House prices
I didn't see much meaningful discussion about solutions.
sounds like most of that "Kodak" office space will be torn down.
Well that’s one of the outcomes. Which obviously raises a question about the best use of land in the future. And how much is that land even worth? No one seems to be certain about it.
I found the discussion about conversion to residential quite interesting. There were a few challenges in there that I didn’t really think about. Like the window challenge. As most of these building have large open floors with windows on the edge of the floor space. If you chop it up into units you will have lots of rooms without windows which would obviously be against the regulation. Kinda obvious but never thought about it.
I was surprised with the transparency about rates per sqft, who paid how much for each building, how did they finance it…This info can be hard to trace, this article was rich with that type of information.
It’s all good. I can see similar markets worldwide having these same issues so it was good to have some insights.
Some more good inflation news today:
Aust services now >goods inflation but as in US goods led on way up & will lead on way down
— Shane Oliver (@ShaneOliverAMP) July 26, 2023
The breadth of CPI increases has slowed
Our Aust Infl Indicator continues to point down
Should be enuf for RBA to hold next wk, but its a close call given it’s concerns re services & wages pic.twitter.com/ImSpV34wra
Australia, Consumer Price Index (CPI) June quarter 2023: Headline CPI +0.8%/qtr. (survey: +1%) to be up 6.0% over the year (survey: 6.2%, prior: 7%); Trimmed mean CPI +0.9%/qtr. (survey: +1.1%) to be up 5.9%/yr. (survey: 6%, prior: 6.6%). #ausecon #auspol #inflation @CommSec
— CommSec (@CommSec) July 26, 2023
gsco wrote:Some more good inflation news today:
https://twitter.com/ShaneOliverAMP/status/1684048608700809216
Anyone who writes the word enuf in a financial tweet shouldn’t be taken seriously IMO.
But given the yanks have just upped their rate I’m thinking little sister will still want to follow big brother so my money is on 0.25 next week here.
lol, Oliver is one of the very tiny handful of economics and financial commentators who can be taken seriously in this day and age.
I'm sure this has been talked about before, but here it is again.
According to this article, a third of Australians do not have a mortgage and are actually benefiting from interest rises.
And this means they're spending big, and so contributing to inflation, which rate rises are meant to combat.
Kinda arse about, and which leads us to the question of "whether interest rates should be used as almost the sole tool to tackle the inflation crisis."
If "younger indebted people are doing more of the heavy lifting than older people with net savings", and the younger generations are effectively having their future stolen, what's the answer?
https://www.abc.net.au/news/2023-07-27/boomers-boosting-inflation-as-the...
AndyM wrote:I'm sure this has been talked about before, but here it is again.
According to this article, a third of Australians do not have a mortgage and are actually benefiting from interest rises.
And this means they're spending big, and so contributing to inflation, which rate rises are meant to combat.
Kinda arse about, and which leads us to the question of "whether interest rates should be used as almost the sole tool to tackle the inflation crisis."If "younger indebted people are doing more of the heavy lifting than older people with net savings", and the younger generations are effectively having their future stolen, what's the answer?
https://www.abc.net.au/news/2023-07-27/boomers-boosting-inflation-as-the...
I dunno what the answer is AndyM, but I'm pretty sure the younger generations aren't pursuing it. As for the boomers, a stock market crash would be about the only thing to stop the spending as discussed here before. But then they can just Equity Mate a new 300 Series off the house gains, stock market crash won't stop that. Then there are those stuck in the middle that mighn't have the biggest mortgage to pay but are still hanging on as the prices are all significantly up. Then there are the renters, poor crew.
As for the NAIRU or whatever it's called, Roy Morgan polls consistently come back with MUCH higher unemployment and under employment. What's the truth? Probably somewhere in between gov numbers and Morgan's.
Have a look at Shadowstats for US data, calculated as it was back in the 1980s, run by John Williams - VERY different to what is officially released for all sorts of stuff. Hall of mirrors.
And inflation, gsco, have you had a squizz at US indexes, emerging markets, soft commods, maybe oil recently? Is it just USD falling (shoutout to Don) or is it the inflation whack-a-mole once more? Hmmm - all answers not taken as financial advice in any way... opinions welcomed for discussion. I'd link 'Livin in the 70's' but that would be lowering the bar too far.
vj, seems that inflation pressures are starting to ease generally, so I wouldn't say it's a whack-a-mole situation (had to look that one up..!).
