Discussion Random Discussion

[VDS66]

I think you will find the housing demand is driven by bringing in mass immigration. Immigrants aren't to be confused with refugees. Refugees are the people escaping terrible outcomes and we demonise them and we only bring in around 25000 to 30000 of them. We bring in around 200,000 other immigrants mostly through "skilled migration" but most are scams to exploit loop holes and get fast tracked. The governments love this type of immigration because they generally bring in money from overseas and drive perpetual growth, especially in property.

Overseas investments laws are also very relaxed here and foreign money especially Chinese money propped the investment market until the rule were tightened by China and the money has dried up. Most immigrants move to the capitals especially Melbourne and Sydney and drive property prices there. The market is looking a bit shaky right now because of foreign investment slowing.

Generally people want to live near the city for convenience all over the world and most know the better investments are those close to the CBD.

Market has hit a wall.

Banks have tightened up lending. Some are rating your capacity to repay at 8%.

There's a mountain of interest only loans about to roll into P&I and if these borrowers cant afford the extra repayments they will be forced to sell.

Investors are biding their time and looking for bargains.

The average home owner who could afford to borrow $800k 6 months ago can only borrow $700k now, based on the same serviceability and income.

The days of people just rocking up and throwing insane offers are long gone. Auction clearance's hovering at a weak 60%.

Banks will have to raise rates because the money they lend is sourced from overseas, and international interest rates are rising... irrespective of what the Reserve Bank does here.

Coupled with the ridiculous high level of household debt, there is all the makings of a perfect shit storm if anything happens to unemployment or an external shock on the economy.

That said,it's a 2 speed market with areas in the $500k to $700k range going crazy from first home buyers, and for the simple fact that most couples can afford to buy there. However, prices are steady.

 

[Dard Ball Get]

Market has hit a wall.

Banks have tightened up lending. Some are rating your capacity to repay at 8%.

There's a mountain of interest only loans about to roll into P&I and if these borrowers cant afford the extra repayments they will be forced to sell.

Investors are biding their time and looking for bargains.

The average home owner who could afford to borrow $800k 6 months ago can only borrow $700k now, based on the same serviceability and income.

The days of people just rocking up and throwing insane offers are long gone. Auction clearance's hovering at a weak 60%.

Banks will have to raise rates because the money they lend is sourced from overseas, and international interest rates are rising... irrespective of what the Reserve Bank does here.

Coupled with the ridiculous high level of household debt, there is all the makings of a perfect shit storm if anything happens to unemployment or an external shock on the economy.

That said,it's a 2 speed market with areas in the $500k to $700k range going crazy from first home buyers, and for the simple fact that most couples can afford to buy there. However, prices are steady.

What price dynamic do you predominantly work in mate?

 

[Moral Decay]

No-one denied anyone work. People made their choices.
My point is that society made its own moves and we aren't better off with 2 average incomes now, than we were with one back then.
Give everyone a pay rise and no-one is better off.

We use the concepts of structural unemployment to maintain unemployment at around 5% because that allows government to have a subservient work force, low interest rates and a cheap labour pool, not since my childhood has any politician campaigned on the idea of 100% employment, as it stands right now wouldn't matter if every one who was unemployed, (and remember employment definition starts at one hour a week) let alone the roughly 27% under employed were desperately looking for work, highly skilled and highly motivated there would still be 5% unemployment, someone has to be unemployed to maintain what is regarded as social harmony.

My point about the UN Charter on Human Rights and the Harvester decision is that even when there are clear decisions about how we want society to run they get watered down or ignored according to desire.

 

[Drake Huggins]

Not necessarily a race to the bottom.
There are plenty of other reasons NOT to relocate to China. Like everything its a balancing act.
No i don't want to tax big companies to the hilt. On the other hand i don't like us signing free trade agreements that benefit the other party more than Australia.

Every political system tends toward an oligarchy, no matter where you are on the continuum. The traditional model of left and right is redundant. The continuum extends from complete government control, e.g communism, fascism, both which are forms of totalitarianism on the far left, to the anarchists on the far right, who believe in having no government control at all. In the end, most political systems, even democracies and socialist governments become oligarchies, placing power in the hands of the power elites, no matter what their beliefs are. The rest of us are too busy struggling to make a living to be bothered with driving massive or necessary change.

 

[gringo2011]

Of course that's true, but there's a reason everyone on the planet can't own property in down town Manhattan, and I WANT IT NOW !!! doesn't help.
Area of a circle increases at the square or the radius. Means the if you go twice as far from the cbd , there's 4 times as much land available.

I agree foreign investment hasn't helped, but i'm pretty sure it also shot up when John Howard delivered the massive tax cuts that came with the GST.

We are very good at making ourselves broke to show off our wealth.

