House prices
donweather wrote:Anyone who bought at or near the top in the last 12 mths or so will be getting a wee bit nervous right about now. Particularly if they have/had fck all equity/deposit. Watch the slippery slope begin!!!
This starts to give an indication.
I dare say rates of sales after last August would’ve increased towards the end of last year and well into the beginning of this year
“ CoreLogic estimates there were almost 598,000 house and unit sales across Australia over the year ending August 2021; the highest number of annual sales since 2004 and a 42% lift on the annual number of sales over the previous 12-month period. ”
https://www.corelogic.com.au/news-research/news/archive/housing-turnover...
Wonder how many of those purchases were fixed rates and how many on variable interest loans
A very good read and also sums up how slippery the slope can become once people “feel” as though they’ve lost money/equity.
It’s all a mind game.
https://thenewdaily.com.au/opinion/2022/06/08/michael-pascoe-rba-hunts-t...
"...“After all, the embezzler spends more because he has more income, and his employer spends as before because he doesn’t know any of his assets are gone.”
Munger saw the bezzle more broadly – what happens when asset prices increase for reasons other than real increases in their productive capacity.
As Michael Pettis summarised it, the overall economy is no better off because there is no corresponding increase in productive capacity. The owner of the assets feels richer, but only temporarily because over the long term, asset prices eventually converge to a value that represents their real contribution to the production of goods and services..."
so basically, the people of australia have been 'bezzled' - by governments of all persuasions - for decades...
as governments have relied on 'the wealth effect' to bamboozle (bambezzle) the public into thinking everything is hunky dory...
...and, not only are the assett prices (houses) bubbled up... we have seen real reductions in real productivity capacity too!
plain old bloody reckless!!!
and not only that... those of us that didn't buy into the cheap credit bambezzleabubble thinking... feel... well know actually... we've been bezzled too!!
how's that MMT looking now?
Yes, wealth effect. One of the reasons why LNP are labeled as better economic managers as asset values usually rise during their tenure. When values drop people feel poorer even if their day-to-day circumstances haven't changed at all. It works both ways.
But 2 are not directly correlated, this is very wrong. Higher asset prices do not directly = a healthy economy.
No political party has full control of the economy. They clearly influence certain aspects of it through government spending which is ~30% of GDP at the moment but 'the economy' is a much bigger basket than government spending or asset prices at any point in time.
People always said cash is king. I changed that into cash flow is king. And as long as cash flows are strong we will do ok. But obviously, to have strong cash flows economy-wide we need quality products and services that add value to people's lives. Systems that are predominantly dependent on asset speculation won't stand the test of time. We need real production with real products to drive the country forward.
flollo wrote:Yes, wealth effect. One of the reasons why LNP are labeled as better economic managers as asset values usually rise during their tenure. When values drop people feel poorer even if their day-to-day circumstances haven't changed at all. It works both ways.
But 2 are not directly correlated, this is very wrong. Higher asset prices do not directly = a healthy economy.
No political party has full control of the economy. They clearly influence certain aspects of it through government spending which is ~30% of GDP at the moment but 'the economy' is a much bigger basket than government spending or asset prices at any point in time.
People always said cash is king. I changed that into cash flow is king. And as long as cash flows are strong we will do ok. But obviously, to have strong cash flows economy-wide we need quality products and services that add value to people's lives. Systems that are predominantly dependent on asset speculation won't stand the test of time. We need real production with real products to drive the country forward.
And this is where Australia will struggle in 10-15 years time. The only real thing we produce is mined out of the earth, and it's predominantly either black and dirty or red and dusty. The black and dirty is a dieing commodity. The red and dusty will continue for some time. But Australia cannot and will not surivive if we just rely on mining as our predominant source of production for this country. But with labour costs the way they are I can't see us ever being able to compete on the global stage with any other real forms of production, but who knows what may come of age in this digital world we now live in.
It's been a capital misallocation for the ages, of gargantuan proportions. It's up to each of us to be productive and actually add value and produce things, in what is a hostile environment to do so. Easier to sell them dirt and punt on price rises, but that is not the best path for the future. (Don: we will replace the black and red with whitish dirt - lithium and rare earth metals, still dirty stuff. At this stage a couple of the ventures will process it here a bit in Oz, so there's that...)
Australia and Canada have a lot in common.
Agree. Covid taught us that work-from-home was possible, but if work from home is possible, then work from China - or Ghana - or India is possible too. I'm sure many small businesses are realising what big businesses realised some time ago: that you can easily offshore a lot of knowledge workers where labour prices are lower. Add the (still nascent) benefits of automation and AI and many of the Australian knowledge workers will soon be undercut or made redundant.
The big shift that I see coming is the decimation of knowledge workers - especially those in developed economies - in an equivalent of the agricultural and industrial revolutions.
