House prices to keep rising for years
- Thread starter moses
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And what tax might this be?
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You have to be kidding.
You seriously believe that without the FHBG being increased that builders would have zero work. Most builders that I have approached have at least 6 months of work, and hey, if they got a little desperate they would just decrease what they charged, and hence stimulate housing organically.
Plus you are looking at this from a very narrow perspective.
You fail to recognise that money tied up in overinflated houses is what restricts spending, which not only generates GST, but also jobs in other industries, and investment in other industries which generates jobs and export opportunities.
What would subsidising value adding export industries ( eg steel ) to the value of income tax cuts and FHBG do for this country? .. oh, only result in incoming foreign money, which would be distributed through the economy, generating jobs, wealth and rivers of money for the government to pay off its debt.
Instead people put it into clay and wood which has no value for australia, and does nothing to help ensure future prosperity for the country
My argument extends back to the previous gov and the current one giving handouts of mining boom money. Where is the ROI for the country if it is ploughed into houses, and is stagnating investment that the government then generates returns on?
Housing is just ploughing money that could be used for productive investment
So you got $1000 you create 10 jobs in your backyard you get back
$200 bucks in income tax, so you lose a thousand bucks to make $200 bucks.
Nice I like your way of thinking
Better you got $1000 buck you buy a candy machine, you then produce Candy to sell to the Australian children, not only that, you sell Candy to the Chinese Children and the yanks as well and you get more GST and Income from export then you can start to see real money coming to the coffer.
You don't think all the excess money the government has lately come from selling Iron Ore to Australian Builder is it? Look what happen when you just sell stuff into your own backyard? the damn thing collapse...
$210 Billion black hole in revenues coming from company that sell stuff oversea.
Why the Chinese Government funds has so much money? that exactly what they do, they make toys to sell to the Chinese, not only they do that they sell to the Yanks and to the Aussies and who ever else want to live it up and spent more than they earn..and if they keep doing it for a long time they end up owing your backyard...
But that is just me looking at Australia as a country interest, not
me too, me too, interest.
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satire kincella, satire....
http://www.google.com.au/search?hl=en&safe=off&q=define%3Asatire&meta=
Interesting point and checked to see how we compare. A quick search found 2 sources, one from 2000 & one from 2003.
http://www.nationmaster.com/graph/peo_hom_own-people-home-ownership
http://www.photius.com/rankings/homeownership_rates.html
Spain, Greece & Ireland win hands down with a whopping 85.3%, 83.6% and 83% respectively... (assuming the figures haven't changed that much over the last few years)
We'd have to be top 5 I'll bet and increasing with the FHB shift from renting to owning over the last few quarters.
9 million houses (say), 54K new FHB's = 54K less renters, could be up roughly 1.2% now, maybe over 2% by the time the FHB boost is phased out at the end of the year.
I love it, now we can really put the money where our mouth is.
http://business.smh.com.au/business/betting-on-the-house-20090513-b3cs.html
Just remember guys house price double every 7 years so always go Long Contract on this one
but on the flipside I wonder what happen to house price when there is a flood of short contracts on the index and people can see where the market is putting their money on property.
http://business.smh.com.au/business/betting-on-the-house-20090513-b3cs.html
Just remember guys house price double every 7 years so always go Long Contract on this one
but on the flipside I wonder what happen to house price when there is a flood of short contracts on the index and people can see where the market is putting their money on property.
Just remember guys house price double every 7 years so always go Long Contract on this one
ROE you keep saying the above over and over and over again and again, but it really looks silly as nobody here is, or has, argued that. So really I'm not sure who your point is directed at other the well-battered straw man of your own creation?
Re that housing "futures" market, will be interesting to see if it get's enough liquidity to make it actually worth trading or using for hedging etc.
Cheers,
Beej
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You can still use the often resorted to realestate argument that your house is "different" to what the index is measuring. Seems to work well for everyone who hasn't tried to sell their mcmansion recently.
I think this will be awesome for the realestate market as it will introduce more volatility and help it return to trend levels.
if its like the warrants...and the market maker is absent...or cannot be bothered etc...used to find sometime when the market was up and I wanted to sell...there was no buyers and the opposite...
I can see more losing money on an index than anything else...maybe they will get liquidity
oh there is another thread on the indexs subject....but hey
about the satire I recognise it when I see it.... I still say it was disgusting...and it tells me heaps about the poster
I can see more losing money on an index than anything else...maybe they will get liquidity
oh there is another thread on the indexs subject....but hey
about the satire I recognise it when I see it.... I still say it was disgusting...and it tells me heaps about the poster
hello,
thanks for your opinion,
no houses/units arent overinflated in my opinion, maybe to you and others
the ROI for government on one humble house/unit is massive over many many years
thankyou
associate professor robots
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Well your opinion flies in the face of historical trends.
As for ROI, I'm sure any educated person who reads these posts can make a judgement on where the money flow fallacies of residential housing are, and that it is wasteful, unproductive and hinders prosperity of all australians. Unfortunately people with interests in housing tend to have less appreciation of the reality of money flow and investment for future prosperity than people who invest in shares or businesses, as evidenced in your inability to respond to logical argument.
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I think that it is reasonable for people to disregard my post regarding this as
a) I was being too aggressive, and this post is questionable too.
b) It probably hit too close to the mark, as it is logical and true
as to your post,
1. To own, yes it is a priority.
2. Educated in what is the question, there are an awful lot of intelligent people who have no clue about investment and economics, and hence
a) why they use dodgy "professionals" to guide them
b) why they avoid more sophisticated investment vehicles
c) why they think that housing is a positive for the wealth of the country
d) why they welcome Kevin Rudd's poor policy regarding GFC
I find it amusing when financial market TRADERS complain about spending on housing being economically unproductive!
What economic value does active/short term trading of shares/options/futures add exactly??? What proportion of Australia's productive capacity (ie smart/capable people, businesses etc etc) devote their time and energy towards simply profiting from the allocation of capital, and the short term movements in various asset and commodity prices, rather than actually producing something with some lasting value from their labour?
At least when a house is built, it is something that has lasting value and utility and is directly related to the standard of living available to people who live in our country! The fact that high value is placed on this, plus the underlying land (which at the end of the day IS our country!), is no bad thing. Land ownership is not a right - we are lucky to live in a country where land/home ownership is in fact attainable to the majority of people.
Remember that even if house prices were to fall, they would still be equally as expensive to the majority - as the prices are driven by the underlying perceived value. All that changes is the number of $$$ that the buyers in the market have available to pay for what they want.
Cheers,
Beej
What economic value does active/short term trading of shares/options/futures add exactly???
What proportion of Australia's productive capacity (ie smart/capable people, businesses etc etc) devote their time and energy towards simply profiting from the allocation of capital, and the short term movements in various asset and commodity prices, rather than actually producing something with some lasting value from their labour?At least when a house is built, it is something that has lasting value and utility and is directly related to the standard of living available to people who live in our country! The fact that high value is placed on this, plus the underlying land (which at the end of the day IS our country!), is no bad thing. Land ownership is not a right - we are lucky to live in a country where land/home ownership is in fact attainable to the majority of people.
Remember that even if house prices were to fall, they would still be equally as expensive to the majority - as the prices are driven by the underlying perceived value. All that changes is the number of $$$ that the buyers in the market have available to pay for what they want.
Cheers,
Beej
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I find it amusing when financial market TRADERS complain about spending on housing being economically unproductive!
What economic value does active/short term trading of shares/options/futures add exactly???
100% agree, there is no productivity in relation to this.
What I am saying is that the money invested in it generates no ROI for the country, not like, say investing in businesses which not only employ people long-term but also increase money inflows into the country.
I can see soft dough has no idea what he is talking about....lets start with all the taxes the govt receives from property...land tax, rates for the locals...stamp duty on mortgages...
then all the tradesman earn a living building repairing renovating....then all the businesses earn money selling furniture, white goods, sof furnishings...the list is endless
then all those tradies and businesses spend money back into the economy...giving people jobs...spreading the money around
oh and you think you are educated....try pulling the other leg...see if that works
then all the tradesman earn a living building repairing renovating....then all the businesses earn money selling furniture, white goods, sof furnishings...the list is endless
then all those tradies and businesses spend money back into the economy...giving people jobs...spreading the money around
oh and you think you are educated....try pulling the other leg...see if that works
What economic value does active/short term trading of shares/options/futures add exactly???
Gives the traders extra money, which they can use to buy any number of things, just like builders do...Provides listed companies higher sources of funding at effectively free rates if they need to raise capital
I think share ownership does give encouragement for innovation by providing funding, and ingenuity for companies to try new things, try new products, and go into new markets. In theory anyhow! Housing is a basic function, it should not be speculative, or require a large proportion of a weekly spend on it. I thing long-term it actually has a detrimental effect on our economy as people spend too much money on this basic function, and not be encouraged to spend it on other more productive items.
As an example.. say I cleared $1000/wk which was close to an average wage. In today's world, say I require $400 to service an average mortgage or rent.
Now say in mr fresh's imaginary world of roses, a nice home cost $200/wk in mortgage or rent. Now seeing as I have an extra $200 worth of "spare" money each week, what do I do with it? Sure, I could spend it, which provide some consumer benefit to the economy... but say I had most things I needed, maybe instead, as I had a whole extra $200/wk I would think "ok, I'm bored of what I am doing, maybe I should save or invest that money in something else". Now housing wasn't really a speculative thing in Fresh World, so there was no point using that money to buy an investment property..
Eventually, I have a good amount of "spare" money set aside so decide to try something different by starting a new business. That business goes on to create some brand new form of widget which takes the world by storm. Not only does this require materials that are required locally rather than exported (so we can buy widgets bought overseas instead of here!), it creates employment, and eventually brings money into the country by those in say Europe that love my widget. That money flows through to the rest of the economy, which provides further businesses, and encouragement for others to make further magic widgets that the rest of the world loves, and makes Australia a strong productive economy.
By spending that extra $200 on housing we have a lot of extra houses and shelter that do not provide any further productive capacity.. none of which can be exported either.. so what!
Firstly - if you take this argument to it's extreme, who is to set what the "lowest cost" for "basic shelter" should be? Remember there is a point at which the shelter will become more and basic the lower the cost. Conversely the higher the cost the better the shelter could be. If you take this to the extreme, we could be like an old eastern block communist state where all property is state owned and we get "allocated" our concrete box to live in for free, then all our spare money can go into "more productive" things! However, we all now where this path leads us, so therefore we also know it's far better to let the market work this stuff out for itself through land values, house prices and rents. This is the most efficient way available to find the right balance, based on what people actually want, between price and quality of "shelter".
Regardless, I don't see housing per se as a "basic function" or just "shelter". It's an argument that I see bandied about a lot. I think in a very narrow sense, housing/shelter is a basic function yes - but only in that as a society it is in our interests that we ensure everyone has shelter/housing of some sort (ie doesn't have to sleep on the streets) - even if that needs to be provided via the government through welfare/public housing etc.
However, land/home ownership is a whole different matter. The right to shelter, or rather our obligation as a society to ensure everyone has it, does not translate into a right to land/property ownership, nor does it translate into the right to have the best located, highest quality home for some arbitrary minimal cost - whether buying or privately renting!
Property is an asset class that is at the very heart of our personal living standards, lifestyle etc. The location where you live, and the quality, size, amenity etc of the home you live in are major inputs to your quality of life and chosen lifestyle. Thus by it's very nature there is going to be an element of speculation in the value of such an asset - especially as there is also the potential for cash returns through a purely market set rental income.
Part of that speculation is how much you might choose to spend on acquiring, maintaining, improving a property that you own, or invest in. The more money that moves towards property as an asset class, the better it will get, thus improving the standard of living available to us.
I don't know how well I am getting this argument across - but essentially what I am trying to say is the "market" has primarily determined the level of capital that is flowing through the property market right now (both prices and rental costs), based on what people want in terms of lifestyle and living standards and what they are prepared to pay for what is available. Anyone who thinks the amount of capital allocated is too high, or that it is unproductive, is primarily making a value judgment really, rather than an economic one IMO.
Say houses were cheaper, and I used my spare money to buy say a second hand Ferrari, or a holiday home, or maybe a chalet in Chamonoix, or even just take a world trip, is that a more or less efficient use of my capital than if I had spent it on a house? Or a house renovation? Sure I might also chose to invest in a business etc, which would be seen as being highly productive, but I could also chose right now just to live in a cheaper area, free up capital and do the same thing. Ultimately I will decide what I spend my money on (as will everyone else re their money!) - and it will be about my lifestyle and investment choices, trade offs, chosen balance etc. Government policy and regulation etc can try and put incentives and penalties in place to encourage me to spent my money one way or another, but ultimately it will (or should be!) still my personal choice! Land/house prices are no different than anything else in this respect.
Cheers,
Beej
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Hi Beej,
Interesting perspective, could you give me your thoughts on :
Does high property prices relative to average incomes make for a higher quality of living for all in society?
For another perspective of property have a read through some of the articles on
http://www.earthsharing.org.au/
I live in my community and shelter in my home. What matters is what is outside my front door than what is necessarily behind it.
Cheers.
Interesting perspective, could you give me your thoughts on :
Does high property prices relative to average incomes make for a higher quality of living for all in society?
For another perspective of property have a read through some of the articles on
http://www.earthsharing.org.au/
I live in my community and shelter in my home. What matters is what is outside my front door than what is necessarily behind it.
Cheers.
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