Australia housing bubble

[DTFRMONT]

Originally Posted by Citroënbender

There’s a mass of (re)development around me, most driven by foreign agents - developers and buyers. It’s totally at odds with other overt indicators of a massive slowdown. I do wonder if there’s people punting on an authoritarian crackdown in HK and resultant PR here for large numbers of wealthy ex-residents; shadows of Tiananmen...

Absolutly going gangbusters in my area of Melbourne (outer east) ATM. Things are getting silly, with normal 4-bedders exceeding $1mill at auction, Was at an auction in Wantirna a couple of weeks back. Unrenovated early 70's cream brick not in the 'desirable' area. Still made around $875K with 5 bidders.

With the goings on in HK, I'd say there'd be quite a few Hong Kongers & expats looking into activating 'plan B' while they can. Remember that there are around 100K Australians living in HK, with thousands more holding PR.

[Yellow_Festiva]

Read last night about a house in Strathfield selling $900k above reserve....

$900k!! There is still people with money out there willing to spend it seems.



Sent from my LG-M700 using Tapatalk

[Franco Cozzo]

Where I work, the property just sold for $17M and 120 apartments are going on the property soon.

If it was me I'd be pushing for 1200 apartments

[MITCHAY]

Originally Posted by XB GS 351 Coupe

That's a good effort, I paid my first place off in 10 years, took a bit of doing but worth it in the end.

Thanks mate. I put $100k down though so obviously helps a lot. Paid off $30k principle in those two years. It's good to have a low rate and 100% offset.

My spending has leveled out now so finally save more than I spend.

Never knew how much money I ****ed down the drain until I had a house

[Yellow_Festiva]

‘How did things get so bad?’: The ‘smoking gun’ that will force the RBA’s hand

Get excited — you’re about to have more money in your pocket, but the extra cash comes with a catch, and the health of our economy is on the line.

Jason Murphy @jasemurphy news.com.au SEPTEMBER 20, 2019 1:13PM

Oh dear. This is what we didn’t want to see. Nothing’s bloody working.

Despite the RBA cutting interest rates twice, in early June and early July, and the Government lining our pockets with nice fat tax returns, the economy has shrugged.

The RBA and the Government would have been biting their nails ahead of the release of the latest labour market figures on Thursday, desperately hoping for a little bit of a move in the right direction. They didn’t get it.

Instead, things went the other way. Unemployment rose ever so slightly in August, but it was enough to shift the official number from 5.2 per cent to 5.3 per cent. And underemployment went up sharply, confirming that in our economy, it is not easy to get the hours you want.

Australia’s “natural” rate of unemployment is estimated at 4.5 per cent. That’s the level where we can expect decent wages growth to really kick in. And for a while we were making progress toward that point. But as the next graph shows, recent progress has been reversed, and the unemployment rate is back up to where it was a year ago.

There is some good news in the figures. The Australian economy is still getting people into work. After balancing out all the people who moved into work, and all the people who moved out of it, the economy put 35,000 people who were previously not working into jobs in the month of August in seasonally adjusted terms. So that’s a good sign.

When things are really bad, you get net movement of people out of jobs, and we’re not going that badly, thank goodness.

Now, you might be wondering, how can we have a rising number of workers and rising unemployment? The reason is that adding 35,000 new workers in a month is not enough right now. The working population is always growing. More young people are becoming adults than there are old people retiring. Women are working much more than in the past. Migration is adding to the labour force.

But it’s not just about having more Aussies of working age. A record proportion of Australians are participating in the labour force (either working or looking for work) as the next graph shows.

Why is participation so high? After all, we used to hear that our ageing population was going to cause labour force participation to collapse. One answer might be that with weak wages growth, families are needing to work more and longer to make ends meet.

Parents go back to work sooner after having kids and/or retirement is delayed a few years.