Up until the industrial age the vast majority of the population were agricultural workers. With the rise of industrial farming that number flipped from somewhere around 80-90% of people working the land to 10-20% or less. In developed economies it is well under 10%.
So people moved to the cities and began working in factories. But as machines improved these became more and more automated requiring fewer labourers. And as multinationals grew in the 20th century and clued into the economics of offshoring factory labour, developed economies moved towards services and closed down their factories, unable to maintain both high blue-collar wages and low-priced consumer goods.
So here we are. My designer clothes are made in Bangladesh and I work in a relatively high-status job as, say, an engineer, or journalist, or web designer earning 20 times more than those seamstresses. But for a nominal fee I can already get a drag & drop website that does nearly all of that and outsource the boring technical details to someone in a developing country for $20 per hour or less with no ongoing obligations instead of a local employee, who, with benefits, will cost many, many times more. And what happens when AI comes to graphic design in the next few years - as it already is - and anyone can simply feed the machine some cues, point to samples, and it will generate a unique logo, website, social media posts, and send them all out automatically?
And "make it so" programming based on natural language input is already a thing, as witnessed by GPT3. The content it can now generate in terms of text and code is truly breathtaking. The timing of these developments is hard to nail down, but they are undoubtedly coming in the next couple of decades at most.
Just as small manufacturing companies and farms were swallowed up by multinationals, the next evolution will result in a concentration of wealth in the hands of those who develop and own these new tools, which are scalable at unprecedented levels.
That's yet another reason to protect our national resources, because with capital, knowledge and labour markets completely unbound by national borders, geography once again regains importance. There is no other Great Barrier Reef; you can't move that to Sri Lanka. And our precious resources in the ground can't come from somewhere else. Our clean air and water matters. The quality of our housing and infrastructure
and farmland matters. It is one of the few remaining scarcities.
Notwithstanding the existential risk from AI, which I take seriously, these developments will probably result in better material outcomes for us all. But what becomes of Australia's economy and jobs market, and how we can maintain a competitive advantage in the global arena, are things we need to be thinking about and acting on now. Unfortunately, this seems to be so far from any Australian government's thinking that it's laughable to talk about in the same breath.
rooftop wrote:Agree. Covid taught us that work-from-home was possible, but if work from home is possible, then work from China - or Ghana - or India is possible too. I'm sure many small businesses are realising what big businesses realised some time ago: that you can easily offshore a lot of knowledge workers where labour prices are lower. Add the (still nascent) benefits of automation and AI and many of the Australian knowledge workers will soon be undercut or made redundant.
The big shift that I see coming is the decimation of knowledge workers - especially those in developed economies - in an equivalent of the agricultural and industrial revolutions.
Up until the industrial age the vast majority of the population were agricultural workers. With the rise of industrial farming that number flipped from somewhere around 80-90% of people working the land to 10-20% or less. In developed economies it is well under 10%.
So people moved to the cities and began working in factories. But as machines improved these became more and more automated requiring fewer labourers. And as multinationals grew in the 20th century and clued into the economics of offshoring factory labour, developed economies moved towards services and closed down their factories, unable to maintain both high blue-collar wages and low-priced consumer goods.
So here we are. My designer clothes are made in Bangladesh and I work in a relatively high-status job as, say, an engineer, or journalist, or web designer earning 20 times more than those seamstresses. But for a nominal fee I can already get a drag & drop website that does nearly all of that and outsource the boring technical details to someone in a developing country for $20 per hour or less with no ongoing obligations instead of a local employee, who, with benefits, will cost many, many times more. And what happens when AI comes to graphic design in the next few years - as it already is - and anyone can simply feed the machine some cues, point to samples, and it will generate a unique logo, website, social media posts, and send them all out automatically?
And "make it so" programming based on natural language input is already a thing, as witnessed by GPT3. The content it can now generate in terms of text and code is truly breathtaking. The timing of these developments is hard to nail down, but they are undoubtedly coming in the next couple of decades at most.
Just as small manufacturing companies and farms were swallowed up by multinationals, the next evolution will result in a concentration of wealth in the hands of those who develop and own these new tools, which are scalable at unprecedented levels.
That's yet another reason to protect our national resources, because with capital, knowledge and labour markets completely unbound by national borders, geography once again regains importance. There is no other Great Barrier Reef; you can't move that to Sri Lanka. And our precious resources in the ground can't come from somewhere else. Our clean air and water matters. The quality of our housing and infrastructure
and farmland matters. It is one of the few remaining scarcities.Notwithstanding the existential risk from AI, which I take seriously, these developments will probably result in better material outcomes for us all. But what becomes of Australia's economy and jobs market, and how we can maintain a competitive advantage in the global arena, are things we need to be thinking about and acting on now. Unfortunately, this seems to be so far from any Australian government's thinking that it's laughable to talk about in the same breath.
yep
whilst some like to paint 'the great reset' as a conspiracy...
and others like to paint it as evil masterminds around a monopoly board...
reality is, it's just the billionaire class planning for this somewhat inevitable future (...or so it seems inevitable...)
question is... will the well educated plebs buy into... "you'll own nothing and be happy"?
without some form of major ressistance ammassing...
it's not all bad...
