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2015 Financial Survey Predictions For OZ

2015 Financial Survey Predictions For OZ

Old Dec 24th 2014, 6:50 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by the troubadour View Post
It probably does depend on the housing market though. I am increasingly of the opinion that Glenn is somewhat out of his depth. Lower interest rates will feed the housing bubble and attract more off shore investors with that and cheap dollar.
Leaving rates will prohibit first time home buyers, already at a record low from entering the market.
Far too much reliance on the housing market to replace the resource decline. 2015 may be interesting or more wait and see?
The thing is, although mining investment is down, mining production and export are going up. This transition will cause GDP to increase still, but cause unemployment to go up, because production/export will not require as many workers.

And even through iron ore prices are down, the volume of production is much higher - and much of the glut in supply is coming from Australia. Therefore it's not too bad really if we look at the bigger picture (excluding the displaced workers unabsorbed by other sectors). It's BHP vs Rio vs FMG.

It's different from the oil glut / oil price slump in that many countries are competing for market share - OPEC vs Russia vs USA vs Canada vs Norway vs Scotland.

I think Australia's problem is more of unemployment rather than GDP output, and that's what policy makers should concentrate on.

More jobs rather than just mere higher GDP.

Because of deficits, we can't expect the Government to really boost spending.

If there's one promising area, it's that NSW economy (1/3 of the GDP) is doing well - a lot of projects/infrastructure in the pipeline and a diversified economy unlike the mining states.

Last edited by commonwealth; Dec 24th 2014 at 6:54 am.
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Old Dec 27th 2014, 9:07 am
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Default Re: 2015 Financial Survey Predictions For OZ

One way of eliminating competition. The small players will largely drop by the wayside. Lower dollar will bring in less dollars in value as well.

Well construction is supposed to compensate in part for the declining resource sector. Immigration will ensure there is no recession while at such levels but a short term filler at best, I'd say.

Still doesn't help ease the massive youth un/under employment in this country and with additional cutbacks in spending very hard to create growth.
Never seen unemployment tackled without growth or some form of stimulation.
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Old Jan 2nd 2015, 7:23 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by the troubadour View Post
Are you telling me you bought a house all those years ago costing 70% of your gross wages? So you lived on baked beans day in out and cycled to work? Not a way most of us would want to go Geordie.

Anyway whatever and today's reality is far removed from nonsense. Few young these days would wish endure such hardship you claim anyway.
Australia's housing was not at levels third most expensive in the world nor were people buying through cheap interest rates. Cheap cash loans lead to problems further down the line.
An increase in interest rates and taking it at a longstanding norm being around 7% will seriously impact on many and the market in general.
This was not the case during high interest rates of a few decades back when the movement was eventually down.

Wages for many are not that high in Australia. Well at least for many. According to Urban Economics just under two thirds of Australians earn less than $52,000 per annum.

Ok take a modest house of say $400,000 (very modest and usually very far out in most Australian cities)

So we'll round the figure for convenience sake to $50,000 which produces a multiple of 8 x gross pre tax.

Result two thirds stuffed in being able to afford a modest $400,000 unit.

That's a bit low and many I expect will claim they don't know anybody on such low earnings. Taking if up a notch to $80,000. According to Urban Economist less than 15% of the gross population fit this category.

This would still require multiples of five at this salary to afford a very modest 400,000 dollar house.

Now looking at combined salaries still close to a third earn less than $52,000 while another 15% earn between $52,000 and $78,000 combined household income. Hardly a lot.

30% of household combined incomes do top $104,000 but 7 in 10 earn less.

Hence roughly half of household incomes top $80,000 per annum.

Those that got into the market when housing was affordable as I did are laughing. I have seen a 300% rise in thirteen years with a fall in more recent times of a few per cent. My salary has not kept pace with that raise. In fact our house hold income has declined in recent times considerably.

Hence the market is way over represented by speculators thanks to Australia's far too generous tax incentives and in the bigger cities foreign investors.

