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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

#21

Post by techdragon »

tmnvix wrote: post #6
ruytlm wrote: post #5

Earlier 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.

Not a hugely accurate measurement method but it's definitely clear that Chinese investment crossed a threshold sometime this year, because I'm starting to notice property developers advertising including Chinese (I'm pretty sure most of what I've seen has been in Mandarin but I could be mistaken.) along side the English. It's not the norm yet, but it's definitely a troubling sign of how significant the overseas investment has grown.

Re: Australia's Economy Is a House of Cards

#22

Post by pitay »

cylinder wrote: post #12
sasas wrote: post #10

A 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?

Barrie's company Freelancer.com was just outed as a bunch of scam artists on HN front page yesterday, now he's an economic mastermind? This whole article is basically "the entire world economy is a house of cards wtf!" Yeah, no shit. We've known that for a decade now. Australia rises and falls with the world economy and if/when China crashes things will be ugly everywhere.

Could you please give a link.

I have searched for the article using 'Freelancer.com' and the earliest one is from 10 days ago titled 'Freelancer.com has ruined my life'. I also see similar articles to this from longer ago. Definitely seems like a site to avoid.

Searching for 'Matt Barrie' only gave this story.

I would love to see the article about them being scam artists.

Re: Australia's Economy Is a House of Cards

#23

Post by hydrox24 »

bruce_one wrote: post #15
bruce_one wrote: post #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) b…

The more I read this article, the less I'm convinced... Another "odd" bit (imo). > This brings me onto Australia’s third largest export which is $22 billion in “education-related travel services”. Ask the average person in the street, and they would have no idea what that is and, at least in some part, it is an $18.8 billion dollar immigration industry dressed up as “education”. > While some of these students are stu…

You're right that there are a couple of odd, basic inaccuracies.

> As if the Australian economy needed further headwinds, the developer-enamoured evangelical right have crucified NSW’s night time economy. Reactionary puritans and opportunists alike seized on some unfortunate incidents involving violence to simply close the economy at night.

In the last couple of years, the only lockout laws I have heard about apply to the CBD of Sydney, and nowhere else. But here, the author conflates the Entertainment district of the CBD with the entire NSW night-time economy.

Perhaps, by the numbers, it's fair enough to conflate those things. But a strongly suspect he's just very wrong.

Re: Australia's Economy Is a House of Cards

#24

Post by hydrox24 »

> In Australia, the average person in the street might think that the way that you get into the Prime Minister’s office is by being elected by the people. Since 1966, this has only been true about 40% of the time.

Well not only are they wrong. Matt Barrie (the author) is wrong too. No Prime Minister has ever been elected by the people. All of them have been elected by their party room. Australia elects Representatives and Parties. Mr. Barrie seems to be wading into topics that he doesn't have the chops for...

Re: Australia's Economy Is a House of Cards

#26

Post by Feniks »

hydrox24 wrote: post #24

> In Australia, the average person in the street might think that the way that you get into the Prime Minister’s office is by being elected by the people. Since 1966, this has only been true about 40% of the time. Well not only are they wrong. Matt Barrie (the author) is wrong too. No Prime Minister has ever been elected by the people. All of them have been elected by their party room. Australia elects Representative…

Ha yeah. That's highschool level of knowledge, at least in my country.

https://en.wikipedia.org/wiki/Parliamentary_system

Re: Australia's Economy Is a House of Cards

#27

Post by gumby »

A much simpler way to look at the same argument is simply to describe Australia as a Chinese mining province. There's no shame in that -- my native Australia has only a bit more than half of the population of my current home, California.

The widely reported "104 quarters of growth" is indeed impressive but it's ironic that the achievement was breaking the record of the Netherlands -- who set their record through extractive industries (oil in their case). And in fact Australia suffers some of the "Dutch disease": a loss of other primary industries, like manufacturing, wage and property inflation, and a sectoral imbalance.

None of this means the sky is falling (or doesn't) -- the economy is flexible, and China's economy, being huge, has a lot of inertia. But people should be honest in how they characterize it.

Re: Australia's Economy Is a House of Cards

#28

Post by shamas »

ido wrote: post #20
shamas wrote: post #8

People 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.

People have been crying "bubble" my entire life, and I'm yet to see one actually "burst". I gather you didn't work in tech in 2000?

This is a fine example of what I was saying, this is people cramming money into something with the hope of getting rich in a short period of time. People getting in knew it was a high risk gamble. Not to mention that the tech industry is now one of the biggest on the planet. Is it still a bubble?

Edit: attempt to add clarity.

The core of what I'm trying to say is almost any increasing asset is labelled as a bubble now days. I'm not denying that there aren't shady investments that appear and collapse all the time, some are enormous, like the tech bubble.

But it requires further classification. There are gambling bubbles built by thousands of agents where some have seen astronomical profit, but then there seems to be more stable "bubbles" like all of the bubbles mentioned in the article.

A bubble isn't a bubble, not without further clarification.

Re: Australia's Economy Is a House of Cards

#29

Post by sdwisely »

hydrox24 wrote: post #24

> In Australia, the average person in the street might think that the way that you get into the Prime Minister’s office is by being elected by the people. Since 1966, this has only been true about 40% of the time. Well not only are they wrong. Matt Barrie (the author) is wrong too. No Prime Minister has ever been elected by the people. All of them have been elected by their party room. Australia elects Representative…

screwed my face up at this, I'm willing to give him the benefit of the doubt and and assume he chose his words poorly and meant that 6 were not the party leader at the time of the election.

It's a shame because there is some interesting opinions in this that wind off into almost stream of consciousness.

If he had stuck to making his point with data and scrapped the anecdotes it would have made it an easier read.

It really need an editor and fact checking.

Re: Australia's Economy Is a House of Cards

#30

Post by alphaalpha101 »

cylinder wrote: post #11
TaylorGood wrote: post #3

Their 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.

Because Sydney barely had apartments until recently. Cross the bridge and it looks like a country village 3km from the city. Not many development sites and houses are very tightly held so it's tough to acquire houses for demolition and agglomeration into a development site. If Sydney is going to be a real city it needs the development that's happening now. I've also noticed cranes here are used for midrise apartment…

>If Sydney is going to be a real city it needs the development that's happening now.

Or maybe you don't need skyscrapers and millions of people to be a 'real city'. Maybe if that's your idea of a 'real city', nobody needs to be a 'real city'. Maybe some people are okay with the idea of not having a ballooning population, especially given that fast-growing populations in the west are driven by high population growth amongst very poor underclass and high levels of Asian immigration, primarily?

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