House prices
"except you’re missing the reason why the RBA would be cutting rates."
They would cut rates because the economy is slowing, but barring some recession, that doesn't seem to be slowing down demand for housing.
Great piece , Oliver .
Governments won't Change Tax rates down ( maybe Stamp Duty ) so can't make the market Boom .
Maybe they can increase Immigration levels a bit ?
They have a much Bigger Responsibility , to ensure the Property market doesn't BUST !
Look what China is doing now .
Why should most suffer , so a few can get into the market .
Once Trust is Broken in anything , it can't come back for ages .
Don't kill the Golden Goose !
"My personal opinion is it would be socially disastrous and extremely irresponsible of governments if property prices were allowed to boom again and housing affordability got any worse than it currently is."
Edit - Changing CGT from 1 to 30 years - a stupid number 30 , lol . Property has the SAME rules as other assets . Why change that ? Who wants to punish property ???
Tighten Neg Gearing - lol - Since when have any rules from the ATO been loose on this . Yes , crooks put in dodgy stuff and some get away wit it .
The rest all looks work debating imho .
Freeride . The RBA are raising rates to slow the economy to Slow inflation back to 2% .
They are NOT supposed to drop rates , even if things are tanking , UNLESS they expect !!!! inflation to fall .
This is where Governments and Central Banks are supposed to not talk , No politics !
freeride76 wrote:Short of some drastic intervention in markets, how could Govt stop prices rising?
This smells of tree change vs mainstream economics. Tree change economics calls for large scale government intervention; it also says that house prices need to fall, which is unworkable. Mainstream economics recommends small adjustments to taxes, rules and regulations etc that change people's incentives and behaviours.
There's two sides to the housing/rental affordability problem:
(i) house average or median prices/rents and
(ii) the economic output and average or median wages.
The 2nd side is often ignored in the debate, but focusing on it means that house prices don't need to stop rising - they just need to stop rising so quickly relative to wages and economic output.
As much as I think he's a crackpot, Kohler conclusively showed that average house prices have outstripped measures of economic output and average incomes, and has suggested some good ideas.
Some ideas off the top of my head:
House demand side:
- reduce immigration
- remove all house buying grants and handouts/incentives
- change capital gains tax discount period from 1 to say 30 years
- tighten negative gearing rules
(no need to completely abolish negative gearing or capital gains tax discount)
- tighten foreign purchasing and ownership laws
House supply side:
- open up/release more land for housing
- reduce incentives or introduce penalties for house and land banking
- streamline housing development processes
- consider incentives for building new houses, including build-to-rent
(remove house buying incentives but introduce building and supply incentives)
- renewed focus on vocational trades training and education
- royal commission into the weekly collapsing of building companies
On the economy and wages/incomes side:
- get back in control of inflation
- improve labour productivity and hence real wages growth
- continue to grow the economy strongly via a focus on long-run supply drivers like education and training, technological r&d, infrastructure, etc
- get on top of out of control building costs inflation
Fair call don, but all things considered I don't see a reason to doubt it.
pop down, property should have different rules to other assets. Somewhere to live and call home is a basic human necessity. Owning a large share portfolio is not.
They look like sound ideas to me Oliver.
I think Pop is out of touch.
Pop Down wrote:Freeride . The RBA are raising rates to slow the economy to Slow inflation back to 2% .
They are NOT supposed to drop rates , even if things are tanking , UNLESS they expect !!!! inflation to fall .
Yeah maybe.
They lifted rates aggressively in 2009/10 after the GFC- held them for 2011 then cut just as aggressively through 2012.
That was related to growth in the economy. Not inflation.
All the notes from those decisions are on the public record and easily accessible.
(not disagreeing with your take Pop- just pointing out the RBA can raise or lift rates at their discretion)
U are right Freeride , again , and not sure how I forgot this bad dream .
The GFC , the ONE time I told people do NOTHING , as had NFI what was going on (still don't but less so ) .
The Central Banks of the entire World ( and nearly everyone else ) went into Survival Mode and Slashed rates .
We were lucky China hit the Stimulus button and , remarkably (if I remember right ) , we avoided a technical recession .
