House prices
velocityjohnno wrote:Actually got an inspiring and a bit humourous take on that idea from the US Flollo:
https://www.zerohedge.com/markets/gen-zer-buys-200-plot-land-desert-afte...
Well done to the young Gen Z fella - now he has something, a beaut little camping pad of land that is his own title, for $200. He's definitely seeing the glass half full.
Well at least he’s got something. Most disturbing thing from that article is the last paragraph:
‘Gen-Zers are finding out firsthand about being scammed into $100,000 of college debt by liberal institutions, only to be released in the real world where central banks and Washington have sparked two years of elevated inflation. ‘
Why does it cost this much? It’s a massive scam. Here is the same, there is no difference between HECS system and the US system. You would expect labor to be the government who will do something about it but no one’s even discussing it. Or at least get rid of indexation so the debt is not rising. It hurts young people the most. I’m hearing of more young ones questioning uni on the basis of the cost. Parents are also supportive of this as HECS debt is getting out of control.
flollo wrote:there is no difference between HECS system and the US system. You would expect labor to be the government who will do something about it but no one’s even discussing it. Or at least get rid of indexation so the debt is not rising. It hurts young people the most. I’m hearing of more young ones questioning uni on the basis of the cost. Parents are also supportive of this as HECS debt is getting out of control.
therein is the problem, perfectly stated.
I could list >20 basic economic sensibilities just like this one (access to tertiary education for all Australians) which are squarely within the policy scope of a traditional Australian Labor movement, that ours is blatantly, unashamedly ignoring.
And look at what the ALP just put the nation through with its continued fallout.
Like you said above, a year wasted, along with nearly 1/2 a billion dollars, and a nation now even more than ever significantly polarised and divided by race.
One could not fuck things up any worse.
Populist, elitist, tribal, racist identity politics drowning out real issues in its most vulgar manifestation.
flollo wrote:velocityjohnno wrote:Actually got an inspiring and a bit humourous take on that idea from the US Flollo:
https://www.zerohedge.com/markets/gen-zer-buys-200-plot-land-desert-afte...
Well done to the young Gen Z fella - now he has something, a beaut little camping pad of land that is his own title, for $200. He's definitely seeing the glass half full.
Well at least he’s got something. Most disturbing thing from that article is the last paragraph:
‘Gen-Zers are finding out firsthand about being scammed into $100,000 of college debt by liberal institutions, only to be released in the real world where central banks and Washington have sparked two years of elevated inflation. ‘
Why does it cost this much? It’s a massive scam. Here is the same, there is no difference between HECS system and the US system. You would expect labor to be the government who will do something about it but no one’s even discussing it. Or at least get rid of indexation so the debt is not rising. It hurts young people the most. I’m hearing of more young ones questioning uni on the basis of the cost. Parents are also supportive of this as HECS debt is getting out of control.
Yes you would and they should!
Especially, I believe it would be a lot cheaper to run lots of Uni degrees now as most seem to be mainly online.
The Greens ran a strong campaign on stopping the wild indexation of the last financial year, which fits into their broader campaign of making university free (paid for by more aggressively taxing multinationals and billionaires and cutting subsidies and tax breaks to property developers, before anyone asks). It was very popular with the people it impacts, but Labor would not budge on it. We held a housing related protest outside Julie Colins office and when a young homeless woman told her that her HECS debt just went up a few thousand dollars overnight all Julie could do was shrug and then was rushed off by her staffer as the media turned up. That experience summed Labor up perfectly to me.
The sooner everyone sees this current government as being a party of neoliberalism and stops falling for their performative nods to their trade union past the sooner we might get somewhere I reckon.
In regard to HECS debts and property prices, if Uni student's didn't need to pay back debts and it was all free or whatever, wouldn't that just mean that professionals with high paying jobs can borrow even more money as HECS debt payments are not affecting borrowing capacity so in effect would push property prices in some areas even higher.
While if they do the degree and dont use it and dont earn over $51K then the debt and payments are not going to factor into how much money they can borrow.
Is this true?????