"And what happens when AI comes to graphic design in the next few years - as it already is - and anyone can simply feed the machine some cues, point to samples, and it will generate a unique logo, website, social media posts, and send them all out automatically?"
this should eliminate about 50% of the very sedentary 'digital nomads' in bali
and the other question is...
how long can australia - the lucky country - continue to blunder its way through?
I see that oz tech. billionaire with the flashy name has stolen / backed tim flannery's idea, of oz producing the no brainer renewables in the north of oz, with a big arse extension cord to singapore to sell the electricity
hopefully he's nice about renting our lives back to us...
How long is a length of string?
How big is a quarry?
"How big is a quarry?"
too big to defend...
when you've fostered and educated a culture and society of apathetic mediocrity ...whilst your power hungry, but little bit far, northern neighbours have done the opposite...
going full science and techo.
with said technology fastly overcoming that overly comforting tyranny of distance by the day...
God only made so much coastal real estate, thats all I know.
Bingo!
freeride76 wrote:God only made so much coastal real estate, thats all I know.
Spratly Islands?
And the CCP.
Spratly's must be holding when there's a typhoon in the South China Sea.
good post rooftop, knowledge workers in the cross-sights. the only way I can think of to buck this trend is to control your entire business from inputs to end distribution, keep all IP in house and off-net, and automate as much as possible, off as low as cost-basis as possible.
Sypkan, we will just sell them different 'eco' dirt, and make ridiculous money doing so. Truck drivers and share holders rejoice!
Coastal RE will remain at a premium even after what's coming.
"...eyebrow-raising metrics.
During the period preceding the GFC in the US, property prices over there rose by the equivalent of 60% of the national GDP. Australia has done a lazy 100%-plus over the past three years.
During the Japanese property bubble, Japan set the record for the ratio of the value of its residential land to GDP, which was more than 330%. Australia has just beaten that record. "
from
https://www.livewiremarkets.com/wires/the-australian-property-market-jus...
kinda makes you proud that Australia can take on the world and win, like the heady days of Bondy and the winged keel winning the Cup...
... only it's all in really bad metrics that you wouldn't wish on your country.
sypkan wrote:rooftop wrote:Agree. Covid taught us that work-from-home was possible, but if work from home is possible, then work from China - or Ghana - or India is possible too. I'm sure many small businesses are realising what big businesses realised some time ago: that you can easily offshore a lot of knowledge workers where labour prices are lower. Add the (still nascent) benefits of automation and AI and many of the Australian knowledge workers will soon be undercut or made redundant.
The big shift that I see coming is the decimation of knowledge workers - especially those in developed economies - in an equivalent of the agricultural and industrial revolutions.
Up until the industrial age the vast majority of the population were agricultural workers. With the rise of industrial farming that number flipped from somewhere around 80-90% of people working the land to 10-20% or less. In developed economies it is well under 10%.
So people moved to the cities and began working in factories. But as machines improved these became more and more automated requiring fewer labourers. And as multinationals grew in the 20th century and clued into the economics of offshoring factory labour, developed economies moved towards services and closed down their factories, unable to maintain both high blue-collar wages and low-priced consumer goods.
So here we are. My designer clothes are made in Bangladesh and I work in a relatively high-status job as, say, an engineer, or journalist, or web designer earning 20 times more than those seamstresses. But for a nominal fee I can already get a drag & drop website that does nearly all of that and outsource the boring technical details to someone in a developing country for $20 per hour or less with no ongoing obligations instead of a local employee, who, with benefits, will cost many, many times more. And what happens when AI comes to graphic design in the next few years - as it already is - and anyone can simply feed the machine some cues, point to samples, and it will generate a unique logo, website, social media posts, and send them all out automatically?
And "make it so" programming based on natural language input is already a thing, as witnessed by GPT3. The content it can now generate in terms of text and code is truly breathtaking. The timing of these developments is hard to nail down, but they are undoubtedly coming in the next couple of decades at most.
Just as small manufacturing companies and farms were swallowed up by multinationals, the next evolution will result in a concentration of wealth in the hands of those who develop and own these new tools, which are scalable at unprecedented levels.
