I get really annoyed when people talk about unaffordable housing - you got to make your own luck; We made sacrifices, worked hard, made some smart decisions, and now we have a portfolio
Tweet Topic Started: 4 Sep 2013, 08:24 AM (7,116 Views)
"Economic growth can increase indefinitely despite the laws of physics."
Which it cannot. This is not speculation, it's applied mathematics. There are finite resources.
Economic growth will find a limit, we may find a solution to that, but I believe we won't (this is speculation), not in time for us to maintain growth indefinitely.
The "norm" may change, making all our assumptions void. It used to be normal for women to be the homemaker and do nothing else than raise children, now they have jobs and lives beyond sewing. It also used to be normal, if not expected, that husbands are to beat their wives. It used to be normal to throw nightsoil out into the street, now we have plumbing and sewerage. It used to be normal for travel between continents to take months, now it takes mere hours.
What the best locations are now and what they are in the future may not be the same, I agree, it is unlikely that they will change quickly, but we can't assume that property will do the same as it has in the past. Especially not on such a small time scale as 40-50 years.
It is speculation in that it may take decades or centuries to get to a point where our resources are stretched to their limit. It may happen tomorrow, no one knows (though this is a stretch). We can suspect.
Increasing growth, by it's very nature is unsustainable in a closed system. Even when such growth is not exponential.
We have a closed system of finite resources, one planet, no new resources are made quickly enough for us to rely on them being available in ever increasing amounts. (Please, don't be a space cadet, I'm a trekkie and even I see the limits to those narratives)
Increasing technological breakthroughs may extend the time we have, but it will still reach a limit.
I would never suggest that waiting for a downturn to make a leap into financial security is a good thing.
I do advocate caution, reflection and understanding.
sexy gatto you have made some great points - i think both Skamy and yourself are right but without a Delorean we can't be certain of anything.
your post correctly suggests that living standards have risen which demonstrates we are wealthier in real terms
I believe you are right in suggesting that because a certain location is hot property today it doesn't necessarily mean it will be hot tomorrow, but Skamy might say huge structural changes can take so much time they sometimes aren't relevant and i would agree.. we don't know what's around the corner but i suspect we will become hugely decentralized relative to today at some stage.
Houses are more affordable than at any time in the past decade according to research released by the Real Estate Institute of Australia (REIA).
According to the research, housing affordability has improved in the past two years with the proportion of income to meet repayments now sitting at 28.7 per cent.
The Australian Capital Territory (ACT) remains the most affordable state and at 5.6 per cent higher than the rest of the country, New South Wales (NSW) the least.
Real Estate Institute of Australia President, Peter Bushby said that with the exception of the Northern Territory, all states and territories recorded improvements over the June quarter, the largest in Queensland.
“Affordability is improved in all states and territories when compared to the same time last year and no doubt, the seven interest rate cuts since November 2011 have played a role,” said Mr Bushby.
The REIA suggested stamp duty reforms, access to superannuation and assistance to first home buyers as a way to boost the participation of first-home buyers in the market.
Posted on Wednesday, September 04 2013 at 10:51 AM
It’s getting easier for investors and homeowners to buy and hold property, with housing affordability improving over the past two years thanks to falling interest rates.
The proportion of income required to cover mortgage repayments is now down to 28.7 per cent, which is the lowest it has been in a decade, according to the Adelaide Bank-Real Estate Institute of Australia (REIA) Housing Affordability Report.
All states and territories recorded improvements over the past quarter, REIA president Peter Bushby says, with the exception of the Northern Territory.
Queensland property in particular is very affordable right now, Bushby says. The proportion of income needed to meet loan repayments dropped by 1.9 per cent to 26 per cent.
“No doubt, the seven interest rate cuts since November 2011 have played a role,” he says.
“The variable interest rate fell in the June quarter, from 6.1 per cent to 5.9 per cent, which is a decrease of 0.7 per cent compared to the same time last year. The (average) three year fixed rate fell by 0.3 per cent over the quarter. It’s 0.9 per cent on the same period in 2012, sitting at 5.1 per cent.”
He adds the Australian Capital Territory is still the most affordable state or territory due largely to higher incomes there.
New South Wales remains the least affordable state, with the proportion of income required to meet loan repayments 5.6 percentage points higher than the nation’s average.
So many whingers on this forum. Stop complaining, and make your own luck people.
I never had much interest in traveling or eating out or anything, so after six years of working my partner and I had plenty saved and decided it was time to put the money into a house of our own. Just hated the thought of all of that dead rent money. Bought ourselves a modest little cottage on the inner city fringe, fixed her up a bit, and by the time my wife was pregnant we decided to upgrade to something a bit bigger in the suburbs, something with a yard for our kids.
