 1996, to a much higher 38pc in 2011.
In 21 suburbs, English is not the most common language, with only 12pc of residents in Cabramatta nominating English as their first language.
Fun weekend video: Flight Attendant Makes a Hilarious Speech
Enjoy this fun pre flight speech – I bet this video will have you watching till the end.
Weight loss improves brain function
If anyone carrying a few extra pounds needs further motivation to lose it then here it is. People who are obese tend to show deficits in memory for events, but this is reversible according to Science Daily:
“Memory performance improved after weight loss, and…the brain-activity pattern during memory testing reflected this improvement. After weight loss, brain activity reportedly increased during memory encoding in the brain regions that are important for identification and matching of faces.”
Blogs you may have missed this week:
If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week:
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.