The future of Australian property prices

moXJO · 25 February 2010

Soft Dough said:
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.

Are you still harping on about this. Your problem is you just don't like the idea that tradies are not slave labor. The $100 per hour does not go in your pocket; it is to cover business expenses. You can not make improvements to your home apart from the labor or your house gets tied in as part of the business if you get sued. Clothing yeah because stubbies and hard yakka shirts are awesome to wear everywhere. That $100 an hour has to cover Workers comp, public liability, phone ,safety costs, advertising , car running costs, tools, electricity and other related business expenses, plus the costs of further training. Also the fact that work is not consistent through the year but the bills are.
Business money and personal money are two different things.
And don't feed me the BS that trades are rolling in money I know plenty that are highly skilled and only make the base. They take a risk working on job sites; they can be injured, fined up to $250k and even charged with workplace manslaughter which is not a factor for the majority of wage slaves. The ones that are rich employ a lot of people and take on the bigger jobs. But a lot of jobs fall over the main contractor goes bust and you lose your house or are instantly bankrupted.

So you don't take a risk on business to make less than wages
Comparing trades to doctors c’mon at least tradies fix the problems:

Professionals can set themselves up as companies and claim phone, internet or whatever their business may use.

Tradies over paid yeah that’s why there is a current shortage.

You could have got a cheaper quote.

drsmith · 25 February 2010

Tysonboss1 said:
the free market sets the prices should never be set by how much study you have to do, it should be set by the supply and demand of that trade, If there is a shortage of skilled labour then tradesman can be picky about which jobs they wish to take and ask for higher prices, This should then encourage more into that trade which should over time raise the supply to where the tradesmen have to fight a bit hard for jobs and this should lower prices.

However if a trade is genuinely such hard yakka that even big pay cheaques don't encourage more people to enter the trade, then it probally means that the ones who are prepared to do the job deserve the larger pay off.

My point was very much about supply and demand. Physical work (hard yakka) is easier to learn than a profession hence there will be more underlying supply. Demand/supply imbalances can occur but they are just that, imbalances.

Bigukraine · 25 February 2010

drsmith said:
My point was very much about supply and demand. Physical work (hard yakka) is easier to learn than a profession hence there will be more underlying supply. Demand/supply imbalances can occur but they are just that, imbalances.

Our society now is very swayed to obtaining higher education and due to this the "value" of doing a trade is lost to the perception that it is beneath ones station after obtaining uni ,tafe, qualifications. We are becoming an older country(ageing population) and this has been the case for ove a decade now so the supply/demand "imbalance" seems to becoming the norm , not just a tempoary "imbalance.

michael_t_f · 25 February 2010

If a trade is so easy go do a couple of weeks labouring for a tradie. I am 100% sure you will see why they charge what they do.
If you earn as much as you claim to, why is paying a tradie such an issue for you? Just go to work for the day, do your super intelligent job, get paid heaps, go home to pay the tradie for the simple, easily learnt job he did that you of course can't comprehend even where to start.
Or go line up with the women doing the Bunnings courses and do your own half assed job.

drsmith · 25 February 2010

Bigukraine said:
Our society now is very swayed to obtaining higher education and due to this the "value" of doing a trade is lost to the perception that it is beneath ones station after obtaining uni ,tafe, qualifications. We are becoming an older country(ageing population) and this has been the case for ove a decade now so the supply/demand "imbalance" seems to becoming the norm , not just a tempoary "imbalance.

Long term the remuneration of tradesman cannot be higher than that of professionals as this is a flawed hierarchy.

Consider for example the construction of a bridge (or any structure). There are professionals (engineers) who design the structure and the tradies who build it. If the bridge builders get paid more than the engineers then obviously the smarter people will gravitate towards building the bridge. Any structure is only as good as it's design regardless of who builds it so the implications here are obvious.

Changing demographics can alter supply/demand balance but this too would only present a temporary departure from the above equilibrium (that is an equilibrium that continues to foster the growth of our civilisation).

I suspect that our perception of economic well being has been a stronger factor in the current supply/demand situation for tradies. Who wants to do crap work (what most people consider to be crap work) when we can pay someone else to do it ?
The problem is that a considerable portion of this attitude has been financed by debt and the fall out will most likely be a shorter term influence than changing demographics.

No one though can realistically blame tradies for taking advantage of a supply/demand relationship in their favour. Tradies though would be well advised to think of themselves like a farmer that is harvesting a bumper crop and squirrel some of the proceeds away in case of leaner times.

Bigukraine · 25 February 2010

drsmith said:
Long term the remuneration of tradesman cannot be higher than that of professionals as this is a flawed hierarchy.

Consider for example the construction of a bridge (or any structure). There are professionals (engineers) who design the structure and the tradies who build it. If the bridge builders get paid more than the engineers then obviously the smarter people will gravitate towards building the bridge. Any structure is only as good as it's design regardless of who builds it so the implications here are obvious.

Changing demographics can alter supply/demand balance but this too would only present a temporary departure from the above equilibrium (that is an equilibrium that continues to foster the growth of our civilisation).

I suspect that our perception of economic well being has been a stronger factor in the current supply/demand situation for tradies. Who wants to do crap work (what most people consider to be crap work) when we can pay someone else to do it ?
The problem is that a considerable portion of this attitude has been financed by debt and the fall out will most likely be a shorter term influence than changing demographics.

No one though can realistically blame tradies for taking advantage of a supply/demand relationship in their favour. Tradies though would be well advised to think of themselves like a farmer that is harvesting a bumper crop and squirrel some of the proceeds away in case of leaner times.

Well put responce and agree with you overall except the thought that we are in bumper harvest time. The problem is how are the gaps that need to be filled to bring things to an equal footing going to be obtained ?? This is also assuming that the trade industry is overpriced and also you are forgeting we are a transiant industry only called upon when required and not even thought about if not needed. This is also a segment that is factored into our charges.
We all have views on this subject and seem to want to blame the govt for the fhog for this situation so if it is the case (both parties adopted this policy) so time for a third party ??? This is getting a little off topic and i will now leave this thread to get back on course and thank everyone for their input to both sides of this "tradie" topic.

Soft Dough · 25 February 2010

Bigukraine said:
Just wan't to say thanks to tysonboss 1 , nun and all the others for putting their views on this subject re the trades. supply and demand in a nutshell is it,stimulus or not. soft d forgets that what he hates about the pesant un uni workforce is that they have made his Sydney home (example only) double over the last ten years (prob more) due to the Howard/ Rudd factor and their labour. soft d hope you don't choke on you "grange" and the supply of cavair is nice and constant for you.

lol another post whereby someone claims that I have put down the qualifications of 1 job versus another.

Perhaps your intellect finds this a justifiable angle for an argument, but please don't insult other people on the forums.

Soft Dough · 25 February 2010

moXJO said:
Are you still harping on about this. Your problem is you just don't like the idea that tradies are not slave labor. The $100 per hour does not go in your pocket; it is to cover business expenses. You can not make improvements to your home apart from the labor or your house gets tied in as part of the business if you get sued. Clothing yeah because stubbies and hard yakka shirts are awesome to wear everywhere. That $100 an hour has to cover Workers comp, public liability, phone ,safety costs, advertising , car running costs, tools, electricity and other related business expenses, plus the costs of further training. Also the fact that work is not consistent through the year but the bills are.
Business money and personal money are two different things.
And don't feed me the BS that trades are rolling in money I know plenty that are highly skilled and only make the base. They take a risk working on job sites; they can be injured, fined up to $250k and even charged with workplace manslaughter which is not a factor for the majority of wage slaves. The ones that are rich employ a lot of people and take on the bigger jobs. But a lot of jobs fall over the main contractor goes bust and you lose your house or are instantly bankrupted.

So you don't take a risk on business to make less than wages
Comparing trades to doctors c’mon at least tradies fix the problems:

Professionals can set themselves up as companies and claim phone, internet or whatever their business may use.

Tradies over paid yeah that’s why there is a current shortage.

You could have got a cheaper quote.

First of all M, as you have no doubt read all my posts relating to this particular line in the thread, I pointed out that a decrease or abolition of government intervention in the housing market would make houses more affordable. As others have failed to deduce I have also stated that education is irrelevant and that it is the government intervention and lack of market forces that is my focus.

If being self employed as a tradesman is not an attractive proposition, can you please then explain why a disproportionate number of tradesmen are self-employed and not wage earners.

