Forum Replies Created
obiwan, you mustn’t post that link, people might actually start believing this is a bubble [biggrin]
the still-weak-but-not-as-weak-as-it-was dollar have certainly improved our ability to consume.You say that its great that the AUD is strong, but we haven’t earned it.
Please tell me, how do we pay for all this consumption of imported goods? The answer is either debt or exports, and its all debt at the moment. Our current account deficit is already seven times larger than Costello’s much trumpeted budget surplus and it gets worse and worse and worse. Do you really think this is sustainable over the long term?
The strength of the AUD has very little to do with our so-called “strong economy”. It is mainly due to US dollar weakness (because of the “twin deficits”) and strong commodity prices. The AUD is actually riding on the strength of Chinese demand and massive financial mismanagement by the Bush Administration.
Current Account Deficit 1996-2005
http://203.26.51.178/cracker/54029_1.jpgI would love to see our dollar back on a par with the USD to return our sense of dignity.I think there is a lot more pride and dignity in seeing Australian products sold around the world don’t you? Parity with the USD is just some arbitrary number, besides the AUD has never been on par since in floated, the long-term average is 70c.
out of interest, what is your definition of a productive enterprise?A business that produces a tradeable good or service. We can’t sell our overpriced houses to the rest of the world.
they typically outsource manufacturing offshoreSure, but the design, development and profit stays in the company’s country of origin.
Who compiled it?The Reserve Bank of Australa.
You can make your own chart by downloading a spreadsheet from here:
http://www.rba.gov.au/statistics/what currency is it denominated in?Australian dollars, it says so on the charts.
would be what is the definition of savings in the first diagram?Ask the RBA.
Has it been adjusted?Its in nominal dollars. If you want to adjust for CPI download the raw data from the RBA and do it yourself … but as you know inflation has been very low for the past 10 years so its not going to make much difference.
Makers of items like dishwashers must be loving itActually I believe Fisher & Paykel (yes Kiwi I know, but similar situation) are in serious trouble because the high Kiwi dollar means they can’t compete anymore, both in their export markets and locally (against imports that have become much cheaper)
I want 2 go on record as saying that IMHO this is leading Australians of the future into financial turmoil.We r not teaching financial fundermentals of how 2 save and start small to build wealth, we r teaching laziness.
I couldn’t agree more.
(and before Robert jumps on me, I don’t think all debt is bad)Here is a chart of household saving 1996-2005:
http://203.26.51.178/cracker/54029_2.jpgHousehold saving is now negative. We spend more than we earn.
Here is a chart of credit aggregates 1996-2005:
http://203.26.51.178/cracker/54029_3.jpgNote how housing credit has zoomed past business credit over the past decade. Australia borrows to build houses, not productive enterprises.
disagree… they were horrible times and frankly quite depressing being the laughing stock of the world.Funny I don’t remember any recession or mass unemployment when the Aussie dollar was at 48cents. Sure imported goods might have been more expensive, but export-focussed businesses were thriving and putting on lots of staff.
Standards of living are vastly better now with a stonger currency and economy.Rubbish! Was Australia a third world nation three years ago? I must have missed that.
Rate rise dampens demand for home loans
The Reserve Bank’s decision to lift interest rates in March appears to have dampened enthusiasm for home loans, newly released figures show.The Australian Bureau of Statistics said owner-occupier housing finance, excluding alterations and additions, rose 1.3 per cent in March to $11.992 billion.
The seasonally adjusted rise was much slower than the five per cent rise reported for February.
Go figure! I don’t know where SALACIOUS’ story comes from, but I always like to post a link (apologies to Robert, I know how it annoys him)
http://smh.com.au/news/Business/Rate-rise-dampens-demand-for-home-loans/2005/05/13/1115843352071.html
SMH May 13, 2005 – 12:09PMWhat if the Chinese grow strong enough economically to start buying Australian property en masse?Point taken. I can see the Chinese investing the Gold Coast etc, but I can’t see it supplying enough demand to prop up the real estate market nationwide, or enough dollars to fix our CAD.
once the currency collpases you may as well switch off the lightsRubbish! I don’t remember any lights going off when the dollar was at 48 cents (circa 2002 from memory). The economy was growing strongly at the time and the CAD was much smaller.
The strong resources industry which has pushed this currency up is a glimmer of hope in our short history to invest in some decent industry and change the nature of the economy.Sounds nice in theory, but that’s not what has happened in recent years. Rather than invest the dividend from the booming resource sector into productive enterprises, Australians have ploughed the money into housing.
We can’t sell our overpriced houses to the rest of the world!
it amuses me that you wish this banana republic status upon us so eagerlyMate, we are a banana republic. The Australian economy revolves around building houses for each other and digging stuff up out of the ground and selling it to the Chinese. The only way we can avoid becoming a banana republic is by broadening our economic base, because once those terms-of-trade turn against us, its gonna get nasty.