We did pretty well out of the cottage – something like a 40% gain tax free in less than five years, so you’ve got to be happy about that. Well, the next house was a bit more expensive, but we just fell in love with it, we had to have it, you know. The bank was more than happy to give us everything we needed. We were daunted by the idea of carrying a $200,000 mortgage, but interest rates had been coming down, and things were going really well. We never imagined we’d both be living in such a beautiful big house, but over time we came to feel that this was our reward for being more careful with our money, for making sacrifices.
After a while, with the wife back at work, and another promotion for me – we thought it was time to start thinking about building up a property portfolio for our retirement, to give us some more flexibility down the track. Well, the bank was more than happy to give us everything we needed. We bought a fixer upper a few streets down from our current house, rented it out to a local teacher – he helped out a bit fixing it up. Rates were starting to go up a bit, but we’d fixed the bulk of it at 7.5% and were comfortable with the repayments.
Prices in our area were starting to really pick up. Our neighbors had sold their house – which was no bigger than ours, and probably needed more work done – for $550,000 ! It was incredible – they’d only paid $280,000 seven years earlier.
Well, we’d got some extra days at day care for the kids, so my wife was able to go back to work full time now. We thought we’d diversify the portfolio a bit, so got ourselves a unit off the plan in a neighboring suburb. The bank was more than happy to give us everything we needed. The rent wasn’t quite covering repayments at that point – but the tax effect was pretty sweet – we just needed 4% capital growth a year to be raking it in ten years down the track. Some of the spec buyers ended up selling after a month and pocketing a 40% gain. We were absolutely spewing we didn’t buy more!
A mate knew the developer, so we got in early on his next release and ended up buying two off the plan. The bank was more than happy to give us everything we needed. We turned over the units after a year and decided to pay off our debt. We own our house and the property up the road outright now. We’ll probably give the kids the other property once they’re old enough – let ‘em move into it when they’re ready for university.
I get really annoyed now when people talk about unaffordable housing. It wasn’t like we were gifted our own house. It was hard. It was bloody scary carrying so much debt. But we made sacrifices, worked hard, made some smart decisions, and now we have a portfolio.
You’ve got to make your own luck. We're not special - if we can do it so can anyone. Just stop wasting your time whining on this forum and go do it people.
There does seem to be a problem here.
It seems my family's critical flaw is that instead of working bogan jobs right after high school, we pursued tertiary education. We have spent years acquiring internationally recognised qualifications. We are the people who meet you at the end of your ambulance ride (though it depends how hard you crashed). However, while we were studying our arses off, couchsurfing to save money, doing unpaid research work, all these self-satisfied swine were working in charcoal chicken shops and mindless office cubicles, earning their deposits.
And now the cretins have the upper hand. Their years of forced into-mortgage savings have catapulted them into a position of advantage. And those of us with useful skills, hard won, are forced to be their tenants.
So based on the comments on this and other websites from Australia I can sense that there is real concern about housing affordability in this country, but I understand we are not at critical mass to actually be addressed by the major parties.
The major parties will never address it because they care about winning votes from the majority and unfortunately the majority are owners or investors, so is clearly on the side that wants house prices to never come down and keep the game intact.
So even if we are a minority why is there no “Housing Affordability” party to at least try to grab a few seats ? I mean if there are so many “silly” small parties in the upcoming federal election I am sure a HA party would get some attention from the media and the public. I for one would definitely vote for a party that addresses this issue…
It seems my family's critical flaw is that instead of working bogan jobs right after high school, we pursued tertiary education. We have spent years acquiring internationally recognised qualifications. We are the people who meet you at the end of your ambulance ride (though it depends how hard you crashed). However, while we were studying our arses off, couchsurfing to save money, doing unpaid research work, all these self-satisfied swine were working in charcoal chicken shops and mindless office cubicles, earning their deposits.
And now the cretins have the upper hand. Their years of forced into-mortgage savings have catapulted them into a position of advantage. And those of us with useful skills, hard won, are forced to be their tenants.
Stupid is as stupid does, and getting higher education qualifications in Australia is just plain stupid. This is a country with a government of the morons, by the morons, for the morons.
I never quite understand the helicopter mums who want little Harry or Ashley to do well in school, learn and get good grades. Even minimum wage in retail is like 40K per year. Leave school at 15, live at home, work in retail, do nothing, can't get fired, no stress, free money savings, then buy a house like a good 'un. Hell, buy 3 and rent 2 of them out to the middle class saps who spent 6-10 years getting their qualification for which they get the pleasure of paying 40% tax which gets kicked back to your sweet bogan ass in the form of election bribes and tax/home subsidies.
If your kids study hard and get good grades, please accept my condolences. They have a life of suffering ahead of them paying for the insufferable. If it looks like your children are going to get into a good university, I would recommend you emigrate.