That's yet another reason to protect our national resources, because with capital, knowledge and labour markets completely unbound by national borders, geography once again regains importance. There is no other Great Barrier Reef; you can't move that to Sri Lanka. And our precious resources in the ground can't come from somewhere else. Our clean air and water matters. The quality of our housing and infrastructure
and farmland matters. It is one of the few remaining scarcities.Notwithstanding the existential risk from AI, which I take seriously, these developments will probably result in better material outcomes for us all. But what becomes of Australia's economy and jobs market, and how we can maintain a competitive advantage in the global arena, are things we need to be thinking about and acting on now. Unfortunately, this seems to be so far from any Australian government's thinking that it's laughable to talk about in the same breath.
question is... will the well educated plebs buy into... "you'll own nothing and be happy"?
without some form of major ressistance ammassing...
Well, I consider myself well educated and the answer is: they can f off. I will fight any system that says "you'll own nothing and be happy".
flollo wrote:sypkan wrote:rooftop wrote:Agree. Covid taught us that work-from-home was possible, but if work from home is possible, then work from China - or Ghana - or India is possible too. I'm sure many small businesses are realising what big businesses realised some time ago: that you can easily offshore a lot of knowledge workers where labour prices are lower. Add the (still nascent) benefits of automation and AI and many of the Australian knowledge workers will soon be undercut or made redundant.
The big shift that I see coming is the decimation of knowledge workers - especially those in developed economies - in an equivalent of the agricultural and industrial revolutions.
Up until the industrial age the vast majority of the population were agricultural workers. With the rise of industrial farming that number flipped from somewhere around 80-90% of people working the land to 10-20% or less. In developed economies it is well under 10%.
So people moved to the cities and began working in factories. But as machines improved these became more and more automated requiring fewer labourers. And as multinationals grew in the 20th century and clued into the economics of offshoring factory labour, developed economies moved towards services and closed down their factories, unable to maintain both high blue-collar wages and low-priced consumer goods.
So here we are. My designer clothes are made in Bangladesh and I work in a relatively high-status job as, say, an engineer, or journalist, or web designer earning 20 times more than those seamstresses. But for a nominal fee I can already get a drag & drop website that does nearly all of that and outsource the boring technical details to someone in a developing country for $20 per hour or less with no ongoing obligations instead of a local employee, who, with benefits, will cost many, many times more. And what happens when AI comes to graphic design in the next few years - as it already is - and anyone can simply feed the machine some cues, point to samples, and it will generate a unique logo, website, social media posts, and send them all out automatically?
And "make it so" programming based on natural language input is already a thing, as witnessed by GPT3. The content it can now generate in terms of text and code is truly breathtaking. The timing of these developments is hard to nail down, but they are undoubtedly coming in the next couple of decades at most.
Just as small manufacturing companies and farms were swallowed up by multinationals, the next evolution will result in a concentration of wealth in the hands of those who develop and own these new tools, which are scalable at unprecedented levels.
That's yet another reason to protect our national resources, because with capital, knowledge and labour markets completely unbound by national borders, geography once again regains importance. There is no other Great Barrier Reef; you can't move that to Sri Lanka. And our precious resources in the ground can't come from somewhere else. Our clean air and water matters. The quality of our housing and infrastructure
and farmland matters. It is one of the few remaining scarcities.Notwithstanding the existential risk from AI, which I take seriously, these developments will probably result in better material outcomes for us all. But what becomes of Australia's economy and jobs market, and how we can maintain a competitive advantage in the global arena, are things we need to be thinking about and acting on now. Unfortunately, this seems to be so far from any Australian government's thinking that it's laughable to talk about in the same breath.
question is... will the well educated plebs buy into... "you'll own nothing and be happy"?
without some form of major ressistance ammassing...
Well, I consider myself well educated and the answer is: they can f off. I will fight any system that says "you'll own nothing and be happy".
I share your sentiment flollo...
but I kind of think this little plan / mantra / imposition i
Do either of you own a pitch fork? We have one.
sorry got cut off there by little boss...
I share your sentiment flollo...
but I kind of think this little plan / mantra / imposition is often presented out of context, and misrepresented a bit, for political gain - who woulda thunk...
my interpretation is, the billionaire / tech head / overly righteous political class, are buying into 'the share economy' idea that comes about with tech.
