freeride76 wrote:

I hear ya Syp.

The facts are though, barring a world war, a billion middle class Asian people will keep improving their material circumstances and part of that will have a huge influence on Aus, including RE prices.

I remember, like Andy, in the 90's still in the delusion that RE prices here would be limited by wages.

Yes, they are limited by credit, but only in the short term.

I'll ask again: where do you think 160-200000 people a year will live, and what do you think that demand will do for RE prices?

I actually mainly agree with you re. house prices, at least there's an assett there, markets may fall, plateau, pause, stop, be loan holidayed... etc. etc. ...but at least there is generally an assett there...

and most people will do whatever it takes to hold onto them...

I imagine the real 'correction' is coming to the other 'assett' classes kaiser suggests. many have little, if any, inherent value at all

even many of the 'good' stocks, if the shit really hits the fan...

"...The number and variety of discretionary enterprises out there that rely on flippant expenditure is alarming..."

this'll be the massive hit to australia

whilst everyone is whinging and moaning... (myself included) ...australians have developed an incredibly high level and standard of living over the last few decades that few of us are even aware of...

a bit like frogs in boiling water

the slow build up has been phenomenal

it seems these is / always was, an argument to be had around avocado toast..

re other assets, given the nasdaq tech bubble in 2000, what would you call the recent high we've just come out of?

Himalayan

gsco wrote:

re other assets, given the nasdaq tech bubble in 2000, what would you call the recent high we've just come out of?

Still more to go upwards and parabolic in that chart (in the next 6 mths or so assuming Russia/Ukraine can sort their shit out).

A graph of Australian (real, so inflation adjusted) house prices going back to the 1920s. Has been dome quite spectacular downturns:

source

Yeah, nothing sustained though in the post-war period.

Depression era crash fits that bill.

thermalben wrote:

thermalben wrote:

Forget house and land prices, check out the pubs!

Justin Hemmes has apparently bought a block of Byron land on Jonson Street for $50 million, and is said to be spending $20 million building a new venue along the lines of the Coogee Pavilion.

Hemmes also bought the (vacant) Cheeky Monkeys backpackers bar for $13 million. And in Vicco, picked up the Lorne Hotel for $38 million.

Sydney developer Podia paid $18 million for the Byron Bay Backpackers on Jonson Street. The old Woolworths (opposite Cheeky Monkeys) also sold for $120 million to the Mustaca family and they're building a new four-star hotel.

Stu Laundy recently bought the Lennox Hotel for $40 million and The Farm for $16 million.

Last year, the Byron Bay Beach Hotel sold to investment bank Moelis Australia for $104 million.

And, media reports a few months ago said that both Hemmes and Laundy were in a bidding war for the Pacific Hotel at Yamba, with an asking price of around $50 million. Dunno if it sold though.

Another one to add to the list.

It’s reported that last week the Great Northern Hotel sold.

$80 million.

Buyers were apparently Scott Didier, founder of ASX-listed building company Johns Lyng Group, and Scott Emery, founder of ASX-listed online lender MoneyMe.

Kingscliff Hotel on the market for $100m. Just a couple of doors up the road from the Swellnet office!

https://www.afr.com/property/commercial/kingscliff-beach-hotel-near-byr…

That's insane Ben, seems like only the other day Kingscliff was a sleepy little town.

gsco wrote:

A graph of Australian (real, so inflation adjusted) house prices going back to the 1920s. Has been dome quite spectacular downturns:

source

War really is good for (very big) business.
Great way to kick start things after a slump.
Or just to keep things topped up.

If there's not an adage that peace only comes through prosperity, maybe there should be.

Took 30 years ( 1930-1960) for real value recovery in house prices post 1930.

I’d call that a previous correction of note.

Of course that could never happen again because……exceptionalism.

AndyM wrote:

gsco wrote:

A graph of Australian (real, so inflation adjusted) house prices going back to the 1920s. Has been dome quite spectacular downturns:

source

War really is good for (very big) business.

Great way to kick start things after a slump.

Or just to keep things topped up.

If there's not an adage that peace only comes through prosperity, maybe there should be.

War may be good for business, but if next one gets out of hand there may be not many people around, or businesses.... Talk about a Reset! Back to Stone Age....Interesting times...

Just gotta be in it for the long haul :)

I reckon I’ve got my forever house. It was sort of forced upon me but has since shown to be a pretty sweet deal.

From what I've seen, it's epic.

DudeSweetDudeSweet wrote:

I reckon I’ve got my forever house. It was sort of forced upon me but has since shown to be a pretty sweet deal.