And BTW, our farmers are amongst the most efficient and least protected in the world. Its European, Japanese and American farmers who are inefficient.
dont know about that surf beach but anywaySure, it sucks compared with beaches further south, but its way better than most beaches in FNQ. Aren’t they trying to build a beach in Cairns now?
AFAIK Port Douglas is closer to the better preserved parts of the reef. The reef boats always sail north from Cairns not south. There is more agriculture (sugar cane) south of Cairns so the reef isn’t so healthy.
PD is pretty much at the northern extreme of coastal development (if you ignore Cooktown). Its pretty untouched up there, and the coastline between Cairns and Cooktown is stunning.
The Daintree is special because once you cross the river there’s no mains electricity and very little development (no thanks to Joh). That’s what people fly half way around the world to see.
My memories of Innisfail was a hick town with not much going on. Some nice Queenslanders though. Perhaps Innisfail can find its Skase but I doubt it will ever be a Port Douglas.
why Innisfail is so very low priced compared to Port DouglasUmmm … would proximity to the Great Barrier Reef and the Daintree have anything to do with it? How about a marina where most of the tourist operators are based, great cafes, bars, restaurants, stunning views north and south, a surf beach. I could go on.
Would take at bare minimum 14 properties to come to this numberYes 1 property sold out of 14. I know of at least two more auctions that were withdrawn prior so the clearance rate was possibly worse than 7%.
Anectodotally I attended a few auctions last Saturday and not only was the reserve not met, no-one made a bid at any of them.
I reckon that’s about the tenth time you’ve mentioned “alterior motives” and “personal financial benefit”. You’ve also accused of posting using aliases (?!)
Nice.
I admit I vent my frustration at high property prices (and the sharks that inhabit the real estate industry) in this forum, but to think that I hope to somehow influence the property prices by posting here is absurd, and I hope other readers give it all the credibility it deserves.
BTW, what possible alterior motives could I have for discussing taxation reform? Perhaps I am trying to influence the government via this forum?! Its a ludicrous proposition.
Your comments seem to also be changing from doom and gloom bubble bursting to flat and soft landing.Not at all. I was making a comment on where I think the market is now. Never have I said the market has already crashed.
I believe there’s a good chance the market will crash and that low clearance rates etc could be a pre-cursor to that.
Will we be in a boom next week if it says so in the newspaper?Obviously not, because I haven’t changed my views despite the topic of this thread.
I am also against State Government Stamp Duty.At last we agree on something!
It seems that you will continue posting what I consider to be propaganda until I agree with you. If I just say I agree with you, will you give up on this constant negative posting campaign of yours regarding the economy and property prices?Seems like you’re trying to get rid of me. It would be a dull forum if you did.
As for propaganda, we’ve endured a decade of propaganda from the property industry. How many get-rich schemes have we seen in recent years? How many investment property books are there? How many property seminars have there been? How many home renovation shows are there?
My tiny contribution going the other was is hardly going to make a dent in the mountain of propaganda from the real estate industry.
The situation on the Northern Beaches is not an economic indicator for the rest of the country!Jeez it was just an anecdote (similar to those that others have posted) I hardly think it warranted the BIG RED TYPE.
As for how the market is performing in the rest of the country … to the best of my knowledge Perth is still booming, I thought Brisbane was as well until I saw that article in the Courier Mail, Melbourne and Adelaide are kind of flat, and Sydney is off about 10%.
My point was that the market is slow in Sydney. Properties are taking a long time to sell and auction clearance rates are low. Its not “ticking along” as AUSPROP suggested. Does anyone know different?
…and I was about to say Sydney leads the market, but someone else has said that for me (must have been one of my many aliases)
One whole person has publicly agreed with you. Lets all be ‘selfish’ then!Lemme see, AUSPROP and ANIBUS were in general agreement with me on tax reform. foundation, obiwan, SeeChange, baloo, ssab, carlin (amongst others) seem pretty bearish on property. That’s not bad tally for a property investment forum which you’d expect to be pretty bullish on property.
The only person that doesn’t agree with me on every single issue is YOU. We must have some common ground surely? Are you in favour of state government stamp duty?
I agree totally although I believe positive articles should also be included with the numerous negative articles that have been posted so a more informed and balanced decision can be made.Go ahead, post some “positive” articles then. I’m not stopping you.
What it does suggest is that (as Robert has argued blue in the face before) the market could actually be just ticking along.Well, I don’t know about other parts of the country, but where I am (northern beaches, Sydney) we had an auction clearance rate of 7% last weekend (no, not 70%, 7%). I’d hardly call that ticking along.
dmichie (and his aliases) will not like this post!I don’t have any friggin’ aliases! Grrrr.
The housing boom is back – with a vengeance.Yes, housing credit is continuing to boom, although at least the speculators (sorry “investors”) are getting out. Looks like owner-occupiers have seen the recent falls in prices as an opportunity to “buy the dip”
Here’s a chart showing how housing credit has zoomed past business credit over the past decade.
http://203.26.51.178/cracker/54029_3.jpg
Proof that Australians are madly borrowing to buy and build houses rather than to invest in productive enterprises. This won’t end well.