Our rates quickly went up , the US more slowly and Europe's kept there's at Zero , for years ( have Killed themselves financially and are all broke as a consequence imho )
The Government is trying to change the RBA's charter to fight both Inflation AND keep Economic growth strong .
Silly really , as the two , often fight each other .
That's why the RBA are supposed to be impartial .
To kill inflation U might have to , nearly , kill growth , for a while .
I am not debating what is more important ie growth or low inflation .
I do know U can't have Strong Growth and Strong Inflation .
Too much strong is a recipe for disaster !
Please check everything I write !
You know more than me mate.
Not about fishing ( especially cleaning and filleting - using a garth hooky thing to , definitely ) , surfing ( especially pop ups !!! , being a nice guy on SW , growing things like chickens etc etc .
As U probably know , FR , is is not about How Much , we know .
I am still , trying to work out some simple things atm .
I have been in My own Rat Race for way too long .
I don't even know how to Smell the Roses properly , anymore :)
Have decided to Retire from Work Stuff and do some other stuff .
Maybe it was seeing U with that Beast of a fish haha ?
March 29th , my Independence Day .
I am going to try and get my smell back , starting with the Ocean , I think .
I am already having fun .
Pop Down wrote:Not about fishing ( especially cleaning and filleting - using a garth hooky thing to , definitely ) , surfing ( especially pop ups !!! , being a nice guy on SW , growing things like chickens etc etc .
As U probably know , FR , is is not about How Much , we know .
I am already having fun .
Love this.
“Live as if you were living already for the second time..."
Nice one PD- all the best for it.
Seems like the RBA are going on hold after seeing the minutes .
" Too early to tell whats happened since our last meeting " .
Very funny imo , why hold monthly meetings , then .
A new style of language .
Australia has a big problem atm , it seems .
If it wasn't for Government ( Federal ) doing so much Stuff , the Economy is going backwards atm .
This Activity ( a range of official numbers I don't really understand ie not just spending ) is Stopping Construction and Services costs from coming down .
This stuff is up 19% on pre covid levels .
If prices don't drop , Inflation won't .
Approvals for housing are very low . Builders are going broke .
The Government HAS to pull it's Head In or Rates will stay where they are imho.
STOP trying to fn FIX everything .
Bowen has just committed to Underwrite EVERY Renewable Project for the next 7-8 years .
My Electricity bill keeps rising , as does those struggling under this big recent jump in the Interest Burden .
Australia's Saving Rate has plunged ( I don't like using this word ) to cover the rising bills .
The US Bond Market is NOW predicting more than a 1% FALL in the FED Funds Rate .
Remarkable change in only 2 weeks .
It is now saying the FED will move to a Neutral Stance .
The FED's NS is .5% above the Real Rate ( Inflation rate which atm is assumed at 2% ) ..
So market is assuming the FED Fund Rate ( The Safest Biggest Deposit Box in the World atm , so lowest rate ) will be around 2.5 - 3% .
Everything in the World of Finance , gets priced based on this rate , somehow .
Even Australian property :)
yes, you said it Pop Down.
The perfect storm of crazy house building costs inflation, building companies going bust left right and centre, lack of tradies and other skilled labour, etc, is definitely causing declining new home sales.
New home sales have declined linearly since 2000, coincidently, the same point in time Kohler identified that house prices really took off relative to incomes and household wealth (https://tradingeconomics.com/australia/new-home-sales). If I remember right, this is also the time that my tradie mates had vanished and were getting huge money in the mining boom.
This perfect storm is much overlooked in the housing/rental affordability crisis debate; I rarely see it mentioned. Australia is simply just not building enough new homes to keep up with its growing population; it just doesn't have the ability to, and it's too expensive to.
"The cost to build a new house in Australia has surged over the last few years driven by massive supply and trade shortages. And at the same time more and more builders are going broke, causing builders to place hefty margins on new contracts to ensure they remain solvent." https://propertyupdate.com.au/how-much-on-average-does-it-cost-to-build-...
"the critical shortage of skilled labour, compounded by the collapse of a number of building companies, is keeping costs elevated."
https://www.domain.com.au/advice/how-much-does-it-cost-to-build-a-new-ho...
Is anything being done about this perfect storm? I seems to barely rate a mention in the debate. Everyone wants to blame negative gearing, capital gains tax discounts, boomers, short-stays, not enough social housing, etc.