Kudos for planting your roots DSDS, and you should always have a foot in property. Question for the room though - if you had your forever home, and had another as investment, what would you do with it right now? At a time of record prices and yields? Do you realistically see capital and rent growth from here? Or cash in and shore yourself up? Or use it to cover other investments you thought were a safe bet but have turned out otherwise? And if the equity in the inv prop erodes enough it may threaten the PPR?

What goes first? And who wants to be last to go?

PS great chart GSCO, to even get back to trend is a 26% fall. And rarely do we hit trend without going below…

Man, I need to lighten up… sorry everyone

“Do you realistically see capital and rent growth from here? “

Yes.
It’s because the investor class are outstripping once again FHB as they pass onto the rentier class any interest rate rise.
It’s because even now no one is talking tax reform.
It’s because right now in Canberra the unions are drinking grange with big business over what’s a reasonable floor for immigration pa. >200k
It’s because the already limited east coast housing availability footprint has just had a sizeable portion of its arse end floodplain literally shit it self.

AndyM wrote:

I still feel there are enough levers to be pulled that we can carry on the Ponzi scheme for decades yet.

Sorry, one more question, and not facetious. What levers haven’t already been pulled? They’ve cut rates, printed money - what monetary levers remain?

Can’t see immigration in a shrinking world economy being the answer.

Yeah I get that bonza, but in the big picture I wonder whether betting big on an increasing population while we remain an expensive place to live while everywhere else does what’s needed to become more affordable, is wise.

We still are not the biggest importer of
Asian people. They do have choice

kaiser wrote:

DudeSweetDudeSweet wrote:

I reckon I’ve got my forever house. It was sort of forced upon me but has since shown to be a pretty sweet deal.

Kudos for planting your roots DSDS, and you should always have a foot in property. Question for the room though - if you had your forever home, and had another as investment, what would you do with it right now? At a time of record prices and yields? Do you realistically see capital and rent growth from here? Or cash in and shore yourself up? Or use it to cover other investments you thought were a safe bet but have turned out otherwise? And if the equity in the inv prop erodes enough it may threaten the PPR?

What goes first? And who wants to be last to go?

PS great chart GSCO, to even get back to trend is a 26% fall. And rarely do we hit trend without going below…

Man, I need to lighten up… sorry everyone

I’m in that exact situation. We have a propert in WA and have received an inviting unsolicited offer on it via a local RE agent. No debt burden and the cash is tempting but what do you do with more cash? I’m not taking the piss. The place in WA is utterly hassle free but surely it can’t increase in price……?

Hard. Life is easy when you don’t have to make decisions.

Well if you don’t have debt, you don’t have any worries.

Global competition for new immigration is a piss easy win for Australia. There are hundreds of levers to be pulled Kaiser.

bonza wrote:

Global competition for new immigration is a piss easy win for Australia. There are hundreds of levers to be pulled Kaiser.

Fair enough I’ll take your word for it

just my view mate. I know fuck all about economics. the only thing I have learnt is that no one else does either.

Amen

kaiser wrote:

Well if you don’t have debt, you don’t have any worries.

I’ll be the first to shout that debt is slavery but eliminating debt doesn’t equal the end of drama.

Here’s one of the best books written in the history of humanity. Unrivalled wisdom. 36 pages long with illustrations. Essential Instruction in life doesn’t get any more digestible or imaginative..

This has been a guiding light for me since I was literally four years old. Never bettered. Reckon I’ve been carrying that bat ever since.

https://taylorlhs.weebly.com/uploads/2/9/4/8/29480235/101141408-dr-seuss…

kaiser wrote:

AndyM wrote:

I still feel there are enough levers to be pulled that we can carry on the Ponzi scheme for decades yet.

Sorry, one more question, and not facetious. What levers haven’t already been pulled? They’ve cut rates, printed money - what monetary levers remain?

Can’t see immigration in a shrinking world economy being the answer.

I think Australia could ramp up immigration a lot more if it wanted to.
And didn’t those rate cuts work perfectly to increase house prices?
That’s what we’re talking about right?
Population growth and/or low interest rates could surely kick the can down the road for a long time.
Just balance things so it’s a continual steady increase not the madness of the past two years, find the sweet spot before inflation goes crazy but there’s still acceptable demand for goods including property.
I thought things were (relatively)fine before The Covid Effect.
Isn’t this what the RBA is currently trying to achieve?
I’m not saying this is what I want but it appears totally achievable, at least while housing is an investment and is also open to international investment.

E-Changer - Exodus
https://www.abc.net.au/news/2022-09-02/pandemic-migration-causes-cultur…

Credit to the journo for at least having a stab at bringing class into the discussion.

65,700 people left Sydney and Melbourne, and prices continued upwards with gay abandon.

I wish my mum would sell her way too big and hard work to look after every garden and everything else by herself house in Sydney, and move to Indo or Thailand.She could live on a yacht charter for the rest of her life in the tropics.

