Te Mata

Australia Faces Its Demons

3,844 posts in this topic

51 minutes ago, cashinmattress said:

Along with a most of the commonwealth, including the UK when (if) BREXIT is realised.

No.

The UK does not ave much that China wants, otherr than Hermes bags and Unis.

Of course, China will have probably had a revolution by then, as the central planning blows up in its face.

Share this post


Link to post
Share on other sites
17 hours ago, spyguy said:

No.

The UK does not ave much that China wants, otherr than Hermes bags and Unis.

Of course, China will have probably had a revolution by then, as the central planning blows up in its face

Yes. Europe and elsewhere thank the UK for their post-BREXIT 20% of GDP gift in the form of the exodus of formerly UK based banking and financial sectors.

UK has plenty of what China wants. Cheap (& soon to be cheaper) post-BREXIT London property, vast swathes of land and assets at bargain (& soon to be cheaper) post-BREXIT prices. Plus poor Britons who will gladly work  for a Chinese boss.

No. China is not heading into revolution any time soon.

Edited by cashinmattress

Share this post


Link to post
Share on other sites

Rather strange this one. Plenty of crash newspaper articles, this doesn't normally happen if there is going to be a real crash. Usually a crash takes everyone but the select few(eg here) by surprise. I thought about moving to Oz, at one time it was a place of cheap housing but now its like London on sterioids

Share this post


Link to post
Share on other sites
12 hours ago, Funn3r said:

 

On 12/8/2016 at 7:45 AM, spyguy said:

Aus. The anglo saxonidh Nairu.

Itll fckup. China will bale it out and ship over all the labour to extract whatver.

Aussies will become a nation of bellhops, taxidrivers and prozzies.

All the taxi drivers and most bus drivers in Melbourne now are Indians.  All the prozzies are imported from Thailand/Philippines etc (so they say). Bellhops are also from asia.   Local IT workers have been displaced and jobs filled from India or offshored to India (my wife and I are victims of this).   If you are a 25 year old 'Barrista' (coffee boy) you can still make a part time living.  
if you are tossed out of your real job now it is almost impossible to get back in, especially if you are outside of that magic 25-40 age group but even then not easy. And even if you are keen to do McJobs, as an acquaintance of mine found out the hard way when applying for a job in Bunnings (our very mega hardware store)  800 applicants for 2 part time casual jobs, no set hours.    I also applied for this company a few years ago when I was struggling and I know everything about hardware but at the same time it was around 100 applicants for 10 McPartime jobs, however I was told by the manager when he unusually and politely rang me to let me know I had not been successful. I asked him why not and apparently it was thought that I was not 'Bubbly' enough. 

And yet property buying is still in a full speculative, foaming at the mouth bubble.  This talk about uncompleted flats is almost nonsense, these flats are wholey and solely the preserve of Chinese money launderers, the real buying action by local speculators is in the suburbs where real people want to live, they are still out bidding and out buying everyone else.

On 12/1/2016 at 9:15 PM, darkmarket said:

"Melbourne Apartment Risks Mount as Prices Drop by Most Since ’14

The 3.2 percent month-on-month drop is the largest such decline since May 2014, according to figures from data provider CoreLogic Inc. This dragged down the overall increase in dwelling values across the nation’s state capitals to 0.2 percent, the smallest rise since March this year.

Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy’s shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation’s biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane."

https://www.bloomberg.com/news/articles/2016-12-01/melbourne-apartment-risks-mount-as-prices-drop-by-most-since-14

That would be an annualised drop of 43% then.

''Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy’s shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation’s biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane."'

The boom is in fact a 'house price' boom for us,the people, apartments being built were never intended for the local population.  Building rates for these flats did not take off after the mining infrastructure boom, they have carried on in a straight line for over a decade.

