Chronic Oversupply: Landlords hit by apartment glut and falling rental yields; Without rental growth or capital growth, the prospects for many investors are bleak
Tweet Topic Started: 21 Aug 2014, 10:18 PM (10,348 Views)
It's one of the countries in the OECD that has yet to attain pre-GFC real GDP per capita. Aside from still-elevated unemployment and a somewhat concerning current-account deficit and budget deficit, it seems to be well on the mend though. Latest quarter GDP growth is not the highest in the G7 though. That would be the US.
Totally fucked is not a recognised economic term. Why would you describe it that way? Support you argument with actual data, not expletives.
OK, the UK net imports 40% of its food requirements and is also a net importer of energy (so much for North Sea Oil).
It has added 6 million to its population in the last 20 years where the previous 6 million took 35 years to develop (which includes the baby boom). The UK is now has the 3rd greatest density of population in Europe and England takes top spot.
The UK has very little in the way of natural resources as every square inch has been mined and pillaged over the last 3000 years.
In spite of a fall in unemployment, income tax receipts are down.
In spite of so called "austerity measures" the UK budget deficit is proving to be a tough nut to crack.
UK state and public sector pensions are unfunded liabilities and private sector pension scheme contributions are in decline.
The UK has doubled its national debt in 7 years.
Newcastle United are sponsored by Wonga (a payday loan provider).
Anyone with half a brain in their head has already left.
So basically, although not a recognised economic term, the UK is totally fucked.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
It's the shift from industrial capitalism to technological not-capitalism. The first 90% of the agricultural revolution was an energy revolution, specifically a wood and grain revolution. The last 10% of the agricultural revolution was the start of the industrial revolution. It was also an energy revolution, two in fact, coal, and then oil. The first 90% of the industrial revolution is now over, we are in the last 10% of the industrial revolution now, which is the start of the technology revolution.
The technology revolution is also an energy revolution, but unlike the three energy revolutions that came before it (wood/grains, coal, oil/gas), the technology revolution is not a supply revolution, but a demand revolution. An energy supply revolution is when we find new sources of energy, and put those new sources of energy literally to 'work'. That is, we replaced muscle with machines. In a supply revolution, everything grows. Output grows, yields grow, populations grow. Machines, houses, serving sizes, families and people get bigger, but not much better. That is, in a supply revolution we get the same stuff, but more of it. In a demand revolution, i.e. the coming technology revolution, we don't find new sources of energy, we find ways to use our existing sources of energy more efficiently and effectively. That is, we get more, for less.
A energy demand revolution is a good thing. As good as the previous three energy supply revolutions, but it is antithetical to our current social and economic institutions. Science and technology change quickly, but human beings not so much. Whatever has worked for humans in the past, they will insist on doing in the present and the future. That is, humans don't like change and cling to the status quo.
However, revolutions are opportunities for those who are outside the power and wealth clubs. So there are people in our society that have been pursuing the current revolution, and because it has a disruptive effect on our economic and social institutions, the people who head up and belong to those institutions perceive these changes as some kind of threat and react accordingly. That is, the status quo become reactionaries, sometimes without even realising it. You can hear it in the language they use. They believe the current situation is part of some cycle of industrial capitalism, and they acted accordingly. Counter-cyclical monetary policy. And yet, despite the empirical evidence that their actions are having almost no effect (or in some case, the inverse effect), their answer is that they need more!
The energy supply revolution is drawing to a close, and the energy demand revolution is just beginning. In the same way that the industrial revolution redefined wealth and power, the technological revolution will also. The changes (if we survive that long) will be all encompassing. Importantly however: 1. Families will get smaller 2. Instead of more and bigger, the 'things' in our environment will become less and better 3. Because of (2) above, our monetary system will find it very difficult, if not impossible to create inflation. 4. As things, including houses, get better and cheaper, the great migration to cities that began 300 years ago will slow and begin to reverse.
Those are the broad strokes. Obviously there is a lot more to it than that. There will be a transition period that will probably be very volatile, with a lot of social unrest and upheaval as the old power structures begin to crack.
Ned
Ned do you live in Western Australia?? If you ever head this way please message me and lunch is on me. If you have any more info i am all ears. Foxbat did tell me to sell in Perth and move some capital to Margaret River on the beach, working well so far.
Thanks. Your ideas gel with my view of the world. I am just putting some of the pieces together. Thanks again for the info.
OK, the UK net imports 40% of its food requirements and is also a net importer of energy (so much for North Sea Oil).
It has added 6 million to its population in the last 20 years where the previous 6 million took 35 years to develop (which includes the baby boom). The UK is now has the 3rd greatest density of population in Europe and England takes top spot.
The UK has very little in the way of natural resources as every square inch has been mined and pillaged over the last 3000 years.
In spite of a fall in unemployment, income tax receipts are down.
In spite of so called "austerity measures" the UK budget deficit is proving to be a tough nut to crack.
UK state and public sector pensions are unfunded liabilities and private sector pension scheme contributions are in decline.
The UK has doubled its national debt in 7 years.
Newcastle United are sponsored by Wonga (a payday loan provider).
Anyone with half a brain in their head has already left.
So basically, although not a recognised economic term, the UK is totally fucked.
There is still a lot of viable coal and oil resources and in the UK. Plus they have huge shale gas reserves that are about to be exploited.
UK shale. Only problem with that is that every inch of the UK shale fields falls into three categories. Already built on, farmland or area of outstanding natural beauty.
The UK is not Texas and any attempt to extract shale in sensitive areas will be met with fierce resistance from environmental groups and locals. Government surveys claim that 50% are in favour of shale but it is the 50% who are not that will be the problem. Add to that fact that there will be no price benefit for UK consumers and it is hard to see shale in the UK being a goer.
Most Coal reserves are not viable at todays prices because the UK can't really open cast mine (for the same reasons as above).
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
It doesn't matter whether or not the British subjects want shale gas extraction to take place. The gas is stored under ground and they have no legal rights on what goes on there. The decision to exploit this resource has already been made in the UK, its a done deal. Even the Duke has staked his claim on this next phenomenal wave of the creation of economic rent.
As for coal, I have a different view on its viability than you as I think it is viable it was only shut down in the UK for political reasons.
It doesn't matter whether or not the British subjects want shale gas extraction to take place. The gas is stored under ground and they have no legal rights on what goes on there. The decision to exploit this resource has already been made in the UK, its a done deal. Even the Duke has staked his claim on this next phenomenal wave of the creation of economic rent.
As for coal, I have a different view on its viability than you as I think it is viable it was only shut down in the UK for political reasons.
You greatly underestimate the people power of village England.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Again this goes back to the amount of dumb money in property.
It was dumb money that chased gold up the last leg of its recent bull run and it is dumb money that has chased WA investment property.
That is not to say that everyone owning investment property in WA is dumb, but we have more than our fair share.
Similar dumb people bought Spanish timeshares and will no doubt be rushing to buy apartments in Alkimos for $69 a week (after factoring in above market rate rental incomes).
I wouldn't buy anything without doing a lot of research into it first. I treat property the same as shares in a company or futures on a commodity.
I don't just buy because some bloke says "buy, this, you can't go wrong" especially if the bloke telling me this is the one selling it to me.
You have to ask yourself, why would a complete stranger sell you a money making machine?
Jimbo I have said this many times. There is no evidence of any change at all in the numbers of investor homes in the WA market. It has stood at about 30% for decades. The last couple of years growth has been primarily driven by first home buyers.
Try to find one source that backs your claim that the property market is dominated by stupid investors. There is no evidence at all except your own opinion of a few workmates that you think are stupid.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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