I've seen it on here with the language some crew use, its kind of a belief in the original internet and it's 'sharing' capacity (that seems to largely have fallen in a hole of late) ... or is it just that a form of incovenient 'over sharing' has developed, as the reach of the internet has moved well beyond the original tech. head / academia / well to do classes that inhabited it initially?
the idea and concept is still alive and well... sort of... with ride sharing, platform sharing, office space sharing, electric scooter sharing, car sharing etc. etc.
the davos class, I guess, have bought right into this idea I imagine, to overcome the compettition and inefficient use of resources... which is reasonable...
however, where they seem to overstep the mark is, with their 'smart cities' concepts where they appear to want to put all the plebs in high density dog boxes (renting 'the space')- whilst they still enjoy their numerous sprawling mansions often many per person...
the fact blackrock and the like, are apparently consciously buying up rental properties, with the background belief the plebs can just rent 'space' over their life span, kind of rubs salt into this open wound...
and, the davos class celebrating the shut down of air travel (for plebs) through the pandemic - whilst they continued to galavant around the world - also created a most salty wound...
then there's their super yachts, holiday houses, car collections, endless properties, parties, hobby farms, and on and on the list goes...
they clearly envision a two tiered society, at a minimum, to combat environmental issues, well, 'climate change' anyway...
I think most people can see the problems with our consumer society and current way of life, but I'm not sure they'll buy into what appears to be a very communist influenced style model being proposed - that may well supply enough to 'want for nothing' initially... maybe... but I think most people can also see where that leads...
people like stuff... people like travel... people like freedom... independence... just like the rich people...
but most importantly, people generally like the freedom, independence, and the passing on of security that comes with owning a property / property... just like rich people...
I don't think the davos dudes are evil masterminds - just hubris filled morons - that possibly showed the true nature of their 'hand' a little too soon...
no pitchfork here vj
but I do always have a very nice mattock nearby... should a job arise...
That was a really good hypothesis of the possible thinking up there Sypkan. I've noticed those in tech are trusting, very trusting, of human instincts. I've also noticed people are more mischievous than they give them credit for. Hilarity ensues, and the results can tend toward high farce, which I love btw:
https://www.abc.net.au/news/2018-06-12/obike-dockless-bicycle-scheme-to-...
No, most of us do have an area where we declare stuff as our own, or respect/disrespect property.
One also encounters what seems very naive beliefs in a new sharing future where everyone is happy with nothing for they have overcome ego, in the alt-spiritual sphere. Don't ask. If it is true, then there really is a vibrational shift and we will go beyond thousands of years of human experience. To question it is to invite the simple shut-down response that one is still dominated by the ego. It's quite brilliant this way, as there is no comeback.
This way of thinking may have a religious dogma behind it, heads up.
Going back to the French Revolution, the Jacobins went to great lengths to ensure a New Man was created, they renamed everything, and stressed a new way of being. Result was chaos and bloodshed.
Haha, that is a good post. So here’s a bit of info for everyone. Ever heard of Vonovia? It is the largest ‘landlord’ in Germany. The company has more than 400000 apartments that are being leased out. Also, there are nearly 140000 garages.
Full portfolio from a wiki link:
According to the annual report 2019, Vonovia owned 416,236 residential units, 138,176 garages and parking spaces, as well as 6,748 commercial units. These extended to 653 domestic and foreign cities and municipalities. Based on a total fair market value of more than 52 billion euros, the vast majority of the portfolio was located in Germany (84%), with the remainder in Sweden (11%), and Austria (5%). Also, 78,691 apartments were managed by Vonovia on behalf of third parties.[70]
https://en.m.wikipedia.org/wiki/Vonovia
Let’s just think about these numbers for a second. Your concerns are truly well and live in some places. Germany has some of the worst home ownership rates in Europe. ‘Progressive’ and prosperous country but a lot of citizens own fuck all.
And cherry on top of the cake; biggest shareholder? Norwegian central bank AND Blackrock.
So this is not some crazy fantasy, this is actually happening. We need to fight it at all costs. I grew up in a different environment as a kid and I learned how to fight for the stuff I care about. But I don’t know about others. What I see around is pretty weak; kids driven like presidents, helmets on push bikes, everyone’s a winner mentality…
This needs to change. We need to train our kids to be tougher so they can fight with confidence. That means being transparent and telling them the truth; life can suck at times, there will be evil people trying to get you at some point in your life and there are things you really suck at. But also, if you are good in something then you are fucking good at something. Don’t be scared to go forward, be best in it and dominate. None of the tall poppy bullshit please. And in our case, we love owning houses, look after them and see them as one of the major life goals. For good and bad, it’s in our cultural psyche. This is a good thing and a goal worth fighting for. And we need to collectively push for it and never give up, individually and collectively.
Good posts, VJ and Flollo.
You vill own nuzzink, änd you vill be häppy!
I'm going to go all contrarian.
Europe has had the rental model for a long time. The UK has a similar model where you can "buy" leasehold - typically a 99 year lease. Maggie Thatcher introduced the idea of tenants in "council houses" being able to sell them and I believe that has come full circle. There is also rent to buy in the UK. At least there is a mix of ideas rather than not much at all in Australia.