Share this post


Link to post
Share on other sites
8 minutes ago, steve99 said:

All the taxi drivers and most bus drivers in Melbourne now are Indians.  All the prozzies are imported from Thailand/Philippines etc (so they say). Bellhops are also from asia.   Local IT workers have been displaced and jobs filled from India or offshored to India (my wife and I are victims of this).   If you are a 25 year old 'Barrista' (coffee boy) you can still make a part time living.  
if you are tossed out of your real job now it is almost impossible to get back in, especially if you are outside of that magic 25-40 age group but even then not easy. And even if you are keen to do McJobs, as an acquaintance of mine found out the hard way when applying for a job in Bunnings (our very mega hardware store)  800 applicants for 2 part time casual jobs, no set hours.    I also applied for this company a few years ago when I was struggling and I know everything about hardware but at the same time it was around 100 applicants for 10 McPartime jobs, however I was told by the manager when he unusually and politely rang me to let me know I had not been successful. I asked him why not and apparently it was thought that I was not 'Bubbly' enough. 

And yet property buying is still in a full speculative, foaming at the mouth bubble.  This talk about uncompleted flats is almost nonsense, these flats are wholey and solely the preserve of Chinese money launderers, the real buying action by local speculators is in the suburbs where real people want to live, they are still out bidding and out buying everyone else.

''Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy’s shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation’s biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane."'

The boom is in fact a 'house price' boom for us,the people, apartments being built were never intended for the local population.  Building rates for these flats did not take off after the mining infrastructure boom, they have carried on in a straight line for over a decade.

Build the houses out in the fcking desert.

And tax the Chinese at 20% purchase price a year FFS.

I wish wed stop pussy footing around on the Chinese.

A Western company cannot sell a tin of baby milk in China, never mind real estate.

 

 

Share this post


Link to post
Share on other sites
On 12/9/2016 at 8:33 AM, spyguy said:

Build the houses out in the fcking desert.

And tax the Chinese at 20% purchase price a year FFS.

I wish wed stop pussy footing around on the Chinese.

A Western company cannot sell a tin of baby milk in China, never mind real estate.

 

 

Unfortunately 'They' like it like this cause 'They' are getting rich on Chinese money and 'They' are getting massive boosts to their property porkfolio's 

They =  

All members of LNP party cabinet, all up to their necks in property speculation etc.

State governments who make a killing with stamp duty charges on high house prices. In fact the stamp duty on an average house now is more than my parents paid for their last house in the mid 1980's

Land bankers who lobby the government, a)get the land they want and  b. ) are allowed to hoard it and drip feed it into the market.

The banks of course, goes without saying and will lend infinite amounts into BTL especially.

The local councils who practice both Nimbyism and land development at the same time, anything with enhances their own individual wealth as Councillors and council planners,ceo's etc., 

House builders who can play on the drip fed land in order to keep their house building costs high and not employ too many people, ie they can plan ahead for decades.

the collective 'They' is in charge of everything the government do. People = nothing.  Just like the UK or possibly even worse now.

 

 

Share this post


Link to post
Share on other sites

Former bank boss David Murray warns of disastrous property crash

 

Quote

Australia’s property market now mirrors one of the worst speculative manias in human history, according to a former Commonwealth Bank CEO.

In a televised interview that drew little media attention, David Murray warned that the entire economy is “vulnerable” because of overvalued house prices in Sydney and Melbourne.

“All the signs of a bubble are there. Many of the signs are the same as the Dutch tulips,” Mr Murray told Sky News on December 1.

 

 

http://thenewdaily.com.au/money/property/2016/12/08/david-murray-bubble/

 

 

Share this post


Link to post
Share on other sites
On 08/12/2016 at 9:33 PM, spyguy said:

The boom is in fact a 'house price' boom for us,the people, apartments being built were never intended for the local population.

This is exactly what the Spanish indulged in. I remember being totally stunned at the shear inflexibility of the blocks of 4 storey appartments that were completely aimed at the British market even though they were 4/5 miles from the coast surrounded by scrub.

Share this post


Link to post
Share on other sites
20 hours ago, The Masked Tulip said:

Former bank boss David Murray warns of disastrous property crash

Chinese and the rest will buy the dips. Pommies ain't got the cash now, and certainly won't when/if there is a big crash.

The the only thing that can 'rationalise' this market is the introduction of strict land owning legislation...something I think nobody is going to even put into a motion or debate through westernised democracies as it will be perceived as racist, nationalistic, etc...

Pandora is already out of the box.

Edited by cashinmattress

Share this post


Link to post
Share on other sites
1 hour ago, cashinmattress said:

Chinese and the rest will buy the dips. Pommies ain't got the cash now, and certainly won't when/if there is a big crash.