Another 50bps on the pyre

No surprises

https://twitter.com/WallStreetSilv/status/1565704584747749382

I find some commonality with Vlad when he describes the ridiculous recent monetary inflation as being the cause for current actual inflation...

https://www.davidmurrin.co.uk/media/geopolitics-and-the-shifting-world-…

Quite long video so don’t expect you to listen to it all but very worthy discussion from the 40min mark. Stick with it because he talks about traditional assets like property not going to withstand this next crash.

velocityjohnno wrote:

https://twitter.com/WallStreetSilv/status/1565704584747749382

I find some commonality with Vlad when he describes the ridiculous recent monetary inflation as being the cause for current actual inflation...

Despite the ridiculous monetary inflation (which is true) this is a propaganda speech where Putin is trying to position himself as 'the leader of the poor countries.'

The reality is - he is a king in one of the most feudal systems alive today. His regime facilitated a huge wealth transfer through privatisation of state-owned assets to the compliant oligarch class. He deliberately developed a classist society where some are unimaginably rich (I'll repeat - unimaginably rich) while others are fed with peanuts and controlled through strict limits on freedom of information.

The poor for him are cannon fodder. The rich did not get rich because of their skills. They got rich because they were close to the regime. You can see that with the way they behave with money. Insane show-offs. When Russians have the money you'll fucking know about it. Classic case of becoming rich overnight.

Completely agree, it's just I can't summon Murray Rothbard to deliver the monetary speech.

& tumultuous night in finance nerd land, SPX fell more than 4% on an 8.3% inflation print in the US. A more human interpretation instead of the chart porn here:
https://www.zerohedge.com/markets/fed-mouthpiece-speaks-least-75bps-nex…

imagine if they go the whole %...
if markets predicting a terminal US rate of over 4.3% and Oz tops out at the 2.6% wanted by some banks here, surely that differential summons the Australian peso once again (perhaps we can have a car industry again at such a crushingly cheap exchange rate)
anyway we see next week

pic.twitter.com/58AyjWSzR7

— Inverse Cramer (@CramerTracker) September 13, 2022

https://www.smh.com.au/business/the-economy/a-home-of-one-s-own-so-good…

Maintain the rage

Bye Bye Burnie
https://www.abc.net.au/news/2022-09-24/burnett-heads-gateway-luxury-mar…

Just got told that the wet land development here -hundreds of homes- is ultimately owned by Chinese developers. Haven’t spoken to one person in town who wanted it. As long as the rich cnts in China are happy!

udo wrote:

Bye Bye Burnie

https://www.abc.net.au/news/2022-09-24/burnett-heads-gateway-luxury-mar…

Big Peggy's happy because she wants more shops.

10 minutes down the road there's this one as well

https://www.abc.net.au/news/2022-09-03/beachside-elliott-heads-masterpl…

'...outside of the cyclone belt', and '...no stingers and no cyclones' - good luck with that over the coming decades

kaiser wrote:

DudeSweetDudeSweet wrote:

I reckon I’ve got my forever house. It was sort of forced upon me but has since shown to be a pretty sweet deal.

Kudos for planting your roots DSDS, and you should always have a foot in property. Question for the room though - if you had your forever home, and had another as investment, what would you do with it right now? At a time of record prices and yields? Do you realistically see capital and rent growth from here? Or cash in and shore yourself up? Or use it to cover other investments you thought were a safe bet but have turned out otherwise? And if the equity in the inv prop erodes enough it may threaten the PPR?

What goes first? And who wants to be last to go?

PS great chart GSCO, to even get back to trend is a 26% fall. And rarely do we hit trend without going below…

Man, I need to lighten up… sorry everyone

What would I do? Well, catching up with boomer relatives recently (these guys have done fantastically well out of the property bubble 1980s on) - they have sold down the investment properties, cleared the debt, and bought a $200K fully done up massive American pick up truck to tow their massive caravan into the sunset. Eat that Landcruiser owners. Eat that climate change. (There was a Dan Ackroyd movie where he had a speedboat named "Suck My Wake"...)

Or the bloke who had the boat 'Unsinkable II'?

There was one down in Hobart named 'The Separator' lol

Vale Bond Bubble, you were a very large thing

https://www.bloomberg.com/news/articles/2022-09-24/the-great-bond-bubbl…

velocityjohnno wrote:

Vale Bond Bubble, you were a very large thing

https://www.bloomberg.com/news/articles/2022-09-24/the-great-bond-bubbl…

It’s so bad. The world is still very inflexible in ramping up the supply to match surging demand. So everyone ends up ratcheting the interest rates to bring the healthy demand down. It feels primitive in 2022, I thought there would be better ways to deal with it by now.

https://www.linkedin.com/pulse/terrifying-charts-raoul-pal