The future of Australian property prices

[wayneL]

@Smurf1976 my oldest is 43, he has never seen how difficult things can get, it just appears to me that there are too many coincidences lining up ATM.
I'm not a great believer in coincidences.

Yep I can see Albo doing a speech in a few months time about the "recession we had to have" (by then Scotty will probably be the Oz ambassador to the WEF or perhaps the trade commissioner for Hawaii)

 

[sptrawler]

Yep I can see Albo doing a speech in a few months time about the "recession we had to have" (by then Scotty will probably be the Oz ambassador to the WEF or perhaps the trade commissioner for Hawaii)

And Josh with his feet up on the opposition bench, hands behind head, saying thank god for that.

 

[moXJO]

How are they going to get immigration on a grand scale if there are no houses to rent or buy?

I think it's time the rba jacked up rates. This shts gone on long enough.

 

[sptrawler]

How are they going to get immigration on a grand scale if there are no houses to rent or buy?

I think it's time the rba jacked up rates. This shts gone on long enough.

A lot of wage slaves on the interest treadmill atm, squeeze time might be here, very soon.

 

[over9k]

At various times I've been in every marginal tax bracket from below the threshold to the highest rate.

No doubt so have many so to be clear that's not a boast, just saying "been there, seen that".

If the source of income is employment then at either end you are owned.

At the top well if you're being paid big $ there's a reason for that, there's almost certainly some serious responsibility that comes with it and whoever's paying expects results.

At the bottom well if you're on minimum wages then you're easily replaced.

At either end someone owns you. Not a problem if you're happy with that, big problem if not.

I'm just quoting this for emphasis. Working for a living is a complete fool's errand in this day & age. If there's one thing I'll be drumming into my kids' heads from the day they get their first part time jobs it is that in two thousand and current year you must, you absolutely MUST own at least *something* or you are absolutely boned.

 

[over9k]

How are they going to get immigration on a grand scale if there are no houses to rent or buy?

I think it's time the rba jacked up rates. This shts gone on long enough.

Only get worried when the politicians start selling their **** off. Until then, the rocket's still running.

 

[sptrawler]

I'm just quoting this for emphasis. Working for a living is a complete fool's errand in this day & age. If there's one thing I'll be drumming into my kids' heads from the day they get their first part time jobs it is that in two thousand and current year you must, you absolutely MUST own at least *something* or you are absolutely boned.

I read somewhere recently, the Government is going to make reverse mortgages, more and more attractive.
IMO the intergenerational transfer is worrying them.

 

[over9k]

I read somewhere recently, the Government is going to make reverse mortgages, more and more attractive.
IMO the intergenerational transfer is worrying them.

The age pension, healthcare expenditure etc requirements of the boomers is a depression-causing chicken coming home to roost that they're trying to do anything to get out from under the thumb of.

They do NOT want to pay for the boomers' retirements. They also know that housing is, shall we say, very high. Hence why they've been floating the idea of inheritance taxes - anything to get the boomers' retirements *somehow* paid for with their own assets (even if it's retroactively).

There is simply no way the budget expenditure can blow out like it's going to without causing a massive and prolonged recession under the current tax etc structure. It simply cannot be done.

So they're left trying to wriggle and squirm and just think of *something* they can do and keep coming back to using housing in one way or another because where the hell else are they going to get the money from?

The piper's going to have to be paid eventually. If they had their way all the entitlements would simply go but getting rid of them is a political impossibility so we're once again back to having to tax or reverse mortgage or whatever in order to fund the spending.

There's simply no other purse, asset, nest egg etc LEFT to raid at this point. Most industries were laid waste to 30 years ago, any public asset not nailed down was flogged by howard & co 20 years ago, there's just nothing else left now.

 

[Bill M]

The Malabar house on Austral St was expected to sell for around the $1.6 million-$1.7 million mark, but strong competition from two committed bidders pushed the price to $2,505,000.​

​

Sydney auctions: Malabar dump next to Long Bay prison sells for $900k over reserve​

https://www.realestate.com.au/news/...-long-bay-prison-sells-for-900k-over-reserve/

 

[Warr87]

honestly don't get it, lol.

 

[wayneL]

The age pension, healthcare expenditure etc requirements of the boomers is a depression-causing chicken coming home to roost that they're trying to do anything to get out from under the thumb of.

They do NOT want to pay for the boomers' retirements. They also know that housing is, shall we say, very high. Hence why they've been floating the idea of inheritance taxes - anything to get the boomers' retirements *somehow* paid for with their own assets (even if it's retroactively).

