The Great Australian Property Swindle
Nov 29th 2010, 7:01 am
#46
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Re: The Great Australian Property Swindle
I was reading an interesting article recently disproving the dual income driving up house prices theory, on Zerohedge or Money Morning. I'll have to dig it out.
As far as I'm concerned the thing that has driven house prices in Australia is three things, 1) Easy credit 2) Negative gearing 3) Government first home buyer bribes.
Arguments about supply/demand (of houses as opposed to easy credit), housing shortages and a constant stream of migrants are a combination of bullshit and/or minor factors in the bubble in house prices that has occurred.
As far as I'm concerned the thing that has driven house prices in Australia is three things, 1) Easy credit 2) Negative gearing 3) Government first home buyer bribes.
Arguments about supply/demand (of houses as opposed to easy credit), housing shortages and a constant stream of migrants are a combination of bullshit and/or minor factors in the bubble in house prices that has occurred.
Nov 29th 2010, 7:06 am
#48
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Re: The Great Australian Property Swindle
Nov 29th 2010, 8:10 am
#49
Love Machine
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Joined: Jun 2010
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Re: The Great Australian Property Swindle
I think the main problem has been buy to let. Now the average joe can own 1 to 30+ dwellings which has reduced the supply and pushed up prices.
Until we heavily tax these greedy bastards for owning more than 2 dwellings then the housing market will not return to sensible levels.
Until we heavily tax these greedy bastards for owning more than 2 dwellings then the housing market will not return to sensible levels.
Nov 29th 2010, 8:16 am
#50
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Re: The Great Australian Property Swindle
I think the best thing you can do, and really the only thing within your power anyway, is to stay out of the market. These guys are relying on capital gain and if people realise that it's cheaper to rent then they will have no one to sucker. At this stage of the game it's a prudent decision regardless of whether it's an effective protest / market corrective measure.
Nov 29th 2010, 8:30 am
#51
no stressin no fussin....
Joined: Aug 2007
Location: Fantasy Island....
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Re: The Great Australian Property Swindle
When I read emotionally charged reports by unknown authors with graphs that have no depth in terms of statistics, and written by armchair economists....I guarantee it's a clown with a view
Bit like on here really, including moi
difference being I don't spout with a "white paper"
he's prolly paid to publish it anyway to make himself look big
I do agree with your other comments though re negative gearing, lending power and FHOG all being drivers of the Aussie housing market
Bit like on here really, including moi
difference being I don't spout with a "white paper"
he's prolly paid to publish it anyway to make himself look big
I do agree with your other comments though re negative gearing, lending power and FHOG all being drivers of the Aussie housing market
Nov 29th 2010, 9:34 am
#52
Fighting my corner
Joined: Aug 2005
Location: Adelaide, South Australia
Posts: 11,948
Re: The Great Australian Property Swindle
Interesting, but depressing read.
http://www.dailyreckoning.com.au/rep...ty-swindle.pdf
The bubble is starting to burst.
http://www.dailyreckoning.com.au/rep...ty-swindle.pdf
The bubble is starting to burst.
Nov 29th 2010, 9:49 am
#53
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Re: The Great Australian Property Swindle
The property bubble burst here in the UK probably 2008, but prices haven't plummeted too much - people just aren't buying at the moment and probably won't be for another 12-24 months.
They'll pick up again, but anyone who was looking for a quick buck from buying property at the peak will be feeling sore over the current market... but then a lot of them are simply renting the properties out until the market picks up again rather than making a loss.
There will probably be talk of the bubble bursting in Oz for another couple of years before it happens - it's difficult to say without knowing more about the state of the economy there.
Jen
Nov 29th 2010, 10:11 am
#54
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Re: The Great Australian Property Swindle
How fortunate that all of these properties are cashflow positive and there is no cost to hold them.
Nov 29th 2010, 10:34 am
#58
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Re: The Great Australian Property Swindle
If the Australian job market implodes, as many commentators are suggesting
it will in 2009/10 thanks to the slump in the Aussie resources sector and slowing retail sales, things could get sticky for new homeowners, very quickly.
“With unemployment currently at just over 5 per cent, many economists are forecasting it will peak at 8-9 per cent in 2010, which will lead to a “bloodbath” in the property market as thousands of mortgagors default on their loans.”
However the article ended with:it will in 2009/10 thanks to the slump in the Aussie resources sector and slowing retail sales, things could get sticky for new homeowners, very quickly.
“With unemployment currently at just over 5 per cent, many economists are forecasting it will peak at 8-9 per cent in 2010, which will lead to a “bloodbath” in the property market as thousands of mortgagors default on their loans.”
consider what a swift rise in interest rates would do to your disposable income before committing yourself to a huge loan you might not be able to afford to service.
That is something we would all agree with.The article also quotes: "the median Australian income of $60,658 a year". That is worth comparing to the average first home mortgage in Australia of $284,512. 4.7 times.