Or does the HECS debt still factor into thing's even if not earning over $51K?
indo-dreaming wrote:In regard to HECS debts and property prices, if Uni student's didn't need to pay back debts and it was all free or whatever, wouldn't that just mean that professionals with high paying jobs can borrow even more money as HECS debt payments are not affecting borrowing capacity so in effect would push property prices in some areas even higher.
While if they do the degree and dont use it and dont earn over $51K then the debt and payments are not going to factor into how much money they can borrow.
Is this true?????
Or does the HECS debt still factor into thing's even if not earning over $51K?
HECS repayments 100% affect the borrowing capacity. So your hypothesis - if they suddenly don't have to pay it they have more disposable income for borrowing - is true.
It's not factored into the loan serviceability if earning less than $51k and not repaying HECS however, the liability needs to be declared at the time of the application. That being said, you won't get much of a loan on less than $51k.
The problem here is that you overestimate the earnings of fresh graduates. Some professions are not too bad but most are not earning enough to buy a property, especially as you factor the HECS into it.
Okay so if there was no HECS debt then it could be just another factor among the long list of factors that could affect property prices in some areas to some degree.
Yeah i get not all will be earning big money straight away but their income will increase in mamy cases quite steadily unlike many lower paid jobs where people often only see very small award wage increases.
Yeah sadly you cant get a loan for much on or under $51K these days but most couples these days are on on two incomes, of course not all property buyers are couples but you need a pretty good income as a single person to get into the market in most places these days.
I feel so thankful sometimes i got in when i did.
There are many factors that impact the demand curve in housing. Higher incomes are definitely one of them. You can also add things like immigration, lower interest rates etc..
Basically, any demand factor needs to be followed by a supply factor to stop the prices from rising. Or, all the demand factors can be removed but that is impossible. And not all are within the government's control, only some are.
For example, This government report has a very good list of different demand factors. One of them is even a 'tax concession' of not including owner-occupied homes as an asset test when receiving an aged pension. So, even this would be considered a factor driving the demand but, there is zero chance of this one actually changing.
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Former_C...
Back to HECS, it needs to be addressed. Like dandan rightly pointed out, the government is even charging interest on debt for homeless people. This is where the government loses its sense of purpose. Is the government there for the people or people are there for the government? They need to get it fixed, the risk of increased demand fuelling property prices needs to be mitigated by removing one of the other demand drivers and increasing the supply so things don't overheat.
Martin North has some good stats re: Sydney and Melbourne investor RE in this link, ignore the title as sub 1% vacancy rates, just dig the numbers
The Geelong area stats would tie in to my post above when looking in the entry area for properties and noticing more on the market, judging the opportunity situation for the kids looks a little better than it was.
US mortgage rates hit 8%
https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed
velocityjohnno wrote:US mortgage rates hit 8%
https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed
Does this mean if you’re signing a new mortgage you’re locked into this rate for the next 30 years?
https://research.rabobank.com/markets/en/documents/309515_RBAPreviewNov2...
mentions Q3 CPI came in hot, implications for RBA in Nov and Dec, suggests them using a Taylor rule with inertia:
"Our own Taylor Rule (no inertia) estimate of an appropriate cash rate is 7%
Our Taylor Rule with inertia estimate of an appropriate cash rate is 4.75%"
"A critical point is that differences in debt market structures only affect the speed of policy transmission, but do not affect the degree of tightening that will ultimately be needed. That suggests that it is not sustainable for Australian interest rates to remain such a long way below interest rates of international peers economies."
Don, not sure about how US mortages work, but I'd think you would be close to the mark?
"A critical point is that differences in debt market structures only affect the speed of policy transmission, but do not affect the degree of tightening that will ultimately be needed. That suggests that it is not sustainable for Australian interest rates to remain such a long way below interest rates of international peers economies."
So we’re just gonna follow the US then hey. Given the overnight rattling of markets there I’m thinking RBA could well give us a surprise pre Cmas then.
US housing market results have certainly given FEDs something to think about.