That's why our economy is ****ed if property crashes. I only know one person that owns a luxury car that isn't on supposed equity in their home and chucked on to the mortgage. If you have owned a house for 15 years and paid it all off of course you have genuine equity because prices will never go back that far but people buy stuff with magic money that is made from gains in property value in short periods. That's utter dumb arse stuff, cars are the worst investment ever, I know people who've bought S class Benz' for $180,000 and 5 years later they are worth $40,000, 10 years $7500 and so on. There is literally nothing that devalues quicker than an ageing luxury car.

It wasn't the tax cuts so much as negative gearing and changes to the capital gains tax rules that Howard and Costello brought in. Also super schemes that are self funded where people pull money from diversified funds to buy property helped push prices and to top it off we had banks that would lend to anyone with nothing to back it. When I got my mortgage last time they didn't ask for documents as I was self employed. I had a spread sheet and they didn't even check it. I could pay it but they didn't know that.

 

[VDS66]

What price dynamic do you predominantly work in mate?

Cheltenham down to Frankston corridor

 

[VDS66]

Every political system tends toward an oligarchy, no matter where you are on the continuum. The traditional model of left and right is redundant. The continuum extends from complete government control, e.g communism, fascism, both which are forms of totalitarianism on the far left, to the anarchists on the far right, who believe in having no government control at all. In the end, most political systems, even democracies and socialist governments become oligarchies, placing power in the hands of the power elites, no matter what their beliefs are. The rest of us are too busy struggling to make a living to be bothered with driving massive or necessary change.

Brilliant post...

 

[Moral Decay]

Every political system tends toward an oligarchy, no matter where you are on the continuum. The traditional model of left and right is redundant. The continuum extends from complete government control, e.g communism, fascism, both which are forms of totalitarianism on the far left, to the anarchists on the far right, who believe in having no government control at all. In the end, most political systems, even democracies and socialist governments become oligarchies, placing power in the hands of the power elites, no matter what their beliefs are. The rest of us are too busy struggling to make a living to be bothered with driving massive or necessary change.

Very few have the time or inclination to even think about this stuff, social lives, the people we love, food on the table, a roof over our heads, the next slab of beer and St.Kilda FC, as bad is for us, just think of those poor Collingwood supporters, having to use bus shelters as protection when they're having sex, but seriously, change usually coms on the back of massive public upheaval, war, famine, bubonic plague. The situation gradually diminishes until people en-masse get sick of it.
Any one out there studied Kondratieff, are we at the bottom point of the wave in a Winter period or something else?

 

[VDS66]

That's why our economy is ****** if property crashes. I only know one person that owns a luxury car that isn't on supposed equity in their home and chucked on to the mortgage. If you have owned a house for 15 years and paid it all off of course you have genuine equity because prices will never go back that far but people buy stuff with magic money that is made from gains in property value in short periods. That's utter dumb arse stuff, cars are the worst investment ever, I know people who've bought S class Benz' for $180,000 and 5 years later they are worth $40,000, 10 years $7500 and so on. There is literally nothing that devalues quicker than an ageing luxury car.

It wasn't the tax cuts so much as negative gearing and changes to the capital gains tax rules that Howard and Costello brought in. Also super schemes that are self funded where people pull money from diversified funds to buy property helped push prices and to top it off we had banks that would lend to anyone with nothing to back it. When I got my mortgage last time they didn't ask for documents as I was self employed. I had a spread sheet and they didn't even check it. I could pay it but they didn't know that.

First home buyer Grant also had a massive impact.

I had dealings with Jacinta Allen in the late 90's. She pretty much said that this initiative alone guaranteed re-election because it was free money, would pump the home building market, and pump values meaning home owners felt like they were getting ahead.

I agree that if property falls it will take the economy with it.

Negative sentiment is a self fulfilling prophecy.

If it does happen, we will once again see a massive transition of wealth from the desperate sellers to the wealthy.

 

[Dard Ball Get]

That's why our economy is ****** if property crashes. I only know one person that owns a luxury car that isn't on supposed equity in their home and chucked on to the mortgage. If you have owned a house for 15 years and paid it all off of course you have genuine equity because prices will never go back that far but people buy stuff with magic money that is made from gains in property value in short periods. That's utter dumb arse stuff, cars are the worst investment ever, I know people who've bought S class Benz' for $180,000 and 5 years later they are worth $40,000, 10 years $7500 and so on. There is literally nothing that devalues quicker than an ageing luxury car.

It wasn't the tax cuts so much as negative gearing and changes to the capital gains tax rules that Howard and Costello brought in. Also super schemes that are self funded where people pull money from diversified funds to buy property helped push prices and to top it off we had banks that would lend to anyone with nothing to back it. When I got my mortgage last time they didn't ask for documents as I was self employed. I had a spread sheet and they didn't even check it. I could pay it but they didn't know that.

All great points. Lil Johnny and the imbecile Costello set the country back decades, generations will suffer due to their incompetence. Hilarious that he’s “the most popular PM”, wake up people

 

[gringo2011]

Its really easy for companies like Apple ( scum company ) to say, oh Apple Australia buy phones worth $900 from Ireland where they aren't made, and sell them for $901 dollars, oh no , we made a loss ( actual manufacturing cost probably less than $50 ), and avoid tax.

Its not so easy for the companies who add value , ie employ people. I work for an internationally owned company which manufactures in Australia, we employ an accountant to minimize tax but we make profit and pay tax.

The system currently favors pure importers.

Well they do but it's importers who cheat like Nike who pay tax on about 40c in every pair of shoes they sell. They invoice an off shore company or several and end up charging themselves so much through shell companies they are nearly tax free.
Four Corners ran a story on HSBC the bank, they ran so many scams they were overtly selling Cayman Island shell companies to hide tax for business. They were excepting Billions of dollars over the counter from criminals. They are so unbelievably amoral in their behaviour.

It's pretty much the difference between companies now and 50 years ago. Once you worked for one company and they treated you like family, the CEO got 4 times the guy in the factory floor. Now they lance you every four years before your long service and rights kick in and off shore the jobs or automate anything they can. The people at the top will get 10 years wages of the sacked factory worker in bonuses for doing the dirty work.

 

[gringo2011]

First home buyer Grant also had a massive impact.

I had dealings with Jacinta Allen in the late 90's. She pretty much said that this initiative alone guaranteed re-election because it was free money, would pump the home building market, and pump values meaning home owners felt like they were getting ahead.

I agree that if property falls it will take the economy with it.

Negative sentiment is a self fulfilling prophecy.

If it does happen, we will once again see a massive transition of wealth from the desperate sellers to the wealthy.

That's the system, I know a few very wealthy land holders and they always buy low and sell high.

 

[gringo2011]

Johnny Howard, what a campaigner. Squandered the biggest boom in our history

We are still doing it with our gas and mineral resources. If people knew what we were doing and it was reported they would rip down Parliament House. We let companies sell our gas overseas and sell it to our domestic market. We can get gas cheaper by buying it retail in Japan and sending it back in a ship than they sell it to us for and they hardly pay a cent for the royalties and don't pay much tax.

We will get $800 million compared to Qatar getting 26.6 billion for the same volume in royalties. But apparently they will go to another county to get it if we charge them anything.

Like Norway we should have had a future fund with all our mining royalties used to better infrastructure and make us bust proof. We are majorly corrupt or majorly dumb.

http://www.abc.net.au/radionational...e-learnt-from-norway-sovereign-wealth/7797560

 

[gringo2011]

Agree totally. The offset to Steve’s brilliance was his cold hard edge and “more more more” arrogance. Their development is lacklustre since his death, too, which is the be expected.

All that being said, I still use an iPhone, and a MacBook Pro

I just had to buy a new Mac book pro and FMD did they just make a massive price jump? I have had three go down in four years to stupidity and I hope I didn't pay that much for them last time. I was using a really old one for a fill in and it did my head in and bit the bullet. I'm not going anywhere near it with drinks this time.

 

[VDS66]

We are still doing it with our gas and mineral resources. If people knew what we were doing and it was reported they would rip down Parliament House. We let companies sell our gas overseas and sell it to our domestic market. We can get gas cheaper by buying it retail in Japan and sending it back in a ship than they sell it to us for and they hardly pay a cent for the royalties and don't pay much tax.

We will get $800 million compared to Qatar getting 26.6 billion for the same volume in royalties. But apparently they will go to another county to get it if we charge them anything.

Like Norway we should have had a future fund with all our mining royalties used to better infrastructure and make us bust proof. We are majorly corrupt or majorly dumb.

http://www.abc.net.au/radionational...e-learnt-from-norway-sovereign-wealth/7797560

Doesn't matter bro.

As long as our homes go up in value, she'll be right ya know?

 

[gringo2011]

maybe contemplate that we are breaching peoples human rights by denying then work.

Article 23.1 of the Universal Declaration of Human Rights states:[1]

(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

— Universal Declaration of Human Rights, United Nations General Assembly

and all a human construct, contemplate the Harvester Judgement, https://en.wikipedia.org/wiki/Harvester_case.

maybe it would have been better interpreted to allow two people to work part time and earn enough money to raise a family and build a house

Society is in a constant state of flux where laws can only be just in there own time. While it helps to understand how wee got to where we are, for me the issue is to determine how we want society to function and then give a frame work to creating change that doesn't involve destruction.

How would you want society to look?

I went to see the French economist Thomas Picketty when he was in Melbourne, he was really interesting in that he's modelled all the data on wealth redistribution and we are reaching a period where the money is being syphoned in to fewer and fewer hands. He's worth a read because it's going to get worse not better and fractured societies are not great places to live.