Australia simply needs to open up more land, train up the workforce, get building costs under control, create market conditions in which building companies stop going bust, and in general restore Australia's ability to build more new houses.
Yeah Oliver, we've raised a carpenter.
Otherwise you lot are all over it at present, not much more for me to add.
Can add:
https://www.macrobusiness.com.au/2023/12/australian-households-writhe-in...
Headline is sensational but there are some sobering charts in there, particularly the real household disposable income per capita, and the CBA's Consumer Spending in Australia one
"The next chart shows that the volume of domestic consumption by Australian residents fell by 0.6% over the September quarter. By contrast, spending by non-residents including international students as well as tourists (both measured as exports) rose by 4.4% over the quarter:"
and you can see what's keeping the domestic economy ticking.
Hit the nail on the head , O :) .
Build more , very nice , homes .
We CAN be very good at that Stuff ( not me , but , probably , FR 76 :) .
"Everyone wants to blame negative gearing, capital gains tax discounts, boomers, short-stays, not enough social housing, etc.".
This I find interesting !
Lets pretend , Everyone , is the Media .
It's ALL about demand , like the Have's , and the Have Not's , perhaps .
If it could be more about people , just Having , and no one , NOT Having , it sounds much more friendly , to this old bloke .
Everyone , then , can Have imho .
Interesting model emerging in the USA:
"a new model of home ownership is emerging, acknowledging that residential real estate is now financialized, and will never be going back. ‘Arrived’ is funded by big money (Jeff Bezos is involved), buying up single homes and selling shares to investors with as little as $100 to invest. Its ‘Single Family Residential Fund’ acknowledges a reality: few people can afford to buy or own a house now. Most will rent. So why not let renters also invest in the homes they occupy through a liquid financial asset?"
You will rent and you will be happy.
Thanks MB
Gee - not surprising , but disappointing to read .
The Biggest Money , Black Rock , has been buying Homes in the US like there is no tomorrow , for a couple of years now .
This Big Money loves to do Engineering/ Structured Shit and Sell the Stuff to people who have NFI what a Prospectus is .
The Regulators don't really understand this Stuff , so it's perfect .
I bet Gates is involved , to .
Private Equity right around the world , is sitting on the biggest pile of cash I have ever seen .
It is burning their collective pockets and they don't like it one bit .
This is where a tiny bit is going , atm .
Great U point this out , as once tried in the US , some DH will want to try it here .
They are hoping the Govt here changes Neg Gearing rules ( they can't use them ) and Cap Gains and especially the Own home cap gain free rule . They will be the only buyer then . Perfect , THEY think !
Ban it here imo .
Pop Down wrote:Thanks MB
Gee - not surprising , but disappointing to read .
The Biggest Money , Black Rock , has been buying Homes in the US like there is no tomorrow , for a couple of years now .
This Big Money loves to do Engineering/ Structured Shit and Sell the Stuff to people who have NFI what a Prospectus is .
The Regulators don't really understand this Stuff , so it's perfect .
.
Yeah - I have mixed feelings about private equity and their involvement in private housing. Noting that I dont see private equity investing in social/public housing (but could be wrong here).
I was mulling on this a bit (not too much mind) and could see how renting could be made more affordable and secure and if there was a way to also invest back into your rental for some return then maybe thats a good idea (dubious - its a return from your own pocket less fees :) ).
Pension funds love this kind of thing though - guaranteed "risk free" returns. And if these huge funds can build large swathes of homes that seem to be clearly needed then that might be better than a builder taking a risk with a bank to fund a fixed cost project.
In Europe there are leaseholds for decades. 6 month rental agreements are way too short and perhaps there needs to be some thought in Australia as to whether security of tenancy can be extended to say 5 or 7 years.
MB
My reaction , as usual , was without a lot of thought .
Perhaps , there is a place , especially with Social Housing Renting , for a well regulated , Builder and Renter of Housing .
Just don't let Private Equity Set the rules .
edit - fuck PE . If it is financially viable ( or even if doesn't lose money ) the Future Fund ( U mentioned Pension Funds ) can seed it .
Get it to do some Nation Building ( instead of just making money ) , for a change .
I like getting long rental agreements , like France .
