Australia's Economy Is a House of Cards
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Australia's Economy Is a House of Cards
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Re: Australia's Economy Is a House of Cards
#2The writing has been on the wall for a long time in Australia but vested interests and the status quo means no meaningful change is actually going to happen.
Take Australia National Broadband Network (NBN) strategy as an example. Connecting every house and business to a fibre optic line would have "future-proofed" the nation for generations. Instead it was destroyed by the conservative government, along with investments in renewable energy, a resources super tax and a range of other progressive ideas.
This country is run by dinosaurs. While there are intellectuals, theres also a proud culture of ignorance and weird working class arrogance. Instead of having pride in working class jobs and pride in working class people who put food on their families tables and support their community it seems theres been a concerted effort to warp it into and "us vs them" attitude of "true blue" working class Australians against white collar "know it alls". This is plain to see when the current Prime Minister and former investment banker goes into rural towns wearing his untarnished Akubra and adopts his fake working class accent to stoke tension between rural and city people.
Australia often has bushfires every 7 years or so that have historically cleared out a lot of dead wood and given the bushland an opportunity to breath and grow again. New policies to prevent bushfires meant woodlands accumulated fuel which led to cataclysmic-ally large bushfires like black saturday, ash wednesday etc.
Its hard not to think that Australias approach towards governance is similiar and that the only way for us to re-set the agenda is through a huge depression.
Re: Australia's Economy Is a House of Cards
#3Their real estate development boom is largely supported by Chinese investors. That is, buying into a Development Co. in AUS and having an Aussie run it.
In Sydney I counted 50+ cranes earlier this year. Will the demand for X amount of new towers continue? Will buyers support it or become Miami 2.0? How many empty condos are there in Miami right now?
They are also very prideful about the state of their economy.
Re: Australia's Economy Is a House of Cards
#4Their real estate development boom is largely supported by Chinese investors. That is, buying into a Development Co. in AUS and having an Aussie run it. In Sydney I counted 50+ cranes earlier this year. Will the demand for X amount of new towers continue? Will buyers support it or become Miami 2.0? How many empty condos are there in Miami right now? They are also very prideful about the state of their economy.
Do you have any data to support the claim that "Their real estate development boom is largely supported by Chinese investors"? My interpretation of that statement is that you are saying it is the most significant factor. I would certainly agree with you if you were to have said "...is supported by Chinese investors."
Re: Australia's Economy Is a House of Cards
#5Their real estate development boom is largely supported by Chinese investors. That is, buying into a Development Co. in AUS and having an Aussie run it. In Sydney I counted 50+ cranes earlier this year. Will the demand for X amount of new towers continue? Will buyers support it or become Miami 2.0? How many empty condos are there in Miami right now? They are also very prideful about the state of their economy.
Do you have any data to support the claim that "Their real estate development boom is largely supported by Chinese investors"? My interpretation of that statement is that you are saying it is the most significant factor. I would certainly agree with you if you were to have said "...is supported by Chinese investors."
From the article regarding cranes: "According to the Rider Levett Bucknall Crane Index, in Q4 2017 between Sydney, Melbourne and Brisbane, there are now 586 cranes in operation, with a total of 685 across all capital cities, 80% of which are focused on building apartments. There are 350 cranes in Sydney alone."
From the article regarding Chinese investment: "Foreign investment across all countries into real estate as a whole was the largest sector for foreign investment approval at $112 billion, accounting for around 50% of all FIRB approvals by value and 97% by count across all sectors - agriculture, forestry, manufacturing, tourism - you name it in 2015-16."
And: "Around $32 billion invested in real estate was from Chinese investors in 2015-16, making it the largest investment in an industry sector by a country by far."
That's $32b of the $112b in real estate.
Re: Australia's Economy Is a House of Cards
#6Earlier quoted context omitted.
Do you have any data to support the claim that "Their real estate development boom is largely supported by Chinese investors"? My interpretation of that statement is that you are saying it is the most significant factor. I would certainly agree with you if you were to have said "...is supported by Chinese investors."
From the article regarding cranes: "According to the Rider Levett Bucknall Crane Index, in Q4 2017 between Sydney, Melbourne and Brisbane, there are now 586 cranes in operation, with a total of 685 across all capital cities, 80% of which are focused on building apartments. There are 350 cranes in Sydney alone." From the article regarding Chinese investment: "Foreign investment across all countries into real estate as…
Yeah, I understand that Chinese investment in Australian real estate is significant - I'm questioning whether or not it is the most significant factor driving the real estate boom. I've always assumed cheap credit and tax incentives for locals were the most significant factors.
Re: Australia's Economy Is a House of Cards
#7Earlier quoted context omitted.
From the article regarding cranes: "According to the Rider Levett Bucknall Crane Index, in Q4 2017 between Sydney, Melbourne and Brisbane, there are now 586 cranes in operation, with a total of 685 across all capital cities, 80% of which are focused on building apartments. There are 350 cranes in Sydney alone." From the article regarding Chinese investment: "Foreign investment across all countries into real estate as…
Yeah, I understand that Chinese investment in Australian real estate is significant - I'm questioning whether or not it is the most significant factor driving the real estate boom. I've always assumed cheap credit and tax incentives for locals were the most significant factors.
Ah, apologies, I misunderstood. I don't recall seeing anything usefully quantified in the article about the effects of tax incentives, though there was a comment somewhere there about negative gearing, quoting David Llewellyn-Smith:
"This tax policy allows more than one million Australians to engage in a negative carry into property in the hope of capital gains. In a nation of just 24 million, 1.3 million Australians lose an average of $9,000 per annum on this strategy thanks to the tax break".
As to determining which is the most significant factor, I will leave that to those with far greater understanding of the area than mine.
Re: Australia's Economy Is a House of Cards
#8People have been crying "bubble" my entire life, and I'm yet to see one actually "burst".
The only things close to bubble bursts were scam driven things like the sub-prime mortgage collapse in the USA.
Re: Australia's Economy Is a House of Cards
#9> Indeed Digital Finance Analytics estimated in a October 2017 report that 910,000 households are now estimated to be in mortgage stress where net income does not covering ongoing costs. This has skyrocketed up 50% in less than a year and now represents 29.2% of all households in Australia.
As of 2011 there were 7.7 million households in Australia (according to the ABS) so how does 910,000 (or 888,207 in the table) become "29.2% of all households in Australia"?
(I may well be missing something...)
Re: Australia's Economy Is a House of Cards
#10A long and perhaps terrifying article. With all the statistics, a strong case is made that Australia is in deep, deep trouble. What I'm having trouble with is understanding why this is not talked about more in more main stream avenues?