30 day cash-rate hasn't budged so thinking they'll sit on pause still (going off VJ's work).
https://www.asx.com.au/markets/trade-our-derivatives-market/derivatives-...
good stuff Craig, keep an eye on the late mail as we head up to Cup day (and RBA day)
Also this:
https://www.smh.com.au/national/chinese-gangsters-accused-of-laundering-...
quarter of a billion dollars, let's get those Tranche 2 AML laws going ffs
velocityjohnno wrote:good stuff Craig, keep an eye on the late mail as we head up to Cup day (and RBA day)
Also this:
https://www.smh.com.au/national/chinese-gangsters-accused-of-laundering-...
quarter of a billion dollars, let's get those Tranche 2 AML laws going ffs
“The laws would force accountants, real estate agents and lawyers to face the same obligations as bankers and casinos to report suspected money laundering.”
Bahahaha you reckon accountants RE agents and lawyers are ever going to report suspected money laundering. They’re immediate response when questioned by police will be “sorry sir I had no idea that was laundered money, I just thought they were paying me nice sums of money because I’m a nice guy”!!!
Craig wrote:30 day cash-rate hasn't budged so thinking they'll sit on pause still (going off VJ's work).
https://www.asx.com.au/markets/trade-our-derivatives-market/derivatives-...
https://www.abc.net.au/news/2023-10-26/asx-markets-business-live-news-rb...
A certainty now it would appear
Interest rates are a bit like tides imho .
They go up for a while , pause for a while and then go out .
The highs and lows depend on a lot of factors that no-one understands , completely .
The RBA and FED are fighting ( not doing too well atm ) the same beast , inflation .
Both Central Bank have to play politics which affects timing . Our Governor is new and the US has an election this year .
Did U guys see that the Oldest Central Bank in the world is , technically , bankrupt ?
Sweden has to bail out their bank ($7B , I think ) after they marked to market their bond holdings .
OMG - who would have thought buying bonds at zero % interest would be a bad idea. ?
For what it's worth , the consensus view from the people I read is that rates have to go up in both countries . Probably , another 1% , to get inflation back to 2% from 4 (6-4 was the easy 2%) .
I think a lot depends on the oil/gas price .
I think they will go up 10% plus p/a for 10 years plus without bloody wars disrupting supply .
So , as usual with markets , I have NFI .
That was pretty manly of the Swedish CB to mark to market their bond holdings. Also a great little picture of who will eventually pay if every other CB has to...
https://www.macrobusiness.com.au/2023/10/chinese-launder-billions-in-aus...
Following on from the SMH story about the AML bust, some good charts here, 'share of total demand for new property - foreign buyers'; share of total demand for established property - foreign buyers'; 'annual change in buy and rent search volumes from overseas property seekers' - note NZ/UK/US look to rent, Chinese to buy.
Hold on to your hats! The flow is beginning to gush. To infinity and beyond! As Mr Krabbs said, 'Moneymoneymoneymoneymoney!'
Big money has worked out how to move since the dawn of time .
It's flow is affected only by SWIFT imho and events .
The US confiscating Russian individual money eg Oligarchs ships being pirated , REALLY , freaked out Big Money imo .
The US changed a Foundation Stone of SWIFT with no referendum .
The $US will be dominant for decades , probably imo .
I only read last week , that Chinese Mega Private !!! Money was buying whole buildings in Japan .
They plan on doing major Reno's and make them residential plus whatever .
Buying in the cheaper areas , apparently .
It's wants to diversify out of China .
I would guess getting the money out of China is the hardest part .
Japan has tighter money laundering laws than most places ( check $20k ish transactions .
Chinese property developers are selling Sydney buildings atm ( have nothing else worth anything to sell imo ) .
The Chinese One Child policy will dramatically affect how wealth will transfer .
One child will get all the money from parents and grandparents .
Where will they store the money ?
Big money flow is a great indicator to most things and should be followed imho .
It's the first money to leave a big problem spot ( often before the problem appears ) .
The first rule of Big Money is No Big F Ups .
Always has been imho .
Keeping it ( and the Power that goes with Big Money ) is more important than making more .
