It's the economy, stupid!

 
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Listening too Fortesque, feels the iron price will be stable in $50's-60's. If I recall correctly.
RTT_Rules
Rio Tinto today predicting the price will continue to slide due to their own efforts (and others) in continuing to ratchet up capacity as much as they can.

No, Super is for retirement, nothing more or less. Our Super contributions are already low. Singapore at least has 40% unless it was changed. Heard an argument that for lower income, its not enough to retire on anyway so why not let them use it for buying a "better" house. The reason why we have Super is for these people who histrpoically retired with often not much more than their last pay check in the bank, not the upper 1/3 who are mostly self funded regardless anyway.
RTT_Rules
They've decided not to allow this for the time being but it keeps bubbling to the surface because people like Scott Morrison want housing to become the only game in town. They won't be happy until housing and construction has absorbed absolutely all the money there is in our economy.

Sponsored advertisement

  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Did anyone else see this - The Australian is reporting that Harry Triguboff is interested in opening some estates with mobile homes in Sydney's west (trailer parks in US parlance I guess):

Meriton last developed mobile home parks in the 1980s with Mr Triguboff saying he had developed about 700 caravan sites in three Sydney locations.

However rising land prices at the time saw the properties used for housing and the caravans sold off.

“This is not my business, but I would do it if they (planning authorities) would let me,” Mr Triguboff said, noting that co-operation would be needed from state and local governments given land would need to be rezoned. “Thirty years ago I built caravan parks. There is a demand for cheap homes, but you need unzoned land.”

How benevolent, I guess they'll be looking for lots of public money to house the great unwashed too - no doubt they'll be really nicely designed to keep the poor well away from everyone else. And I suppose we are also talking about land 50-70 km from Sydney CBD so not exactly located where the jobs are in terms of the Sydney basin.
  HardWorkingMan Chief Commissioner

Location: Echuca
There are quite a few "Lifestyle villages (aka retirement parks)" like this along the Murray River (so obviously elsewhere as well).  Caravans get moved out and transportable homes come in on 2 or 3 semi-trailers and are bolted together to make a 3 (or 4) bedroom home usually with a garage.  They are hemmed in on top of each other so the occupant owns the house and rents the land.

The seem to be filled by people who have downsized and are using the money from the sale of their house in the capital cities to fund their retirement or to use as a base to go travelling
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
In a sign that the East Coast property market is weakening (or at least going off the boil), Sydney real estate mega-agency McGrath has slumped to a new record low on the ASX ($0.64) since the float only 18 months ago.

Meanwhile Perth's Mandurah was the subject of a 7:30 Report article the other night - perhaps one of the worst hit parts of WA with falls of around 20% in the last two years. It's the urban fringes that are generally suffering the most.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
In a sign that the East Coast property market is weakening (or at least going off the boil), Sydney real estate mega-agency McGrath has slumped to a new record low on the ASX ($0.64) since the float only 18 months ago.

Meanwhile Perth's Mandurah was the subject of a 7:30 Report article the other night - perhaps one of the worst hit parts of WA with falls of around 20% in the last two years. It's the urban fringes that are generally suffering the most.
don_dunstan
I heard a bank, cannot remember the name has publicly called the Sydney market is now at its peak with no significant rises beyond the rest of the year and into 2018.

They said the Sydney boom was more sensible in the locations of the newer high rise as it followed PT corridors, Melbourne and Brisbane did not. Thus exposing those properties to potential drops as they become less desirable that others going forward.

As for Mandurah, the wording above is typical media misleading comments. Its only a 20% drop from the preceding ridiculous over priced rise. Only affects those who bought at the top or shoulder. Again people need to use common sense and if a property has risen 25% in 3 years, then the chances of another sustained 25% rise are F_all. If that isn't common sense enough, then so be it when the price drops.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud


...As for Mandurah, the wording above is typical media misleading comments. Its only a 20% drop from the preceding ridiculous over priced rise. Only affects those who bought at the top or shoulder. Again people need to use common sense and if a property has risen 25% in 3 years, then the chances of another sustained 25% rise are F_all. If that isn't common sense enough, then so be it when the price drops.
"RTT_Rules"

Mandurah is a very new part of Perth though, most properties that have lost value wouldn't be very old and/or might have wafer thin equity; inevitably built during the "shoulder". I've been there, its quite a picturesque fishing and boating spot but they've built a huge amount of high end Gold Coast-style canal-fronted property and it strikes me as simply too far from the CBD (although it does have a fast electric train link and freeway).
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
I heard a bank, cannot remember the name has publicly called the Sydney market is now at its peak with no significant rises beyond the rest of the year and into 2018.
"RTT_Rules"

You can't ever really know - we have a finance & construction industry AND governments at all levels (state and federal) doing everything they possibly can to keep inflating the bubble beyond all reasonable estimates. I can imagine that without a change in settings that Sydney and Melbourne could end up with $2 million dollar median prices and that many people who already own property in those cities will be cheering the rises on... therein lies the problem.

