Can someone explain to me the rational argument for believing that there...

MPmaster
MPmaster

Can someone explain to me the rational argument for believing that there *isn't* a housing bubble in London?

It seems so obvious that I'm struggling to understand how anyone can fail to see it.

Am I missing something?

Or are people just ignoring obvious warning signs just like last time?

Evil_kitten
Evil_kitten

Or what the argument is for believing that there's *not* a housing bubble in Vancouver?

viagrandad
viagrandad

Have people already forgotten what happened the last time real estate experienced dramatic appreciation in a very short space of time?

happy_sad
happy_sad

Does nobody realise how completely insane all this is?

haveahappyday
haveahappyday

How can you look at this and not be concerned?

SomethingNew
SomethingNew

Why are we just ignoring the fact that S&P500 stocks have never been more overvalued?

likme
likme

Why are people still buying at these multiples?

Are they completely insane?

Or just gluttons for punishment?

Poker_Star
Poker_Star

And this is happening at a time when global trade is collapsing and the economy is about to fall off a cliff.

If only you knew how bad things really are.

Techpill
Techpill

@Poker_Star

(these numbers are from Caterpillar)

Methnerd
Methnerd

Please lads, be careful out there.

Raving_Cute
Raving_Cute

@MPmaster
There's gonna be a world economy collapse
why
BECAUSE THE HOUSING MARKET IS BOOMING IN LONDON AND VANCOUVER
LOOK AT HOW IT APPRECIATED IN AMERICA IN BROAD REGIONS EXPLAINED BY SUBPRIME MORTGAGE LENDING INSTEAD OF THESE FEW AREAS
t. a moron

London and Vancouver are in massive housing market booms because of migrants and foreign "investment". In the former, pretty much EVERYONE wants to go live there from the rest of the country. It's got more population in the Greater London area than some of the other countries of the UK combined.

The difference is that in both of these areas, get this

THERE ARE NEXT TO NO NEW HOUSES BEING BUILT, YET MIGRANTS AND FOREIGN MONEY CONTINUES TO PILE IN.

Something that isn't the case in the rest of the fucking country.

The only people who are affected by this are rich foreigners and literally no one else. It will be a good thing when this bubble pops, and these areas finally become habitable for whites again

Crazy_Nice
Crazy_Nice

@MPmaster
Housing prices are inflated sure but the s&p 500 is priced in for the TPP. If the TPP doesn't work out it will crash, if it does work out the multiples are justified

King_Martha
King_Martha

@Crazy_Nice

The TPP passing would justify the S&P500 shiller PE being 62% above the mean value?

Ok.

Soft_member
Soft_member

@King_Martha
Yep. The short term benefits to corporations will be massive if the TPP isn't rendered toothless

girlDog
girlDog

@Raving_Cute

Also, it's not just London.

The broader south east region, which isn't exactly being flooded with Chinese money, is also up substantially.

The rest of the country is pretty much irrelevant - but you don't need literally everywhere to be massively overvalued to have a dangerous bubble.

Evil_kitten
Evil_kitten

@Raving_Cute

And what's going on in Oslo?

Is that all foreign speculator money too?

Boy_vs_Girl
Boy_vs_Girl

@MPmaster
Housing prices are driven up by immigrants one way or another.

There are a billion indian people in India. 90%+ of them would give an arm and a leg to be allowed to move to Britain.

Most politicians own many investment properties as a large percentages of their net worth.

If the price moves down, all they need to do is turn up the immigrants tap. The indians will flood in, they will buy/rent up everything causing massive demand propping prices up for another 5-10 years.

They can do this until India is drained of 1 billion people, or Britain collapses due to lack of infrastructure to support the population.

This is why the bubble is never going to collapse completely. At best it will 'consolidate' for a decade and shoot up again when the next generation of politicians realise the pattern and vouch for more immigrants.

happy_sad
happy_sad

@Boy_vs_Girl
Add to this that central banks all over the world have been cutting rates like no one's buisness.

I mean market corrections are normal. A 15% drop every 4 years or so, is normal standard behaviour.

BUT if Central banks are so afraid of this, that they're cutting rates to 0% and in some cases negative just to avoid it... then when it finally does happen it will be much much worse.

Until then though the low interest rates contributes to the demand for housing.

I mean in Sydney pic related house is worth 1.5 Million AUD. (about 1Mill USD). The median house is a million dollars.

I just don't believe there's that many people walking around with a million dollars in their pocket. Completely loan fueled. And the loans are completely fueled by the low interest rates.

What I predict is about 20 more years of this.. and then a devastating bout of hyper inflation that changes the world forever.

Burnblaze
Burnblaze

@Crazy_Nice
If a stock already has all possible future successes priced in, but none of the equally likely failures then it is entirely overvalued.

Lord_Tryzalot
Lord_Tryzalot

@MPmaster
there's a bubble here in Auckland too.

Here's the thing, markets are zero sum. In order for there to be a bubble, most people have to believe that there is not a bubble. Greater and greater fools.

If the sheeple come to their senses and see the bubble, they panic, sell and pop the bubble.

A bubble is psychological.
The bubble IS the incorrect belief that there isn't a bubble.

It's not hard to beat the retail investor, it's not hard to be smarter than the crowd. Sit tight, be right.

ZeroReborn
ZeroReborn

london's population is up 1.5 million in the last 25 years, and increasing at a rate of 1.5% a year for the past 5 years.

as far as i know, london has a some of the most stringent zoning issues for new construction in the world. they are literally running out of space.

it's inflated for sure, but the market is also struggling to keep up with demand.

JunkTop
JunkTop

Bubble in Australia. In New Zealand in some areas is much worse.

Fuzzy_Logic
Fuzzy_Logic

Blame easy money and the fed preventing deflation in 2009. All the malinvestment was never burned off. Now we have price increases without growth.

Ignoramus
Ignoramus

@MPmaster
Can someone explain to me the rational argument for believing that there *isn't* a housing bubble in London?

There is one mate. Everyone is in denial after Brexit.

The endgame will lead to the break up of the United Kingdom and London become a separate state like Singapore.

LuckyDusty
LuckyDusty

@MPmaster
@Lord_Tryzalot
What this man said. You are in the right my friend, the mind of the vulgar man cannot see what is obvious - It cannot see the tree from the forest, therefore only few will have the knowledge and capacity to make a prudent decision. The rich become richer, and the fools poorer.

ZeroReborn
ZeroReborn

@Booteefool

25k new homes for a population that is increasing 150k a year.

up 35% and still not keeping up with population growth.

happy_sad
happy_sad

hurr muh supply and demand

Housing does NOT work like that.

It's supply and SOLVENT demand.

Know the difference, it might save your life.

Now, what would happen, if, suddenly, central banks' madness doesn't work anymore?

You guessed it.

iluvmen
iluvmen

@Crazy_Nice
Another reason to root against the TPP.

Ignoramus
Ignoramus

@happy_sad

I genuinely didn't believe that they'd be able to keep rates this low for this long without things falling apart. I'm staggered that it hasn't collapsed.

But it can't hold together forever. Eventually, things are going to break.

TechHater
TechHater

Brexit has taken a lot of air out of the real estate market in London already although pessimism could help ease the let down.

Nude_Bikergirl
Nude_Bikergirl

@happy_sad
What suburb user?
Kellyville/Castle hill has prices going for like 2m per acre. I'm on the wealthier side on acreage near Rouse hill and land doubles in price when developers hear "train line" and "acreage" in the same sentence.

Asian demand was what has driven the 2014/2015 growth until they capped it from Aus/Chinese ends, and the current boom had some nice houses near me go for 4 & 3.7.

Growth like this isn't sustainable, and the money is coming from nowhere. Reserve rates this low, prices this high, negative rates going to happen in 2018/19, and QE by 2020 until there is another tech boom.

People in North West Syd literally mortgage their average 2 storey house and pay back interest only, and just expect the house growth to continue.

Stay safe user, this shit is going to get rough.

lostmypassword
lostmypassword

@happy_sad

I predict about 20 more years of this

You think this current bubble has 20 years left in it?

Or that we'll have cycles of bubbles and crashes for 20 more years until hyperinflation?

RumChicken
RumChicken

@viagrandad
Money wasn't infinitely available last time. There was no such thing as QE so it had to stop when the market ran out of buyers. Strap in, we're going for a new record.

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