They are looking for storage facilities that are BIG and safe .
I just found out that Central Bank of Sweden was , definitely , not a good storage facility .
Big Money would have known this as a certainty , ages ago .
They also know how to make their own money ( third generations are known to struggle for some reason ) .
donweather][quote=Craig wrote:30 day cash-rate hasn't budged so thinking they'll sit on pause still (going off VJ's work).
https://www.asx.com.au/markets/trade-our-derivatives-market/derivatives-...
Seems likely don, but interesting reading their, ahem, reasoning. When you apply a bit of a sceptical eye to it you realise how much they rely on economic theory, and how bankrupt economic theory is.
It seems that they are concerned about the ‘services inflation’ figure more than goods inflation, and include two key items, those being rent and petrol. Rents going up is fairly directly affected by them putting up interest rates. Now if vacancy rates were around the usual 5 to 10%, the interest rates rises would not necessarily increase rents, but at 1% vacancy rates their interest rate rises directly increase rents, and now they want to argue that increasing rents is a reason to increase rates. Circular reasoning as its stupid best.
And petrol prices! For whatever reason, they don’t seem to have realised that rising petrol prices actually work in the same way as interest rate rises; i.e., they take money out of the economy (of course not really, it just gets re-directed away from base consumption, which is their aim).
So increases to petrol prices should in fact be subtracted from the inflation figures when they deliberate increasing interest rates. Somehow nobody in the echo chambers of the Reserve Bank has realised this.
And their final reason for increasing interest rates is that they don’t want higher inflation to be ‘normalised’. Nice idea, in theory, but again it is just an economic theory. There is zero proof that such a social ‘normalisation’ of higher interest rates exists. It is just a theory.
In fact, still, there is no consensus in economic theory about what causes inflation. There is no compelling argument that is backed historically and contemporaneously. Economics only ever describes why something happened after it happened, with zero proof.
The purpose of economics is to make astrology look good. (Galbraith, paraphrased)
James Packer and Lachlan Murdoch are Third generation .
They own property :)
Both had a small stuff up with some telecom play managed by a Jodie Rich ( really , I don't lie , do embellish quite a bit though ) .
Both dads blamed Rich , of course .
To show Rich how pissed off he was , Kerry got some mated to hang him out his very high office window , by his ankles , apparently .
James and his family , seem to have sorted out their families affairs since Kerry's passing .
I haven't read of any money stuff ups .
Rupert is still Alive and looking for another wife , probably .
Lachlan has been given the reins of Fox .
Lachlan realises he needs good counsel .
Jacques Nassar ( former CEO of Ford ) resigned from the board , as agreed 10 ish years ago .
He needed someone who can talk to his other family members .
Someone who they all trust , including Rupert ( it was Laughlin's decision , apparently ) .
Someone who everyone thinks is honest and refuses to backdown from a difficult job .
Someone who is smart and has clout on the international stage .
Apparently , lots of people showed extreme interest , of course .
Incredible recognition and the money is great . Probably a free jet to .
There was , apparently , only one Man for the job , who didn't apply ( it was always an invitation job ) .
I am sure U all know that Laughlin picked Onion Eating Tony Abbott .
I loved he had the guts to support any farmer and eat or drink their product for promotion . Especially a raw onion ! They taste like shit imho .
I loved he made the Queens hubby a Sir , before they both died .
About time imho and I don't like royals !!!
Shit , if the peerage list hit my desk , and his name was on it , I would check if was April fools day .
It would have a tick in one second , marked - WTF - Who didn't do their fucken Red Box ! Captains Choice . No discussion necessary !!!
So guys , Tony is running Fox !
What could go wrong ?
If the Jetski rider who dropped a guy out the back of Superbank at 8.49am today , reads this , and it's a business , please let me know the pick up spot .
Money is no object(ion) !
I liked Kerry Packer had kept and eye and ear out for him ( Not the Murdoch's as didn't like the treatment of Sir John Monash ) .
My favourite Packer story was Kerry was in some Casino in the US , playing cards .