The the only thing that can 'rationalise' this market is the introduction of strict land owning legislation...something I think nobody is going to even put into a motion or debate through westernised democracies as it will be perceived as racist, nationalistic, etc...

Pandora is already out of the box.

Like non Chinese being able to buy chinese property?

Or an iz firm being able to export baby milk powder, and sell directly to the chinese?

Chinese-world trade is bent, and its not the world bit thats bent.

Share this post


Link to post
Share on other sites
5 hours ago, cashinmattress said:

Chinese and the rest will buy the dips. Pommies ain't got the cash now, and certainly won't when/if there is a big crash.

The the only thing that can 'rationalise' this market is the introduction of strict land owning legislation...something I think nobody is going to even put into a motion or debate through westernised democracies as it will be perceived as racist, nationalistic, etc...

Pandora is already out of the box.

Unless these capital outflow rates reverse, the Chinese are mere months away from their next almighty currency devaluation.

They don't have the cash either.

china-foreign-reserves1024.png

Share this post


Link to post
Share on other sites
13 hours ago, zugzwang said:

Unless these capital outflow rates reverse, the Chinese are mere months away from their next almighty currency devaluation.

They don't have the cash either.

Assuming state financial forecasting is the same as individuals and corporate financial health?

Don't be so quick to poo poo the purchasing power of China's growing number of millionaires and billionaires.

Fact is they they DO have the cash. Lots of it.

If China heads for a 'crash' the outflow of currency into London, Vancouver, Australia, et al will accelerate.

In fact it is already, and has been for ages. In property, corporate & state assets, luxury items, travel, etc.. haven't you noticed?

For a country with a modernisation in the region of 4 decades, they have achieved so much.

To assume that the western hedgmon will retain leading status in light of the growth of China, India, and other developing regions is absurd.

America has it right. They have achieved and will remain on top for a while with a massive military...the big stick. But at some point that will change, perhaps in my lifetime.

Britain won't really factor in much of this. We had our chance, say until 1997 with the handover of Hong Kong.

Share this post


Link to post
Share on other sites
12 minutes ago, cashinmattress said:

Assuming state financial forecasting is the same as individuals and corporate financial health?

Don't be so quick to poo poo the purchasing power of China's growing number of millionaires and billionaires.

Fact is they they DO have the cash. Lots of it.

If China heads for a 'crash' the outflow of currency into London, Vancouver, Australia, et al will accelerate.

In fact it is already, and has been for ages. In property, corporate & state assets, luxury items, travel, etc.. haven't you noticed?

For a country with a modernisation in the region of 4 decades, they have achieved so much.

To assume that the western hedgmon will retain leading status in light of the growth of China, India, and other developing regions is absurd.

America has it right. They have achieved and will remain on top for a while with a massive military...the big stick. But at some point that will change, perhaps in my lifetime.

Britain won't really factor in much of this. We had our chance, say until 1997 with the handover of Hong Kong.

I think the Chinese millionaire and billionaires, bar the odd one or two, tend to have other peoples cash.

Its really hard to tell. Economic figures are state secrets in China. You know, superior planned economy and all that.

It would be unpatriotic to remove hard cash from China..... 

Why would anyone but a traitor want to invest in a less superior economic system?

Share this post


Link to post
Share on other sites
Brisbane down
 
'BRISBANE home prices have taken a hit as a slide in demand and a flood of new units impact the city’s property market, according to the latest data from Real Estate Institute Queensland (REIQ).

Median house prices fell 1.6 per cent in the September quarter, compared to the previous three months, though prices are still up 4.1 per cent compared to the same time last year.

However, the median unit price of $440,000 is down 1.1 per cent compared to 12 months earlier after dropping 2.7 per cent during the quarter.'

Edited by Sancho Panza

Share this post


Link to post
Share on other sites

IO mortgage problems in Oz.They're only 39% of new business

http://www.news.com.au/finance/real-estate/buying/caution-as-interestonly-mortgages-continue-to-rise/news-story/3efcd43756c9da36fbf9558963ca7cac

'

According to APRA’s latest quarterly property exposure statistics, released last week, interest-only home loans increased by almost $8 billion in the September 2016 quarter. These types of mortgages now make up 39 per cent of all residential home loans.

