The future of Australian property prices

[prawn_86]

I would put the invest the cash rather than try stock piling it, Cash is a terrible investment. did you take account of inflation and tax doing your calculations. You don't have to put it into an over leveraged property the stock market would do just fine.

Investing for a deposit is better than saving for a deposit.

By chance I just came accross this youtube video, which explains the way I have always thought of cash.

http://www.youtube.com/watch?v=2epTX1LtCuU&NR=1

I should have been clear. By cash a meant a mix of term deposits and investing in shares, which would deliver a return > than inflation

 

[Bigukraine]

Points are fair, but what people fail to realise that all professions are required to do work which is not paid for, such as continuing education, and also registration fees, professional indemnity, amongst other things.

These same people are not fortunate enough to be able to set themselves up as a company, and hence do not reap the benefits of tax deductability on items used for personal use such as

mobile phones, fuel, V8 utes, clothing, home improvements.

I have brought this up on multiple occassions and have failed to EVER have an ASF self-employed tradesperson admit what is the hourly rate, call-out fees etc which they charge.

I have, however just recently seen that pay rates for electricians and plumbers are over $100 per hour ( in a newspaper over the last month or so ) How does this compare to other jobs, I mean ones that have not had their wages propped up by the first home vendors boost.

Tradies and unions have a lot to thank Krudd for..... oh and the naivity of the general public.

As far as i am concered its a supply and demand issue, if you want a trade person how much you pay is relivant to how many around to choose from. In your previous quote you said more compertion was needed to bring price,s down which i agree in principle , but i remember the days prior to 2000 when builders and private people were screwing the trades price wise due to the lack of work avaliable to a point that it was worse than the average weekly wage but with the same overheads and risk as of today.

So what happened ??? the cost of putting on apprentaces was prohibative, no one put them on and hey presto 15 years on hardly any young tradies around. To sum it up the customer and the builder's are now paying for somthing of their own creation and now winging about it ??? They are now paying for their short term artifical cost for trade services that was too low and will now take a number of years to rectify numbers back to a acc level.

In regards to professinals not being able to use the advantages of a company imo most professions can work as a company eg accountants set up a practace , marketing prof can set up a pr firm etc etc its a matter if they want the associated risks of running a company so if they choose the save haven of being an employee then that is their choice . Also take offence to my profession being proped up by fhb as mine and a majority of trades do resto and work to existing dwellings.

Health professionals charge like wounded bulls because of the investment of education , hex and the years it takes to obtain qualification as well as other areas that you highlighted but do you complain about them ???

ok if i out line my charges to you for what advantage to me will it be and how will it help you personally and or in this thread. if you give your intentions for use of this info then i will disclose if i feel your reasons intentions are valid

 

[Mofra]

Basically it comes down to relying on capital gains, which you can get with cash in a term deposit anyway. Yes maybe not as much, but its less worries etc

How on Earth do you manage to obtain capital gains on a depreciating asset (ie cash)?

 

[prawn_86]

How on Earth do you manage to obtain capital gains on a depreciating asset (ie cash)?

Through an interest rate in a high interest saver or term deposit. I did not mean cash stuffed under my mattress

 

[Mofra]

Through an interest rate in a high interest saver or term deposit. I did not mean cash stuffed under my mattress

a. That's not a capital return upon disposal/maturity of the asset
b. Most term deposits (for people on higher tax rates) provide a guaranteed loss in real terms (after tax/inflation are taken out, even ignoring opportunity costs)

 

[cuttlefish]

I see that having is crebility shot to pieces after his failed predictions hasn't stopped Steve Keen from commenting on property lol.

http://www.smh.com.au/business/property/australias-mortgage-debt-blowout-20100224-p1ex.html

 

[cutz]

I see that having is crebility shot to pieces after his failed predictions hasn't stopped Steve Keen from commenting on property lol.

http://www.smh.com.au/business/property/australias-mortgage-debt-blowout-20100224-p1ex.html

Good article but I wouldn't go so far to say that his credibility has been shot to pieces.

As with any bubble, clear thinkers have had a history of ridicule by the mainstream, eventually his prediction will prevail, pinpointing an exact date is pure guesswork.

 

[michael_t_f]

soft dough, here on the Gold Coast if you were a electrician charging $100 per hour you would find it hard to get work. Most are between 60-85 per hour no call out and wages are around 30- 35 per hour. As a sparky myself I find it hardly worth working for yourself unless you had a good contract with a builder to keep you working or you are already a well established business. You also have to take into consideration that if you are self employed that some weeks you might not be getting your 38 hours a week.

 

[Beej]

Good article but I wouldn't go so far to say that his credibility has been shot to pieces.

As with any bubble, clear thinkers have had a history of ridicule by the mainstream, eventually his prediction will prevail, pinpointing an exact date is pure guesswork.

His credibility WAS shot to pieces because he WAS running around the media in late 2008 telling everyone their house was about to crash in value by 40%! To prove his conviction he even sold his own unit in Surry Hills and rented - implying very much that he believed such a crash was imminent.

If he had been more circumspect and recognised the folly of making such predictions on national TV, then he might have retained some credibility.

 

[Dunger]

His credibility WAS shot to pieces because he WAS running around the media in late 2008 telling everyone their house was about to crash in value by 40%! To prove his conviction he even sold his own unit in Surry Hills and rented - implying very much that he believed such a crash was imminent.

If he had been more circumspect and recognised the folly of making such predictions on national TV, then he might have retained some credibility.

Keen was silly to put his money where his mouth was in predicting a downturn in a market that has plenty of government stimulus to keep things turning over and add to that the hype that stems from the media to the general community talking about property investing. He does garner a little respect for following through with the lost bet.

Disclosure: I rent and I can gurantee that I won't be putting myself into huge amounts of debt for a home and spend most of my working life working by proxy for the bank and being at the mercy of interest rates. I'll risk my hard earned in other asset classes thank you.

I also earn above the average wage and live in Sydney and I can't afford to buy a median priced house in Sydney.

 

[Dunger]

I also read (note read - not participate) a property forum... Man they make most Bulls look like Bears.

It's all blue sky.

I've read threads where if times are good, rent goes up and if times are tough, rent goes up.

It doesn't matter what the market or governments do, prices can only go up for them.

If you even sound like a bear you're ridiculed to no end!

 

[SM Junkie]

soft dough, here on the Gold Coast if you were a electrician charging $100 per hour you would find it hard to get work. Most are between 60-85 per hour no call out and wages are around 30- 35 per hour. As a sparky myself I find it hardly worth working for yourself unless you had a good contract with a builder to keep you working or you are already a well established business. You also have to take into consideration that if you are self employed that some weeks you might not be getting your 38 hours a week.

If I was a tradie I think I'd be heading over to the Gordon Project. Minimum wage of $150,000 for unskilled workers. More if you have a trade behind you. Then there will be the inevitable shortage of tradies in the city and their wages also dramatically increase. The cycle is starting all over again.

 

[Soft Dough]

Also take offence to my profession being proped up by fhb as mine and a majority of trades do resto and work to existing dwellings.

Health professionals charge like wounded bulls because of the investment of education , hex and the years it takes to obtain qualification as well as other areas that you highlighted but do you complain about them ???

ok if i out line my charges to you for what advantage to me will it be and how will it help you personally and or in this thread. if you give your intentions for use of this info then i will disclose if i feel your reasons intentions are valid

You take offense to being subsidised by FHBG, but you are as FHBG is propping house prices up and allowing people to gear to renovate etc. It is a fact which not many people here would disagree with.

You think health professionals charge?? how much do you think a GP makes? How much do you think a hospital doctor makes?

Considerably less than tradespeople in a lot of cases, and the competition to get in is fierce, it takes a minimum of 10 years to become fully qualified and the job is a LOT more stressful.

I want to know how much tradesmen charge from their own mouth, I just like to point out that there is an obscene amount of fat that can be sloughed off the cost of building a house if tradesmen charged a reasonable amount for their work ( and their businesses are essentially tools in the back of a truck, for a vast majority of building subcontractors, and their overheads are very very minimal )

 

[MACCA350]

I also read (note read - not participate) a property forum... Man they make most Bulls look like Bears.

It's all blue sky.

I've read threads where if times are good, rent goes up and if times are tough, rent goes up.

It doesn't matter what the market or governments do, prices can only go up for them.

If you even sound like a bear you're ridiculed to no end!

Did you see the "Robots lives here" sign:

cheers

 

[Bigukraine]

You take offense to being subsidised by FHBG, but you are as FHBG is propping house prices up and allowing people to gear to renovate etc. It is a fact which not many people here would disagree with.

You think health professionals charge?? how much do you think a GP makes? How much do you think a hospital doctor makes?

Considerably less than tradespeople in a lot of cases, and the competition to get in is fierce, it takes a minimum of 10 years to become fully qualified and the job is a LOT more stressful.

I want to know how much tradesmen charge from their own mouth, I just like to point out that there is an obscene amount of fat that can be sloughed off the cost of building a house if tradesmen charged a reasonable amount for their work ( and their businesses are essentially tools in the back of a truck, for a vast majority of building subcontractors, and their overheads are very very minimal )

Great to see you only took what was important to you in my whole reply how about answering the other half ???"? On top of that i would like to see you in twenty years time when due to doing the work of my choosen trade my hands are riddled with arthritis my back (off which i am getting treatment for already due to degeneration because of the tasks i do) ps the chrio i see now charges $47.50 per 15 mins , and all of this will be self funded as i allow for this as a part of my charges. Now tell me i charge to much !!!! Your view of "tools from the back of a truck" is very simplistic and insulting as well as the over heads being minimal beggers belief. I am sorry but imo you views are at least very jaded, but thats what forums are about, different views anyway have a nice life

 

[Soft Dough]

Great to see you only took what was important to you in my whole reply how about answering the other half ???"? On top of that i would like to see you in twenty years time when due to doing the work of my choosen trade my hands are riddled with arthritis my back (off which i am getting treatment for already due to degeneration because of the tasks i do) ps the chrio i see now charges $47.50 per 15 mins , and all of this will be self funded as i allow for this as a part of my charges. Now tell me i charge to much !!!! Your view of "tools from the back of a truck" is very simplistic and insulting as well as the over heads being minimal beggers belief. I am sorry but imo you views are at least very jaded, but thats what forums are about, different views anyway have a nice life

I addressed things which you wrote which I disagreed with. Please lose that kind of attitude as you did not address every single point which I made.

For example,I agree that the government and society thought university education was important ( which it is not ) and hence there are many BA out there not using their qualifications. From the many older tradespeople I know, it was the lack of apprentices that was the problem, not the lack of funding to pay their $3.50 per hour first year rates.

On the arthritis issue, perhaps you think that it is more significant than being a medical practitioner with the highest level of mental health issues amongst all professions? It is extremely stressful making many decisions per day that can mean life or death. So in answer no, I think arthritis is not a significant problem.

$47-50 for a 15 minute chiropractor consult.

1. Never go to a chiro, they will cause more problems than they could possibly cure, this from my many physiotherapist colleagues.
2. Sorry but you were ripped off, no allied health professional makes almost $200 per hour, except pharmacists who need to own businesses that cost $1million plus to make any real money.

You get insulted easily.

I know many plumbers, painters and electricians who work with a single truck, and I have seen the books of my brothers in law, and as you are well aware, the overheads ARE quite low, their net profit was very nice.... as you probably know but are not prepared to admit.

Though it is off topic, I know diesel fitters who work from the back of a truck, no store rooms, no workshops required. The availability of parts and a well set up truck negate the need

 

[Tysonboss1]

I've read threads where if times are good, rent goes up and if times are tough, rent goes up.

The main drivers for rental growth are

1,inflation
2,population growth ( or more so the growth in house holds which has been out pacing actual population growth in recent years)

both of these remain fairly constant through good times and bad, So rental growth will probally remain constant also.

 

[Tysonboss1]

$47-50 for a 15 minute chiropractor consult.

1. Never go to a chiro, they will cause more problems than they could possibly cure, this from my many physiotherapist colleagues.
2. Sorry but you were ripped off, no allied health professional makes almost $200 per hour, except pharmacists who need to own businesses that cost $1million plus to make any real money.

I think you need some business training, you seem to think that the amount in which people charge per hour equals = Take home profit, This is simply untrue.

the chiro probally does charge $200 dollars an hour, but from this figure has to come rent of the building, electric, gas and phone bills, he probally has a receptionist who's hourly rate, holiday pay, super, sick days all have to come from the $200 fee,

Not to mention insurance, advertising, stationary, printer cartridges etc.etc.

The same is said for lawyers, mechanics, accountants, trades people and any other class where people complain about the high hourly fee.

I think tradies deserve their pay ( I am not a tradie ), alot of their work is hard yakka especially in summer. I don't want to be outside moving bricks around in the middle of summer, do you, thats hard work, so they deserve every thing they get.

At the end of the day we live in a free market that sets the prices, and if there is limited people available to do a job we need the price to go up to attract more to the profession.

If their job is so easy, why don't you just become a tradie your self.

 

[Tysonboss1]

the overheads ARE quite low, their net profit was very nice.... as you probably know but are not prepared to admit.

what business are you in,

Can you give us a break down of what the business that pays your wages charges, and why you think it's pricing structure is so much fairer than the average tradie.

You will probally find if you try and break down the prices that any business charges based on the cost price of the product compared to the retail price every business looks like they are ripping people off,

Thats why so many businesses do not reveal the cost price to the customers, because it always gives off the impression of un fair profits.

It's like a cafe charging $4.50 for a coffee where the ingredients only cost $0.36 cents thats a 1200% market up, that seems totally unfair right, well not really when you factor in the Gst, Staff wages, electricity gas, rent, shop fit out, wastage, insurance, etc.etc

It's when you factor in the many other costs that you start to see it's quite fair.

 

[Soft Dough]

what business are you in,

Can you give us a break down of what the business that pays your wages charges, and why you think it's pricing structure is so much fairer than the average tradie.

You will probally find if you try and break down the prices that any business charges based on the cost price of the product compared to the retail price every business looks like they are ripping people off,

Thats why so many businesses do not reveal the cost price to the customers, because it always gives off the impression of un fair profits.

It's like a cafe charging $4.50 for a coffee where the ingredients only cost $0.36 cents thats a 1200% market up, that seems totally unfair right, well not really when you factor in the Gst, Staff wages, electricity gas, rent, shop fit out, wastage, insurance, etc.etc

It's when you factor in the many other costs that you start to see it's quite fair.

Well I have 2 posts to respond to so I may miss some points as I want to keep this to 1 post.

1. I have owned businesses, small and large, and am very competent wrt overheads, staffing, GP% in retailing etc. I have also seen the accounts of tradesmen and have a realistic understandiing of the low overheads that a subcontractor experiences compared to other small businesses ( and for single employee entities I use the term small business very loosely )

2. If it was with that intent that the OP was referring to chiropractors, which I cannot just assume, then it is a requirement to compare apples with apples when comparing rates with subcontracting tradesmen, who are often single employee entities ( or at least single worker entities without spousal redirection of profits etc ). To compare a business which requires a premises is just ridiculous.

3. The reason that a tradesperson is in a much better position is little capital outlay and more importantly, lower outgoings to chew up cashflow. The above cafe requires leases, which for example in many shopping centres, for a cafe size site can be more than $100k per year, along with higher business risks of negative cashflow, especially during downturns.

4. I work in health, hence I also have an idea what health professionals earn. I also refrain from using markups / margins of, for example retail health professionals ( eg pharmacists ) as their capital outlay requires a ROI and their overheads are of a business nature and not of a single employee pseudo-business nature.

Perhaps comparing a GP to a plumber would be a better example, as both are employees of pseudo companies ( and in fact the tradesman has many more avenues available to legally minimise tax )

A GP will often earn 60% of their billings which are around $30 per consult and can perform 4 consults per hour.

So a GP earning $72 per hour vs a plumber earning $100 per hour. The higher overheads of the plumber being offset by the ability to claim many more items as tax deductions etc, means that there is a real difference.

It is much easier to become a plumber, to work as a plumber, plumbing has no more shortage in supply than GPs, plumbing takes 6 years less to qualify than a GP.... so please, explain, if it is not from propping up demand by government intervention, why does a plumber out earn a GP?

5. I could become a tradesperson, but to take a paycut is not really an option I find appealing.