On the same table was a big Texan guy , all dressed up as a Cowboy ( Kerry had a jacket and jeans on ) .
As the night wore on , the Texan didn't like all the attention the staff were giving to this old bloke from Fn Australia , who didn't say anything .
He walked over to Kerry , said something like who the fuck do U think U are .
Kerry stood up and asked the guy how much he was worth .
The Texan proudly boasted $90m !!!
Kerry said "I will toss U for it " .
The Texan , apparently , left .
Ahh the good old days in PH
Nearly had a loose wheelchair go through my windscreen after bouncing off the roof of the cruiser in front going to South Hedland, fun times
30 day bill not budging, it says no rise today
Yep, noted that.
ABC now getting into the spirit of the times with this one:
https://www.abc.net.au/news/2023-10-31/golden-888-visa-home-affairs/1030...
velocityjohnno wrote:https://www.news.com.au/finance/money/wealth/bizarre-reason-couple-spent...
wtf
Crazy amount of money but I agree on the food. Great area for that.
I had a work colleague who purchased in Sydney not that long ago. His buying power was in 7 figures but he was still only interested in Blacktown. Although he could afford many areas, he had to be close to his people.
Well VJ.
I can beat that wheelchair story.
Bought a new [2nd hand] car last week. Perfect for what the famaily and I needed { i-load crewman]. Good condition, Ferrari red and at a great price.
Yesterday some tosser on his phone rear ended me while i was waiting to turn right, didn't even brake before impact.
My dream car is now a write off. Owned it for five days.
My wife never even got to ride in it.
It was not meant to be, trust the situation will find you a replacement iLoad of your colour choice mattlock.
phones are so dangerous on the road, I have a suspicion that all the new car safety stuff like AEB that stops the car automatically and the one that stops the car from changing lanes is actually meant for retards who are looking into their phones
Re interest rates - if the RBA hold then I believe we will crash through .63 USD down to 60c and if that doesnt hold then 55c. Then we will get inflation and a lot of whingeing about being a banana republic.
On the other hand...
It nearly 64 , has been in a few cents range for months .
55c ? So USD is going to appreciate 20% plus , against all currencies .
Is this a chart view ?
Not sure what U are expecting ?
According to someone I heard this morning who should know " Market is 53% thinking rates will go UP . The Real market is much higher .".
This her second meeting - my guess ( she wants to start strong imho ) is up .
velocityjohnno wrote:ABC now getting into the spirit of the times with this one:
https://www.abc.net.au/news/2023-10-31/golden-888-visa-home-affairs/1030...
only about 10 years behind the curve...
how could / did governments allow this to fester for so long?
monkeyboy wrote:Re interest rates - if the RBA hold then I believe we will crash through .63 USD down to 60c and if that doesnt hold then 55c. Then we will get inflation and a lot of whingeing about being a banana republic.
On the other hand...
hate to be the doomsdayer...
but, if oil prices go up to some of the doomsday predictions I heard today due to ME crisis...
seems we could be lined up into an inflationary / interest rates death spiral
Meanwhile, we are still waiting for this house price crash to occur.
https://www.theguardian.com/australia-news/2023/oct/31/record-property-p...
freeride76 wrote:Meanwhile, we are still waiting for this house price crash to occur.
https://www.theguardian.com/australia-news/2023/oct/31/record-property-p...
Yes, it’s nearly the end of 2023 and there’s still no crash. Many were saying that this was the year of the crash. I honestly can’t see it.
flollo wrote:freeride76 wrote:Meanwhile, we are still waiting for this house price crash to occur.
https://www.theguardian.com/australia-news/2023/oct/31/record-property-p...
Yes, it’s nearly the end of 2023 and there’s still no crash. Many were saying that this was the year of the crash. I honestly can’t see it.
Is Dons recession coming soon?
The anxiety is killing me.
Don = stopped clock
goofyfoot wrote:Yes, it’s nearly the end of 2023 and there’s still no crash. Many were saying that this was the year of the crash. I honestly can’t see it.