I read a quote from Harry Triguboff the other day saying that he would tell the government to bring in more migrants if there was any sign of vacancy rates rising on the eastern seaboard... who is really running this show and for whose benefit?
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Iron ore continues to march downwards as discussed in this Business Insider article... the spot price in USD is now in the mid-sixties but historically it's still quite high. It does make it less likely that an iron-ore new mine construction boom will come to the rescue of WA's economy though.
  rxclass Junior Train Controller

Location: On the manual turntable at Marino turning an exquisite Rx class steam locomotive.
G'day all,

Read an item in 'The Australian' Business section earlier this week, cannot remember which day has the paper is now on it's way to recycle, which stated that many economists were stating that the new economy should include growth, but very few if any increase in jobs. Included in the article was the comment by Bill Gates that the governments of advanced economies will have to consider taxing robots as if they were workers if in fact they replace workers.

Regards,
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Alan Joyce cops a pie in the face at a Perth business breakfast today (ABC)... not sure what the bloke was unhappy about but Joyce at least took it in good humour.

Interesting Ian Verrender opinion piece on why it's so important to the budget to keep the price of housing unaffordable (ABC), for all the reasons that we've already discussed on this thread. Can't see that situation changing any time soon.
  Carnot Minister for Railways

Banks went for a bit of a nose-dive this morning, even as the Big 4 posted a combined interim profit of $15.6 billion:
https://www.businessinsider.com.au/bank-stocks-are-getting-hosed-ahead-of-the-federal-budget-2017-5
  michaelgm Chief Commissioner

Bank share holders, have received their dividend, take your cash, and, park it somewhere else. Until the next payment cutoff rolls around. Not surprised, at the drop in price.

As for Alan Joyce, no one deserves that. My nephew wanted to be shares in Qantas, when they in deep Smeg, some three years back. Around $2, a share? Can not recall accurately. My view was that, he would have a return quickly, or loose his cash. I would buy the equivalent amount as him. He spent his cash on a girl/car, didn't happen. Can't bring myself to look Qantas share price now. Alan Joyce, has in my view, done reasonable job, I expected them to go the way of Ansett.
  Carnot Minister for Railways

There are big differences between Ansett in 2000/01 and Qantas today.  Ansett was being asset stripped and run-into-the-ground by its owner (Air NZ).  Hardly the case with Qantas which is still majority Australian owned with a much more diverse shareholder list, and has benefited from recent low oil prices.  Things did look pretty grim a few years back with its run-down fleet of old jets, big $$$ loss, and the fact it was second-rate compared to Virgin Australia when it came to customer satisfaction.  It seems to have turned a corner...

Then again, Jetstar hasn't had great press lately:
http://www.sbs.com.au/news/article/2017/04/28/jetstar-angered-worst-airline-survey
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Then again, Jetstar hasn't had great press lately:
http://www.sbs.com.au/news/article/2017/04/28/jetstar-angered-worst-airline-survey
Carnot
People who fly Jetstar (like me) don't give a damn that it's not rated highly... it's cheap.

Meanwhile the Foreign Investment Review Commission announces that there's been a huge boom in Chinese money flooding into Australian residential real estate (Fairfax):

The $55 billion increase in all approved foreign investment in Australia, to $248 billion, was "predominantly driven by increased investment in the real estate sector", FIRB chairman Brian Wilson wrote in the report released on Tuesday... By value, investment in new homes made up a third of total foreign investment in Australia last year. Foreign real estate investment overall rose by 36.8 per cent.

Is it really a good thing for the people who live here that people who don't actually live here are buying up residential property?
  MILW Junior Train Controller

Location: Earth
I heard a bank, cannot remember the name has publicly called the Sydney market is now at its peak with no significant rises beyond the rest of the year and into 2018.

You can't ever really know - we have a finance & construction industry AND governments at all levels (state and federal) doing everything they possibly can to keep inflating the bubble beyond all reasonable estimates. I can imagine that without a change in settings that Sydney and Melbourne could end up with $2 million dollar median prices and that many people who already own property in those cities will be cheering the rises on... therein lies the problem.

I read a quote from Harry Triguboff the other day saying that he would tell the government to bring in more migrants if there was any sign of vacancy rates rising on the eastern seaboard... who is really running this show and for whose benefit?
don_dunstan

UBS, Deloitte and others have been talking about the top of the market. In an ideal world, they should be right.

However, it seems that the overall situation will encourage continued inflation of the bubble until an uncomfortable correction ensues. The few measures taken to cool things down are probably too little, too late. TIghtening of lending comes after years of secret sub-prime loans with an untold number of fudged loan applications and thousands of households in various degrees of mortgage stress. Modest interest rate rises can be written off as tax deductions on investment properties, and the reduction in deductibles might save the ATO money (which is good) but won't stop the market. That the government and banks took those steps is a subtle acknowledgement that there is a problem, but they don't really want to do anything about it, probably because they can still squeeze more profit out of the market in the short term, while actively throwing ice on the market would be painful and kill that short term profit opportunity.

The exponential rate of house price inflation is alarming, such that $2M median house prices could be a reality in the near future. The March figure of about 19% is equivalent to a house price doubling time of about 4 years. That's a speculator's nirvana but with low wage growth in mind it's a nightmare for everyone else. Of course, things do seem to have slowed somewhat, but will probably continue at an unsustainable rate until you know what.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
There comes a point where rents cannot increase because no one will pay, this then clamps down on investors who cannot even get a bad level of return and look elsewhere to invest. Likewise buying the property, people simply run out of the capacity to borrow to buy. Sydney has had poor rental returns for years now with investors relying on capital growth, but the banks are starting to go public saying the ability for people to pay has just about hit the limit.
  MILW Junior Train Controller

Location: Earth
It hasn't received much publicity, but rents are already quite flat in some areas and have been for a few years, particularly with flats in lower socioeconomic areas of Sydney, where minimum wage workers are already at the limit. In fact, even with houses it has been possible for prospective tenants to negotiate discounts on advertised rent of about $30 per week, since stretched landlords need the money even if it's not what they originally asked. Outside the hotspots it's already effectively a tenant's market. There is competition between tenants but if you check out real estate websites, there are plenty of vacancies in cheaper areas. In those areas, landlords who put their rents up by more than $10/wk/yr risk losing their tenants. In some cases, the actual average rent inflation is less than $5/wk/yr.

Meanwhile, insane sales have continued, with a modest 4 bedroom house on a 929 sq m block in Strathfield selling for $5.4M, $800,000 above reserve, in late April. The house is earmarked for demolition although it is unknown whether it will be replaced with a larger house or high density accommodation.
  Carnot Minister for Railways

Why anyone would buy or rent a house in Sydney is beyond me...  I'd much rather live outside the big smoke, ie. Lithgow.
  kitchgp Chief Commissioner

Before criticising the big Australian banks too much, albeit some of it is more than justified, consider this aspect of small bank life in the USA:

http://www.bankrate.com/banking/list-of-failed-banks/

http://www.bankrate.com/banking/what-happens-if-your-bank-fails/
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Meanwhile, insane sales have continued, with a modest 4 bedroom house on a 929 sq m block in Strathfield selling for $5.4M, $800,000 above reserve, in late April. The house is earmarked for demolition although it is unknown whether it will be replaced with a larger house or high density accommodation.
MILW
I was looking at realestate.com.au around Chatswood and the prices are astonishing. Why should an average house be $5 million, who is benefiting from those outrageous prices? I don't understand why there are people who are still cheering this insanity on, clearly normal working people cannot afford to actually own property in that place any longer.
  locojoe67 Assistant Commissioner

Location: Gen X purgatory/urban Joh-land
Quo bono?

The banks, generating income on larger loans.
The estate agents, conveyancers, hangers on etc.
The state govt, by way of manic stamp duty revenues.

As previously discussed.
  1771D Junior Train Controller

Greedy scum in general.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud
Anna Bligh races to the defence of the poor downtrodden banks by arguing that the "too big to fail" levy announced in Tuesday's federal budget is manifestly unfair (Sky News):

Australian Banking Association CEO Anna Bligh has slammed the policy, saying that every Australian will have to pay for the levy on the big 5 banks.

'This is bad policy, it's policy on the run and every Australian is going to have to pay the bill,' Bligh says.

'Any Australian who has money in a superannuation account, any Australian who has a retirement income that's linked to the value of banks because they are the biggest investors in banks will be affected.'

Ms Bligh says there was no consultation between the government and the ABA over the decision to take money away from the banks, and believes the policy framework or tax architecture simply does not add up...

...Banks with liabilities of more than $100 billion - which is currently the big four lenders and Macquarie - will be slugged a levy of 0.06 per cent on those liabilities each year from July 1, delivering revenue of $6.2 billion over the next four years.

Anna Bligh was bought in for a specific reason - to try and sink any ideas the government might have about taxing the $30-odd billion dollars a year made by the big four banks. She's already proving well worth the hundreds of thousands (millions?) she's being paid to do that job; I have no doubt that this somewhat limp-wristed measure will be sunk in the end.

Like the French Bourbon King Louis XVI and his inability to tackle the French aristocracy, they just can't stand up to the people who can most afford to pay tax (but consistently refuse to do so)... they keep getting forced to back down. In danger of paying tax? Buy yourself an ex-politican to stand up for your right not to.
  kitchgp Chief Commissioner


................................

Anna Bligh was bought in for a specific reason - to try and sink any ideas the government might have about taxing the $30-odd billion dollars a year made by the big four banks. .......................
don_dunstan


Anna Bligh took up the job in February; long before the banks were aware of the tax.
  don_dunstan The Ghost of George Stephenson

Location: Adelaide proud

................................

Anna Bligh was bought in for a specific reason - to try and sink any ideas the government might have about taxing the $30-odd billion dollars a year made by the big four banks. .......................

Anna Bligh took up the job in February; long before the banks were aware of the tax.
kitchgp
I think they knew damn well what was coming and how to fight it.

It'll be interesting to see if this measure gets though. Like the mining tax and the coup with Kevin Rudd, just try and tax the aristocracy and see what happens.

Sponsored advertisement

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.