PART-TIME NATION

There is more bad news about the 35,000 net people who got into work in August: Most of them ended up in part-time positions. The economy added an estimated 50,000 part-time roles and lost 15,000 full-time roles in seasonally adjusted terms.

That doubtless contributed to the increasing share of people who wish they could get more hours. Underemployment is up as the next graph shows.

WHAT TO DO, WHAT TO DO?

The first response to this situation is simple: do more with the tools we’ve always used. You can now expect another cut in interest rates. Commonwealth Bank economists think the RBA will cut ASAP when the RBA board meets at the start of October.

“We believe that today’s labour force data is the smoking gun that will force the RBA’s hand,” said CBA economist Gareth Aird in a note to clients.

The RBA will not be the only institution under pressure to act. Treasurer Josh Frydenberg will be too. Unlike the RBA, which is nearly out of ammo, the Treasurer is in a good spot to actually do something.

All those extra people participating in the labour force will be paying taxes, and that makes it even more likely that Mr Frydenberg can find money in the Budget to help get the economy moving.

We all know he wants to deliver a surplus. Personally, I think that’s a bad idea when the economy is sputtering along like it is right now, and the money (our money) would be much better off circulating in our economy.

But with higher tax revenues, it raises the prospects he can do both — deliver a skinny surplus and also spend a chunk of money to try to stop unemployment getting worse.

So that’s how monetary policy and fiscal policy will likely respond. A swift rate cut and some begrudging government spending. But the weakness in the Australian economy raises big questions about whether, in the long run, we know enough about why economies do well some times and poorly at others.

In theory, our long era of low interest rates should have generated lots of inflation, wages growth and a higher GDP per capita. Instead, it has generated mostly higher asset prices and stagnation. We see similar situations overseas.

The ongoing weakness has been strong enough that no less of an economic institution than Alan Kohler has been arguing for something called “helicopter money”.

That’s where the RBA just creates money and puts it in our bank accounts. Sounds nice, doesn’t it? But this idea being discussed in serious circles is a worrying sign that we are not too sure why things have got so bad, nor what to do about it. Oh dear.

Jason Murphy is an economist. He is the author of the new book Incentivology. Continue the conversation @jasemurphy

https://www.news.com.au/finance/econ...ef0ac3e9b34785

[Polyal]

hmm..whats the talk of tax return bonus? I did my online (not submitted) and I owe the bastards money somehow. Do you get the return bonus after lodging?

[vztrt]

Originally Posted by Polyal

hmm..whats the talk of tax return bonus? I did my online (not submitted) and I owe the bastards money somehow. Do you get the return bonus after lodging?

Gets added when it calculates your return.

[Polyal]

Originally Posted by vztrt

Gets added when it calculates your return.

And Im still negative! Might be time to see the accountant. Cheers

[asagaai]

Mate

I have no need to see the accountant to tell me I am negative.

Just go home and am told by my wife and oldest negative daughter all the time. 😨

[buggerlugs]

https://www.abc.net.au/news/2019-09-...mbers/11512002

[Citroënbender]

Unsurprising, really.

[buggerlugs]

https://www.abc.net.au/news/2019-09-...dable/11555420

[Franco Cozzo]

Originally Posted by buggerlugs

https://www.abc.net.au/news/2019-09-...dable/11555420

Looking at the cheap end of the market here, did the loan repayment calculator thing and on my wage even with the deposit, its not really enough to live solo and pay off the mortgage on a $400K property 120km out of Melbourne, unless I want to be eating vegemite on toast for breakfast lunch and tea

The weekly repayments were going to be over 60% of my weekly wage - assuming interest rates didn't go up again and a 240km daily commute to work and back.

Realistically I don't think I could live that far out because I'd be spending 2 hours+ commuting to work assuming it was smooth on the freeway out of Melbourne, and how much fuel would cost me, that same coin buys a 1 bedroom apartment in some of the inner Melbourne suburbs.

Its one of those things where I need to jump $20K+ in wages so change industries or partner up for it to be realistic.

