JonoP

Correct. That is why Greece is screwed, Spain is screwed, Ireland is screwed, the US is screwed, the UK is screwed, Iceland is screwed, Japan is screwed etc. What do they all have in common? They all had a huge debt bubble... The way that the crash happens will vary from country to country but the fundamental cause (too much debt) and the final effect (huge cuts to asset prices, public services and living standards) will not vary very much. They are the only possible outcomes.

Bardon, if you had a clue you would be dangerous. That random, irrelevant link you posted is talking about adding property to a self-managed superfund. I think you will find that very, very few people in Australia have a self-managed super fund. They are the equivalent of a SIPP in the UK. The original question was, if I understood it correctly, asking how much of the money held in Australian institutional Super Funds was invested in Australian residential property. Typically, the way that Superfunds would make this kind of investment would be by buying Residential Mortgage Backed Securities (RMBS). RBMS are classed as fixed income assets. If you go to the Australian Prudential Regulatory Authority website (i.e the people that regulate the Super industry), download the linked Excel document and then look at tab 18, you will see that they very kindly provide us with a breakdown of assets held within Super Funds. http://www.apra.gov.au/Statistics/Annual-Superannuation-Publication.cfm As you can see, Australian fixed income assets make up 8% of total Superfund Assets. And that is ALL fixed income assets, so RBMS will be considerably less than 8%.

Hah hah, it is not extremist. It is just what happens. When there is a bubble it always, ALWAYS pops. And there is a bubble here. The only two things to debate are timing and severity. The first is tricky but the second is fairly easy as it is the world’s biggest bubble……

Prove otherwise.

Ironically, it is virtually nothing as Aussie housing debt is rated as too risky and too short term for it to be legally purchased by super funds.

Extreme and highly unlikely - you hope. But it has been the outcome that has befallen almost every other nation that has had a huge housing bubble. And Australia has the worst bubble of them all. I have no particular views on tax. It happens. It always has and probably always will.

Gah! And that is the problem with the bulls on this site. Lack of ability to think outside of the box. The Greeks did not vote for the swinging cuts that have been made to their economy. Nor did the changes come because of a tax review. They were forced on Greece by the international markets. Greece HAD to accept them as otherwise the markets would not lend them the money they need for their very existence. Exactly the same thing will happen to Australia when the credit bubble bursts. The changes will be FORCED on which ever government is in power.

Hmm, I think I can just about get the gist of what you were attempting to type there. New iPhone perhaps? I think that you will find that CGT stays when -ve goes though. -ve is an anomally that Australia will not be able to afford in future.

My god, that is a lovely little snippet in that article that Blueskies posted: ''Only 3 per cent of all loss-making properties are owned by taxpayers with a taxable income of over $200,000. Taxpayers who earn $80,000 or less own 80 per cent of all loss-making properties.'' That is shocking. I am dumfounded. So, say your average 'investor' has two properties (one to live in and one to rent out) he purchased for $350K each. That means their monthly mortgage interest repayments will be around $4.4K. And even if they earn the full $80K, they will be taking tome less than $5K per month. One void, and they are toast. This market is so dumb that it is actually humorous.

Yeah, and four years ago Deutsche Bank were busy releasing press releases saying there was no US housing bubble. And the Fed was busy saying there was no US bubble. As were all the large US retails banks. Guess what? Turns out there WAS a bubble. There is only one statistic that has any bearing on what will ultimately happen to the Australian economy, and that is the debt level of Australian consumers. Which is the highest in the world.

And that is my point exactly. Do you think the conservatives would have got elected in the UK 3 years ago on an election campaign of ‘let’s sack 25% of the public sector’? Do you think the Greek government would have won an election if they campaigned on the policies that they subsequently HAD to implement to stave off national bankruptcy? Governments will take the least worst option when faced with national bankruptcy. And when the choice is between cutting back medicare, the police force and schools as opposed to cutting back negative gearing, then they will go for negative gearing. And as for Perth. Hah hah. I agree it is a disaster in the making and I posted my thoughts on the topic a few months back. However, I think that you will find that once price drops occur in outlying districts, it becomes extremely hard for buyers to justify the premium associated with living in an inner district, so they go where prices are lower, which means that inner areas to have to drop their prices accordingly to compete. It is how crashes work…….

.......but hardly good news for a proprty industry that constantly plays the 'record numbers of immigrants' card to justify the current bubble.......

Unfortunately, it is not extreme. Your problem is that you cannot make the mental jump that is required to understand how the fact that Australians are carrying the highest amount of personal debt in the world can pose a risk to your banking system. I find this amusing as you have basically every other western nation in the world to use as an example, but no one seems to put two and two together. And, with regards to the CGT, you might, just might, find that they no longer want it to ‘balance out’ but rather they will keep the CGT and loose the negative gearing……

You have to bear in mind that huge numbers of the recent immigrants to Australia are only over here on temporary work visas. If the jobs dry up, then these people will leave. They have to, they are not allowed to remain in the country if they do not have a job. Plus, there is no social security or health care for temporary residents without a job.