Yep I was just salivating to have one so I could link up the 'reject the recession' dancers to call the nadir of it, for immaturity reasons, but the chance is not going to present itself and it's time to accept that (sigh). Both parties are petrified that a recession ('we had to have' TM) will occur on their watch and will do anything, anything to avoid that including pump house prices over 10x income, increase the population by 10%, toast 1/3 of homeowners with >4% IR after the all time crazy low rates (*but still a negative real rate! Hence AUD going down!), and lock large numbers of the young outside home ownership. Clown world.
monkeyboy wrote:Re interest rates - if the RBA hold then I believe we will crash through .63 USD down to 60c and if that doesnt hold then 55c. Then we will get inflation and a lot of whingeing about being a banana republic.
On the other hand...
That would really throw a spanner into the importation of Balinese garden settings.
If anyone recalls, about 2000 AUD was near 50c and Holden was on a roll exporting the VT/VX model to the US and getting huge sales locally, earning income with a competitively low currency. Probably good for the miners/energy co's today if they earn in USD, or other USD exposed businesses.
velocityjohnno wrote:That would really throw a spanner into the importation of Balinese garden settings.
If anyone recalls, about 2000 AUD was near 50c and Holden was on a roll exporting the VT/VX model to the US and getting huge sales locally, earning income with a competitively low currency. Probably good for the miners/energy co's today if they earn in USD, or other USD exposed businesses.
Yes - possibly great for miners but depends on their cost base I guess.
I think it like this - my $20,000AUD German engineered VW bought in 2019; still has a market value of $20,000 yet a new model with "vanity" upgrades is now $30,000 AUD.
Thats ridiculous but thats inflation and a shitty AUD.
Absolutely, agree on the car pricing bit. Cost to replace is a wanker at present. Covid sent prices mental such that my 1990s manual V8 bought at 8K in 2009 went 40+ and my 1970's V8 bought at 7K in 2002 went 200+ in the asks! Unbelievable. Looking into that kind of market now, a falling AUD plus rising oil reducing the still-very-solid asks on late Aussie muscle like 2013-7 manual SSV Redline might present an opportunity - and have a very fun bogan car experience for weekend driving over the next 10 years, and knock inflation for 6 to boot.
OK I've got a bit of fun chart porn for everyone, some US-themed scary haloween charts by the bond vigilantes site:
https://bondvigilantes.com/blog/2023/10/six-scary-charts-happy-halloween/
2. shows interest payments becoming a bother for USGov
3. suggests US recession threatening
5. is a beautiful allegory of the 1970s inflation as seen through US CPI comparisons
6. real rates are positive there. Not here!
Crazy charts, how's Aus doing? I know too broad a question but I guess what will the likely effects be here?
velocityjohnno wrote:OK I've got a bit of fun chart porn for everyone, some US-themed scary haloween charts by the bond vigilantes site:
https://bondvigilantes.com/blog/2023/10/six-scary-charts-happy-halloween/
2. shows interest payments becoming a bother for USGov
3. suggests US recession threatening
5. is a beautiful allegory of the 1970s inflation as seen through US CPI comparisons
6. real rates are positive there. Not here!
Yep - and the US Treasury is going to market over the next 2 quarters for about 3 trillion USD more....yields will be going UP.
No one is scared of Halloween and these charts don't really scare me , if of interest .
Others , do , too many, to mention :)
1. Duration smuration .
More bonds have been sold than in the GFC ( % ? ) because China have been huge sellers of bonds .
Simple - Why fund our enemy stuff . I wouldn't lend the US money .
2. I used to be scared of this . Boy who cried wolf due to can lucky kicking down the road .
When this becomes an issue , we will have bigger things to worry about .
3.Often has , and then then the sun comes up , again .
4.US Home owners all , nearly , locked in rates for 30 years .
Only Central Banks were buying Zero bonds , for years .
5. Sharks and waves lol .
I am a surfer and deal with them .
6. Wages ( last nights figures ) are going up 5.3% atm .
There is , almost no , unemployment .
The FED is trying to slow the economy .
They want a nice little recession .
Wars worry me .
Revolutions worry me .
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers