The future of Australian property prices

[Humid]

Ok…I am a big fan of feta cheese in a tossed salad. I’m also more of a fan of rocket instead of iceberg lettuce. When cherry tomatoes are in season I also like them in a salad. I don’t care too much for mushrooms. As for dressings, Paul Newman’s balsamic is my go to.

A bit main stream

 

[MovingAverage]

A bit main stream

My taste in salads is a little pedestrian but you did ask

 

[sptrawler]

Some parties are better at it than others if you look at the stats
Some parties do try to introduce change through mining taxes,franking credits and talk about negative gearing but are shot down as left loonies and poor economic managers and look where we are biggest debt ever......you make your choices

Yes, the rich gave it the tick of approval, the working class thought it was pretty average and made their choices.
What an amazing turn around in what the parties project these days, the Libs giving workers money to stay home during the pandemic and being criticised for it.
It will be interesting to see the platform the parties take to the next election, with respect to house prices IMO.

 

[Humid]

My taste in salads is a little pedestrian but you did ask

Similar to your taste in news......

 

[Humid]

Yes, the rich gave it the tick of approval, the working class thought it was pretty average and made their choices.
What an amazing turn around in what the parties project these days, the Libs giving workers money to stay home during the pandemic and being criticised for it.
It will be interesting to see the platform the parties take to the next election, with respect to house prices IMO.

Tinker around the edges and do nothing

 

[MovingAverage]

the Libs giving workers money to stay home during the pandemic and being criticised for it.

and yet the left still complain...oh the irony

 

[over9k]

That's because political parties are in the business of gaining power and staying in power. The days of political parties making tough, pragmatic decisions are a relic of the 20th century. It's all about populism and prosperity now. We will continue to see money printing and the protection of the residential property market as policy priorities of all major parties.

It's a game of political musical chairs. One day it's all going to end, and when the music eventually stops nobody is going to want to be in power, because things are going to get very ugly.

Don't forget, they're all real estate "investors" too

 

[sptrawler]

Don't forget, they're all real estate "investors" too

It would be interesting to see if any are off loading the IP's.

 

[MovingAverage]

It would be interesting to see if any are off loading the IP's.

the lefties ?

 

[sptrawler]

the lefties ?

I wouldn't know, but people talk over a couple of beers, so if something is being considered, the pollies will be the first to know I guess.

 

[Dona Ferentes]

It would be interesting to see if any (one) is off loading the IP's.

anecdotally ... suburb I live in is close to the CBD, and sought after (water glimpses), the usual inner city terrace jumble of cramped but usually renovated/ updated, with street parking as a rule ... then YES, the IPs are being sold (and selling).

Reason is that as des res location, many have been rented to the 2-3 year contract hotshots, from both OS and IS, but these people are now working remotely, and tenancy/ leasing is waning. And, no beach, no nightlife, so the AirBnB mob are few and far between.

Speaking of which, and I have refrained from commenting on this thread because it is underbaked, but here I go:
- One contributing factor I have observed as a driver of scarcity is the, for want of a better descriptor, short term stay crowd. The socio-economics would be, to an extent, that those on short stays are leaving behind an empty nest. Not reciprocating, not house swapping but essentially accounting for two residences, the rented one and the empty one at home they will return to. This dynamic in Covid times has switched from the inner suburbs to the getaway locations, the coastal and scenic towns within a few hours of home.
- Another comment/ observation is that the current surge in asset pricing is NOT a localised phenomenon. Local factors and govt policy are only a bit of the story. It is worldwide.

 

[wayneL]

- Another comment/ observation is that the current surge in asset pricing is NOT a localised phenomenon. Local factors and govt policy are only a bit of the story. It is worldwide.

Yes indeed.

This is why I'm staying right out of the Liberal/Labor "economic management" conundrum.

There is a layer of decision making above national gu'mint, as manifested by the coordinated actions of the various central banks.

Left Vs right is a distraction to befuddle the plebs... IMNTBCHO

 

[gartley]

Jayzuz!

Logically, I'm with you Gartley. However I'm not so sure The Fed and other Central Banks I want to play the game according to the rules.

I personally think that rates should have been raised a hell of a long time ago. I mean if we take a true picture of CPI, *all* things considered, we have had negative real rates for years.

how long can central Banks kick the can further and further down the road? Bloody hell of a lot longer than I ever thought possible.

BWTFDIK

Central banks are the feudal lords of money markets. They're big players and they almost always get what they want.
But back in Feb money market traders, who buy and sell the $US90 trillion odd worth of government debt swirling around on global markets, decided they were wrong. All of them.
If sustained, it will lead to higher borrowing costs because banks will have no option but to pass those rate hikes on.
So it will be very interesting moving forward as the market has had a small pullback and consolidation and soon I believe will continue bullishly.
And that means central banks would have to abandon their ultra-loose interest rate policies earlier than expected. The trickle of selling on bond market will soon swell in the future , it will eventually turn into a tsunami. Bond prices will eventually collapse further forcing the yields — market interest rates — to soar.

The battle is on.

 

[over9k]

Which, if your thesis is correct, will only pull the market back down again.

