Gloom and Doom for Oz Thread

Discussion in 'Markets & Economies' started by JulieW, Jul 27, 2015.

  1. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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  2. leo25

    leo25 Well-Known Member Silver Stacker

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    Thanks guys. I just saw bordsilver mentioned it in the 3rd last post on page 5, i didn't realise he linked it earlier in.
     
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  3. House

    House Administrator Staff Member

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    From bad to worse :confused:
    • The poor FHO’s are still having the worst time ever in “unaffordable” Sydney and Melb. It shows in the numbers with a respective 54% and 24% increase on last year :(
    • Employment increased 27,600 higher in NSW to be up by 46,800 over the quarter. Up an unfortunate 156,000 YoY
    • NSW has added a measly 300k+ extra jobs over the past three years.
    • Including bonuses, YoY wage growth was stagnant at 2.63%, the best result since Dec 2014 (2.73 per cent)
    • Retail turnover year-on-year improved +3.15%, seasonally adjusted
    • Greater Sydney's rolling annual unemployment rate continues to drop to 4½%. The lowest in about a decade :(
    • Holden and Toyota closures... zero impact.
    • The significant majority of the much maligned household income to debt ratio of 200% is mainly held by the upper two quintiles. It was pushed up by the addition of debt held by SMSF’s to the calculations.
    • The rolling annual deficit has dropped to a disappointing A$14 billion, the lowest absolute level in about 9 years.
    • Half way between the expected ‘8 interest rate rises in 2 years’ prediction... and still nothing :(
     
  4. Miksture

    Miksture Active Member Silver Stacker

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    Interesting discussion. I just looked into free will vs determinism (hard and soft) recently. The trick seemed to be in being able to link causality to the process for making choices. While there is evidence of brain activity leading up to the point of making a choice, trying to say that that activity is a predetermined predictable process based on cause and effect is not yet possible. :) Of course, that is not an argument FOR free will but it is one for holding judgement on deciding that everything is predetermined.

    Interesting discussion topic and interesting person.
     
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  5. Dale

    Dale Member

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  6. Miksture

    Miksture Active Member Silver Stacker

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  7. Dale

    Dale Member

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    I agree Miksture, I think we are on the brink of a big deflation in house prices 20-30% and a recession, not sure which will come first but I don't think roaring exports will save us.
     
  8. Miksture

    Miksture Active Member Silver Stacker

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    I am not sure what is going to happen really. Sydney and Melbourne seem to be quite high in real estate and with the recent changes to bank lending policies forcing them to seek 20%(??) deposit before lending will cause a big slow down in the housing space for sure. There is still increasing demand in housing which puts upward pressure on prices but will it be enough to slow the deflation of house prices?

    Personally, I think that wage rises would stimulate spending and would put a good spin on Australia's growth. Currently, with GDP rises but no commensurate wage rises means that someone is hoarding profits. If those profits go to overseas investors then they are lost but if they are spent locally it would stop a recession. Time will tell I guess.
     
  9. Dale

    Dale Member

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    Mortgage stress is spiking while credit growth is still slightly chugging along.
    Problem is wage growth is at historic lows, as well as savings (if i recall savings are close 2008 gfc levels). A lot of the spending in our economy is coming from home equity.
    First home buyers are increasingly using mum and dad for a deposit too, up to about 50% last I looked growing from 20% in 2010.
    Foreign investment has vanished also.

    [​IMG]

    [​IMG]
     
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  10. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    GDP includes government spending, no profits to be made there as it is just can kicking and doesn't necessarily contribute to increases in productivity anyway. And money is not wealth so it doesn't matter if it goes overseas as we are exchanging it for goods - which does make us wealthier.

    Creating economic activity by stimulating spending is such a keynesian thing. ;)
     
  11. Miksture

    Miksture Active Member Silver Stacker

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    Profits going overseas is always a problem. We are not talking about money going overseas in trade when we talking about GDP?
     
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  12. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    No we’re not talking about money going overseas when we talk about GDP.

    But profits are the reward for risking capital in order to meet market demand. Consumers buy goods, entrepreneurs are hopefully rewarded with profits. Those goods we can’t economically produce ourselves are bought from overseas with our money. Naturally the profit that results from that exchange in value may go back overseas to the suppliers/manufacturers business owners that met the market demand.

    It doesn’t matter therefore if an increasing amount of profit goes overseas as long as the wealth (prosperity) of a nation is enhanced. These profits take the form of money whereas wealth on the other hand is our capacity to enhance value ie meet our needs and desires. As long as prosperity is rising the amount of profit being exported to foreign countries can also continue to rise. If our prosperity starts declining though then it’s not the amount of profit being exported that is a concern, it’s our productivity. And restricting or reducing the amount of profit going overseas will not solve that.

    So we shouldn’t concern ourselves with profits, that’s the domain of the entrepreneur (and the tax office), but rather our focus should be on prosperity and productivity. :)
     
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  13. leo25

    leo25 Well-Known Member Silver Stacker

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    Housing oversupply is really starting to build up in Sydney, so it's only a matter of time when prices start falling more noticeably. Atm prices are being discounted in private.

    Here are some stats I've been tracking for the last 2 years. The number are of housing availability in some NSW suburbs from March 2016 to now (June 2018). Number are taking from realestate.com.au.

    Zetland: Buy: 43 to 121 now. Rent: 31 to 141 now.
    Parramatta: Buy: 166 to 300 now. Rent: 182 to 305 now.
    Epping: Buy: 128 to 260 now. Rent: 84 to 181 now.

    Oh and there are still a lot more big apartment complexes being built. Atm buying an investment property in Sydney makes no sense as the rental yield is falling fast. Even the real estate agents can't make sense of it and that's even assuming interest rates don't increase.
     
    Last edited: Jun 7, 2018
  14. leo25

    leo25 Well-Known Member Silver Stacker

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    I'm sure the banks are still valuing the houses at the highest value possible on their books.
     
  15. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    Instead of the absolute number of properties to rent/buy, what are the rates as a percentage of stock of properties/rentals? In suburbs where there has been a large growth in dwelling numbers (i.e. Zetland, Parramatta, Epping) you should automatically expect to see an increase in the absolute numbers even if the vacancy rate was unchanged (or falling even).
     
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  16. Miksture

    Miksture Active Member Silver Stacker

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    Ah no!!??!!!?111 The exploited economy theory. As long as we are being well exploited we can be a little more prosperous. I am not a fan of that theory. If the profits are re-invested locally we become more prosperous and we are not required to perform at the same level to remain prosperous.
     
  17. leo25

    leo25 Well-Known Member Silver Stacker

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    Yes you would expect to see an increase of availability initially, but then you should see the demand soak up the extra supply over time. (the whole point of adding more supply is based on the assumption there is more demand) But what i have been seeing is the supply number growing larger over time, so that would say the supply is growing faster then the demand. When supply out passes demand prices fall, which is what we are now seeing.
     
  18. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    @Miksture I’ve never heard of that theory. I suspect it has no validity because if we are getting wealthier, then we’re not being exploited.

    Reinvesting profits to improve productivity is done so at the discretion of the business owners. It is but one tool at their disposal. Shipping profits offshore to buy more Caterpillars to increase productivity or meet unmet demand is another.

    Check your definitions.
     
  19. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    2% vacancy rate is generally regarding as a tight rental market whether there are 20 places available in a suburb with 1,000 rentals or 200 rentals available in a suburb with 10,000 rentals. The denominator matters.
     
  20. leo25

    leo25 Well-Known Member Silver Stacker

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    I understand what you are saying. Unfortunately i didn't collect data on what the total dwellings was in each area over time (would be hard to find and track). But what i can tell you is that the % of availability is growing over time. So if it was say 2% back then, it would be 4%+ now.

    i found this link, but it's from 2016. http://www.censusdata.abs.gov.au/ce...t/census/2016/quickstat/SSC13156?opendocument
     
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