But with evidence that house price growth is easing — capital gains recorded over November were the softest they have been since December 2015 — and with mortgage rates on the way back up, the rise in interest-only lending is beginning to ring alarm bells.

“In slow growth markets, which most markets in Australia currently are, if you’re not paying down the principal loan amount and there is a market event that leads to a drop in property prices, a homeowner with an interest-only loan could be left dangerously exposed,” the CEO of HomeStart Finance, John Oliver said.

“Even in current high-growth markets such as Melbourne and Sydney, there is speculation about a potential bursting of the property bubble. If this happens, it could lead to a lot of homeowners losing their properties.

“Australia’s property market is littered with periods when the value of properties actually fell, such as the Sydney market between 2004 — 2007 where prices fell by 8 per cent and Adelaide between 2010 — 2013 where prices fell by 4 per cent.”

CoreLogic figures showed Melbourne house prices dropped by 1.5 per cent in November while Sydney prices rose by just 0.8 per cent. The combined capital city index grew by just 0.2 per cent over the month.

A SLEEPING PROBLEM

Interest-only home loans have typically been popular among property investors because it minimises mortgage repayments in the short-term while investors bank on capital growth in the long-term. So with property investors such a strong force in the Australian property market, Martin North, Principal of Digital Finance Analytics said the increasing popularity of interest-only isn’t surprising.

“We need to understand who are getting those interest-only loans. There is a very strong correlation between interest-only loans and greater investment lending,” Mr North told news.com.au.

“In the last three or four months we have seen investors come back and investor loans are driving the market again.”

But this love affair with property investment, and the subsequent rise in interest-only lending, could now start to cause real headaches at a time when interest rates are starting to rise.

“We have got two issues. The first issue is we have got this continued growth with investor loans and my research tells me investors are still pretty keen on the market ... and therefore interest-only loans are being sold,” Mr North said.

“The second issue is we have got interest-only loans with people currently and when they come up for renewal, with interest rates rising, the bank will be asking harder questions about whether they can refinance and repay the capital. And some of those [investors], from my surveys, would indicate they don’t have a plan to repay the capital. That means there is a sleeping problem for those with interest-only loans currently.”'

Edited by Sancho Panza

Share this post


Link to post
Share on other sites

" interest-only home loans  "

 

I#ve posted elsewheer about the insanity of I/O loans.

 

As interest rates tend to 0, amount lent can increase exponentially.

Share this post


Link to post
Share on other sites

https://www.businessinsider.com.au/australian-house-prices-are-showing-no-sign-of-slowing-down-2017-3

'

Here’s a table from the group showing price changes in Australia’s five mainland state capitals over the past week, month and year.

Australia-capital-city-house-prices-Mar-Source: CoreLogic

Prices rose in all capitals last week, according to the group, led by Adelaide and Brisbane at 0.5%.

Over the past month, Melbourne, at 3.7%, have seen prices surge higher, closely followed by Sydney where they’ve increased by 2.2% over the same period.

Prices in both cities have now increased by 4.3% and 5.0% respectively so far in 2017. Adelaide, where prices have risen by 1.9% over the same period, comes in at a distant third place.

Reflective of the trend over the past 12 months, prices in Sydney have now increased by 18.9% from the same week in 2016. Price growth in Melbourne over the same period isn’t far behind at 14.7%.

CoreLogic says that prices in Sydney grew by 104.5% from January 2009 to February 2017, outpacing Melbourne where they increased by 87.7% over the same period.'

Share this post


Link to post
Share on other sites

http://www.theaustralian.com.au/business/opinion/brace-for-the-selloff-property-market-at-a-tipping-point/news-story/3b48c6724b028f579c3161344a221cd4?nk=5f7caa79bc4aa07b952e187cb804050c-1490052423

'It has begun. The much maligned prediction of a sell-off in property prices is beginning to come true.

Of course, you wouldn’t know it looking at the headline-grabbing median prices and the ridiculous prices being paid for shoe boxes in Sydney — “Hey,” says the buyer, “what’s an extra million when the additional interest is $45,000 a year.”