A better thing to look at is how much of this country (the world's) "growth" has been debt financed. It's pretty easy to keep the credit expanding if you make credit cheaper (dump interest rates) but you eventually run out of ammo at 0%.

After that, your only option is to start QE, which might give you a nominal increase, but a nominal and a real increase are not the same thing.

So then you start fudging the numbers, like making sure you keep house prices out of the CPI so you can make it look like the cost of living hasn't increased nearly as much as it actually has.

Sure enough, you reach runaway inflation (a bubble), but only in asset prices. Capital gets diverted out of other actually productive endeavours and into asset price speculation (because there's far more to be made there) which creates an entire economy dependent on a perpetual increase in housing "investment", something which can only be maintained through a perpetual increase in the demand for housing (be it from credit, foreign purchases, migration cramming ever more people into each dwelling, so on and so forth).

You then have a completely bifurcated economy consisting of asset (housing) owners and everyone else - people simultaneously owning assets that wage earners cannot even hope to access the necessary credit to outbid those who already own housing on account of how much more favourable the loan conditions (interest rates) are for them whilst also bleeding those same people (their competition) dry with rent due to housing, like medicine, being a good that the normal rules of supply & demand do not apply to on account of the fact that it's not the kind of thing that you can simply go without/not buy.

And voila, you get Australia.


Historically, the last time you saw conditions like this, where the exact same phenomenon of a small number of people who owned the assets that couldn't simply be gone without (housing, railways, water networks etc etc) bleeding everyone else dry, was in the gilded age.

This then gave rise to/was the perfect conditions for the support of the most left wing position there is: communism.


And wouldn't you know it, compared to a generation ago, we now see the political left just about as far left/completely off the deep end as you can imagine now.

Funny that, isn't it?

 

[againsthegrain]

10% from 500k is 50k 10% from 1m is 100k 10% from 2m is 200k and so on.

How can we keep seeing the same gains on and on? I do realise they can throw incentive and grants. How much do u throw/can afford to throw at increases of 200k to keep people being able just to scrape in and afford it? Even tho I can't see it stopping I also can't see a way to keep pumping it at such a momentum we are at now.

Somebody will have to pull out something totally off left field soon

 

[over9k]

10% from 500k is 50k 10% from 1m is 100k 10% from 2m is 200k and so on.

How can we keep seeing the same gains on and on? I do realise they can throw incentive and grants. How much do u throw/can afford to throw at increases of 200k to keep people being able just to scrape in and afford it? Even tho I can't see it stopping I also can't see a way to keep pumping it at such a momentum we are at now.

Somebody will have to pull out something totally off left field soon

Immigration and foreign ownership. Just allow cashed up chinese to buy everything and foreigners to pour in and cram ever more people into an ever (relatively) diminishing space.

You hear about those places with 12 people living in a 3 bed/2 bath house and so forth for a reason. ****, I stayed in one as a cheap airbnb a couple of years ago not knowing what I'd actually booked.

Same as you get those two bedroom apartments where the living area has false walls installed and been "converted" into another bedroom too. I've seen that more times than I can even think.

Sometimes they're not even set up with walls, they're just tents pitched inside:

Multiple tents found pitched in Melbourne apartments and rented out

Looking for an affordable apartment with all the ambiance of the outdoors? Then this might be the place for you...

www.theage.com.au

 

[againsthegrain]

Immigration and foreign ownership. Just allow cashed up chinese to buy everything and foreigners to pour in and cram ever more people into an ever (relatively) diminishing space.

You hear about those places with 12 people living in a 3 bed/2 bath house and so forth for a reason. ****, I stayed in one as a cheap airbnb a couple of years ago not knowing what I'd actually booked.

Same as you get those two bedroom apartments where the living area has false walls installed and been "converted" into another bedroom too. I've seen that more times than I can even think.

Sometimes they're not even set up with walls, they're just tents pitched inside:

View attachment 126401View attachment 126402

Multiple tents found pitched in Melbourne apartments and rented out

Looking for an affordable apartment with all the ambiance of the outdoors? Then this might be the place for you...

www.theage.com.au

The irony is they all escape the 3rd world slums to come to the west and slowly work or turning it to the same standards.

 

[over9k]

The irony is they all escape the 3rd world slums to come to the west and slowly work or turning it to the same standards.

Thing is, even total shitholes here are paradise compared to a slum in brazil or whatever, and that's before we even start on wages - they deliberately live in destitution so they can send every spare cent back home because the money goes so much further there. Our minimum wage will damn near buy you a palace in some parts of the world so if you can save a hundred bucks a week by living in a shithole then so be it, that hundred bucks will feed your entire family for 6 months back home.

Again, just simple economics.

 

[over9k]

You'll also note how none of the high rise what I call "vertical slums" are ever built in eastern sydney out at vaucluse or wherever for example, where all of the most vocal pro-migration voices (landlords) live.

Again, just another one of those total coincidences, you know?

 

[moXJO]

This then gave rise to/was the perfect conditions for the support of the most left wing position there is: communism.


And wouldn't you know it, compared to a generation ago, we now see the political left just about as far left/completely off the deep end as you can imagine now.

Funny that, isn't it?

Big indicator to the beginning of the end imo. Just look at any other south American Communist sht hole and how it all began to unravel.