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
It seems my family's critical flaw is that instead of working bogan jobs right after high school, we pursued tertiary education. We have spent years acquiring internationally recognised qualifications. We are the people who meet you at the end of your ambulance ride (though it depends how hard you crashed). However, while we were studying our arses off, couchsurfing to save money, doing unpaid research work, all these self-satisfied swine were working in charcoal chicken shops and mindless office cubicles, earning their deposits.
And now the cretins have the upper hand. Their years of forced into-mortgage savings have catapulted them into a position of advantage. And those of us with useful skills, hard won, are forced to be their tenants.
Wow! I do detect a feeling of injustice!!
With those bogans... So you are an educated health professional..your choice. The business of saving human life, you of all people realize that life can change in an instant. You have participated in the sometimes negative outcome in the "resus" situations of your patients.
Just remember, quality of life of that patient he/she is someone's loved one. Maybe You need a sea change. STAT.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
"Economic growth can increase indefinitely despite the laws of physics."
Which it cannot. This is not speculation, it's applied mathematics. There are finite resources.
Economic growth will find a limit, we may find a solution to that, but I believe we won't (this is speculation), not in time for us to maintain growth indefinitely.
The "norm" may change, making all our assumptions void. It used to be normal for women to be the homemaker and do nothing else than raise children, now they have jobs and lives beyond sewing. It also used to be normal, if not expected, that husbands are to beat their wives. It used to be normal to throw nightsoil out into the street, now we have plumbing and sewerage. It used to be normal for travel between continents to take months, now it takes mere hours.
What the best locations are now and what they are in the future may not be the same, I agree, it is unlikely that they will change quickly, but we can't assume that property will do the same as it has in the past. Especially not on such a small time scale as 40-50 years.
It is speculation in that it may take decades or centuries to get to a point where our resources are stretched to their limit. It may happen tomorrow, no one knows (though this is a stretch). We can suspect.
Increasing growth, by it's very nature is unsustainable in a closed system. Even when such growth is not exponential.
We have a closed system of finite resources, one planet, no new resources are made quickly enough for us to rely on them being available in ever increasing amounts. (Please, don't be a space cadet, I'm a trekkie and even I see the limits to those narratives)
Increasing technological breakthroughs may extend the time we have, but it will still reach a limit.
I would never suggest that waiting for a downturn to make a leap into financial security is a good thing.
I do advocate caution, reflection and understanding.
Quote:
It used to be normal for women to be the homemaker and do nothing else than raise children, now they have jobs and lives beyond sewing.
I would not repeat that in face to face female company if I were you.
We can have a bit of fun with physics and maths analogies in economics but it is daft to take them too seriously.
Economics is a man made game it does not follow the "rules" of physics nor does it follow pure nor applied maths. Economists could certainly make better use of maths and stats to estimate market behaviour etc I agree. We live in a human made economic paradigm we can keep it going as long as we want. We can stop growth at any time aka Japan but Australia is not making those decisions, Australia is growing in population. Human beings can be very creative when the need occurs, who knows in a few decades we may not use steel as the main skeletons of our buildings, we may create renewable carbon fibres for the job. In 100 years everything could be solar powered. Economic growth is not restricted to resources and their availability.
The thing is that we do not operate in a closed system, we not only create the system and we add to it and modify it to make it fit whoever takes the mantle of power. If we want growth then growth is what we will mostly get.
But back to house prices.
House prices have been increasing with population and prosperity for 100s if not 1000s of years, there is even evidence from Hebrew texts and the Romans on the value of property. “He is not a full man who does not own a piece of land.” -Hebrew Proverb And from a famous financier born 200 years ago “Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.” -Russell Sage
It is silly to believe that property will no longer provide capital gains. People thought the same in the 70s and the 90s it is just downturn doom and gloomers speak with their same old exaggerated tales of woe.
ECMO
4 Sep 2013, 08:24 PM
There does seem to be a problem here.
It seems my family's critical flaw is that instead of working bogan jobs right after high school, we pursued tertiary education. We have spent years acquiring internationally recognised qualifications. We are the people who meet you at the end of your ambulance ride (though it depends how hard you crashed). However, while we were studying our arses off, couchsurfing to save money, doing unpaid research work, all these self-satisfied swine were working in charcoal chicken shops and mindless office cubicles, earning their deposits.
And now the cretins have the upper hand. Their years of forced into-mortgage savings have catapulted them into a position of advantage. And those of us with useful skills, hard won, are forced to be their tenants.
Mate you made your bed - sleep in it - you know that your tertiary education will have more long term value that a few extra years in a downbeat job to save for a deposit. Why do you hold such a grudge against people much worse off than you? What is the matter with ya?
Just get yourself a house and stop whining, everyone else who owns a house did the hard yards, you wont find a shortcut, so just get on with it. If you choose to throw away your hard earned cash paying someone else's mortgage that is up to you.
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.
I'm sorry Skamy, I don't want to be at odds with you, but...
I can repeat that in any company I like, because I was talking about the past, in which it was normal, notice the phrase 'used to be'? I didn't even mention that women in similar times were not allowed to read books that pertained to anything other than romance or poetry.
"Economic growth can increase indefinitely despite the laws of physics."
or, in other words, “Keep your physics out of my economics. It messes up my abstractions”
Growth cannot continue forever, at some stage we run out of resources and I don't mean just concrete or steel, I'm talking about space, energy, population and materials. Even money is a resource.
This is a fact, plain and simple, it may take ages, but we will get there.
I'm not trying to suggest that property will cease to provide capital gains.
I'm suggesting that your insistence that it will just because it has in the past is false logic.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
I'm sorry Skamy, I don't want to be at odds with you, but...
I can repeat that in any company I like, because I was talking about the past, in which it was normal, notice the phrase 'used to be'? I didn't even mention that women in similar times were not allowed to read books that pertained to anything other than romance or poetry.
"Economic growth can increase indefinitely despite the laws of physics."
or, in other words, “Keep your physics out of my economics. It messes up my abstractions”
Growth cannot continue forever, at some stage we run out of resources and I don't mean just concrete or steel, I'm talking about space, energy, population and materials. Even money is a resource.
This is a fact, plain and simple, it may take ages, but we will get there.
I'm not trying to suggest that property will cease to provide capital gains.
I'm suggesting that your insistence that it will just because it has in the past is false logic.
Your phrase may be perceived by women as offensive in the fact that it appeared to denigrate the raising of children and homemaking to something less important than the big manly jobs that occupied men folk back in the day, they may even think that you believe the same of today's stay at home Mums. Try it out on someone by all means and see how ya go
I am a scientist not an economist and I am saying don't mistake your man made economics for my science.
The end of the world is nigh scenarios have been played to death over my lifetime so forgive me with my boredom with these larger than life theories of peak oil, resources running out etc etc.
Property investment is mostly boring, mostly stable and has offered highly predictable returns since humans have first built shelters for themselves. Where humans congregate to work successfully and prosperously and grow in population, the value of property will rise.
Sure Armageddon could arrive any day, and people used to walk around sandwiched between billboards stating the end of the world is nigh, most folk don't pay much heed to negativity like that and they have labeled such talk as doom and glooming. I don't recommend hanging your hat with folk like that. You don't need doom and gloom to sell good ideas for the preservation of our planet or equitable outcomes in our 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.
If people are offended because of their own inferences and misunderstanding, it is not my problem.
I'm not talking about the end of the world and anyway, it wouldn't be the end of the world, just the end of human civilisation. The earth might a lifeless barren rock, but it will still be here.
I'm talking about the end of cheap, renewable inputs that drive economic growth.
It's not about 'Peak Oil' it's about 'Peak Cheap Oil' which we've already surpassed, this is why there is so much drive towards shale fracking and LNG. Oil is in everything, from fuel to food (fertilizer)
If you want to insist that maths and physics are totally separated from economic conditions, that is your failure to understand.
Economic growth is an increase in the production and consumption of goods and services. It entails increasing population and/or per capita consumption.
Economics cannot be separated from goods and services, goods and services require resources to produce. The availability of resources requires physics to work.
If populations continue to increase (apparently about 80 million people a year) we will run out of space, materials and energy. If per capita consumption continues to increase, we will run out of materials and energy.
We live on a planet with finite space and finite materials, we will not be mining space debris for a great deal of time.
It is simply astounding to think that a scientist, as you have stated you are, cannot see that the resources in the ground are finite. It truly scares me that people who have similar beliefs are our leaders.
For the record, I'm not a doomer, I'm a realist, realistically we cannot continue on this path of ever increasing growth.
World Footprint
Do we fit on the planet?
Today humanity uses the equivalent of 1.5 planets to provide the resources we use and absorb our waste. This means it now takes the Earth one year and six months to regenerate what we use in a year.
Moderate UN scenarios suggest that if current population and consumption trends continue, by the 2030s, we will need the equivalent of two Earths to support us. And of course, we only have one.
Turning resources into waste faster than waste can be turned back into resources puts us in global ecological overshoot, depleting the very resources on which human life and biodiversity depend.
You have probably seen bits of it, you'll probably dismiss it as doomer rubbish, but this movie is great... I've put it up other people following this narrative... It is a climate change movie, but there is a great animation about economics and consumerism in the middle of it.
The Age of Stupid
For those with little time...
Or this one, about consumerism...
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
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