The future of Australian property prices

[wayneL]

The argument you're making is a classist political argument. It is about nothing more than the long held belief of a class stratified society.

The argument is attractive to skilled workers as they see it enabling them to pay someone to do their laundry cheaper. What they don't realise is that such a move would undermine the strength of the economy, removing the demand for their skills, landing them unemployed and in the same situation as the initial unskilled group.

For examples, see the USA. Their economy failed and are their wages sky high ? LMAO.

Failed?

Well not yet, that may still come if the socialist, pseudo-Keynesian, mock monetists have their way, but not yet.

Never confuse the business cycle with failure.

 

[cynic]

People on $15.96 an hour do not buy houses, nice try though.

I bought my first house on a net fortnightly wage of $484.60. I believe that my gross hourly rate at the time worked out to between $8 and $9. Houses were less expensive in those days but interest rates were so much higher!

 

[psailagroup]

Especially when some furniture is made in Indonesia.....(Off the Dick Smith website)


(Link)



Life Hacker Articles on Australian Pricing

Australia Has The Most Expensive IKEA Products In The Entire World

Ask LH: Why Does The Nexus 7 Tablet Cost So Much More In Australia?

Great point but easy to answers.
My opionion is based on working in the logistics industry.
1) shipping cost from Indonesia to Melbourne is 50% more vs Indonesia to melbourne
2) when the good arrive here, you have to pay duty and gst (duty) was designed to keep manfacturing in Australia alive but other cost have effected this law) rate for ikea furniture is 10% duty of the commercials value plus 10%gst
So already the good have increased by 20% just on government charges
Australian port charges are the highest in the world, due to wages, government red tape etc
The bad part is there is so many other barges to add its not even funny
10 years ago imported goods where cheap for the Australian public but now because we rely on importing has gone up through the roof

 

[Mrmagoo]

On the contrary, you remove many of the incentives for upskilling. Who would want to put them selves through 10 yrs of medical school if there isn't a significant gain to be had from this? (not taking the cost involved into account)

No medical school is 10 years.

If the only two jobs in the world were at Kmart or as a Doctor and no one wanted to be a Doctor and everyone wanted to work at Kmart. Then Maybe.

 

[Julia]

No medical school is 10 years.

Rubbish. If you want a specialist qualification, I doubt it would be fully achieved even in ten years.

 

[Mrmagoo]

Rubbish. If you want a specialist qualification, I doubt it would be fully achieved even in ten years.

Pass.

 

[FlyingFox]

Great point but easy to answers.
My opionion is based on working in the logistics industry.
1) shipping cost from Indonesia to Melbourne is 50% more vs Indonesia to melbourne
2) when the good arrive here, you have to pay duty and gst (duty) was designed to keep manfacturing in Australia alive but other cost have effected this law) rate for ikea furniture is 10% duty of the commercials value plus 10%gst
So already the good have increased by 20% just on government charges
Australian port charges are the highest in the world, due to wages, government red tape etc
The bad part is there is so many other barges to add its not even funny
10 years ago imported goods where cheap for the Australian public but now because we rely on importing has gone up through the roof

good points but this is a partial answer.

1) Depending on the goods this can have a significant impact e.g large bulky goods but generally is a small portion of the final price. certainly does not double the price.

2) Many countries have import duties and trade quotas. The tax system in the US is even more complicated than here as you have state and federal levies. The GST is a consumption tax that applies to all goods sold regardless of origin (GST in Uk is now 20%, up form 17.5%).

Source: My father was importer/exporter for many years both in Aus and overseas until retirement.

The single major factor in the equation is wage cost and general cost of doing business here. Another reason is that many overseas companies take a profit now so as to buffer prices changes when/if the dollar drop, well this is an argument used anyway (for example a lot of vehicles are still prices at exchange rates of 1 AUD = 0.8-0.9 US Dollars).

However the most basic reason is that we the consumer's will gladly pay the price as we will gladly pay the price for houses.

My pet peave is the one. I will certainly cop a lot of flack for this. Please be gentle lol.

http://www.porsche.com/usa/models/boxster/boxster/

Price in Oz, only 120K.

 

[FlyingFox]

Pass.

Sorry mate. Lost all respect for your replies....

I think you'll be happy with everyone working at Kmart, Wollies etc. Mind you they pay really well.

To add to Julia's answer, a colleague of mine finished his Geriatrics qualifications. I am not sure if he had to do post grad med but currently it is:

3-4 yrs for BSc plus Honours
4-5 yrs of Post grad Medicine
7 yrs of Geriatrics Training (got paid for this)

He has since been told that to get permanent positions in the field, he needed a PhD and he is now doing one.

 

[Mrmagoo]

Sorry mate. Lost all respect for your replies....

I think you'll be happy with everyone working at Kmart, Wollies etc. Mind you they pay really well.

To add to Julia's answer, a colleague of mine finished his Geriatrics qualifications. I am not sure if he had to do post grad med but currently it is:

3-4 yrs for BSc plus Honours
4-5 yrs of Post grad Medicine
7 yrs of Geriatrics Training (got paid for this)

He has since been told that to get permanent positions in the field, he needed a PhD and he is now doing one.

Only 4-5 years of which is "medical school" the rest is other stuff.

Honestly the **** people come up with once the word "doctor" gets involved is amazing.

 

[FlyingFox]

Only 4-5 years of which is "medical school" the rest is other stuff.

Honestly the **** people come up with once the word "doctor" gets involved is amazing.

No all of which is training he requires to practice as a Geriatrician. There are similar lengths of training required for other specialties including general practice. The pay in these training periods is nothing to write home about and you need to not only complete actual work but studies at the same time. Moreover you are never actually a qualified medical doctor unless you complete this. The "other stuff" is just as important if not more so. Finishing a uni degree is the easy part.

There are similar post qual training periods for most professions, e.g Lawyers, CPA for accountants but not necessary.

I can't speak for other people but this is not ****. I am a "doctor" (I have a PhD, I work in medical research)!!

 

[McLovin]

No all of which is training he requires to practice as a Geriatrician. There are similar lengths of training required for other specialties including general practice. The pay in these training periods is nothing to write home about and you need to not only complete actual work but studies at the same time. Moreover you are never actually a qualified medical doctor unless you complete this. The "other stuff" is just as important if not more so. Finishing a uni degree is the easy part.

There are similar post qual training periods for most professions, e.g Lawyers, CPA for accountants but not necessary.

I can't speak for other people but this is not ****. I am a "doctor" (I have a PhD, I work in medical research)!!

I know an oncologist and a pediatrician. The oncologist didn't start "working" until he was into his 30's, the paediatrician didn't start until she was 28. They may not have been at school, but they sure as hell weren't treating patients unsupervised.

 

[Vixs]

Firstly, good on you Vix! I wish we were/are as good with our money.

However no one said it can't be done (except in a few situations). I think what we are saying is that housing is Australia is absurdly expensive compared to most metrics and most other places around the world.

Also why should I be sold into this scheme and be indebted to the banks for 30-60 yrs? There is no guarantees that I will work myself up the property ladder. I think to some of us it sounds ridiculous to be living in or on the verge of mortgage stress just to be in a house and not even where we want to live.

In any case, I want to congratulate you once again for sticking to your plan. I wish more young people thought as hard about their financial future,myself included.

Cheers, I appreciate that, and I'm glad it was accepted with the tone I intended - as information and not an argument. That's not my plan, just in case there was any confusion - I'm not single, not looking to do all that on my own hehe - just wanted to demonstrate it was possible per MrMagoo's post.

I do recognise our prices are by global standards extremely high, but I can't change that myself, and nor can anyone else until a substantial change is made to negative gearing. Only thing that can ruin your chances of success in this country is not having a job.

The hardest part of someones wealth creation seems, to me, to be that first step of getting out of the rent cycle and into your own house.

 

[Mrmagoo]

No all of which is training he requires to practice as a Geriatrician. There are similar lengths of training required for other specialties including general practice. The pay in these training periods is nothing to write home about and you need to not only complete actual work but studies at the same time. Moreover you are never actually a qualified medical doctor unless you complete this. The "other stuff" is just as important if not more so. Finishing a uni degree is the easy part.

There are similar post qual training periods for most professions, e.g Lawyers, CPA for accountants but not necessary.

I can't speak for other people but this is not ****. I am a "doctor" (I have a PhD, I work in medical research)!!

I missed the bit where that is all "medical school".

The required, non paid bit was 5 years, one year more than an engineer needs. Big deal.

Are you going to apologize for attempting to mislead people into thinking a medical degree is 10 years instead of 5 ?

 

[FlyingFox]

I missed the bit where that is all "medical school".

The required, non paid bit was 5 years, one year more than an engineer needs. Big deal.

Are you going to apologize for attempting to mislead people into thinking a medical degree is 10 years instead of 5 ?

Fine I will correct myself and apologize if I mislead anyone. The required period of training for a medical doctor can be over 10 years; a part of which is paid. Currently most medical schools in Australia, US and UK are moving to a post graduate medical degrees. While the post graduate degree is only 4-5 yrs, the required undergraduate degree is another 3-4 yrs. In most cases this is a medical science degree. Therefore the total time in "medical school" is 7-8 years.

This does not change the point of my initial post. Why would someone spend X years getting training, accumulate HECS debt, work longer to be paid similar to someone working at K-Mart, Wollies etc? As weird as this sounds, it can be true for many new graduates......

Simple economic principles, can't have risk free reward. Opportunity cost always has to have a price!

This applies to whether you do engineering, law, accounting etc etc. Obviously the opportunity cost is different for each. Not to mention the risk of not actually succeeding/getting a job.

 

[Vixs]

Rubbish. If you want a specialist qualification, I doubt it would be fully achieved even in ten years.

Sounds about right Julia.

4 years for undergrad MBBS. (EDIT: Thought it was 6 for some reason, 4 for people who held a different degree. My bad.)
1-2 year internship.
4-6 years postgrad specialisation for surgeons/specialists.

Loosely recalled from a conversation I had with my cousin who is currently doing her postgrad.

 

[FlyingFox]

Cheers, I appreciate that, and I'm glad it was accepted with the tone I intended - as information and not an argument. That's not my plan, just in case there was any confusion - I'm not single, not looking to do all that on my own hehe - just wanted to demonstrate it was possible per MrMagoo's post.

I do recognise our prices are by global standards extremely high, but I can't change that myself, and nor can anyone else until a substantial change is made to negative gearing. Only thing that can ruin your chances of success in this country is not having a job.

The hardest part of someones wealth creation seems, to me, to be that first step of getting out of the rent cycle and into your own house.

While there may not be a change possible without changes in negative gearing, recognizing that it is an issue is the first step. Left to it's own devices, the economy will correct it. Prices don't anywhere for a few years and all the "investors" may just see the error in the whole negative gearing argument.

Not having a job will certainly put a spanner in things but it is not a guarantee of success either. Here or else where.

The wealth creation bit depends on many factors. I was having a conversation with someone about the element of "luck" and "gut feeling" involved in wealth creation. I recently came across the story of William Knox D'Arcy. Have a read if you get a chance. Having said that, you will def not win if your not in it.

My personal issue is that a bad decision at the early stages can really set you back. Look up a post made by psailagroup a few days ago regarding his house valuations. Went from $420K to $360K in two years. Not saying that it has any impact on his situation or anyone else's. But that its a change of 60K or 14% in two years. Buy now and you have saved 3-4 yrs off your mortgage.

Seen many people from my parent's and in-laws generation make an absolute killing in housing. Been told repeatedly to get into the market etc etc. Anyways...I am carrying on a bit....Good Luck!

 

[FlyingFox]

Sounds about right Julia.

4 years for undergrad MBBS. (EDIT: Thought it was 6 for some reason, 4 for people who held a different degree. My bad.)
1-2 year internship.
4-6 years postgrad specialisation for surgeons/specialists.

Loosely recalled from a conversation I had with my cousin who is currently doing her postgrad.

Hmmm...forgot about the internship.

undergrad MBBS is atleast 5 years usually 6. Most schools are switching to postgrad now which is 4yrs.

 

[So_Cynical]

This does not change the point of my initial post. Why would someone spend X years getting training, accumulate HECS debt, work longer to be paid similar to someone working at K-Mart, Wollies etc? As weird as this sounds, it can be true for many new graduates......

Simple economic principles, can't have risk free reward. Opportunity cost always has to have a price!

I have a nasal polyp, cost to remove in Aust thru the private system $3500 approx with the surgeons fee being $1350 for maybe 2 hours work...its simple day surgery.

Cost to have the same day surgery done in the best Hospital In Manila with one of the top surgeons in the Philippines about $1100 .. less than a third.

Pretty sad that i am being forced in a round about way to get non emergency surgery done off shore...im really quite disgusted with the attitude of the medical industry here, the surgeons receptionist made me feel quite inadequate and poor with her attitude to my poverty.

 

[Garpal Gumnut]

I have a nasal polyp, cost to remove in Aust thru the private system $3500 approx with the surgeons fee being $1350 for maybe 2 hours work...its simple day surgery.

Cost to have the same day surgery done in the best Hospital In Manila with one of the top surgeons in the Philippines about $1100 .. less than a third.

Pretty sad that i am being forced in a round about way to get non emergency surgery done off shore...im really quite disgusted with the attitude of the medical industry here, the surgeons receptionist made me feel quite inadequate and poor with her attitude to my poverty.

Thats socialism for you mate.

It's on the nose.

Seriously though, if our public health system wasn't so full of receptionists and pay clerks on sick leave about being "bullied" it could provide better services to polyps such as yours.

Also there is a shortage of Specialists due to a closed shop attitude which only a Liberal government will be able to smash.

gg

gg

 

[FlyingFox]

I have a nasal polyp, cost to remove in Aust thru the private system $3500 approx with the surgeons fee being $1350 for maybe 2 hours work...its simple day surgery.

Cost to have the same day surgery done in the best Hospital In Manila with one of the top surgeons in the Philippines about $1100 .. less than a third.

Pretty sad that i am being forced in a round about way to get non emergency surgery done off shore...im really quite disgusted with the attitude of the medical industry here, the surgeons receptionist made me feel quite inadequate and poor with her attitude to my poverty.

It's across the board, not just medicine. Cost of tap washer 45c, Cost of changing said tap washer $45 (if your lucky). Cost of living for everyone is much higher here.

But I agree that the system here is flawed. A lot of it does have to do with government and self imposed regulation on numbers in various specialities as well as other legislation. The people in the field are happy to keep is as is at it benefits them.