As I noted first time home buyers have never been so low on the ground. The term Generation Rent is not without reason. Many will never get into the market or at tremendous personal sacrifice with likely poor returns as the wealth creation through housing runs its course.

Perhaps we may at sometime in the future return to the purpose of house buying. That being to raise a family, have security of tenure, covering inflation and modest gain rather than runaway housing inflation and wanta be get rich quick jocks without actually working.
Still utter nonsense

On an income of 2x 50K the tax bit would be 20K (rounded up and including medicare),leaving 80K,shall we say $1540 a week.Pay the mortgage $ 540 weekly leaving $1000.They've never had it so good.

First home buyers thin on the ground? Young people are thin on the ground,any link there?
In my game (welding,but now retired),some of the kids live with mum and dad,life of luxury,all found and very cheap.Buying houses and renting them out.Which box do they tick for you,

Greedy landlord?

Struggling first home buyer?

I wonder which box they tick for the financial industry?

Like me the bank has no interest in statistics,lend as much money out as you can,as safely as you can and aim for a net profit of 1% .Long may they continue to do that.Those bank shares made millions for me and provide a very large income in retirement.

You'll not believe this but when I started 99% of people didn't want to do that,they didn't have the time to do it,it was too risky,and they always had other / better things to spend their money on.They were dumb bastards then,they are older dumber bastards now.They still tell me I got it wrong and they got it right.

Luckily for them in their 60,s they have all the time in the world to still dribble the same shite,and still pat each other on the back and tell each other how wise that shite is.They have all the time in the world to go to work,and hope for a retirement at 70,when it will be a bit of a struggle.

They wouldn't spend any money when they were younger because everything was just so expensive.They still hoard money today because everything is just so expensive.They blamed the govt and everybody else for their own failings,they still do the same today,weird innit.

Luckily for me and the cook I've got no time at all to go to work,far too busy enjoying retirement,(cook and I)

If you go looking for problems and things to worry about,then problems and things to worry about are all will see and find.

I went looking for answers,and answers were all I found.

How could anybody expect dozy young bastards,or dozy old bastards, to put any effort in at all to help themselves.Age has nothing to do with it,refusing to think and denying reality is the problem they will have for their entire lives .

UNLESS THEY CHANGE THE WAY THEY THINK (they'll still refuse to think).

Geordie downunder
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Old Jan 2nd 2015, 8:02 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by Swerv-o View Post
This is true, but outside of superannuation, Australia offers very very few paths to tax efficient savings. It's very difficult to build wealth growth when the government is reaching in taking their share.

Term deposits, for example, after tax and inflation, very often leave you behind the game. Savings accounts are taxed at your marginal tax rate. There are very few [legal] avenues to develop effective wealth growth here. It's small wonder that people see property as a viable alternative.

Super is all well and good, but the government see this as something that they can tinker with and change at will, and your money is locked away until you reach preservation age, which can also be changed on government whim.

If they current mob drop the company tax rate by the proposed 1.5%, then insurance bonds will become a more interesting tax efficient investment, but your money is still locked away for at least 10 years...

Successive australian governments keep banging on about how we need to pay for our own retirements, but they don't provide us with a sensible tax environment to allow us to build the wealth we need. Hence people end up investing in property, as once it's paid off, it can still provide a healthy rental income while you're in old age.


S
That's a spectacular load of bollox,well done.

Govts sold off Commbank,nobody was interested (I was)Very good return.Excellent income through dividends.


They sold off CSL,bloody hell the shares are worth 100 x what they were sold at now.I didn't get any of them,and I'm still making the same mistake,waiting for the price to come down so I can buy them.Unlikely I will ever own them now.Sucking my thumb and waiting cost me a lot there.

They sold off Qantas,never buy airline shares,the whole of history tells you they very rarely make money.I didn't want a bar of that one.

They sold off Telstra,I got them,no huge capital growth but very reliable income.Overall a disappointment.They'll be a sell shortly for me,I'll buy something else.Perhaps CSL,but I doubt it.

They sold off Medibank (MPL).Got them and sold them today @$2.40.Time could well prove me wrong,but I just fancied making a bit of money in a short time .I was very happy with the 20% return for a month.The money will be used for options in feb when I short sell CBA.

In this world of unlimited opportunity that you will never see,keep telling yourself,it isn't your fault,it's all down to the govt.They are the bastards holding you back,it isn't your choices holding you back.Would'nt it be silly to think like that.
The constant in the whole thing is,less than 1% of the population directly own 1000 shares in any of those companies.Hang on I could be wrong there.

MPL had 400,000 expressions of interest to buy shares.If they all applied for them I think the minimum application was for 1,000 shares.They had to spend $2000,scares the crap out of you doesn't it.So shall we say that 1% of the population owns 1000 shares in MPL.

I hope it works out well for them,it probably will.

I hope it gives them an interest in investing,and they take control of their own financial destiny.That's not going to happen sadly,history teaches us the mistakes that people will make in the future.

But well done again for such bollox

Geordie downunder
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Old Jan 2nd 2015, 8:43 am
  #50  
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by swans View Post
Still utter nonsense

On an income of 2x 50K the tax bit would be 20K (rounded up and including medicare),leaving 80K,shall we say $1540 a week.Pay the mortgage $ 540 weekly leaving $1000.They've never had it so good.

First home buyers thin on the ground? Young people are thin on the ground,any link there?
In my game (welding,but now retired),some of the kids live with mum and dad,life of luxury,all found and very cheap.Buying houses and renting them out.Which box do they tick for you,

Greedy landlord?

Struggling first home buyer?

I wonder which box they tick for the financial industry?

Like me the bank has no interest in statistics,lend as much money out as you can,as safely as you can and aim for a net profit of 1% .Long may they continue to do that.Those bank shares made millions for me and provide a very large income in retirement.

You'll not believe this but when I started 99% of people didn't want to do that,they didn't have the time to do it,it was too risky,and they always had other / better things to spend their money on.They were dumb bastards then,they are older dumber bastards now.They still tell me I got it wrong and they got it right.

Luckily for them in their 60,s they have all the time in the world to still dribble the same shite,and still pat each other on the back and tell each other how wise that shite is.They have all the time in the world to go to work,and hope for a retirement at 70,when it will be a bit of a struggle.

They wouldn't spend any money when they were younger because everything was just so expensive.They still hoard money today because everything is just so expensive.They blamed the govt and everybody else for their own failings,they still do the same today,weird innit.

Luckily for me and the cook I've got no time at all to go to work,far too busy enjoying retirement,(cook and I)

If you go looking for problems and things to worry about,then problems and things to worry about are all will see and find.

I went looking for answers,and answers were all I found.

How could anybody expect dozy young bastards,or dozy old bastards, to put any effort in at all to help themselves.Age has nothing to do with it,refusing to think and denying reality is the problem they will have for their entire lives .

UNLESS THEY CHANGE THE WAY THEY THINK (they'll still refuse to think).

Geordie downunder
Not bollocks by a long shot. Housing has never been so unaffordable. Surely you can find links telling you as much? The market at least in Sydney and Melbourne is largely speculators. Perth is just too over priced in the present economic downturn to make it worth it.
I am unaware of anywhere in Australia that would be rated as a fair buy. Anyhow as mentioned First Time Home Buyers are at all time low levels.

More a case of lucky for you that you bought at the right time. It was hardly rocket science sitting on an appreciating asset and a buy to let as well and profit during the boom. A matter of timing.

Hard to go wrong with bank shares in Australia, until well they go wrong. The degree of government protection sees to that. Of course if the housing market topples and the bank exposure being as extreme as it is those shares will not look so smart.
But good for you making a bit of money. It is but one way. Quite a few from the seventies period you speak would have made a killing considering the cheapness of property then. I know some that did. One in fact purchased a residential hotel in London with the profits made some twenty years back. Another went into property in London and Ireland (when cheap) All from Aussie investments at the time.

I expect a few profited from the recent high dollar high wages in Australia as well. Properties were a steal in some other countries at the time.
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Old Jan 2nd 2015, 8:59 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by swans View Post
That's a spectacular load of bollox,well done.