Thinking that I remember reading , close to 50% , are renters there ( check that haha ) .
Not sure why and owner would agree to 20 year agreement ( maybe the govt owns it ? ) , though ?
Keep thinking , mate :)
good use of taxpayers money?
ethical advertising?
appropriate behaviour in an affordability crisis?
is it any wonder the ndis is blowing out...
this government really does seem lost sad and desperate
https://www.afr.com/wealth/personal-finance/too-good-to-be-true-spruiker...
Pop Down wrote:MB
My reaction , as usual , was without a lot of thought .
Perhaps , there is a place , especially with Social Housing Renting , for a well regulated , Builder and Renter of Housing .
Just don't let Private Equity Set the rules .
edit - fuck PE . If it is financially viable ( or even if doesn't lose money ) the Future Fund ( U mentioned Pension Funds ) can seed it .
Get it to do some Nation Building ( instead of just making money ) , for a change .
I like getting long rental agreements , like France .
Thinking that I remember reading , close to 50% , are renters there ( check that haha ) .
Not sure why and owner would agree to 20 year agreement ( maybe the govt owns it ? ) , though ?
Keep thinking , mate :)
Yeah, agree - the pension funds (our Industry super funds) could get involved - I think the government is trying to encourage that but not mandate it. The Future Fund describes itself as:
"We invest the assets of the Future Fund, the Medical Research Future Fund, the DisabilityCare Australia Fund, the Aboriginal and Torres Strait Islander Land and Sea Future Fund, the Future Drought Fund, the Disaster Ready Fund and the Housing Australia Future Fund."
Might have to dig into their portfolio and see how that adds up...
Finally the MSM takes notice:
https://www.abc.net.au/news/2023-12-09/tax-hitting-household-savings-mor...
Now can they stop moaning about the upcoming tax cuts. Australia is the only country I know where tax cuts are a derided.
Good spotting again MB .
JF also mentioned Immigration being looked at .
I will start by saying any home buyer who bought a home when rates were 4% lower , and didn't EXPECT rates to rise , where badly advised .
Rates , for a person who lived through 15% , still feel low .
Just heard last week to watch out for Bracket Creep !
Well done , OUR , ABC .
The article confirms , lots of levers are being pulled , lots of different people are pulling them , and no ONE ( Should be the PM ) has Vision or Plans and is NOT leading .
We need to find a Hawke or a Keating ( he has gone a bit gaga imo ) , desperately !
Our Country and Economy , for way too long ( both parties ) , is being Pulled , Pushed , Prodded , and being Told what to do by people with NO vision or Guts .
In Spite of this , Australian's are working REALLY hard , to keep things going !
Our people have True Grit imho .
We have a lot more work to do !!!
edit
Has anyone's electricity bill dropped by $250 ?
Maybe that was only a small mistake and can be covered up ?
Toto ???
I hope the mutt looks like the one in Wizard of Oz !!!!!!!
From memory , The Wizard of Oz , was a charlatan .
^ lower immigration and now penalties for foreign purchaser house banking: https://www.abc.net.au/news/2023-12-10/foreign-investor-vacant-home-fee-...
It’s almost like the adults have suddenly taken control again..
Regarding taxes, the proposed stage 3 cuts are not the way forward. Progressive tax rate cutoffs/bands should be indexed to inflation.
meh. Unless the plan entails a NOM figure less than 100k pa happening anytime soon. I seriously doubt it.
agree, watch what they do, not what they say
At least after all these years it's finally a front page issue, it just took a shit storm of epic proportions to get it there.
Will be interesting to see what Labor's definition of a "sustainable level" of immigration is.
I’d say it’ll be close to <> 300k. They’ll claim that as a 50% reduction with super clean white teeth grins and when it’s pointed out the pre pandemic lib average was less / by a bees dick difference - they’ll scream and rant of lib failure of visa processing choking the system.
Meanwhile it’ll mean f all.
Both Parties have NO real long term Plan on Immigration , that I have seen .
Nothing they are committed to .
Really time ALL parties had one imo !
That would require a few Decisions .
They will , then , leave the definition of a "sustainable level " to a Focus Group , unfortunately .
Perhaps , as Andy says , the Shit Storm HAS demanded Urgent attention ( vote losing ) and will STAY on the Front page for a least a few days .