The deposit isn't a big deal, its just not really viable for the repayment side of things.

[.:4:.]

Originally Posted by Franco Cozzo

Looking at the cheap end of the market here, did the loan repayment calculator thing and on my wage even with the deposit, its not really enough to live solo and pay off the mortgage on a $400K property 120km out of Melbourne, unless I want to be eating vegemite on toast for breakfast lunch and tea

The weekly repayments were going to be over 60% of my weekly wage - assuming interest rates didn't go up again and a 240km daily commute to work and back.

Realistically I don't think I could live that far out because I'd be spending 2 hours+ commuting to work assuming it was smooth on the freeway out of Melbourne, and how much fuel would cost me, that same coin buys a 1 bedroom apartment in some of the inner Melbourne suburbs.

Its one of those things where I need to jump $20K+ in wages so change industries or partner up for it to be realistic.

The deposit isn't a big deal, its just not really viable for the repayment side of things.

So granted things were a lot cheaper in 2012, but i pay a 460k mortgage in sydney, 25km from the cbd as the crow flys, 36km by car. Granted, when i got the loan i was on only $25 an hour but had a wife to feed me. The whole time i have paid the mortgage. So i offed the wife a few years back, kept the house and yes my rate has gone up, i manage to pay the house and associated costs, and live a life perfectly fine on my income alone. Well, i cant afford a drug addiction or anything like that, but i do ok on a pretty average income. I have a nice boat and crap, but in my favour, whilst i own a car, i drive a work car with a fuel card and work pay for a few other things for my private use. So, thats in the realm of a few grand of my income saved per year. The first few years of a mortgage are crushing, but after that, wages go up, however the price you paid for a place does not change. So it does get easier in time. And when you buy a house to live in, its to live in, not an investment, so current values mean nothing. If it tanks who cares, the market always picks up in time and well, you need somewhere to live.

[roKWiz]

Originally Posted by Franco Cozzo

its not really enough to live solo and pay off the mortgage on a $400K property 120km out of Melbourne, .

Franco, I like your thinking, can you convince the other 5 million people in Melbourne to stay there too please. As you know there's nothing to see out here in the country.

[FairmontGS]

Next cycle well underway

https://www.abc.net.au/news/2019-10-...logic/11562824

[78xcgxl]

Originally Posted by FairmontGS

Next cycle well underway

https://www.abc.net.au/news/2019-10-...logic/11562824

Until the recession hits. Economy is being run to the ground by the Federal government.

[FairmontGS]

Originally Posted by 78xcgxl

Until the recession hits. Economy is being run to the ground by the Federal government.

Recession? What recession?

There's money sloshing around everywhere looking for yield and cap growth. A recession would make little difference to that and where it ends up.

[Yellow_Festiva]

Originally Posted by buggerlugs

https://www.abc.net.au/news/2019-09-...dable/11555420

Yes and no.

You can still buy a unit in Sydney for under $300k.

You can still buy a villa / townhouse with a courtyard and garage for under $400k.

You can still buy a freestanding house with land for under $500k.

It won't be modern, it won't be big, it won't have fancy communal facilities.

Hell, it probably won't even have a lift.

It won't be within cooee of the CBD.

But, it's a roof over your head and it's a start.

The 'great Australian dream' used to revolve around a 1/4 acre block with a hills hoist, a Holden or Ford in the driveway and lots of grass to play backyard cricket or set up your water slide.

That's doable, but many people simply don't get that ownership of decent property in a decent location is a gradual process that takes time, effort, sacrifice and a little bit of luck.

Most millennials would be more happy to rent a shoebox in Newtown for $600 a week then say they were living in Campbelltown / Penrith or Liverpool with repayments for less that are actually paying for eventual ownership.

I'm a high school teacher. I'm amazed at the amount of Yr 11 students who have never had a job or got there L's.

