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Aussie John takes aim at Steve Keen in property punch-up

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Australian Broker | 30 Oct 2013, 08:00 AM Agree 0
In a frank debate with economics commentator, Professor Steve Keen, John Symond dubbed his opponent 'Mr Bubble' and rejected suggestions the country's housing market is in trouble
  • Tony | 30 Oct 2013, 09:55 AM Agree 0
    At last someone takes on Keen. Keen belongs with Tim Flannery as yet another example of someone the media run to for a headline or comment. How many times in the past decade has Keen said the property market in Australia is going to crash
  • Inner East Melbourne Broker | 30 Oct 2013, 10:03 AM Agree 0
    Why do people continue to publish what Steve Keen has got to say.

    'Asian Buyers' - is this being taken way put of context by the media? There are strict FIRB rules that dictate that only brand new housing stock can generally be purchased by off shore investors - not exactly the bread and butter domain of FHOG buyers. A non resident investor cannot usually purchase an existing home on a block of land in inner Melbourne or Sydney.

    Maybe its the media commentators that are stereotyping somewhat by who appears to be turning up at auctions and OFI's.
  • not so old broker | 30 Oct 2013, 10:23 AM Agree 0
    I'm not keen on Keen. I'd like to know where he got his figure to make the statement (if quoted correctly) "claimed SMSFs and Asian investors are pushing first home buyers out of the Australian housing market". SMSFs claiming only that between 3.5 & 12% of the SMSFs invest inRetail & Commercial properties (respectively). And who actually provided him with the number of 'overseas" buyers to justify his claim. Chicken Little comes to mind.
  • Danny | 30 Oct 2013, 10:35 AM Agree 0
    My understanding of investment history of past busts is that one of the signs of a bubble is when the person urging caution is "shouted down" by the participants within the boom. But it is always different this time isn't it ?
  • Sharryn | 30 Oct 2013, 10:43 AM Agree 0
    I agreed Tony. I think the valuers are listening to Keen and the likes.
  • Wilko | 30 Oct 2013, 11:06 AM Agree 0
    Good on you John Symond.

    It is good to take on the likes of Keen who still treat the economy, post GFC, as an academic exercise.
  • Observer | 30 Oct 2013, 11:09 AM Agree 0
    Sooner or later Keen will be correct. A broken clock is correct twice a day.
    However there can be no doubt that overseas investment is driving up prices in Sydney (in particular) and that investors are crowding out first home, buyers particularly since the NSW First Home Buyers Grant was limited to new dwellings only. This is coupled with ridiculously tight development controls and NIMBY attitudes to new development in established areas which is limiting the supply of new homes in the areas young people want to live.
    Even at the periphery of Sydney, land prices are ridiculously high, driven by high infrastructure contributions to councils. Even then the supply is constrained by development controls and when land does come to the market there are many more buyers than blocks available, again driving up prices.
    Negative gearing laws should be amended to restrict the setting off of losses against future profits on sale and not against other non-property income.
    I do agree with Keen on one thing - the ability of SMSFs to gear property investments is a risky one and is already leading to some shonky selling practices a la Westpoint etc.
  • PeterT | 30 Oct 2013, 11:20 AM Agree 0
    Every time Steve Keen opens his mouth, a pixie dies...
    Seriously, what would it take for this guy to predict that house prices will risk? Every prediction he's ever made around housing has had a basis in the current conditions, but then has ignored how the market will react to those conditions. When his prediction fails he blames the policy makers who adjusted and corrected the market conditions.
    Case in point: "Housing will drop 40%," made just before the GFC. When the market boomed, he blamed the government grant and dropping interest rates. Any turkey could have seen that one coming when rates were 9%+!
  • Dacian Moses | 30 Oct 2013, 11:23 AM Agree 0
    Plenty of people have taken on Steve Keen. He has even hiked up Kosciuszko after losing a bet on the imminent demise of the housing market. I have always liked Symonds - but I will rely on Steve Keens economic theories over John's optimism any day. The market does not need to 'crash' for Steve to be right (look to Japan for inspiration)
  • Kay | 30 Oct 2013, 11:24 AM Agree 0
    Good to see comments from people who have not been in front of real clients - any Real Estate agent will agree we are seeing strong growth in house prices in Sydney. Valuers have a crucial role to play, but so do finance brokers and property spruikers - ASIC has put out a warning again .... As a Personal Finance Strategist - we need to look beyond the debate and see the true needs of the human beings we serve - they have lost hope and neither Keen nor Symond give a damn.
  • dpathle | 30 Oct 2013, 11:51 AM Agree 0
    All of the Aussie John fans need to compare qualifications to Keen and Symonds. Google search "Symonds Gadens ATO" and see what you find. Don't discount the words of the wise pessimist over the recommendations of the optimist salesman who has been in trouble with the ATO.
  • Ray | 30 Oct 2013, 12:05 PM Agree 0
    It is about time to raise stamp duty for foreign investors. Australian stamp duty should be lowered and foreigners should at least be tripled
  • Kay | 30 Oct 2013, 12:21 PM Agree 0
    Any Real Estate agent will agree we are seeing strong growth in house prices in Sydney. Valuers have a crucial role to play, but so do finance brokers and property spruikers - ASIC has put out a warning again. As a Personal Finance Strategist - we look beyond the debate and see the true needs of the human beings we serve - they have lost hope and neither Keen nor Symond see it.
  • Country Broker | 30 Oct 2013, 12:56 PM Agree 0
    Question , Does Keen regret selling his house , did he ever sell it , has he ever been correct in any property forecast ?
    Saying he belongs with Tim Flannery is an insult to Flannery
  • Positive Broker | 30 Oct 2013, 02:45 PM Agree 0
    I think John Symonds and the majority of us brokers who work closely with the property market everyday would have a much better idea if there was a property bubble. After years of stagnant growth we are miles away from a bubble.
  • Old Joe | 31 Oct 2013, 11:29 AM Agree 0
    One of the points that you never see in these debates is the reasons behind property prices and the locations. I mean Real Estate in Chelsea UK can be up t o $20MILL GPB ( not aussie ) and it was cheap once. The main point that I see is that there is a lack of stock and when the stock floods the market like Gold Coast and now Perth the prices start to stagnate. Keen never talks about this , he looks at the bubble effect but doesn't take in to account that if you move to Gosford and commute you lose 15 hours of your life on a train every day, compared to walking to work from the CBD or Potts Point. There is no CITY in any part of the world that does not have the price of square foot of real estate rising up as commuting becoming expensive and less reliable.
  • Concerned Broker | 31 Oct 2013, 12:10 PM Agree 0
    I was a sceptic on the housing bubble but now I believe that prices are being pushed higher by Chinese buyers. Until the last few years these buyers were looking at multimillion dollar properties in the top end suburbs. Last weekend I saw a property in Riverwood sell to a phone bidder from mainland china. Half the property was illegally built over a main sewer line and a water easement, yet it still went $200,000 over reserve. What would happen to the real estate market if/when these buyers stop buying?
  • adam | 31 Oct 2013, 05:46 PM Agree 0
    Seriously, Stephen Keen has lost all credibility, just bangs on with the same flawed academic argument that doesn't reflect the way home buyers or aspiring home buyers think. I recall Keen sold his apartment a number of years ago to back his judgement on property prices, i'm guessing it's probbaly 30-40% higher today - nice call.
  • John C | 01 Nov 2013, 09:32 AM Agree 0
    There is a real issue with the First Home Buyer and the construction of New Homes. This is still not being addressed, and whilst we have the acute shortage of property you will have this discussion of whether there is a Property Bubble or not. I suspect this is one of the reasons why Governments are not willing to release large tracts of land for new home building as it would force a correction in pricing. Australia's real estate is some of the most expensive in the world. If we had a population of 40-50 million people I could understand this, however with a population of only 23 million the current pricing does not add up.
  • Wilko | 01 Nov 2013, 10:03 AM Agree 0
    Fair dunkum dpathle?

    Aussie John's experience counts more than economic theory and qualifications. All the MBAs in the world could not stop the GFC and in some ways were responsible for it.

    I did your google search and have found out that Symonds had no trouble with the ATO in the end because Gadens has been found to be at fault.

    Seems to me that we should let Mr Keen be a mortgage broker and a real estate agent for a year to truly understand foreign ownership and inflated prices.

    if we up the supply then the prices will begin to come down. Truth is the governments of this land control a lot of the supply through stupid DA laws and once we have reform and start to ease the supply problems we will see an easing of prices not a crash of the bubble.
  • Septimus | 24 Dec 2013, 01:19 PM Agree 0
    I live in a plush Melbourne suburb surrounded by Foreigners who use the house market like a modern day gold rush. They come in speculate and get out all the time raising the prices. I cant keep up with them. But my kids will never have a chance to get in just so real estate people can have short term gain. Have you guys ever heard of Charles Ponzi? - obviously not. Steve K will have the last laugh on you but what about my kids?
    Hong Kong imposed a tax like the stamp duty mentioned above and that pulled up the same boom there overnight.
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