Three years ago, no politician in the UK would have countenanced the idea of sacking 25% of the public sector. But that is what is now happening. Hardly a vote winner. I think you fail to understand quite how severe the impact of the forthcoming Australian credit crunch will be. Your whole financial system will be teetering on the edge of bankruptcy and the outcome of what happens to it will be dictated by the international financial markets. At this point, your politicians will be scrabbling to appease the markets and quite frankly, they will not give a damn about appearing to ‘backflip’. The decision will run along the lines of ‘cut tax advantages for investors or drastically reduce spending on health and education’. I think I can guess the outcome of that decision. And you are correct, this change in policy will span all asset classes not just housing. Finally, during a credit crunch, landlords can try to hike their rents. But they will just get voids. And people will be emigrating on masse from Australia, so landlords will have to compete for tenants.

Hah hah, that article is a statement of the obvious. However, rather than being ‘a remote possibility’ the scenario above is almost certain to happen. The only question is what will be the trigger that makes international markets increase their cost of lending to the Aussie banks. The author has missed out a couple of steps though. The first is the one where the government steps in to ‘back the banks’ just like they did in the US & the UK. Government debt goes from pretty much zero to a huge amount at this point. This weakens the Aussie dollar drastically, thus forcing the government to do something about reducing the government debt. So, they increase taxes. How will they do that I wonder. Hmmmmm. Removal of Negative Gearing seems fairly obvious……

Hah hah, classic!! I think Boom Boom could best be classed as an aggressive victim. An unusual combination of personality traits. I would love to know where he gets his attitude from. I am torn between. 1. He is, young, a student, and this is an ideological viewpoint. 2. He is long term unemployed and feels that it is ‘not fair’. 3. He is a manic depressive and just thinks that ‘everything is shite’. 4. He is a NWO/far right conspiracy theory believer. What do you think? Any other theories?

I wish someone would write a PB equivalent that works with IE. It is still the most widely used browser out there and some of us have to use it as we have corpoate supplied laptops.

I have informed knowledge that there is a relationship between what people do and how much they get paid. Employers bid to buy skills off prospective employees using wages, bonus structures etc as their currency. Employees will stay with a given employer only if the recompense they receive remains competitive and attractive. I think that you may have the relationship the wrong way around – this will not help when you are negotiating employment packages with prospective employers. You sound quite young and idealistic though so this kind of experience will probably come with time. The people that fall outside the model I detail above are the people with no skills to offer. If you have no skills, and can only provide manual labor, you are essentially a commodity and employers will bid to buy commodities at the lowest possible price.

And also, 'Employment'- as a social/legal construct is designed to allow the capital holder to leverage the input of his fellow man while at the same time evading the moral claims of those individuals for a scaled share of the profits of the venture, as would be the case if they were treated as partners.' That is utter rubbish. It takes balls to start a business. People who are prepared to take a lot of risk start businesses and people who do not like risk but prefer a regular salary payment work for them. Risk gets rewarded. Simple as.

And what is the alternative that you suggest? If you have skills in an area that is in demand (such as Architecture, Academia, Pharmaceuticals, IT and Finance to name but a few) then employers bid for your skills. If your only skill is in putting things in cardboard boxes then you may find it hard to differentiate yourself from you peers and hence it is unlikely that you will have many people bidding for your skills. So really, the ‘gilded cage’ you speak of only applies if you have no skills that are attractive to a prospective employer. And the person who is ultimately responsible for you not having any useful skills is…..you.

Agreed. Although they are a bit backwards (comes from being so far away from the rest of the world) and are thus at the 2007/2208 stage of the bubble in terms of the rest of the world. They will also be hit harder as their much vaunted 'she'll be right' attitude would be defined by the rest of the world as burying their heads in the sand. I am pretty gobsmacked that they have not learned any lessons from watching the crash in the rest of the world, but I guess they will have to learn the hard way.

So if everything is smelling of roses, can you explain why the AUD has been dropping like a stone these last couple of weeks versus the GBP? http://au.finance.yahoo.com/q/bc?s=AUDGBP=X&t=3m&l=on&z=m&q=l&c= The trend is not your friend in this instance. You are believing the happy news the Aussie media constantly pumps out wheras the forex guys are believing the sorry news coming out of China. Oh well, at least your exported mud gets cheaper. That is, of course, if anyone will be wanting to buy it after China goes tits up.

We went to the same private school you know. He is a true working class hero.

I am troubled by the idea of a 21 year old listening to you and yours. I bet he left school at sixteen because he was expelled. For being boring.