But yes if you look at say the commmodities page on tradingeconomics.com, you can find some soft commodities that are still going up. Could have made a killing in orange juice CFDs recently, have tripled since 2020:
interesting convo on abc other day about inflation, with commentator saying large proportion of latest inflation has moved into services sector - justified or not...
observations and comments on here have noticed this but few financial guru dudes seem to have noted it
the argument was this will make inflation more sticky
"...I dunno what the answer is AndyM, but I'm pretty sure the younger generations aren't pursuing it..."
this level of disenagement is just as worrying as anything else in the now boiling over cook pot
Seems like a lot of younger people have given up in despair, if they're lucky they'll inherit something when their parents die.
Wonder what their reaction would be if the government of the day introduced an inheritance tax on deceased estates.
"Wonder what their reaction would be if the government of the day introduced an inheritance tax on deceased estates"
if done so exclusively as opposed to one component part of a comprehensive and meaningful tax and incentive overhaul to address the issue? all roads lead to zombie apocalypse.
Comprehensive and meaningful?
Is that a thing these days?
Maybe if they targeted those inheriting multiple properties and left the basic inheritance alone.
Inheritance tax is evil.
An aside:
gsco wrote:vj, seems that inflation pressures are starting to ease generally, so I wouldn't say it's a whack-a-mole situation (had to look that one up..!).
But yes if you look at say the commmodities page on tradingeconomics.com, you can find some soft commodities that are still going up. Could have made a killing in orange juice CFDs recently, have tripled since 2020:
Cocoa has done very well too. Reminds me of the ancient wisdom "Don't get exercised on lean hogs."
Yep Andy our kids' friend group reckon they'll never own a house when they talk between themselves. How on earth did it come to this??
I guess with the despair you could use my 1990s recession strategy, for when all looks hopeless (it was jobs then):
"Just go surfing."
What will happen is that the imbalance will eventually revert to mean, and in the meantime, you surfed thousands of waves.
Back then, it was the mining boom taking off by around 2002 which cured the jobs bit and replaced it with flat stick for half a decade.
I'm sceptical VJ.
If through legislation property is maintained as a good investment, then prices will continue to go up. The haves will continue to purchase and the have-nots will continue to miss out.
Short of governments taking a hands-off approach, which includes immigration,I don't see how things can revert to the mean.
All of that notwithstanding, opting out, redefining your definition of living the good life and going surfing is a pretty good option.
Things could very easily revert to the mean if the Gov of today grew some balls and killed negative gearing and CGT reduction on housing. This would throw a significant number of houses back into the housing supply, thus reducing the feverish demand.
Definitely, but didn't the ALP lose the 2019 election because of talk along those lines?
Personally, I'd be prepared to take a hit to the monetary value of my place if it meant housing became more broadly affordable.
It's that time of the month again. This surfer using 30 day bill thinks not much will happen tomorrow. Major bank economists always welcome on the forums ;)
Hope you are wrong on that one Andy but the mountain of current policy seems immovable. There has to be a change, for the young people and their right to have family formation as previous generations have had.
The big levers that could be pulled for quick results are dramatically lowering immigration and as donweather said - removing negative gearing.
Lowering immigration substantially would mean a major recession.
Removing negative gearing would create howls of protest and endless earbashing of pollies from home owners, by lobby groups and from disgruntled investors watching their wealth decline. Oh, and their own property portfolios would take a hit.
All other options are very slow tp take effect and lthe supply increase is likely to be swamped by the ongoing demand from high immigration to the point of being sort of invisible.
The most likely short term help for the young would be a major recession / depression slumping home prices and immigration - this is moderarely likely but creates another set of winners and losers.
Was told a classic story yesterday by a real estate agent mate of mine.
Let's call him V.
He went round to a house to do an appraisal - he's on his best behaviour, trying to make a good impression to try to get the gig.
So in the front yard of this place is a fair-sized Xanthorrea.
V, being a friendly and helpful kind of guy, says "hey I know a great trick. These grasstrees love a bit of fire and if we do a little burn-off they come up great."
The potential clients agree, so V busts out this little butane torch he happens to have in his car.
So the grasstree burns all right, it goes up in flames to the extent that cars stop and there's a traffic jam in the street and neighbours are coming out of their houses to look.
Next thing you know, the cops and fireies have turned up.
Next time I see him I'll have to find out if he got the gig or not :)
never take advice from someone keen to use a butane torch they carry around with them?
I know that guy Andy.
Interesting to see what happens here with Condon Hill.
Incredible spread behind Lennox Point.
Sold in 2021 for 14 million and now on the market again 2 years later for 18 million.
https://www.realestate.com.au/property- ... properties
Considering what's around, that kinda sounds cheap for 18 mill.
Is old mate the agent??
Better leave the torch in the car, or maybe at home :)
that does seem like a decent buy if you had that kind of money. But who has that kind of money laying around?
We'll soon find out.
Back in the day the Condon kids tried to donate most of that Ridgeline to the community as open community space in perpetuity in exchange for a small development around the family home.
https://www.ballina.info/blog/2007/08/27/condon-hill-handover-moves-a-st...
That would have been the deal of the century for the community.
It never happened.
"Land owner Margaret Condon, who is not related to the Lennox Head developer of the same surname, said she had always planned to open the hill up for the general public. "We wanted to donate it because we realised the value of the land," she said. "Not from the perspective of looking at it, but from the perspective of those who have the privilege to look from it. We realise what a beautiful and special spot it is." Mr Connelly said the proposal involved dedicating the hill, free of cost, with two strings attached that the hill be named in honour of its patriarch, Samuel William Condon, and that the council enter into a legal deed with successors to never rezone the hill to develop it for commercial purposes. The Condons would retain 3.38 hectares of land on the fringe of the hill".
freeride76 wrote:I know that guy Andy.
Interesting to see what happens here with Condon Hill.
Incredible spread behind Lennox Point.
Sold in 2021 for 14 million and now on the market again 2 years later for 18 million.
https://www.realestate.com.au/property- ... properties
Pick up a lazy 4 mill in two years. Easy money.
velocityjohnno wrote:Yep Andy our kids' friend group reckon they'll never own a house when they talk between themselves. How on earth did it come to this??
I guess with the despair you could use my 1990s recession strategy, for when all looks hopeless (it was jobs then):
"Just go surfing."
That's basically my approach. The whole thing is set up for couples with secure, decent paying jobs, with inheritances somewhere down the pipeline. Of course it's still possible to buy a home as a single person in precarious employment, but the odds are so firmly stacked against you that just going surfing is the best thing you can do for your mental health.
Go surfing, look at the sky, listen to the birds, go camping in a national park for the weekend.
Have a think about what a "high standard of living" means to you.
100%.
x2.
x 3
Well I am a little surprised at the RBAs decision today. Perhaps they’re leaving the big decisions to the new kid on the block when she moves in.
https://thenewdaily.com.au/opinion/2023/08/04/inflation-recession-rba-ko...
I’m not convinced interest rates have peaked nor that we’ve dodged a recession.
I do think the markets have got one last hurrah left in them before a solid crash at some point next year
donweather wrote:I’m not convinced interest rates have peaked nor that we’ve dodged a recession.
That was the 'whack-a-mole' bit I alluded to in previous pages. To me it looks like small inflationary fires are beginning all over again in various things (because expressed in USD? How much influence/correlation?) Media articles saying telling me inflation's over and it will fall at the same time.
Yesterday US Treasury tried to sell a very large issue and with less demand, yields rose and it appeared to spook the stocks. Govs issuing more debt - less buyers - prices of debt fall - yields rise - more pressure to raise rates...
Anecdatally (new word), I'm seeing signs of everything slowing around here. Slowing work schedules in construction, big time sales with 50 to 60% off at big stores, ads for storage available rather than fully booked, can actually book appointments and be seen soon, mad covid used-car pricing retracing a little, etc.
Update of Aus yield curve
http://www.worldgovernmentbonds.com/country/australia/
Steepening again? Implications?
Little bit off topic but a good one. Rigging the market in the best way possible.
AndyM wrote:Was told a classic story yesterday by a real estate agent mate of mine.
Let's call him V.He went round to a house to do an appraisal - he's on his best behaviour, trying to make a good impression to try to get the gig.
So in the front yard of this place is a fair-sized Xanthorrea.
V, being a friendly and helpful kind of guy, says "hey I know a great trick. These grasstrees love a bit of fire and if we do a little burn-off they come up great."
The potential clients agree, so V busts out this little butane torch he happens to have in his car.