I would love to be proved wrong ( happens a lot ) on this issue .
ps What is the SN definition , I wonder .
Somewhere between 100k and 500k per Year , should cover the Non Extreme range imho .
As Melbourne is almost full , the number is not as important as where , they go , to me .
Give everyone Incentives to Not come to Melbourne , please .
If it gets really serious , Albo will Appoint Someone ( else ) to Fix the job .
Tony Abbott could do it imho .
lol Just make Onion Boy Dictator , for 2 years , then U can burn him at the stake , again !
Nothing will change until the voting cohort getting fkd on every which way (shelter, food, amenity, transport, ENVIRONMENT) become large enough that they are represented in parliament at a significant level. Has there been any teals who have even said the word immigration?
too many vested interests in parliament with ~2.5 houses each. All accessing the revolving door of private public industry.
so, labor 'promised' they would reduce immigration...
on their election labor announce... 'the immigration system is broken and we will fix it'
then they import half a million people for a year or two... with no explanation or justification...
then - suffering woeful poll numbers - they announce... 'the immigration system is broken and we will fix it' ...(very scott morrisonesque)
and they will fix it by reducing immigration to 400k for a year or two...
before reducing it 250k... the already - and out of the ordinary - high number that we have had for years that created the mess and disillusion in the first place...
genious
the teals have achieved absolutely nothing...
disappointingly so
unbelievably so
sypkan wrote:the teals have achieved absolutely nothing...
disappointingly so
unbelievably so
I’m curious as to what you based that on
sypkan wrote:the teals have achieved absolutely nothing...
disappointingly so
unbelievably so
Hey they achieved kicking the libs out of inner urban seats so Australians could experience what they are currently experiencing...
OK so, if you want a change on immigration it's not coming from the 3 main parties. You will have to vote to reflect this.
So - who has a low or no immigration policy?
One Nation:
"One Nation will extend its zero-net migration policy and focus on permitting only highly skilled migrants from culturally cohesive countries into Australia."
https://www.onenation.org.au/immigration
Sustainable Australia:
"Policy: Based on the best scientific advice and as a positive example to the rest of the world, stabilise Australia's population size as soon as practicable, aiming for a population target under 30 million through to and beyond 2050."
https://www.sustainableaustralia.org.au/policies#sustainablepopulation
There's two. Others don't even have it listed as a policy.
Well done VJ
Pauline Hanson - the nice lady from Qld who used to run a Fish and Chip Shop .
I didn't rate her at first and found her voice annoying .
After showing True Grit ( by being very consistent in her Strong convictions ) my view has changed ( the same with Lambie ) .
For over 10 years she has wanted our Immigration Policy debated and made an Election issue .
Seems she was right , all along .
I will enjoy , this debate .
Pop Down wrote:Well done VJ
Pauline Hanson - the nice lady from Qld who used to run a Fish and Chip Shop .
I didn't rate her at first and found her voice annoying .
After showing True Grit ( by being very consistent in her Strong convictions ) my view has changed ( the same with Lambie ) .
For over 10 years she has wanted our Immigration Policy debated and made an Election issue .
Seems she was right , all along .
I will enjoy , this debate .
Are you serious?
First she wanted to stop Asian immigration; then Muslims.
Now she has repackaged it under the guise of "only those from culturally cohesive countries"!
Not serious Ant , I don't think she is very nice and has had bad advisers and political bedfellows throughout her amazingly long career ) .
I said she Seems , right , in believing this issue ( what HER constituency , wants debated ) should be debated by all Australians .
I agree on that , that's all .
velocityjohnno wrote:sypkan wrote:the teals have achieved absolutely nothing...
disappointingly so
unbelievably so
Hey they achieved kicking the libs out of inner urban seats so Australians could experience what they are currently experiencing...
3 female malcolm turnballs in inner urban seats?
that's what I base that on
and the fact they've made practically zero impact on anything
I compare this to the impact the last time we had 3 independents shake up the system, rob oakeshot, tony windsor, and the 3rd guy whose name escapes me...
the teals are useless (seem to have slotted in nicely to the big party, low target, seat warming role position though...)
Andrew Wilkie was it, Sypkan?
thats the guy
sypkan
I agree that Teal has made no difference AFTER the election but can't compare them to the 3 Amigo's .