I fail to see the arguments for eg being done for $250k for mistakes. Are you aware of the many professionals ( especially in health ) who can be taken for considerably more and who don't have the ability to amortise the costs as effectively since they are wage earners.

other arguments are flawed

1. House being taken... pty ltd anyone? Obviously you have never owned a company before.
2. Business expenses are minimal eg electricity??? huh how much electricity does a tradesperson pay for when the use on the site power. Tools are one off set up expenses. Phone, car, clothing are often rorted for personal use, as are some input materials etc for self work.
3. Tradies overpaid so that is why there is a shortage?? No I said tradies are overpaid as there is artificial demand being driven by government intervention, and hence the geared proceeds of this intervention.

Perhaps you could offer an opinion as to what would happen to their wages if no government stimulus was available in the housing market.

I look forward to your reply.

Soft Dough · 25 February 2010

Beej said:
Hear hear! I was going to write a similar post but Tysonboss1 has summed it up pretty well IMO.

I don't know where you find GPs that only charge $30 per consult that also only do 4 consults an hour? In Sydney, if you can even find a bulk billing GP, they would do at least 8 consults an hour or more and so earn more like double what you are suggesting. However, most GPs in this town charge $65-$80 a consult (and we pay the difference between medicare rebate and their charge), and so all earn considerably more than you are estimating. I have never met a poor doctor. I won't even mention my 2 friends (married couple) who are both neurologists and the HUGE amounts they earn - but that's because I think they deserve every cent of it!

Cheers,

Beej

I love the neurologist bit. How many neurologists do you think are trained in Australia per year? They are an elite group, comparing an F1-11 to a spitfire is not relevant.

Neurology is around 12-15 years training, you do NEED to charge a lot to catch up to anyone who started work at 15 years old.

General practice consults are free, and easily accessed by no doubt 90% of Australia's population every day of the year. Perhaps if you don't want to wait for a consult, then you can choose to pay for the service. There is no building alternative to this.

I think that you also failed to recognise that you pay $60 for the consult and get $30 back too, so in that effect, although it is not quite clear from your writing, they do not earn medicare as well as your contribution.

Unfortunately I work with doctors, and I think it is the perception that they are wealthy, of course some have decent incomes ( eg $120-200k per year ) but most are 30 before they fully qualify, with minimal assets to their name. I also use an extreme example, comparing one of the most elite groups, where only a small proportion of individuals can actually qualify for and complete the training with an occupation where majority of the population would be able to do the training to become qualified ( and this is not being disrespectful, just stating it as a fact )

Tysonboss1 · 25 February 2010

Soft Dough said:
I also use an extreme example, comparing one of the most elite groups, where only a small proportion of individuals can actually qualify for and complete the training with an occupation where majority of the population would be able to do the training to become qualified ( and this is not being disrespectful, just stating it as a fact )

But it doesn't come down to the percentage of the population that are "capable" of doing the training and taking up the profession, What counts is how many people Actually do the training and take up the profession compared to the amount of people willing to pay for their services.

Soft Dough · 25 February 2010

Tysonboss1 said:
But it doesn't come down to the percentage of the population that are "capable" of doing the training and taking up the profession, What counts is how many people Actually do the training and take up the profession compared to the amount of people willing to pay for their services.

I agree, it was just the example I had previously used to illustrate the point that it is not necessary to provide stimulus to a sector that does not need it and results in a wages explosion.

As I have posted, I have no problem paying for services, no matter from whom, I just have a problem when it is artificially inflated due to government intervention.

And don't get me wrong, medicos are not immune to price manipulation. Some doctors were exploiting the medical safety net, which the government closed. Not a direct comparison I admit, but just highlighting the fact that my problem is not with tradies taking advantage of the situation, but the fact that the government is stupid enough to make a situation which can be taken advantage of ( and as I have and will continue to spruik, has little positive effects for the economy compared to alternative spending, and also increases debt of the country, both government and personal )

MACCA350 · 25 February 2010

Tysonboss1 said:
What counts is how many people Actually do the training and take up the profession compared to the amount of people willing to pay for their services.

What also counts is the number of 1st year apprentices that are kicked out and replaced by another 1st year apprentice by the tradie simply to keep paying lower wages.

My cousin started a first year building apprenticeship but subsequently left after finding his chances of remaining employed to completion of his apprenticeship was unlikely(among other personal decisions)

Not sure what measures are in place to discourage this but whatever they are they're not working..........I'm not saying all tradies do this, but many are.

cheers

rcm617 · 25 February 2010

We're all ripping to much out of the system, which is great for all of us while we're getting pots of money for our quarry products. However in the meantime we're destroying all our other industries that are actually producing something we can export. Manufacturing is almost non existent, agriculture is still there but slowly becoming internationally uncompetive. What else is there? If China has a hiccup and cuts back on minerals where's the money going to come from. I dont think it was magnificent economic management by the government that saved our economy, we were lucky China kept growing. I wonder where our house prices will be if that were to end.
By the way I think medicare is a massive subsidy for the health care practitioners.

Soft Dough · 25 February 2010

the best post I have read in a long time. You are absolutely right on the money with our squandering of mining boom proceeds, and as I always point out, it is best to invest it in productive assets and infrastructure, rather than divert the proceeds into short term political points eg handouts for imports and boosts to encourage people to invest in asset classes that do nothing to generate export dollars ( by this i strongly mean residential housing )

Being involved in health, I was attracted to this a lot.

rcm617 said:
By the way I think medicare is a massive subsidy for the health care practitioners.

And it is inefficient, unfortunately in its current guise appeals to the socialists out there, and just like the first home vendors boost, it only ends in tears when the funding runs low/out.

The fix? Not sure, as I think that it is of benefit for a community to have access to good healthcare. We do not however all need Mcmansions.

Personally, I am quite happy to have a user pays system, because at least that way our hospital doctors will be able to earn a decent living, it would encourage good practitioners to stay in very highly stressful jobs, and would enable world class facilities and research opportunities ( which can actually lead to good revenue )

Idiode · 25 February 2010

What has all this got to do with "the future of Australian property prices"???

Try to keep to the thread please.

rcm617 · 25 February 2010

Idiode said:
What has all this got to do with "the future of Australian property prices"???

Try to keep to the thread please.

Excessive income leads to excessive property prices. If that income drops because of lack of international competitiveness, property prices drop. At the moment we're insulated from that because of resource demand from China but it will not always be thus.

joeyr46 · 25 February 2010

Idiode said:
What has all this got to do with "the future of Australian property prices"???

Try to keep to the thread please.

Funnily they are probably the key to were property prices go in future
Healthy economies produce healthy populations with fundamentally healthy relationships between wages and prices of goods.
Once we start to pay people for not producing because of government intervention(or any other reason) then we create bubbles
So yes very relevant

moXJO · 25 February 2010

Ok I'll break it up

If being self employed as a tradesman is not an attractive proposition, can you please then explain why a disproportionate number of tradesmen are self-employed and not wage earners.

Because it costs too much(plus excess book work) for the main contractor to put you on wages. The workers comp alone for a decent wage is up to and over $9k on $60k wages add super and taxes and it's easier to just hire subbies.
So the majority of the time unless you have an abn then you don't get work. Oh and the going rate for a lot of tradies in this situation is $35 an hour.

I fail to see the arguments for eg being done for $250k for mistakes. Are you aware of the many professionals ( especially in health ) who can be taken for considerably more and who don't have the ability to amortise the costs as effectively since they are wage earners.

That 250k is for maximum work cover fines for a major safety breach, not being sued.
As an example; If I have 3 guys above 2.1 meters with no harness then that’s 5k a pop and $500 personal fine for them. And the rules and regulations are many. If someone is doing something stupid, falls and dies I am up for manslaughter and $250k. Given that workers will do something without thinking fines can add up even with good safety systems in place.

1. House being taken... pty ltd anyone? Obviously you have never owned a company before.

Oh I've never run a company Obviously someone hasn't
Umm this is where you’re talking out your A$$. The house often goes up as security for material accounts even if it’s in your wife’s name
And if you start mixing business with personal assets you lose the personal assets.
Eg: I buy material and use it on the house, or pay tradies from the company to fix up the house. I then go bankrupt over a bad debt. They will link it and deem the house up for grabs. I know this because my friend got done in this exact manner. You keep the business separate from personal assets.

2. Business expenses are minimal eg electricity??? huh how much electricity does a tradesperson pay for when the use on the site power. Tools are one off set up expenses. Phone, car, clothing are often rorted for personal use, as are some input materials etc for self work.