And that is the point. We know the boom in property prices has little to do with anything other than historic low interest rates, which appears to have made paying an extra million at auction as insignificant as an impulse purchase of a bar of chocolate at the supermarket checkout.

I have now heard every possible explanation for surging house prices and the only one that matters is interest rates being lower than at any time since Captain Cook.

Surging house prices have nothing to do with a shortage of land. Hong Kong has less land and a much higher density of people per square kilometre and that has not prevented falling property ­prices. Moreover, surging dividend incomes, retiring baby boomers and Chinese fondness for our climate and air quality are all “weight-of-money” arguments that have never prevented falling prices.

Sydney, Melbourne and Brisbane property buyers are merely pawns in a global game of Central Bank Chess whose end has ­arrived.

As central bank bond buying, also known as quantitative easing, pushed government bond yields lower, investors were forced to seek higher returns elsewhere. Corporate bonds were next to surge, then junk bonds, equity and property. And record prices for art, low digit numberplates and collectable cars came soon after.

But keep in mind, few investors have any experience navigating a sustained secular increase in ­interest rates and inflation and even less would know anything about “credit events”, which long-duration assets are always susceptible to.

Property income yields are at historic lows and yet property buyers couldn’t be more enthusiastic. Buyers who tell me that they don’t mind buying on a yield of 2.5 per cent because they will get a capital gain need to understand that the capital gain will only come when a buyer is willing to accept an even lower yield.

 

And yield’s cannot fall much further when your oversupplied property is vacant and your yield is zero — as many leveraged Brisbane apartment owners are about to discover.

The end of every bubble is marked by the appearance of the greater fool principle: betting a bigger fool will come along and ­accept an even worse return. It’s speculation, pure and simple.

Nobody will escape

Am I going too far? Think of this: record levels of household debt to GDP, household debt to income and record levels of credit card debt means that when bond interest rates rise — and they’ve ­already started rising — investors will be able to least afford the additional costs thanks to having previously paid and borrowed too much.

Within five kilometres of Brisbane’s CBD, 5500 apartments were completed and available to be moved into by owners or tenants in the nine months to September last year.

During the same period, vac­ancy rates rose from 2.7 per cent to 4.7 per cent — a near doubling — 5km-15km from the CBD. Landlords who purchased a flat that has no tenant need to deeply discount their rent or accept zero income. And that puts financial stress on the landlord even if they haven’t lost their job.

Most worryingly, another 13,300 new apartments will be completed within 5km of the CBD before September this year.

Meanwhile, some financial planners have reported to me being cold-called by developers with offers of 7 per cent commissions to market properties to their clients. This inducement comes on top of the free holidays, free cars and free frequent flyer points being offered as incentives to property buyers.

As supply increases, (see graph) these discounts will become more aggressive, ensuring lower prices. Reports of some apartments being revalued 30 per cent lower than 18 months ago will not help.

Financial stress occurs when AMP and CBA, Westpac and others, tighten lending restrictions on particular types of loans or blacklist your suburb, thereby pulling the rug out for any new buyer of your desperate-to-sell property.

Many believe their suburb will be immune. Many believe the falls won’t impact houses and will be quarantined to apartments. Many believe their property won’t be affected because it has some special quality. Such beliefs are nothing more than head-in-the-sand wishful thinking.

My bankers have told me all of their smartest and most successful property investors have sold up or are getting out, and they cannot lend them a cent — they won’t take it.

Drop a pebble in a pond and the ripples will eventually impact the entire pond and everything in it.

Why should Tweed Heads and Bowral prices be nine or 10 times incomes when thousands of similarly-sized towns around the world — and the same distance from capital cities — can be purchased at half the multiple? It doesn’t make sense and it isn’t sustainable. And neither are low interest rates. Hold on tight.'

Share this post


Link to post
Share on other sites

As you lot know, I bought a house in Australia in 2014.  It's the house we will go back to.  It's a great house in a good location with good commuter links and good access to several areas of outstanding beauty.  We've had the same tenants since 1 months after buying it.

And yet, if it is worth more in USD terms when we go back than I paid for it I will be bloody amazed.  I would never, ever, buy a place in Australia for yield or income or capital gain. We bought - and it was right for us - rather than have all of our savings in one asset form (digital blips in the financial systems computers).

 

 

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.