They Decided an Election after the votes were in .
The Voters in Teal seats knew what was on offer , and chose Teal .
No problem , and it did , decide an Election .
The 3 Amigo's went to an Election as Blueish .
They won as Blue .
They ALL ( with lots of inducements from Julia G ( another woman I now REALLY like , after a rocky start ) ) turned RED .
They gave Australia a Government , that was , not rightly , elected imho .
It took another 4 years of mess , before the electors were able to show what they wanted ( they were also very angry ) and voted in Tony Abbott ( with a much bigger majority ) .
They gave him the chance to Stop the Boats .
After , he did that , interestingly , Legal Immigration really started to increase .
The average intake per year has gone of the charts in the last 20 years .
As we have discussed , Housing ( a Human necessity ) is affect by most Government Policy .
Immigration is just one .
An issue like Immigration ( like most issues ) will have extremist views on BOTH sides .
500 000 plus people came into Australia last year .
About 200k are people with Skills our country urgently needs ( apparently ) .
We need them !!! imho .
That leaves 300 000 .
We have to find them all homes and work .
Help them become Australians .
Australia is a small country .
What we do on any issue especially , Immigration and Climate Change make no , real , difference to the rest of the World .
They don't notice us, as we are Downunder , them .
We have a lot of Australian's , who also need help to find a home .
I would like to hear from all Australian sides , and for us to come together , and do what's in OUR interest .
I take notice of many countries Immigration Policies , especially ones that change
rapidly !!!
We should have an IDEAL number ( which can change but slowly ) , which then Pops Up or Pops Down , when needed imho.
I will let U guys , and hopefully some girls , work out an Ideal number as I have NO opinion atm .
You've got a point there Syppo, the wealth and connections amongst the Teals is undeniable.
But at the same time, considering the Teals won Australia's six richest electorates, it'd be easy to argue that those candidates would be both expected and required.
What have they achieved?
Broadly speaking I'd say they've undeniably given a huge boost to the growing understanding that the two-party system is neither essential not desirable.
Along with a growing Greens presence, they've given the two majors a wakeup call that's impossible to ignore.
Unless they become more responsive to the electorate, Labor are looking down the barrel of, at best, being elected as part of a minority government, while the LNP are rapidly looking like unelectable dinosaurs.
Also, and this is highly important, the Teals have laid down an extremely successful blueprint for a modern political campaign, which according to a former Labor strategist was more sophisticated than any Labor campaign he'd ever worked on.
More specifically, the Teals have obviously given the cross bench a great deal more clout and as far as I'm aware have used this to strengthen legislation surrounding the Climate Change Bill.
Independents in the Senate were also instrumental is passing this Bill.
In addition, the Teals have been involved with legislating to establish a National Anti-Corruption Commission, and have been at the centre of serious discussions about improving transparency of political donations.
Labor and the LNP have watched their primary votes steadily slip for decades but have been able to hide behind the two-party system.
Now the Teals, along with other independents as well as the Greens, have pulled the curtain back and exposed the possibilities.
Good comment. Most of the credit for the National Anti-Corruption Commission should be given to Helen Haines who is not a teal however.
Good call bonza, Helen Haines introduced the bill to Parliament in September 2020.
She's been fighting for it for a while.
She's one of 10 independents in the Lower House but not a Teal.
yeh good points andym, I may have been a little harsh...
(I was being a little facetious too)
and yes popd is right too
(except the big australia bit... fuck that shit...)
my main point though was that the '3 amigos' became a force in their own right, well after their initial bargaining chip had expired, always seemed so reasonable, even if I didn't agree with them
the teals seem to have largely become invisible after such a big initial hoo haa
but yeh, their impact on the big parties cannot be understated, lets hope that ball keeps rolling
any independent's still a good one in my book
its funny, they nearly always seem to come from the little bit right of politics, starting way back with don chipp (not independent I know)
(it's like the labor party is a communist cult of compliance that you can never leave... (whoops did I say that bit aloud?))
jaquie lambe has proved herself to be a real assett, she seemed a bit hard, right wing, and nutty at the start, but now can often appear more left than labor, exposing them as the neoliberal stooges that they are...
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers