Play Nice Random Chat Thread: Episode IV

Mordecai

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Although I tend to agree in principle, I wonder the borrow power of someone on $523 vs $1634 is.. I wonder if that’s the exponential difference.
This is true. Everyone piled in on borrowing and those that didn't get in are left behind.


But look here now. They want us at the same time to buy houses with a massive mortgage and also spend on coffee etc to keep the economy going.

It can't be done. People are getting squeezed and eventually it's unsustainable.

The person running the coffee shop isn't selling coffees and can't pay the mortgage.
 

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Snake_Baker

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This is true. Everyone piled in on borrowing and those that didn't get in are left behind.


But look here now. They want us at the same time to buy houses with a massive mortgage and also spend on coffee etc to keep the economy going.

It can't be done. People are getting squeezed and eventually it's unsustainable.

The person running the coffee shop isn't selling coffees and can't pay the mortgage.
Mordy is all over this circus. Take note people.
 

JeanLucGoddard

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Contemporary Western economics died stone dead in October 2008.

Printing money and low interest rates and all that is just an attempt by people who literally cannot imagine anything else to keep the system going - zombie economics.

The next crash - which is coming, could be this week, or two years away - is going to clear away the bullshit.
 

Mordecai

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No perspective. In 1990 the median unit price for Melbourne was $115,000. In 2019 it was $645,000.
In 1990 the average weekly salary in Australia was $523. In 2019 it's $1634.

So a flat in Melbourne costs 460% more but salaries have only gone up by 212%. Must be the coffees.
I like these back of the envelope calculations. They really illustrate what's happening.

Another perspective is to look at the rent/yield of the asset.

Rent has largely kept track with wages. The yield of these assets is unchanged but the asset itself has rocketed up in price as people chase any yield they can in this environment.

Renters are comparatively (looking back 20 years ago) ok when looking at it in isolation (wage growth vs rent cost). They have missed out massively in not owning the asset however.

We basically need an apartment glut to drive down rent prices. It hasn't happened and I don't know why.
 
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Mordecai

Norm Smith Medallist
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The fact that this discussion revolved around housing costs is a great indicator of why we're so screwed in Australia.
there's economic factors driving the prices up but also the religion of "gotta own a home". I don't begrudge people for wanting that feeling of stability, something to call their own but it threatens to become unsustainable. The government will do everything it can to keep it going because the alternative is dire.
 

Hojuman

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In Korea they have a system called " Jon-say "

Basically you pay say a $50,000 to $200,000 deposit to the landlord for let's say a 2 year lease. You pay no rent after that. He / She deposits that in their account and you save madly for 2 years. When you leave the contract you get your deposit back and they keep the interest.
 

Val Keating

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Well he didn't do them properly....

I've seen a few things where he has brought up psilocibin, including a talk where he went on for a while about how good it was for people with terminal conditions.

That may seem counter intuitive - the bad news is you're gonna die, the good news is take this, trip balls and think about it. (If you've ever seen that mk ultra footage of the soldier tripping in a cubicle and being asked what the time was you'll get what I mean.)

But apparently it works.

Peterson is often an idiot, but he seems like very good clinical psyche doctor. He is definitely a compassionate, empathetic person who cares about stuff, and more importantly, people.
fu** knows mate. I thought he was in with Sam Harris and the like who are all about tripping balls.

This is true. Everyone piled in on borrowing and those that didn't get in are left behind.


But look here now. They want us at the same time to buy houses with a massive mortgage and also spend on coffee etc to keep the economy going.

It can't be done. People are getting squeezed and eventually it's unsustainable.

The person running the coffee shop isn't selling coffees and can't pay the mortgage.
Have you seen the big short? Slightly different but the prices of apartments v the rate in which they’re building them, I can’t see appartments increasing in value at all. Especially with the quality so poor. A lot of people are going to be stuck with overpriced investment appartments that they can’t sell.
 

SMaturin

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fu** knows mate. I thought he was in with Sam Harris and the like who are all about tripping balls.



Have you seen the big short? Slightly different but the prices of apartments v the rate in which they’re building them, I can’t see appartments increasing in value at all. Especially with the quality so poor. A lot of people are going to be stuck with overpriced investment appartments that they can’t sell.
If you believe a lady I work with who's brother in law is head of the real estate council of australia or some shit, there are already a fu** tonne of empty cbd apartments and the real estate sector are bracing for the impact of a biiiiiiig crash.
 

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Val Keating

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If you believe a lady I work with who's brother in law is head of the real estate council of australia or some shit, there are already a fu** tonne of empty cbd apartments and the real estate sector are bracing for the impact of a biiiiiiig crash.
It’s no secret. Yet substandard apartments are still being built.
 

King Corey

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In Korea they have a system called " Jon-say "

Basically you pay say a $50,000 to $200,000 deposit to the landlord for let's say a 2 year lease. You pay no rent after that. He / She deposits that in their account and you save madly for 2 years. When you leave the contract you get your deposit back and they keep the interest.
So 2 years of interest in that example = 2 years rental payments (in effect)?

Do they also have standard rental arrangements elsewhere for comparison?
 

King Corey

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fu** knows mate. I thought he was in with Sam Harris and the like who are all about tripping balls.

Have you seen the big short? Slightly different but the prices of apartments v the rate in which they’re building them, I can’t see appartments increasing in value at all. Especially with the quality so poor. A lot of people are going to be stuck with overpriced investment appartments that they can’t sell.
Apples and oranges though.

CBD shitboxes were in oversupply 20 years ago.

But even a poor standard shoebox in a quality inner suburb (Camberwell, South Yarra etc) will still command a strong rent and resale.
 

Hojuman

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So 2 years of interest in that example = 2 years rental payments (in effect)?

Do they also have standard rental arrangements elsewhere for comparison?


Interest rates on deposits low a.t.m. About the same as here.
They have monthly rental arrangements ( " wol-say " ) but of course the rent is higher.

My mother-in-law had 5 rental properties at one stage ( bless her dear departed soul
) She ran a " drinking " bar at one stage too which let's say.......provided " entertainment "
 
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JeanLucGoddard

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there's economic factors driving the prices up but also the religion of "gotta own a home". I don't begrudge people for wanting that feeling of stability, something to call their own but it threatens to become unsustainable. The government will do everything it can to keep it going because the alternative is dire.
In Australia, like much of the Anglosphere, the first step of neoliberal takeover and financialisation was turning housing from a fairly simple basic (shelter) to an act of speculation.

Even in places like Scotland where house prices are a thing, people can't get their head around the notion of auctions like we do.

Australia's real estate speculation has done us a ripper before - the Great Depression of the 1890s - and it will again.
 

koshari

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In Korea they have a system called " Jon-say "

Basically you pay say a $50,000 to $200,000 deposit to the landlord for let's say a 2 year lease. You pay no rent after that. He / She deposits that in their account and you save madly for 2 years. When you leave the contract you get your deposit back and they keep the interest.
bit different to the aussie version of "John Says"
 

Val Keating

Norm Smith Medallist
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Apples and oranges though.

CBD shitboxes were in oversupply 20 years ago.

But even a poor standard shoebox in a quality inner suburb (Camberwell, South Yarra etc) will still command a strong rent and resale.
I’m not saying they’re currently not being sold at a high price, and I’m not suggesting it was a bad investment for anyone who got in before the boom, I’m saying buying an apartment now as an investment is a bad investment. They’re building apartments all over inner Melbourne. Why would anyone buy a old apartment when they can buy off the plan, get a brand new apartment with bigger tax break?

Supply & demand
 

ferball

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fu** knows mate. I thought he was in with Sam Harris and the like who are all about tripping balls.



Have you seen the big short? Slightly different but the prices of apartments v the rate in which they’re building them, I can’t see appartments increasing in value at all. Especially with the quality so poor. A lot of people are going to be stuck with overpriced investment appartments that they can’t sell.
I read an interview with the guy who the big short was about around the time of the gfc. He was scathing and said he was lancing boil that criminals were profiting off.
 

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