What are we??? Fu*ken hippies that live out of vans. Are you the type of dolt that thinks we run off with a hammer and a ute and get work all day? FFS for someone that has such a concrete idea of how tradies go about business of making money to roll in, your actual business strategy for us is lacking. You are talking about guys on what more or less equates to wages or less because they get stiffed with insurances, gst and their own book work. There is a long list of expenses exactly the same as any other business. You are also talking about guys that rort the tax system and let me tell you they don't last long. And yes there are a lot of real scum bag trades out there. But a lot are the average business owner with average business problems.

Good luck with prices coming down. There is a whole safety industry full of bureaucratic BS leaching off us. These are the ex union guys, ex pollies and a host of others that happily make life more costly for you. It increases costs and time spent on the job and it's not going away. As a tradie you get wrapped up in that much red tape from unions or workcover that it's amazing any work gets done. The latest thing seems to be training courses you have to participate in if you want to work in certain conditions (eg: at heights, tagging elec tools, ewp and so on).
There was plenty of work before the FHOG and will be plenty after. So long as the mining boom is going there will be a shortage of tradies. Unless we get massive deflation don't be holding your breathe for prices to come down

Why I argue with someone that obviously has no idea about the construction business yet thinks he does is beyond me: You get me riled up soft D, but we always have Rudd bashing to bond over
Oh and another thing building a reasonable size houses is cheap. Building a fricken McMansion that could double as an elephant enclosure and football field ain't.

joeyr46 · 25 February 2010

moXJO said:
Ok I'll break it up

Because it costs too much(plus excess book work) for the main contractor to put you on wages. The workers comp alone for a decent wage is up to and over $9k on $60k wages add super and taxes and it's easier to just hire subbies.
So the majority of the time unless you have an abn then you don't get work. Oh and the going rate for a lot of tradies in this situation is $35 an hour.

Dont forget the long service leave levy and payroll tax

Oh I've never run a company Obviously someone hasn't
Umm this is where you’re talking out your A$$. The house often goes up as security for material accounts even if it’s in your wife’s name
And if you start mixing business with personal assets you lose the personal assets.
Eg: I buy material and use it on the house, or pay tradies from the company to fix up the house. I then go bankrupt over a bad debt. They will link it and deem the house up for grabs. I know this because my friend got done in this exact manner. You keep the business separate from personal assets.

Agreed no way out if you give a directors guarantee

What are we??? Fu*ken hippies that live out of vans. Are you the type of dolt that thinks we run off with a hammer and a ute and get work all day? FFS for someone that has such a concrete idea of how tradies go about business of making money to roll in, your actual business strategy for us is lacking. You are talking about guys on what more or less equates to wages or less because they get stiffed with insurances, gst and their own book work. There is a long list of expenses exactly the same as any other business. You are also talking about guys that rort the tax system and let me tell you they don't last long. And yes there are a lot of real scum bag trades out there. But a lot are the average business owner with average business problems.
Lot of time and costs quoting
Good luck with prices coming down. There is a whole safety industry full of bureaucratic BS leaching off us. These are the ex union guys, ex pollies and a host of others that happily make life more costly for you. It increases costs and time spent on the job and it's not going away. As a tradie you get wrapped up in that much red tape from unions or workcover that it's amazing any work gets done. The latest thing seems to be training courses you have to participate in if you want to work in certain conditions (eg: at heights, tagging elec tools, ewp and so on).

and the inductions for every body that has an ego problem and doesn't think you've been trained or learnt anything in your apprenticeship

and unlike the medical profession your supposed to actually finish the job succesfully with a guarantee, whereas they ask you to try this and if your stil ill come back next week end try something else
User pays sounds good but only if a successful outcome, Yes all for it

So_Cynical · 25 February 2010

nunthewiser said:
And paying 2k a week rent? or was he lucky enough to bunk down with others ?

Combination of the 2 caravan parks and house sitting for friends while they had a 6 week holiday in Hawaii....apparently the maximum time you can stay in a caravan park is 6 weeks.

The future of Australian property prices

moXJO

menace to society

drsmith

Bigukraine

michael_t_f

drsmith

Bigukraine

Soft Dough

Soft Dough

Soft Dough

Tysonboss1

Soft Dough

MACCA350

rcm617

Soft Dough

Idiode

rcm617

joeyr46

moXJO

menace to society

joeyr46

So_Cynical

The Contrarian Averager

Similar threads

The future of Australian property prices

menace to society

menace to society

The Contrarian Averager

Similar threads

Privacy & Transparency

Privacy & Transparency