As for the great reset - taking the contrarian view there are some radical ideas coming out of the WEF; some will stick eventually (like Digital Central Bank currencies, which we are moving toward faster than we realise), some will not. BUT I have to agree that we cannot go on like this. So much inequality, so much greed, so much destruction. Humans are pretty disgusting at a collective level I'm afraid to say.
Haha, that sounds like a gen X childhood Flollo! You came 4th? You f&$king lost. Get over it! No ribbons for you! And yes, if you do it well, it's yours. If you are the absolute best, you get to be Iceman. Nothing heard on a blog or vlog in either situation.
Some people are about to get burned in housing. Of course, if one sees it coming and is positioned differently, "the wise lament neither for the living nor the dead," to paraphrase the Bhagavad Gita.
More religiousity, related to Flollo's mention of the mass tenant landlording companies earlier: iirc reading about the Messiah that will be coming for the Jewish people, two preconditions: one, the temple of Solomon is rebuilt (problem: Dome of the Rock sits on this spot) and two, the Jewish people will own everything in the world prior to the occasion. I have no views either way on this subject, and no idea who owns these companies, but note the general precursor conditions to the prophesy. Correct me if I'm wrong.
Best response: don't be dumb and get caught out in a heavy debt situation where the asset can be taken from you, for a Gen X response to today's issues.
velocityjohnno wrote:
Stop it! Overcommitment, accountability, believing in propaganda...Language is too harsh for an overly ignorant populace. Nothing can ever go wrong! Even if there are any hints of issues, we have our parenting government to save us all. God save the government! No need to set yourself up as a strong, reliable individual.
Also, servicing will become a major issue. Anyone wanting to buy a home will get stress-tested by banks on a much higher cash flow requirement. By default, this will reduce the price levels.
Haha, yes what could possibly go wrong? Just out of interest Flollo, coming from the continent, did you see a different attitude to debt within your family/people around you? Came out as a little kid myself, I note an extremely different attitude to debt in those I know from there, and in expats I've talked to here.
tbf that title above was quite a bit sensational, didn't do justice to some of the points they raise (especially Oz comparison to Ireland where debt implosion was an upper middle class thing rather than a poor thing like GFC in US). But if you don't have sensational headlines, how do you get people to watch? Also can't vouch for the source though I know Martin North's long time position on this, the individual presentation was what appealed.
Watched that video VJ, great share.
Yep, keep it bookmarked, we may need to summon them again to dance in the Sunrise studio before this is all over...
velocityjohnno wrote:
kochie's financial advice has really come along hasn't it?
quite the guru...
Sypkan, VJ & Flollo they are some absolutely ripping posts by very smart, switched on, astute, very well observed & researched deadset legends
Well done all and thanks for your input & discussion.
I see legacy as one very important factor on this current trajectory. We certainly questioned bringing a child into the world following the last two years however legacy and what we can instil and create in our future generation played a large part in our decision making.
We most certainly have a choice in what life we can create for future generations, that starts with; 1. family and then 2; a collection of likeminded families and 3; a collective of collectives numbering the hundreds of thousands
Having said that I stand side by side by my fellow comrades with a pitch fork in each arm and at the ready ;)
velocityjohnno wrote:Haha, yes what could possibly go wrong? Just out of interest Flollo, coming from the continent, did you see a different attitude to debt within your family/people around you? Came out as a little kid myself, I note an extremely different attitude to debt in those I know from there, and in expats I've talked to here.
A very good question. And the short answer is yes, absolutely. Debt is seen as a last, last resort necessary evil. Of course, housing is where most would give in but they will often hold their position on everything else. Let me elaborate a bit more because it's much deeper than the debt itself. I will write some stories as some of you expressed the desire to learn more about life in other parts of the world.
Let me tell you a story about my grandmother. An industrious woman, a child of the 2nd world war, lived through the whole communist era from 45-90. After 1990 the state went through the privatisation. What it meant for her (and many others) was that they were offered to buy their own apartments from the state and for the first time in their lives, legally become private property owners of the apartments they lived in. They were offered 'loans' from the state with monthly repayments under favorable conditions. She always said that she will not die until she pays this apartment off.
In the previous system (which went through many revisions over the years), workers and state-owned enterprises were paying 'hosing building tax' which was going into a fund that was developing residential property. That property would then be allocated to people through 'living rights'. Administration of this changed over the decades, different agencies or companies directly would allocate apartments to workers and people got a place to live but never owned those properties.