I feel sick watching most of Yr12 students (adults) getting dropped off by mummy or daddy like primary school children.

Why don't they have a job?? So that they can concentrate on their studies, get into Uni and get their dream job straight out.

Why don't they drive? So they can concentrate on their studies, not date, be constantly controlled and monitored by their parents so they can get into Uni and get that great job straight out.

Oh how I fear for the future.....

[Citroënbender]

My gay nomad clients have struggled to tenant one of their Newtown shoeboxes at $400/wk and although dated, it’s not too bad. It took almost six weeks to turn around between tenancies. One of the agents reckoned that lenders were still gunshy of anything under 50sqm lot size and therefore purchases were mostly the SMSF crowd.

[Yellow_Festiva]

Originally Posted by Citroënbender

My gay nomad clients have struggled to tenant one of their Newtown shoeboxes at $400/wk and although dated, it’s not too bad. It took almost six weeks to turn around between tenancies. One of the agents reckoned that lenders were still gunshy of anything under 50sqm lot size and therefore purchases were mostly the SMSF crowd.

They still anal about that ancient 50sqm rule???

Was the same 20 years ago when people actually laughed and felt sorry for you for buying something so small.

You would like this... I bought a 1br unit of 48sqm with a garage of 15 or 16sqm.

I was much younger and I didn't have that 'full time job for the minimum 2 or 3 years' that was mandatory back then to get a loan.

Lender first refused to lend because of my income (yet he jokes I was making more than him as a casual teacher + other incomes).

Then they picked me up on the unit size and didn't want to get into the debate about if the garage was included to pass the 50sqm rule.

To be honest, I believe the guy was jealous of my situation and was making it difficult on purpose.

He proudly told me that the only way to not lose your holding deposit and buy the property was to purchase it outright.

I said 'ok then'. And did just that.

Mongrel called me a few weeks later seeing that the property was sold and pretending like he was following up on the loan and asked me if I needed help on another property.

Said... Nah, I bought that unit after taking your advice.

Was $72k if I recall... back when that was decent coin

[prydey]

Originally Posted by Yellow_Festiva

I feel sick watching most of Yr12 students (adults) getting dropped off by mummy or daddy like primary school children.

Why don't they have a job?? So that they can concentrate on their studies, get into Uni and get their dream job straight out.

Why don't they drive? So they can concentrate on their studies, not date, be constantly controlled and monitored by their parents so they can get into Uni and get that great job straight out.

Oh how I fear for the future.....

Feel better now, being all judgemental?

My daughter's uni course had an entry atar requirement of around 97. You think the students that want to get in to those sort of courses don't put in the work? I'd much rather have my daughter put in the hard work at this end of her life (which she did, 98.7 atar) and set herself up for later than be worrying about after school jobs or getting a licence as soon as able.

You fear for the future but it may well be controlled by those students you detest now, who see long term, not short term.

[Yellow_Festiva]

Originally Posted by prydey

Feel better now, being all judgemental?

My daughter's uni course had an entry atar requirement of around 97. You think the students that want to get in to those sort of courses don't put in the work? I'd much rather have my daughter put in the hard work at this end of her life (which she did, 98.7 atar) and set herself up for later than be worrying about after school jobs or getting a licence as soon as able.

You fear for the future but it may well be controlled by those students you detest now, who see long term, not short term.

True for the people that actually use the free time as intended.

More than half didn't. They did what they did to keep their parents happy.

When they didn't get the marks they wanted there was always an excuse.

Now Uni's are wanting to see other 'non academic' entry factors than marks to get in. Life experiences, membership to clubs and groups, volunteering in the community, individual initiatives and interests, learning stuff outside of school because you wanted to not had to, work experience, involvement in sports etc.

These life skills were a given not that long ago before smart phones and Fortnite.

Now some Uni's are interviewing applicants for courses. I know of academically brilliant students that have not got in because they bombed out in the interview.

[BENT_8]

Originally Posted by Yellow_Festiva

I'm a high school teacher. I'm amazed at the amount of Yr 11 students who have never had a job or got there L's.

I feel sick watching most of Yr12 students (adults) getting dropped off by mummy or daddy like primary school children.

Why don't they have a job?? So that they can concentrate on their studies, get into Uni and get their dream job straight out.

Why don't they drive? So they can concentrate on their studies, not date, be constantly controlled and monitored by their parents so they can get into Uni and get that great job straight out.

Oh how I fear for the future.....

A lot depends on the upbringing, my 3 eldest all started work at 14, my Eldest dropped out of school after yr11 due to bullying, all his so called mates said he'd be a bum working in fast food.
He turned 21 in August, manages a furniture/electrical retail outlet for a company he's been with just on 12 months and is part way through his first house build.
The people who said he'd fail and finished school have gone nowhere.
School isn't everything its cracked up to be.

[Yellow_Festiva]

Originally Posted by BENT_8

A lot depends on the upbringing, my 3 eldest all started work at 14, my Eldest dropped out of school after yr11 due to bullying, all his so called mates said he'd be a bum working in fast food.
He turned 21 in August, manages a furniture/electrical retail outlet for a company he's been with just on 12 months and is part way through his first house build.
The people who said he'd fail and finished school have gone nowhere.
School isn't everything its cracked up to be.

I agree. That's what I was getting at.

I got a very, very low TER (shocking all my students when I tell them) and have done quite well due more to life skills and upbringing then schooling.

[Franco Cozzo]

I got an ENTER score of 47.55 in 2009, but admittedly I didn't apply myself as I knew I was going into the automotive industry.

Now I'm a 'manager' of the customer service side of a manufacturing companies head office with a 80 year history in Melbourne.

I'm the least educated and most uncouth yobbo out of the entire team but the MVP nationally in customer service and ranked by the GM as most important of the crew - go figure

School looks good on paper, but you can be educated with the street smarts of a pet rock, the problem is getting past the HR team before you get the interview with the team is the big problem.

I look terrible on paper (and in person, which is why I have to work harder than everyone else )

I've just got an eye for opportunities in the market and 'network' very well (fancy word for corruption), I'm not particularly intelligent.

[MITCHAY]

Mate I got 0 UAI or what is now called ATAR. Drinking beers in my place right now

Anyways after the rate cuts and putting that money back into the extra payments, it's knocked off $100 in interest per month. I suspect a lot of people will be doing this.

I know they want to throw around cheap money but a lot of people are in debt up to their eyeballs. Thankfully it's just the mortgage for me.

[BENT_8]

Originally Posted by Franco Cozzo

I look terrible on paper (and in person, which is why I have to work harder than everyone else )

I've just got an eye for opportunities in the market and 'network' very well (fancy word for corruption), I'm not particularly intelligent.

And whilst its working for you that's all that matters really, the world would be a boring place if we all went about it the same way.

The bullying my eldest copped was because he drew a square when asked for a triangle of all things, his class mates hung **** on him about it every maths lesson from then on so he ditched school.

I called in to his store yesterday to say g'day and watched him work over a customer, they we're looking at a fridge for $900, he casually mentions how he recently bought himself a new fridge and went for the dark steel look like the one next to it, they turned their attention to it and despite the $600 difference, pulled the trigger on it, he then said how you can furnish your whole house in that coloured appliances and then added a washer to the sale, turned a $900 sale into $2.3k in the blink of an eye.
Could literally sell ice to Eskimo's the scheming bugger..lol

[FairmontGS]

Originally Posted by Franco Cozzo

I've just got an eye for opportunities in the market and 'network' very well (fancy word for corruption), I'm not particularly intelligent.

I can vouch for this man

[GasoLane]

Originally Posted by BENT_8

And whilst its working for you that's all that matters really, the world would be a boring place if we all went about it the same way.

Rest assured that Franco's life is anything but boring