So the grasstree burns all right, it goes up in flames to the extent that cars stop and there's a traffic jam in the street and neighbours are coming out of their houses to look.
Next thing you know, the cops and fireies have turned up.Next time I see him I'll have to find out if he got the gig or not :)
Tried the same thing at home once… the eaves got smoked and the xanthorrea died! Definitely works in the heath but probably not a good idea in the garden.
Let’s be thankful we don’t live in Argentina!!
https://money.usnews.com/investing/news/articles/2023-08-14/argentina-ra...
97% to 118% - the straw that broke the camel's back.
"... adding the country's currency will be devalued to 350 pesos per dollar in the aftermath of a shock primary election.
Sunday's primary vote, seen as a reliable bellwether for the upcoming presidential elections, propelled ultra-right libertarian outsider Javier Milei, who wants to axe the central bank and dollarize the economy, to first place with some 30% of the vote."
iirc they've defaulted on their bonds about 6 times in the last century, had legal battles over such with vulture funds, etc. They are great and consistent at soccer, though.
Nope nothing to see here. Move on folks!!
https://thenewdaily.com.au/finance/2023/08/17/origin-energy-billion-doll...
Nuts. Just got the notice that the electricity is about to go up 30%. Water falls from the sky and then goes down a big concrete hydro tube driving a generator and now that water and gravity costs 30% more than it did last month. I hereby declare that inflation is purely a monetary phenomenon. Wankers.
velocityjohnno wrote:Nuts. Just got the notice that the electricity is about to go up 30%. Water falls from the sky and then goes down a big concrete hydro tube driving a generator and now that water and gravity costs 30% more than it did last month. I hereby declare that inflation is purely a monetary phenomenon. Wankers.
Challenge your supplier VJ. My missus (the queen of negotiation) got 30% off our bill - both electricity and gas with one phone call. Set aside 20 minutes and get stuck in.
donweather wrote:Nope nothing to see here. Move on folks!!
https://thenewdaily.com.au/finance/2023/08/17/origin-energy-billion-doll...
I read the article, but seriously can someone fucking explain this shit? What the actual fuck? Inflation is a genuine rort.
donweather wrote:Nope nothing to see here. Move on folks!!
https://thenewdaily.com.au/finance/2023/08/17/origin-energy-billion-doll...
Let the market decide!
Yeew!
And there's more to come, as they have to spend an enormous amount upgrading for the renewable grid (and you will pay for it). Then everyone will get electric cars (and will pay for it). Move over, Big Oil...
icandig wrote:Challenge your supplier VJ. My missus (the queen of negotiation) got 30% off our bill - both electricity and gas with one phone call. Set aside 20 minutes and get stuck in.
Good idea, but I'll probably just go off grid, like going off gas.
velocityjohnno wrote:Nuts. Just got the notice that the electricity is about to go up 30%. Water falls from the sky and then goes down a big concrete hydro tube driving a generator and now that water and gravity costs 30% more than it did last month. I hereby declare that inflation is purely a monetary phenomenon. Wankers.
VelocityJohnno. Hope you are well
I’m with you all the way on this crap.
The word ‘inflation’ is being used for all purpose and manner at present.
Companies are simply hiding behind the veil of guilt knowing all along they are ‘price gouging’ the lot of us.
This is merely a financial strategy to peg back all the money they didn’t make through the Covid period.
I build a lot of decks and pergolas, thus using volumes of treated pine timber in all its nominal sizes.
I’ll use a 5.4m length of 90x45mm as an example.
Early 2021 this stick of wood was costing me $27.52 per length. Annual price increases were hardly noticeable until now.
A few weeks ago I constructed a multi level deck for a customer, who had previously questioned my materials costs, a rare request.. I took photos of all the prices to satisfy
him and he was as surprised as I was, I’m very open and transparent on materials costs at all times, once you get a reputation for ripping clients off, you’re screwed, may as well close your business.
So, the same stick of timber today now costs me $42.50.
Quite a dramatic increase.
In a nutshell we’re all being shafted across all daily expenditures.
Mate , I haven’t forgotten your request for a list of plants to possibly ‘reinstate’ dune systems,
I’m onto it but will take sometime as the explanatory process is an exhaustive one to explain all the intricacies, but you have my word.
Also, I need to have a chat with you soon about Hydro Power, it’s not as clean as we (not me) are lead to believe it is. AW
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers