Houses and land are personally owned property and are "real" tangible assets.
Would you prefer to own abstract paper assets which represent property held by other people? Bank accounts represent abstract money lent to banks, held and employed by banks for their own purposes. A $100 currency note represents abstract money which the government declares is exchangeable for an abstract $100. Bonds represent abstract money held and employed by the bond issuer for their own purposes. Share certificates/registry entries represent abstract money held and employed by company directors for their own purposes.
Frummy, would you like to respond to this?
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
Why the hell would news like this make you sick? Isn't this good news, or would you prefer if we were not wealthy?
Some people are strange.
Because this is just saying that Australians are wealthy because they think/say they are. It's a subjective measure of wealth that only exists inside the Australian property religion.
Houses and land are personally owned property and are "real" tangible assets.
Would you prefer to own abstract paper assets which represent property held by other people? Bank accounts represent abstract money lent to banks, held and employed by banks for their own purposes. A $100 currency note represents abstract money which the government declares is exchangeable for an abstract $100. Bonds represent abstract money held and employed by the bond issuer for their own purposes. Share certificates/registry entries represent abstract money held and employed by company directors for their own purposes.
What about shares in the worlds 100 most profitable companies?
What if Australian's wealth was derived from that?
Just as good if not better.
Meanwhile, I remember Ireland was the second richest country in the world. I wonder what they had in common with us...
Quote:
Ireland is now the second wealthiest nation in the world with more than 30,000 millionaires living here, according to new research published by Bank of Ireland Private Banking.
"Astounding" growth in personal wealth has pushed Ireland into second place in a survey of the top eight Organisation for Economic Co-operation and Development (OECD) nations.
The survey found that Irish wealth is "disproportionately" skewed toward property, with 71 per cent of total wealth invested in the asset last year.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Because this is just saying that Australians are wealthy because they think/say they are. It's a subjective measure of wealth that only exists inside the Australian property religion.
You cannot live in a wealthy country with cheap housing. Why? because wealth builds bigger better homes.
It is silly to think Australian housing wealth is not real. Where do you think the money came from to buy those homes? It came from the wealth in the community of Australia and whatever overseas investment there is. Are you trying to say that the wealth in homes is not real? well I can assure you it is - having recently profitably sold a home, the money is real when I check my bank account.
Some really dumb gloomers try to tell people that the money to pay for homes came from increased debt. This is untrue people borrow the same relative to wages as they did decades ago. The only difference in Australia compared to other countries is that Australia has a higher number of people well off enough to able to borrow to buy their homes. Australia is rather like Norway and Canada and other rich more egalitarian societies.
Some other really dumb gloomers will try to tell you that just because some places of the world built too many homes and could not sell them, all houses in the world no longer hold real wealth. The number of houses in the world that were sold at a loss was miniscule relative to the number that will see the wealth they hold return and grow.
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.
Because this is just saying that Australians are wealthy because they think/say they are. It's a subjective measure of wealth that only exists inside the Australian property religion.
No, if you read the article, it says this was an objective measure applied by Credit Suisse to many countries around the world. It wasn't specific to Australia or the "property religion" at all, and wasn't based on how wealthy Australians think/say they are.
You cannot live in a wealthy country with cheap housing. Why? because wealth builds bigger better homes.
It is silly to think Australian housing wealth is not real. Where do you think the money came from to buy those homes? It came from the wealth in the community of Australia and whatever overseas investment there is. Are you trying to say that the wealth in homes is not real? well I can assure you it is - having recently profitably sold a home, the money is real when I check my bank account.
Some really dumb gloomers try to tell people that the money to pay for homes came from increased debt. This is untrue people borrow the same relative to wages as they did decades ago. The only difference in Australia compared to other countries is that Australia has a higher number of people well off enough to able to borrow to buy their homes. Australia is rather like Norway and Canada and other rich more egalitarian societies.
Some other really dumb gloomers will try to tell you that just because some places of the world built too many homes and could not sell them, all houses in the world no longer hold real wealth. The number of houses in the world that were sold at a loss was miniscule relative to the number that will see the wealth they hold return and grow.
Quote:
You cannot live in a wealthy country with cheap housing. Why? because wealth builds bigger better homes.
Would you consider Germany a wealthy country or a poor country?
Quote:
It is silly to think Australian housing wealth is not real. Where do you think the money came from to buy those homes? It came from the wealth in the community of Australia and whatever overseas investment there is. Are you trying to say that the wealth in homes is not real? well I can assure you it is - having recently profitably sold a home, the money is real when I check my bank account.
Some really dumb gloomers try to tell people that the money to pay for homes came from increased debt. This is untrue people borrow the same relative to wages as they did decades ago. The only difference in Australia compared to other countries is that Australia has a higher number of people well off enough to able to borrow to buy their homes. Australia is rather like Norway and Canada and other rich more egalitarian societies.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Well the 2x real house prices that we SUFFER are not real wealth in comparison say with a country whos house prices are around 4x a single gross wage. So that half's our position to start with. Then reduce the overvalued Aus$$ by another 20c then redo the calculation. I would say those two issues would knock our figure down by 60%. You know, those people living in countries with house prices that are at a sensible level and even those where renting for life is quite normal mostly don't feel poorer than us with an inflated everything. Lots of people here live extremely impoverished lives and its not just money either, even a $500k house in Sydney leaves you in a moonscape outburb with little life in it. I would say our style of housing and suburbs would be some of the most soul destroying in the western world at least, I suspect there is no international measure of that is there? Australia did not rate quite so highly re the worlds Quality of life index which is far more realistic than the 'Most livable city' index
As for the poorest with $10k in super and that is where that money would be, will never get the benefit of it.
Would you consider Germany a wealthy country or a poor country?
Germany is a product of its history, it does not resemble many other economies. Personally I think it is a boring economy and terribly vulnerable to the car market. It has left its infrastructure too crumble and who know if it has invested enough in its manufacturing to survive the next decade. Fear of debt can be a bad thing too.
Its house prices are not low, your graph just shows more growth in Australian prices. Which is obvious as we started at a lower level.
Ok I will try one more time to help you understand debt and how it is measured and what it actually means.
Below I show two scenarios one with more of the population affording home ownership than the other. This is just so you can see how this impacts the household debt to income ratio.
The figure you constantly refer to tells us more about household formation rates than it does about median debt held by individuals. This graph shows debt liabilities for new and recent home owners and you can see clearly they are not more indebted relative to salaries and interest rates.
This last graph puts your debt graph into context.
If you really want to insist that Australia is a high debt country then you will have absolutely no understanding of what will happen in the economy.
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.
Veritas, I'd be interested to hear your take on the population spread in Australia versus Ireland. Do you think our elevated house prices might be due to too many people cramming into Melbourne and Sydney? Have they achieved a more even distribution of people in Ireland? Or is this not even relevant to house prices?
The tiny dark brown dots on the map of Australia are the most intriguing ... so many people wanting to cram into such a small area ... why?
Well the 2x real house prices that we SUFFER are not real wealth in comparison say with a country whos house prices are around 4x a single gross wage. So that half's our position to start with. Then reduce the overvalued Aus$$ by another 20c then redo the calculation. I would say those two issues would knock our figure down by 60%. You know, those people living in countries with house prices that are at a sensible level and even those where renting for life is quite normal mostly don't feel poorer than us with an inflated everything. Lots of people here live extremely impoverished lives and its not just money either, even a $500k house in Sydney leaves you in a moonscape outburb with little life in it. I would say our style of housing and suburbs would be some of the most soul destroying in the western world at least, I suspect there is no international measure of that is there? Australia did not rate quite so highly re the worlds Quality of life index which is far more realistic than the 'Most livable city' index
As for the poorest with $10k in super and that is where that money would be, will never get the benefit of it.
Steve at any stage I want I can sell up my Australian home and go buy 1/2 of Ireland. An Irish person cannot sell their home and come and buy half of Australia. The wealth is real. You are unusual in that you wish you had an Irish economy when everyone else in the world wishes they could have an Australian economy.
It is like saying it is better to own a painting by a Street artist than an original Van Gogh.
Not a lot of people desire the first and a huge number desire the second.
Like it or lump it there are a lot of wealthy Aussies on good wages and that money will go into housing.
Wealthy people live in wealthy areas with expensive houses.
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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