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How Can The Market Crash If There Is No Bubble?

A report from News.com.au on Australia. “Prime Minister Scott Morrison has slammed Labor’s bold plan to fix the housing market, with the ominous warning it could ‘invite a housing market crash.’ But while the Coalition has poured cold water over the Opposition’s promise to limit negative gearing and halve the 50 per cent capital gains tax discount, it has ignited fierce debate among leading property experts and everyday Aussies alike.”

“News.com.au spoke to some of the country’s biggest names in real estate to get their take on what has become one of the hottest topics in the country. Starr Partners chief executive officer Douglas Driscoll warned far more research was needed before any ‘sweeping change’ was introduced.

“‘I think Scott Morrison is right — it could create a house-of-cards scenario, especially when the market is as precariously poised as it is,’ he said.”

“Philip Soos, Independent economist and PhD candidate investigating Australian bank crime and mortgage control fraud: ‘Not parody and not the Onion: the Real Estate Prime Minister says that cutting back the tax rorts that totally didn’t cause house prices to rise will cause a housing crash. Also, how can the housing market crash if there is no bubble?'”

The South China Morning Post. “Growing numbers of Hong Kong flat owners are selling up for much less than offer prices – some at more than HK$7 million (US$890,000) below bank valuation – as a rise in interest rates looms next week. According to the latest data from CLSA, the offshore arm of China’s biggest brokerage, between August 1 and September 6, at least 29 cases of low to mid-range properties were recorded as being sold for much less, 19 of them at below Hang Seng Bank valuations.”

“‘[Homeowners] are not positive about the prospects [for the home market]. They fear that if they ask for prices that are too high, their flats cannot compete with others,’ said Nicole Wong, managing director of property research at CLSA.”

“For instance, CLSA’s data shows a 998 square foot flat at the Park Towers development in Causeway Bay sold for HK$33 million on August 7 – that’s 18.3 per cent below Hang Seng’s valuation of HK$40.4 million.”

“One at Whampoa Garden sold on August 25 for HK$10.5 million, a 13.2 per cent down on its HK$12.1 million valuation, while another flat at Park Central development in Tseung Kwan O sold on August 1 for HK$8.3 million, 12.3 per cent below valuation.”

“‘Sellers are cutting their prices to unload stock to attract buyers and would rather cash in than hold on,’ said Wong, and she expects the trend to continue. ‘The downtrend has started. The trend for record rises in home prices is reversing.'”

From This Is Money on the UK. “The Royal Institution of Chartered Surveyors argued for an overhaul of property taxation after a survey of its members showed that they felt older homeowners were put off downsizing by the costs involved, which is clogging up the property market.”

“Sam Mitchell of online estate agents Housesimple said that London is firmly a buyers’ market at the moment, ‘with heavy price discounting the norm.'”

“‘There is a new reality in the capital that sellers are having to come to terms with,’ he added. ‘Prices are down on last year, and sellers have found it difficult to adjust to these price adjustments. Having enjoyed strong price growth for a decade it’s easy to become complacent and assume this upward trajectory will continue unabated.'”

“‘Many of the transactions going through at the moment are down to sellers accepting offers a fair bit below the asking price. Sellers and agents need to adjust their price expectations if they want to attract buyers.'”

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This Post Has 19 Comments

  1. ‘For instance, CLSA’s data shows a 998 square foot flat at the Park Towers development in Causeway Bay sold for HK$33 million on August 7 – that’s 18.3 per cent below Hang Seng’s valuation of HK$40.4 million’

    ‘London is firmly a buyers’ market at the moment, ‘with heavy price discounting the norm.’

    Oh dear…

      1. Nobody in here is going to spoon-feed you, Lazarus. Read what Ben posts and the HBB readers’ comments and draw your own conclusions.

    2. We are debugging this blog, so feedback about function is appreciated. There’s a pretty complicated caching plug-in installed and it has prevented new comments and posts from appearing. Hopefully we’ll have that all worked out with everyone’s help. Thanks.

  4. Like I mentioned yesterday, the caching is nutty. It’s a case of now you see it, now you don’t posts. And as Donk mentioned earlier, username and password must be entered with every new post.

    1. ‘username and password must be entered with every new post’

      Is that still the case? I thought I fixed that.

      1. A lot of those Craiglist ads are duplicative, since apartment complexes spam multiple ads for the same offers in violation of Craiglist policies.

  8. One of the WordPress plugins isn’t set correctly as I have to use the refresh button on the Homepage to see new posts. I have verified this behavior with Chrome, Edge and Firefox.

  9. “Prime Minister Scott Morrison has slammed Labor’s bold plan to fix the housing market, with the ominous warning it could ‘invite a housing market crash.’

    The political prostitutes, policymakers, and regulators who worked hand-in-glove with the banksters and REIC to create these insane bubbles need to be held fully accountable when their financial house of cards implodes under the weight of its own fraud and fictitious valuations. It’s ironic that the guiltiest parties are the ones who are most vehement in fighting any change to the fraudulent status quo because they claim it could cause a housing market crash – disregarding, of course, their own central role in creating these unsustainable bubbles in the first place.

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