The future of Australian property prices

[over9k]

Well IMO a lot of the problem Australia has is highlighted by the response to the quarantine guy in Perth, many are saying they should increase the pay, so they dont have to have a second job driving Uber.
I bet if you tripled their pay, they would still do a second job, if time allowed.
The problem is most Aussies have become lazy, the people who come from real underpriviliged countries can see the opportunity and will jump at it.
Eventually they will leapfrog the Aussies, so who is wrong?
Just my opinion.

Thing is trawler, our minimum wage will buy you a palace in india or bangladesh or wherever, so as far as they're concerned, they're being paid a fortune. Hence the maximum effort.

 

[againsthegrain]

Thing is trawler, our minimum wage will buy you a palace in india or bangladesh or wherever, so as far as they're concerned, they're being paid a fortune. Hence the maximum effort.

It also works when living the same standard of life as they are used to e.g 2 or 3 families in a small unit/apartament. Its not that Aussies are lazy its we are used to a different standard of life. Working min wage or 15 hour days is not sustainable for a whole lifetime. Who wishes they worked a 3rd job on their deathbed?

 

[satanoperca]

So what have been the drivers to property price increases over the last decade:
1. Mass Immigration - increase in demand, inability to meet supply
2. Allowing the other 6billion people on this planet to buy shelter which is meant to be for Australians
3. Availability of cheap credit - ability to pay more for less, driving up demand
4. Sociology - this is one of the biggest driving demand, Aussies feel that property only ever goes up and for the last 30years they have been correct.

What changed with Covid:
1. Mass Immigration came to a halt, should have seen prices correct, but alias our gonuts come to the table with
2. Massive injection of capital from RBA and Govnuts, and when I mean massive, I mean massive, never in the history before us, have we seen the govnuts pump borrowed money into one sector, this was via bank mortgage amnesties - backed by the govnuts, RBA injection of $200B, jobkeeper and jobseeker, along with govnuts grants to businesses, govnut grants on stamp duties and renovations.

So we had a classic example of demand being reduced (people needing homes/shelter) and demand being increased (people looking to make money with only 2 options left, shares or property).

So fundamentals are out the door, when govnuts interfere.

My question, is if the govnuts think the economy is going great, why are interest rates at almost zero, and if the economy is going crap are IR to be -2% - then why work, the banks will pay you to borrow.

The reserve bank and in the ineptitude of our elected official is staggering, but the complacency of Australians also staggers me, the majority believe that property is a means to wealth, without realising that without a community to live in that is safe, house prices mean nothing.

I feel that it is going to be sometime before we see a reset to good old fashion values and my children will be able to work hard and buy shelter.

 

[over9k]

So what have been the drivers to property price increases over the last decade:
1. Mass Immigration - increase in demand, inability to meet supply
2. Allowing the other 6billion people on this planet to buy shelter which is meant to be for Australians
3. Availability of cheap credit - ability to pay more for less, driving up demand
4. Sociology - this is one of the biggest driving demand, Aussies feel that property only ever goes up and for the last 30years they have been correct.

What changed with Covid:
1. Mass Immigration came to a halt, should have seen prices correct, but alias our gonuts come to the table with
2. Massive injection of capital from RBA and Govnuts, and when I mean massive, I mean massive, never in the history before us, have we seen the govnuts pump borrowed money into one sector, this was via bank mortgage amnesties - backed by the govnuts, RBA injection of $200B, jobkeeper and jobseeker, along with govnuts grants to businesses, govnut grants on stamp duties and renovations.

So we had a classic example of demand being reduced (people needing homes/shelter) and demand being increased (people looking to make money with only 2 options left, shares or property).

So fundamentals are out the door, when govnuts interfere.

My question, is if the govnuts think the economy is going great, why are interest rates at almost zero, and if the economy is going crap are IR to be -2% - then why work, the banks will pay you to borrow.

The reserve bank and in the ineptitude of our elected official is staggering, but the complacency of Australians also staggers me, the majority believe that property is a means to wealth, without realising that without a community to live in that is safe, house prices mean nothing.

I feel that it is going to be sometime before we see a reset to good old fashion values and my children will be able to work hard and buy shelter.

My thoughts exactly. So the question is, what happens next? The only thing we can be certain of is that the politicians will at least try to keep the bubble pumped, and whilst australians might be out of ammo (credit), cashed up foreigners sure aren't, and there's a hell of a lot more of them too. Interest rates (credit) are only one type of ammo that they've run out of - they still have several others.

As I've said before, only once the politicians start selling up should we be thinking about doing the same. In the meantime, there's really only inheritance.

 

[satanoperca]

So the question is, what happens next?

Only time will tell, and there lies the problem to your question, time. 1yr, 5yrs, 10yrs in the future.

I have no confidence that our elected govnut officials will change anything, show direction, be leaders and make decisions for the betterment of the country of Australia, today, tomorrow, and in 10 years time.

Likewise, I don't think the Australians as a whole, really care to elect people of leadership, that can forge economic decisions that benefit Australia as a whole for not just today but in 2 decades time, most Australian's or that be it humans are only interested in what they can gain individually today rather than collectively in the future.

So, to answer your question, nothing will happen, it will be the same rinse and repeat strategies from the RBA and the Govnuts, until a collective mass of voters rise up and present a different way/ideas of governance.

Interest rates (credit) are only one type of ammo that they've run out of - they still have several others.

Agreed
1. Any foreigner can buy shelter in Australia, big world we live in (crap that has already been unofficially been happening for decades, please don't tell anyone)
2. Super, release the hounds, a very large amount of capital that can support prices
3. More govnuts stimulus to the housing sector, govnuts can borrow and then deploy capital into supporting prices as they are not responsible for the long term payments or repayments of said debt.

And so at some time in the future when this all unravels, our elected officials and employees of the RBA, govnut economists will all say the same old adage :
"NO ONE COULD HAVE SEEN THIS COMING"

I will add as a species, we are failing badly, with all the knowledge we have, we are destroying the planet and reducing happiness for all humans that have to exist on the one piece of property we have to exist, called Planet Earth.

When the aliens, come down, or future generations look back at our generation, they will perceive us as basic organisms, trying to compete for resources that we can all share, but were greedy as a collective and destructive as a whole.

But in whole, nothing has change in thousands of years.

 

[over9k]

Took the words right out of my mouth.

So in the meantime, if the politicians hold - we hold.

 

[gartley]

Took the words right out of my mouth.

So in the meantime, if the politicians hold - we hold.

Personally I don't care to hold anything backed by the promises of politicians other than hard assets like precious metals and even Bitcoin.
It may seem that for example the housing trend will continue indefinitely because it has already persisted for such a long time. But let's face it, it's a ticking time bomb. The sad hard facts are that every debt bubble throughout history has eventually ended up in bust without exception. This bull market started in the early 1980's, and that by any standards is very long bull market, more importantly without any significant corrections along the way. That makes it downright scary.
What will make it go bust? Certainly as you say the powers that be will continue to pull out all stops to continue the good times. But things like IR are not entirely in control of the RBA but subject over the long term to the broader global bond market movements. So there is only so far the RBA can go…
I don't like to predicting, I like to look at the charts and look at circumstances from which to trade from, but looking at things based on what has taken place so far this year, initially (perhaps in the next 2-3 years) a driver maybe unemployment.
Generally lockdowns have decimated many SME owners, especially retail.
These SME pay their taxes and employ people and they are now becoming endangered species. We see this trend worldwide and as
SME usually make up 50% of GDP, the government has by imposing lock downs entered into a suicide pact with the economy.
It will very interesting in the months ahead as the stimulus is ceased...

 

[over9k]

I don't disagree with you at all - but you think the politicians won't get their money out of dodge before anything really happens?

 

[gartley]

I don't disagree with you at all - but you think the politicians won't get their money out of dodge before anything really happens?

No doubt some will , but most will have the blinkers on and continue to hold like most of the population. Because they will have the conviction of thinking " the market always goes up and never has or will ever go into a bear market".
For now they have thrown everything at their disposal to keep the levitation intact. The question now is, what do they have left? Especially since they will be tapering the stimulus as in Scomo's words yesterday: the economy cannot continue depending to survive solely on tax payers money....

 

[jbocker]

As I've said before, only once the politicians start selling up should we be thinking about doing the same. In the meantime, there's really only inheritance.

Hmmmm, better watch what my kids bring around for dinner!

 

[satanoperca]

I don't disagree with you at all - but you think the politicians won't get their money out of dodge before anything really happens?

Again I agree, but pollies are dumb and don't have any comprehension of market and market forces.

2 months ago, did the hedge funds in the USA think that they could be disrupted by a group of forum users against the $$$$$$ they had until control, NO.

Times can change fast, pollies can change just as fast, ask Mr Chump, Past President of the largest economy in the world, months later cannot find a reputable lawyer to stand by his lies.

Pollies will lie to protect themselves, not something you can bank on.

 

[sptrawler]

Hmmmm, better watch what my kids bring around for dinner!

They aren't talking about us in planet Perth jbocker, they are talking about trying to jump on the roundabout in Sydney or Melbourne, where real Australians live.
Not in the other 97% of Australia's land mass, where the unwashed masses like us live. ?

I lay awake at night worrying about people who can't afford a house in Sydney or Melbourne, it must be absolutely devastating for them.

 

[sptrawler]

2 months ago, did the hedge funds in the USA think that they could be disrupted by a group of forum users against the $$$$$$ they had until control, NO.

If all prospective property buyers in Sydney and Melbourne organised themselves the same way, I have no doubt they could bring about the same result, but getting people to not join the ponzi scheme is difficult. Everyone wants to buy a certain winner.

 

[over9k]

Again I agree, but pollies are dumb and don't have any comprehension of market and market forces.

2 months ago, did the hedge funds in the USA think that they could be disrupted by a group of forum users against the $$$$$$ they had until control, NO.

Times can change fast, pollies can change just as fast, ask Mr Chump, Past President of the largest economy in the world, months later cannot find a reputable lawyer to stand by his lies.

Pollies will lie to protect themselves, not something you can bank on.

Mmm talk is cheap though.

Everyone always look at things like CEO's selling or buying their holdings in the very company they run as a very reliable signal to follow but don't do the same with politicians at a macro level. It kind of baffles me to be honest, if people can recognise why to do this with a chief exec buying/selling whatever they're in control of, why is it not also a good idea to do with politicians and whatever they're in control of?

 

[gartley]

Mmm talk is cheap though.

Everyone always look at things like CEO's selling or buying their holdings in the very company they run as a very reliable signal to follow but don't do the same with politicians at a macro level. It kind of baffles me to be honest, if people can recognise why to do this with a chief exec buying/selling whatever they're in control of, why is it not also a good idea to do with politicians and whatever they're in control of?

So follow the politicians? Yeah right!!
After Scummo won the election he came and said buy, buy, buy, .Nine months later the stock market crashes 40%.
I wonder if the polllies sold their shares before before hand, surely they had "inside information"?
Instead we heard the Australian economy is robust and strong. "Look here, don't look there".
Wanna know the real reason why housing is protected? Because this country has nothing else and when that goes (and it will eventually get hit) we are in deep excrement. In the last 8 years our manufacturing base has been decimated entire industries have disappeared, exports in the last 5 months have smashed, education income has disappeared, tourism and hospitality non existent, small businesses going by the day, retail well the list goes on and on....
Feel sorry for our kids...

 

[over9k]

So follow the politicians? Yeah right!!
After Scummo won the election he came and said buy, buy, buy, .Nine months later the stock market crashes 40%.
I wonder if the polllies sold their shares before before hand, surely they had "inside information"?
Instead we heard the Australian economy is robust and strong. "Look here, don't look there".
Wanna know the real reason why housing is protected? Because this country has nothing else and when that goes (and it will eventually get hit) we are in deep excrement. In the last 8 years our manufacturing base has been decimated entire industries have disappeared, exports in the last 5 months have smashed, education income has disappeared, tourism and hospitality non existent, small businesses going by the day, retail well the list goes on and on....
Feel sorry for our kids...

You know full well the crash in the market was caused by the virus.

One republican senator sold about 60 million worth of stock just a couple of days before trump closed the U.S border. Nancy pelosi just bought a whole mountain of tesla calls literally the day before biden executive ordered federal vehicles to be electric. This kind of stuff is absolutely endless.

Are you seriously going to sit here and genuinely argue that politicians don't insider trade basically constantly?


Again, why does this logic apply with chief exec's buying/selling what they control but not politicians buying/selling whatever they control?

 

[againsthegrain]

You know full well the crash in the market was caused by the virus.

One republican senator sold about 60 million worth of stock just a couple of days before trump closed the U.S border. Nancy pelosi just bought a whole mountain of tesla calls literally the day before biden executive ordered federal vehicles to be electric. This kind of stuff is absolutely endless.

Are you seriously going to sit here and genuinely argue that politicians don't insider trade basically constantly?


Again, why does this logic apply with chief exec's buying/selling what they control but not politicians buying/selling whatever they control?

So where do you monitor which politicians are selling and what?

Do you monitor it? Sure if it happens to come up in the paper but otherwise I don't think I know anybody that keeps tabs on all the politicians in aus. On asx there is automatic statements when large sales/buys take place, however with re? I don't know

 

[Smurf1976]

Working min wage or 15 hour days is not sustainable for a whole lifetime.

I've "been there, done that" with working 7 days a week and so on in the past.

It's very doable for a while but nobody in their right mind would plan on doing it for a lifetime.

Incidentally that's a common element among everyone I know who's reasonably comfortable financially. They've all gone through a few years where life's a blur amidst the chaos of work, work and more work. Most seem to try and bring it to a halt once the house is paid off.

There might be a way for the ordinary person to get ahead without that, but it's the common element from what I've seen.

 

[satanoperca]

Mmm talk is cheap though.

Everyone always look at things like CEO's selling or buying their holdings in the very company they run as a very reliable signal to follow but don't do the same with politicians at a macro level. It kind of baffles me to be honest, if people can recognise why to do this with a chief exec buying/selling whatever they're in control of, why is it not also a good idea to do with politicians and whatever they're in control of?

I think you and I are looking at housing differently, I see it as a basic requirement for building and maintaining a productive and safe society, and left in the hands of greedy pollies and banks will not meet its primary need, shelter, I did not see it as an asset class to trade for profit as a general rule. That is for the building and development of businesses which in turn can help provide for need one shelter through employment and wage growth.

But each to their own.

 

[sptrawler]

I've "been there, done that" with working 7 days a week and so on in the past.

It's very doable for a while but nobody in their right mind would plan on doing it for a lifetime.

Incidentally that's a common element among everyone I know who's reasonably comfortable financially. They've all gone through a few years where life's a blur amidst the chaos of work, work and more work. Most seem to try and bring it to a halt once the house is paid off.

There might be a way for the ordinary person to get ahead without that, but it's the common element from what I've seen.

That kind of sums up what I said to a friend, who asked how did you get set up, I said for most people it isnt easy.
At some time in your life, you have to go hard to get ahead, if it was easy everyone would be comfortable and most arent.
Relying on luck isnt a plan.