 

[VDS66]

All great points. Lil Johnny and the imbecile Costello set the country back decades, generations will suffer due to their incompetence. Hilarious that he’s “the most popular PM”, wake up people

Johnny War Crimes Howard should be in jail with his mates Blair and Bush IMO.

 

[VDS66]

I went to see the French economist Thomas Picketty when he was in Melbourne, he was really interesting in that he's modelled all the data on wealth redistribution and we are reaching a period where the money is being syphoned in to fewer and fewer hands. He's worth a read because it's going to get worse not better and fractured societies are not great places to live.

What do we expect?

Govt policy is influenced by the neo-liberal IPA and their stooges get parachuted into Parliament FFS.

 

[gringo2011]

Very few have the time or inclination to even think about this stuff, social lives, the people we love, food on the table, a roof over our heads, the next slab of beer and St.Kilda FC, as bad is for us, just think of those poor Collingwood supporters, having to use bus shelters as protection when they're having sex, but seriously, change usually coms on the back of massive public upheaval, war, famine, bubonic plague. The situation gradually diminishes until people en-masse get sick of it.
Any one out there studied Kondratieff, are we at the bottom point of the wave in a Winter period or something else?

If by studied it you mean I've heard of it. I think on the wave we definitely seem down but as some may have noticed I tend toward catastrophysing. I reckon the yin yang with communism hasn't helped capitalism. It was like the prim aunt who would pull out her bible and recite verse when capitalism got drunk on it's self and started smashing the furniture.

 

[Dard Ball Get]

I just had to buy a new Mac book pro and FMD did they just make a massive price jump? I have had three go down in four years to stupidity and I hope I didn't pay that much for them last time. I was using a really old one for a fill in and it did my head in and bit the bullet. I'm not going anywhere near it with drinks this time.

Yeah $4k for a laptop is absurd, but I’m a lifelong Mac user and fiscally irresponsible when it comes to pretty things...

 

[VDS66]

All great points. Lil Johnny and the imbecile Costello set the country back decades, generations will suffer due to their incompetence. Hilarious that he’s “the most popular PM”, wake up people

But to mention the structural damage to the budget due to their middle class pork barrelling.

 

[VDS66]

I went to see the French economist Thomas Picketty when he was in Melbourne, he was really interesting in that he's modelled all the data on wealth redistribution and we are reaching a period where the money is being syphoned in to fewer and fewer hands. He's worth a read because it's going to get worse not better and fractured societies are not great places to live.

Fractured societies is the number one reason why I'll always respect Krudd for his action during the GFC.

 

[gringo2011]

Yeah $4k for a laptop is absurd, but I’m a lifelong Mac user and fiscally irresponsible when it comes to pretty things...

Yeah we bought a PC lap top for one of the kids and I'd forgotten how to use one and gave up. PCs are so shittily made and unintuitive.

 

[Moral Decay]

If by studied it you mean I've heard of it. I think on the wave we definitely seem down but as some may have noticed I tend toward catastrophysing. I reckon the yin yang with communism hasn't helped capitalism. It was like the prim aunt who would pull out her bible and recite verse when capitalism got drunk on it's self and started smashing the furniture.

From my understanding and I'm a complete novice we fit the economic model for a Winter period, the high value of commodities and property as well as the winter period for social models, population dislocation in Europe and Nth Africa, instability in political models, USA, Italy, France, Greece, Turkey,England all being regarded as previously stable democratic institutions, even in Australia with lack of faith in Politics, Church, Banking could be used as examples of social dislocation. Given that the cycle is 60-70 years the difficult part is knowing whether we have bottomed out or is that yet to come? If we go back 70 years we do have WW2 and the subsequent post war boom, the current theory is that either robotics or something yet unknown will drive the next wave.

Along the communism line, the Kondratieff wave is independent of any "ism", it doesn't matter what system of governance we adopt, we will still get the highs and lows but the model of governance can affect how deep or high those waves will be. Personally my reading of pre Communist Russian and Chinese societies would tend to them being just as bad if not worse than their Communist variants. Communism or Capitalism or Democracy or Totalitarian state they can all look good in the Spring and Summer periods of a Kondratieff wave, when the wave tends to late Autumn and Winter they all look horrible but maybe in their own special ways, ways that may have more to do with the specific culture than with the type of Governance.

 

[Moral Decay]

I went to see the French economist Thomas Picketty when he was in Melbourne, he was really interesting in that he's modelled all the data on wealth redistribution and we are reaching a period where the money is being syphoned in to fewer and fewer hands. He's worth a read because it's going to get worse not better and fractured societies are not great places to live.

Yeah I read the book, but man what a drag! Only finished because I'm difficult.