Govts sold off Commbank,nobody was interested (I was)Very good return.Excellent income through dividends.


They sold off CSL,bloody hell the shares are worth 100 x what they were sold at now.I didn't get any of them,and I'm still making the same mistake,waiting for the price to come down so I can buy them.Unlikely I will ever own them now.Sucking my thumb and waiting cost me a lot there.

They sold off Qantas,never buy airline shares,the whole of history tells you they very rarely make money.I didn't want a bar of that one.

They sold off Telstra,I got them,no huge capital growth but very reliable income.Overall a disappointment.They'll be a sell shortly for me,I'll buy something else.Perhaps CSL,but I doubt it.

They sold off Medibank (MPL).Got them and sold them today @$2.40.Time could well prove me wrong,but I just fancied making a bit of money in a short time .I was very happy with the 20% return for a month.The money will be used for options in feb when I short sell CBA.

In this world of unlimited opportunity that you will never see,keep telling yourself,it isn't your fault,it's all down to the govt.They are the bastards holding you back,it isn't your choices holding you back.Would'nt it be silly to think like that.
The constant in the whole thing is,less than 1% of the population directly own 1000 shares in any of those companies.Hang on I could be wrong there.

MPL had 400,000 expressions of interest to buy shares.If they all applied for them I think the minimum application was for 1,000 shares.They had to spend $2000,scares the crap out of you doesn't it.So shall we say that 1% of the population owns 1000 shares in MPL.

I hope it works out well for them,it probably will.

I hope it gives them an interest in investing,and they take control of their own financial destiny.That's not going to happen sadly,history teaches us the mistakes that people will make in the future.

But well done again for such bollox

Geordie downunder
Being a long time buyer and seller of shares on the international market I have certainly made far more money than through the employment route on a number of years. Have had a few prefer to forget losses as well. In the end to date still a mile ahead minus loses but could have done far better. But in principle agree keep your eye on the ball and I'd imagine during retirement would be a perfect time to expand on such a hobby.

Old rule applies though never spend more than you can afford to lose. Start small and gain confidence and a word of caution it can get very addictive.
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Old Jan 3rd 2015, 1:45 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by Beoz View Post
Do you know what the current proportion of property investors are foreign? I read an article a few months back stating it wasn't very much - like 1%.

So stats would be good though.
I'd love to know too as the only reason I can see for foreign buyers is getting money out of an unstable country.

In Sydney's Inner West by the time you take into account ongoing costs (rates, water, insurance, land tax, agency fees, void periods etc. but excluding purchase costs) the return is close to 2% and if you dont pay Aussie tax there is no negative gearing. Additionally a weakening Aussie dollar reduces captal gain in the foreign currency making that part less attractive too.

Much better investment opportunities in other Capital Cities or markets.
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Old Jan 3rd 2015, 2:02 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by spottydog View Post
I'd love to know too as the only reason I can see for foreign buyers is getting money out of an unstable country.

In Sydney's Inner West by the time you take into account ongoing costs (rates, water, insurance, land tax, agency fees, void periods etc. but excluding purchase costs) the return is close to 2% and if you dont pay Aussie tax there is no negative gearing. Additionally a weakening Aussie dollar reduces captal gain in the foreign currency making that part less attractive too.

Much better investment opportunities in other Capital Cities or markets.
Yes there's been no mention of it since.
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Old Jan 4th 2015, 4:10 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by spottydog View Post
I'd love to know too as the only reason I can see for foreign buyers is getting money out of an unstable country.

In Sydney's Inner West by the time you take into account ongoing costs (rates, water, insurance, land tax, agency fees, void periods etc. but excluding purchase costs) the return is close to 2% and if you dont pay Aussie tax there is no negative gearing. Additionally a weakening Aussie dollar reduces captal gain in the foreign currency making that part less attractive too.

Much better investment opportunities in other Capital Cities or markets.
If you consider the continued over valued Sydney and Melbourne markets and depreciating Australian dollar it is just as likely, even more so to be even more attractive to certain overseas buyers.

The desire of the main source country, PRC being to get money out of reach of an intrusive government and place it in safe real estate overseas. Just how much of this money is laundering is an open question.
The thing being a large number are paying way over the reserve price, in fact blocking out locals in the process.
This of course raises prices but overseas investors tend me to be for the long term. Yield is of little interest to many, who prefer to leave untenanted anyway. Long term being to consideration. They can flip to each other if wanting shorter term profit in the 'hot' areas.
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Old Jan 4th 2015, 4:18 am
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Default Re: 2015 Financial Survey Predictions For OZ

2014 may well have been the last of the good years. Plummeting resource prices and a growing realisation that all of the extra revenue from the boom has already been spent.

Ross Garnaut's (respected Australian economist) 2013 book Dog Days, gives a dark prognosis for post boom Australia.
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Old Jan 4th 2015, 4:42 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by the troubadour View Post
If you consider the continued over valued Sydney and Melbourne markets and depreciating Australian dollar it is just as likely, even more so to be even more attractive to certain overseas buyers.

The desire of the main source country, PRC being to get money out of reach of an intrusive government and place it in safe real estate overseas. Just how much of this money is laundering is an open question.
The thing being a large number are paying way over the reserve price, in fact blocking out locals in the process.
This of course raises prices but overseas investors tend me to be for the long term. Yield is of little interest to many, who prefer to leave untenanted anyway. Long term being to consideration. They can flip to each other if wanting shorter term profit in the 'hot' areas.
Sorry to interrupt you, but can we have the percentage on overseas investors?
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Old Jan 4th 2015, 5:46 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by Beoz View Post
Sorry to interrupt you, but can we have the percentage on overseas investors?
RBA seem to suggest total sales to foreign investors is around 5 to 10%. That rises to more than 30% for new builds in NSW and VIC.

(best info I could find - http://www.rba.gov.au/publications/b.../bu-0614-2.pdf )
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Old Jan 4th 2015, 7:23 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by old.sparkles View Post
RBA seem to suggest total sales to foreign investors is around 5 to 10%. That rises to more than 30% for new builds in NSW and VIC.

(best info I could find - http://www.rba.gov.au/publications/b.../bu-0614-2.pdf )
So not really enough to have an impact on first home buyers.

That said the government should be taking advantage of foreign investment by charging extra stamp duty on foreign money considering most of it is laundered from China. They could put that back into first home buyer schemes. Foreigners will invest anyway. If they slow down then stop the extra stamp.

Gradually kill off NG too. No need for it and its a burden on the deficit.
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Old Jan 10th 2015, 2:09 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by old.sparkles View Post
RBA seem to suggest total sales to foreign investors is around 5 to 10%. That rises to more than 30% for new builds in NSW and VIC.

(best info I could find - http://www.rba.gov.au/publications/b.../bu-0614-2.pdf )
The lack of policing the regulations in the purchase of established property is something that has been poorly tackled or acted upon. Thank heavens for that Liberal MP for raising the matter in Parliament. Praise given where praise due regardless of colour of political party or individual.
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Old Jan 10th 2015, 2:17 am
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Default Re: 2015 Financial Survey Predictions For OZ

Originally Posted by Beoz View Post
So not really enough to have an impact on first home buyers.

That said the government should be taking advantage of foreign investment by charging extra stamp duty on foreign money considering most of it is laundered from China. They could put that back into first home buyer schemes. Foreigners will invest anyway. If they slow down then stop the extra stamp.

Gradually kill off NG too. No need for it and its a burden on the deficit.
It has been reported Chinese buying has led to an increase of pricing. Many prime locations are out bid by Chinese buyers by bidding way over the reserve price.

A tax on empty properties and flats could be a way to go. All too many buy lock up and leave having no interest in renting out.Greater checks on the flow of corrupt money into Australia as well. I accept likely a hard one as the pretty top appear to be add it as well.

No more First Home Buyer Schemes please. They are a waste of time and only result in property rising in price as real estate adjust prices upwards to match government incentives.
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