There is simply no way the budget expenditure can blow out like it's going to without causing a massive and prolonged recession under the current tax etc structure. It simply cannot be done.

So they're left trying to wriggle and squirm and just think of *something* they can do and keep coming back to using housing in one way or another because where the hell else are they going to get the money from?

The piper's going to have to be paid eventually. If they had their way all the entitlements would simply go but getting rid of them is a political impossibility so we're once again back to having to tax or reverse mortgage or whatever in order to fund the spending.

There's simply no other purse, asset, nest egg etc LEFT to raid at this point. Most industries were laid waste to 30 years ago, any public asset not nailed down was flogged by howard & co 20 years ago, there's just nothing else left now.

There is still high/hyperinflation, as discussed before, though not without its own set of consequences.

 

[rcm617]

Easiest way to cut back on pension would be to include house values in the assets test. Might also help to put a lid on runaway house prices. How to bring it in without losing votes will be the problem.

 

[over9k]

Easiest way to cut back on pension would be to include house values in the assets test. Might also help to put a lid on runaway house prices. How to bring it in without losing votes will be the problem.

Bingo.

Until enough boomers die, this is what we're stuck with.

 

[qldfrog]

Easiest way to cut back on pension would be to include house values in the assets test. Might also help to put a lid on runaway house prices. How to bring it in without losing votes will be the problem.

With runaway inflation, pension just need to un indexed and it becomes a non issue

 

[sptrawler]

Easiest way to cut back on pension would be to include house values in the assets test. Might also help to put a lid on runaway house prices. How to bring it in without losing votes will be the problem.

Just extend the reverse mortgage facility, to be like a superannuation pension, with minimum withdrawals.
Then when the person passes away it is taken out of the estate. Just a thought.
Pretty easy really, property is valued, if the person wants to stay in it and have a pension, then that pension is fixed at a % of the value of the property + interest and the pension drawdown is indexed every year with their birthday and life expectancy.
In the end the person enjoys the reward of their endeavours and the Government gets its money back with interest.

 

[Warr87]

i would not be surprised if it takes a more global event (like mortgage defaults in other countries) or similar to trigger a bit of fear, and then see a spooked/downward spiral. i've said it in other posts, but i dare say it will be a tinderbox though I still hope it wont be.

until then, its a game of hot potato for whoever is currently the government in power.

 

[sptrawler]

i would not be surprised if it takes a more global event (like mortgage defaults in other countries) or similar to trigger a bit of fear, and then see a spooked/downward spiral. i've said it in other posts, but i dare say it will be a tinderbox though I still hope it wont be.

until then, its a game of hot potato for whoever is currently the government in power.

I think it depends how it is sold, in the past it has been a case of demonizing old people and saying they should be chucked out of their home or lose the pension, then the other side says why should they have to lose the house they have lived in for years just because it has gone up in value.
This way the person can stay in their house, but they have to fund their pension through it and it isn't just a basic pension it is a pension the same as if they had the equivalent in super and it has an interest component as they are borrowing against it.
Then they can decide, if they want to sell it and downsize, because in the end they lose it anyway and it solves the intergenerational wealth transfer.
It would be interesting how they would set it up eg, house value $5m $1.6m max pension benefit so pays say 5% 67 year old $80k less interest, $3.4m deemed as in accumulation phase at 15%, therefore tax payable on the increase in value each year payable annually.
Basically just treating the home as though it was money in super, so year one the person has say approx $100k against the estate, pension + interest + tax owing on valuation.

 

[Warr87]

my memory must be short (or I'm too young) because I don't remember people being demonised. I'm sure you are right though (I just dont remember this talk but I'm only in my 30s). I could see that argument if people had large houses worth millions and yet still managed to draw on the pension or other benefits with careful accounting tricks. that never looks good to the public if someone is struggling to get the pension but has no assets vs someone with mass amounts of assets and pension. but honestly not too sure how it's all done these days as I'm a fair ways off from needing it. I do understand to some extent the accumulation phase and how that is generally structured.

I'll be honest, I don't have a general solution to suggest for all of this. i'm sure if they wanted to solve it, they could make some headway. no shortage of smart people with knowledge in taxation and economics. it'd be more the political appetite. not just to suggest policy, but its likely-hood of passing through.

 

[sptrawler]

You are right, it was floated quite a few years ago, probably 20_30 years actually, because $1m homes were called homes of the very rich then, now in Melbourne/Sydney they are common place.

 

[Warr87]

I remember 15years ago that a 1mil house was a big thing. But as you say now ... pretty common place. (for now, who knows if the house of cards folds)