If this sounds like some great utopia to some let me warn you - it is not. Firstly, when you have a situation where some bureaucrat is deciding who lives where then that bureaucrat becomes one of the most powerful people in the society. You end up with corruption on an unprecedented level where those closer to the bureaucracy get better places to live. Secondly, to the first point, whole generations of people now know that to move ahead in life one needs to stay close to the bureaucracy. Not close? You've got no chance. Ambitious and capable? It doesn't matter. The end outcome is a massive brain drain of people not 'aligned' with the system. Thirdly, when 'everything' is owned by 'everyone' then no one cares about it. It might sound weird but it's true. When people don't own anything themselves they tend to take way less care about their place of living and its surrounding environment. It's always a 'state problem' and not my problem. As the state is a reflection of its people then the state itself doesn't do anything about it. The end result is the decay of buildings and their surroundings. What initially looked new and shiny quickly turned into ugly, uninviting places to live. And finally, fourth, problems then were the same as problems today. Too many people and not enough houses. So, the state tends to rush the development so they can look good and maintain peace. The results are developments on a massive scale with total disregard for the local environment. Most buildings are rectangular shells, built in the most utilitarian way possible. Squeeze in as many 30-50sqm apartments as possible. Quantity over the quality of massive proportions. Australians would die in shock if they had to live in these places. BTW there are some great Instagram accounts that share these buildings across the ex Eastern Block. You can usually find them with #brutbuilds hashtags.
I recommend people take note of what I wrote in there. I'm sharing these stories in the hope that history doesn't repeat itself.
Anyway, back to my grandmother. She was determined to pay off this loan. Additionally, my grandfather retired around 1990/91 from memory and decided to build a house in the village he is from. The plan was to spend the retirement in the village and keep the apartment so children can live in it or rent it out as an additional income further down the track. This is where the story becomes incredibly interesting. My grandmother was always the one managing the money. And imagine this; they decided that they will build this house with their own hands using only - Aged Pension. So here we have people in their 60s building a new house with a pension that is not enough for comfortable living. And by building, literally building with their hands. No loans, just one brick, one rock at a time. I still remember the day we were pouring concrete on the suspended slab (which is a ceiling, very common in Europe to have a slab below and above). I was very little but I still remember the wooden ramp my grandfather build to get up there with wheelbarrows. There were no cement trucks or concrete pumps, concrete was mixed out the front in the concrete mixer and we were pouring it one wheelbarrow at a time. Anyone who knows this type of work would understand the pain of this process. But village and relatives jumped in and worked together to get it done.
It was enough for them to move in after that. House was far from finished but you could live in it. In the early days, there was no water or telco in the street so they had to collect rainwater and go to the post office to make phone calls. But slowly, they kept going. The logic was insane from today's perspective; set up a garden, grow all your food, cut woods in the forest for heating, and spend no money other than on bare necessities. I remember spending time there as a kid and I never ate artificial food. I worked in the garden and around the house all the time. I still know how to plant potatoes and build walls out of stone. My grandfather taught me everything I needed to know. And this strategy worked really well.
Unfortunately, my grandfather died in 2009 but my grandmother kept going and ticked things off one by one. The first was to connect the house to the water system. They eventually brought it into the street but she still had to spend thousands to get it to the house. Secondly, insulation was a major next step. In Europe, it is done from the outside with polystyrene sheets rendered onto the brick or concrete houses. It's much better than this crap here. She obviously couldn't do it herself but had to hire others. Eventually, she saved enough money to do it. It cost her thousands of euros but she saved, a little bit at the time and paid the whole thing in cash. Thirdly, she needed an air conditioning system. Back in the day most didn't have it but the reality is, it gets super hot in summer and you can't stay there without one. Again, she saved and paid in cash. And finally, she bought a grave and built a beautiful tombstone for my grandfather and her. This alone would've cost her ten thousand euros +, even in that village.
A couple of years back I spoke to her and she just made the last payment on the apartment. She now achieved more or less everything that she planned. At 85 she is not showing any signs of slowing down. Every time we talk she's got some new plans.
So what's the point of the story? The point is to highlight the most fundamental relationship to money that most should have - you save so you can invest and spend. You don't spend and then save to pay the accumulation of bills associated with spending on credit. Admittedly, it is unrealistic that people save for huge purchases like houses. But it is not unrealistic that they save for all their consumer goods purchases. If they actually had to save they would probably purchase less. So, it doesn't suit the 'modern' narrative of 'You can have it all!' Sorry guys, bad news - you can't fucking have it all.
In Australia, we love big houses with big garages. And then we park the cars out on the street because the garage is full of junk. In the name of 'fintech' we flooded kids with Afterpay and taught them nothing about financial accountability. Taking out a mortgage and buying a house is not a bad thing when done right. Buying sneakers in Footlockers with Afterpay is pure lunacy and total money mismanagement.
So when you ask about people's sentiment about credit back in Europe I'll only tell you one thing; imagine if I told my grandmother that I took out a loan to buy sneakers in Footlocker. She would tell me to get fucked, literally. I would be embarrassed. No cash no sneakers.
Finally, I want to quote one and only Benjamin Franklin with one of his 13 Virtues:
'5. FRUGALITY. Make no expense but to do good to others or yourself; i.e., waste nothing.'
https://fs.blog/the-thirteen-virtues/
And if my writing can encourage others in this little forum to save more and consume less then I succeeded. I think we can all agree (whatever your beliefs are) that Australia will be a better place, culturally and environmentally, if we all consumed a bit less and focused more on producing real value that helps our citizens. Just talking about it with many others makes a big difference. And despite all the issues, I'm still optimistic about the future.
That's one of the best posts ever on this forum. Completely concur. And I do believe that frugal conservation of resources and living within the land and environment is the fundamental village nature of Europe, too. Before all this bullshit and buy now pay later and hyper development/extraction/fishing.
Mum and Dad were always very modest, always just the old Renault that got more and more beat up (I later discovered the French had engineered them for North Africa when chasing surf), in a sea of debt-fueled Landcruisers in the school car park; always the most nondescript house in the best street they could afford, DIY,, debt was shunned, family took care of family. Can still remember my maternal grandmother, great uncle and great aunt at 96+ whiling their days away working beans and growing tobacco on a cane farm... The result of this weird way of living is freedom, your time is your own, and you own what you have.
"So what's the point of the story? The point is to highlight the most fundamental relationship to money that most should have - you save so you can invest and spend. You don't spend and then save to pay the accumulation of bills associated with spending on credit. Admittedly, it is unrealistic that people save for huge purchases like houses. But it is not unrealistic that they save for all their consumer goods purchases. If they actually had to save they would probably purchase less. So, it doesn't suit the 'modern' narrative of 'You can have it all!' Sorry guys, bad news - you can't fucking have it all."
Great stuff Flollo.
Thank you, flollo. That was very good, and reminded me of my upbringing in Denmark. Where did you grow up?
As a child I was again and again told that "if you owe 1 Dollar (Krone), you're in debt. But if you own 1 Dollar, you're a free man!"
I built my first house in NZ very much like your nana did, flollo. Buy framing timber on special; scrounge leftover materials from other builds; carry the whole lot up 106 steps to the building site. I had to borrow $75000 (from memory), and I was freaking out. Paid it off in 3 years.
And your story reminded me of why my hackles go up when some govt flunkie says "for the greater good...", because it always ends up being for the good of some small elite.
House prices forum is on fire at the moment , nice work fellas
What a crock of pompous shit this last thread page is. The privileged lecturing the last in line on the ponzi that those same privileged depend on,
Outdated cliches in a world made redundant by glorified gamblers in suits that you picked up in your government paid uni economics and business degrees that teach you nothing but how to roll a dice. Debt creates wealth. It’s just shitty timing that fucks you.
Fucking spot on Bonza.
Spare us the genius of the crew on here with their holier than thou attitude to debt who have simply hit the jackpot in the last 25 years due to government induced market altering policies that have kissed them on the dick, and now they sail off into the sunset whilst dancing on the debt graves of the young.
Those who may now face financial stress were just trying to do what those have done before them. Get a place of their own for their family so they don’t rent for life paying off some other lucky bastards mortgage. Do you think they wanted to pay the prices they did for a home? Fuck no, but they had very little choice. And I’m sure some will say, they should have moved out of Melb/Sydney, whilst in the same breathe squealing about regional property prices that price out the locals.
Oh but afterpay, you bought some shoes on afterpay. Fuck off with your sweeping mainstream generalisations. Afterpay is just a credit card.
You’re welcome to enjoy your financial freedom, but spare the lectures will ya.
And for the record I’m not talking about my own experience here, but there is nothing worse than muppets who punch down on others and think they are financial wizards, but really they simply got lucky.
freeride76 wrote:And the CCP.
Spratly's must be holding when there's a typhoon in the South China Sea.
haha i know the answer to this one. finally ... i know an answer. the thing is, i am not allowed to tell. damn it.
Tell me again how flollo's grandmother "got lucky"?
(In my own case, yes I did get lucky. My good fortune was that nobody else wanted what I bought; that everybody said that what I was trying to do was impossible; that no person in their right mind would ever buy the house I built. Well, they were wrong, and they can stfu.)
My comment wasn’t directed at his grandmother. No doubt some have done the hard yards, but just as many, likely many more have simply got lucky. And if they are gracious about that, that’s all fine. But I can’t cop those who now shake their heads at those homebuyers these days just trying to make a go of it.
Island Bay wrote:Thank you, flollo. That was very good, and reminded me of my upbringing in Denmark. Where did you grow up?
Thanks mate. I was born in Croatia while it was still part of Yugoslavia in the 80s.
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers