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Housing Crisis: Australians Resort To Renting Tents As Cost Of Living Skyrockets
Last week we brought you “Million Dollar Shack,” a comedic yet sobering documentary that provides a first hand account of California’s housing bubble.
As we noted when we presented the clip, the short film embedded above has it all: absurd prices for rundown properties, soaring costs for rentals, even a tent in someone’s backyard that goes for $46 a night (you get an extension cord, one shower a day, and wi-fi).
Of course California isn’t the only place where the cost of living has gone through the roof.
Indeed, between America’s transformation from a nation of homeowners to a nation of renters, capital fleeing China for international real estate, and the proliferation of ZIRP and NIRP, housing costs have skyrocketed from New York, to Oslo, to Hong Kong. As we pointed out last Thursday, UBS is now out warning that London risks a “substantial price correction should the fundamentals for estate investment deteriorate.”
All of this comes as DM central banks across the globe swear there’s no inflation and not only that, the same central banks cite a deflationary impulse on the way to cutting rates to zero or below which of course only serves to exacerbate the housing bubbles that are pricing the lower- and middle-classes out of the market.
The situation is so bad in London that one apartment seeker was recently shown the following “room” which she was told could be hers for "just" £500 a month.
Well as it turns out, Silicon Valley and London aren’t the only places where tents and cots under the stairs are actually being marketed to renters. As Australian media reports, "tents outside" are now going for $90 a week. Here's more:
Renters in Melbourne are offering tents on a balcony instead of a normal bedroom — and people are desperate enough to move in.
Those who want cheap rent in the city can find adverts on sites like Gumtree, promoting the low-cost housing solution.
One tent is being rented out at Southbank for $90 a week.
The seller, who already lives with two other people, had previously lived in the tent for six months.
It is described as comfortable and has electricity and a mattress.
The person who moves into the tent can share one of two toilets and can have access to the living room, kitchen and two new fridges.
Flatmates.com.au chief executive Thomas Clement gently suggests that before you resort to living in a tent on someone's porch, you consider living outside the city and dealing with the commute:
"More and more people want to live closer to the city centre and I believe that’s where some of the issues come in A lot of people are having affordability issues but the easy solution is move out of the city a little bit. I think people’s desire to live centrally is outweighing the logic of taking something affordable.”
Maybe. Or maybe prices are just too damn high. That is, maybe it's not the renters that are being illogical - maybe it's a market that's been distorted by a variety of factors including, but certainly not limited to, ZIRP. In any event, we took a quick spin around Gumtree.com and found another amusig listing which, despite a valiant effort on "Debbie's" part to sell it in a way that isn't demeaning, is for all intents and purposes being pitched to vagrants:
hi,everyone i know how backpacker can be to cramped in shareing rooms with no private or to put a tent up at a caravan park , i have a caravan i have parked in my drive way that i am gonna let out for short stay people who are travelling through.
caravan has all utilities as reverse air con, microwave,toaster, kettel , small gas cooker, linen, it has 2 single beds or the table folds down to a double bed , where you have your own space,inside house you tv with foxtel if you like to use and socialised in side the house , share bathroom, kitchen if you like to cook up a storm, pergola out back with bbq that you can use if you like,internet at an extra cost.
your close to shops , beach, and transport, i have dogs that are friendly love people for attention.
PRICE
$25 a night
$30 a night for 2 people
$5 a day for internet per person in house
$155 if you stay7days for one person or for 2 is $190
there is a security bond but depends on how long you stay.
please text me or call no emails please Debbie.
Yes, "no e-mails", which shouldn't be a problem because if you're considering renting out Debbie's driveway "caravan," chances are you aren't toting around a MacBook (unless you're a jobless recent college graduate, in which case you probably left school with $35,000 in debt and five Apple products). Here's more from Thomas Celement (cited above):
“We don’t believe it’s a reasonable way for people to live."
“People think share accommodation is a student thing but it’s not. The majority of people who live in share housing are around 27 and in their first or second job.
“Living in a tent doesn’t connect with someone with a professional job.”
No argument there.
Of course at the end of the day, if living on someone's porch in a tent or in someone's driveway in a "caravan" isn't your style, you can always just go home...
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$90 bucks a week seems fair. Not that easy to find a tent where you can smoke anymore.
All due to immigration, haven't the Australians let in a billion Chinese?
I wish! Maybe then, there'd be a glut of the smokin' Chinese babes in my city. But at the moment, the demand is vastly outstripping supply.
A billion... you've given me hope!
smokin' chinese babes would want your limp micro penis?
Nothing speaks to the insanity of the banking sector like Australia being cramped for room. A continent the size of the United States with the population of Los Angeles, and people are living in tents for lack of housing options.
Smells like rent control. Then again, there's Australia, and there's habitable Australia.
It's all habitable... well, everywhere except the major cities now.
We concreted and tarred over the most fertile land in the country and built cotton and rice farms where it doesn't rain.
Anyone with a modicum of sense would be systematically relocating the business and financial sectors (and all the people associated with them) of the cities inland and reclaiming the coast for agriculture.
But no one capable of gaining any kind of political influence here is allowed to have the slightest hint of sense.
HAHAHAHAHAHA, "it's all habitable". That is a really dumb statement. Tell you what, take a flight from Sydney to Broome and then tell me what you think. After 5-10 minutes leaving the airport you are into rural Australia. After 15-20 minutes more there is fucking nothing but the most inhospitable, moonscape known to man for another 4 hours. When I say inhospitable, I'm not talking a scenic desert, I'm talking a fucking wasteland.
It's all habitable - the shit you read on the internet.
I worked at DeGrussa. It is all habitable.
Sure, some places are easier to inhabit than others. But that lazy, unimaginative thinking is exactly what had us cover the few places on this continent that receive regular rain with concrete and steel.
Do the flight, then comment.
Google is your friend. You might not look so stupid in future if you know where DeGrussa is.
It is all habitable!
I've driven from Sydney to Darwin. Australians are just small thinkers, just look at Sydney CBD most pathetic city centre outside of Africa. City planners couldn't plan an f'ing BBQ at the beach.
You're brilliant. Will you be my friend?
I'm looking for that one-in-a-billion!
no
and australia has restricted foreign ownership a while
it's partially due to china but more so due to cheap australian rates and the huge commodity boom
basically same thing as Alberta in Canada... Calgary was almost as bad as Vancouver and there's almost no rich Chinese there... it's all $40-60 labour and cheap mortgages that caused the boom
All of those things are a factor, but none so major as land rates and stamp duty. State and local governments profit massively from artificially high real estate values. This is how a back bencher in NSW, VIC, QLD and WA have higher salaries each than the President of the United States.
Technically, our backbenchers have to pay for their own stuff. Unless, they have access to a union creditcard.
+1 Smoke em if you got em! he he heee
This will never fly in the Los Angeles area and surrounding suburbs... Theyll send the effing swat team to 'evict' the people. I know a LOT of people with great jobs who live in trailers that refuse to buy into the trap of homeownership, etc... Then theres the boondock camping phenomenom occurring which w'll talk about later ;-)
We left our stick built home and are full timers. tenants now pay the mortgag5, we live and work where we want.
Smart young people rent a parking spot in the city centre, park a van in it, throw in a queen-size bed, and make $150k+ per year by working 14+ hour days.
They avoid the cost and danger of commutes, while using the saved time to make more money. Anything else is madness.
... and now we understand the insanely high cost of parking in the city. Smart people live under a bridge and have a 24-hour gym membership so they can access toilets and showers. Smart people do survival courses or hang out with the indigenous population - if they can find any that still remember how to live off the land.
fucking aussies r dumb asses just like the ameridumbs....
ur central bank and its owners like at the heart of ur fucking real estate bubble and r the reason why the chinese r setting up shop in ur luxury homes and prime spots...meanwhile the average "mate" gets the bend over....
and what do u do about ur banker owned government...
FUCKING NOTHING...
oh well......................
Yeah... Let's blame the slaves for Massa's beatings. Surely they could break those chains if they just tried harder...
i thought the roads were paved in gold in australia...?
Pfft, paved with Gold. Thats for Ameritards. We are all Platinum downunder now baby!
Naaah, just Kalgoorlie.
http://museum.wa.gov.au/explore/wa-goldfields/rush-gold/streets-paved-gold
The RBA wants to keep easing?????
From: USA
To: Australia
We had the same problems in prior to 2008 and we also have the same problem now. Don't make the same mistakes we did.
Didn't you hear? Our new PM made millions insider trading for Goldman.
We're merely following a script.
Australia does whatever the US tells it to do and believes whatever the US tells it to believe.
That's certainly true of our political class. But very few here pay them much attention.
Although, from what I've seen, it seems much more that Australia is in the dictatorial role of the relationship.
Maybe it's time people got together and sued these bastard central bankers
or at least pitch tents on their front lawn.
Landlords should keep raising prices while the government denies inflation.
In the US they report under 2% inflation.
Government keeps lying until there is a revolution.
Gasoline prices down almost 50% in 4 years. Walnuts up 70% in two weeks.
So I still can't afford to drive out for a bag of nuts.
>>>Government keeps lying until there is a revolution.
The government (US, Aussie, wherever) will continue lying, especially after any serious revolt, and they will continue lying until the moment their heads are cut off (though some of the savvier players may admit that 'mistakes were made').
Every day they laugh, have another beer, slap each other on the back and say, "Shit! We got away with it again! Let's see what we can get away with tomorrow!"
Wait until the US has a social credit system like China; people will be barred for living in certain cities just for speaking their mind.
http://www.newrepublic.com/article/123285/chinas-troubling-new-social-cr...
All because the governments have allowed Chinese money to flood the real estate markets in Western Countries. The same thing has happened in Auckland,New Zealand. The sh..t is about to hit the fan in real estate markets worldwide.
Did the same thing to the Japanese in the 80's. They bought over priced assets withe the dollars we gave them for goods. Then the market tanked and we bought back said assets at a 50% discount. For all the talk about the wise Chinese culture, they seem to be doing some stupid shit to me.
First by inflation, then by deflation...
Not chinese culture that assumes right of the People to decide. It is the command and control economy that do not even bother to mask their Oligarchs.
Yes indeed it is the same situation around the world. Something will break.
This is the Hilton compared to people living in the slums of Manilla. The phenomenon is global and getting worse. 7.3+ billion carbon units at this time and NGOs and governments and the UN setting goals (rather insane goals) of putting 9-10 billion people on the planet by 2050. That's 3 more Chinas. Have you looked around at the environment lately? Notice anything missing, e.g., ice, species, forests, etc. If things are this bad now, how bad do you think they will be with another 3 billion people, all trying to find food, fresh water, housing, and other crazy luxuries? But mention overpopulation and folks around here start beating their libertarian breast plates in outrage.
"Sir we have a problem. Reality is trying to crash the party."
Setting goals?
What? Are they running a dating service?
I don't know what you're whining about.
They plan on moving all those 3rd world assholes to Europe, the US and Canada.
It'll be a Utopia!
Another place "royalty" has completely fucked up.
The idea that their are still Western Nations with Monarchies in 2015 is sad... Then again I don't know how much sadder it is than living in a nation run by a bankster mafia. Probably worse though because the bankster mafia ultimately controls the monarchy. The crown is just another middle man
However if Barack's lavish lifestyle shows us anything a king may be less palatable, but it's likely cheaper.
No doubt, any nation can certainly afford to feed, clothe and house one man in great splendor & opulence. It's the cost of his "baggage handlers" that always break the national treasury ;-)
Don't worry Aussies your increased costs of living are just "Transitory". Just ask the FED!
Throw anotha shrimp on the barbi and grab a fosters mate - and don't touch the croc
I have trouble figuring this out. Housing is driven up by so many people with so much wealth demanding all the homes. Yet, I read ZH and hear the US economy is in recession, and we teeter on the edge of a 2008 style financial crisis.
If all the houses are over a million dollars across such a vast area, when wages are stagnant or falling, when tens of millions dropped out of work.
The top 1% are the only ones showing wage growth, and I accept that tech bubble workers are in the 1%, but how can there be so many rich that they drive all prices to the sky? Isn't there a set limit on how many high paid workers Google and others hire?
Markets decide prices, so we must have buyers flush with near unlimited money, and enough buyers to bid the entire market sky high. That sounds to me like a fantastic rich growing wealth ridden economci boom of epic scale, not teh crumbling American economy that we hear about. So, which is it. Are we filthy rich, or poor?
The rich are driving prices sky hi only in places the news constantly features. yeah prices are up since the crash but the market is still weak in most areas of the USA.
The Chinese and the rich are welcome to come down and drive up real estate around where I live.
I'd love to sell out my shack for a cool million.
there was a saying during the great depression attributed to a politician or banker or some ivory tower person, "........yea, but, 75% of the people ARE working". in other words, there is definitely a have and have not, third world economy, developing in the usa. working doesn't allow you to keep up. when more than half the population is just one week off away from homelessness the country is not wealthy anymore but there are a lot of wealthy people taking advantage of the advantage.
'Markets decide prices '.......dumbest comment ever...! if one 3000sqft house is appraised for a $million dollars then ALL FUCKING HOUSES APPRAISE FOR THE SAME AMOUNT. well how do people buy these over priced homes with no income...THEY FUCKING GET NO DOC LOANS.
JESUS FUCKING CHRIST WE WENT THRU THIS FOR 10 YEARS AND PEOPLE STILL DONT GET IT. central banks control the economy not supply and demand or any such shit they teach in school. pricing for everything is based on the amount of credit available.
it never ends the stupid....
Collateral
Oct 28, 2015
Memo: Total U.S. Treasury, agency debt, and mortgage-backed securities (1,2) 4,240,037 Less: Face value of securities under reverse repurchase agreements 325,798 U.S. Treasury, agency debt, and mortgage-backed securities eligible to be pledged 3,914,240http://www.federalreserve.gov/releases/h41/20060202/
Federal Reserve notes outstanding 1,535,449
Feb 1, 2006
Federal Reserve notes outstanding 909,157
U.S. Treasury and agency securities pledged (1) 734,938
http://www.cnsnews.com/news/article/ali-meyer/bernanke-leaves-fed-record...
The boom in real estate in Canada,New Zealand,Australia is largely from overseas buyers,not from the local populations who earn a living in their respective country. Some of that money from China is illegal and pushed through the real estate sector. Governments have been quite happy to see Chinese money push up housing values, creating a false sense of wealth of middleclass homeowners/voters. The impact of all that overseas money of sometimes questionable origin is starting to have significant economic consequence on the resident population.
NONE OF THE MONEY IS ILLEGAL...it may be illegal to move the money outside of china but the money isnt counterfit.....it isnt 'illegal'..? not all the homes are purchased by foreigners either. 'local populations' do not have the income to buy million dollar homes....AND MAKE THE PAYMENTS. that is why they are foreclosed and all the cdo and leveraged mortgage products/derivatives the banks created are shite...!!!!!!!!!!!!!!!
the joke is 'the aussies have made the same mistake the usa did''...no shit sherlock because it is different this time. how many times have i heard the puffery from an aussie about how their natgas/mining boom wasnt a chinese fiat bubble....hahaha. people live in denial.
In Australia, it is actually illegal for a foreigner to purchase an existing home. Apparently, there is a crack down on this at the moment. However, foreigners are free to purchase as many new or off-the-plan dwellings as they please.
Anyways, selling realestate to foreigners is going to be one of our main 'exports' going into the future. The thing you need to understand is that Australian cities offer a lifestyle you cannot find in many places outside of Australia.
Our inner cities are not overrun by negros. That alone makes a big difference. In fact, our inner cities are being overrun by Chinese who have a higher average IQ than an Australian. If you call being overrun by wealthy intelligent people a problem, I'd hate to see what you think a serious problem is!
Sub 80 IQ EBT negros, or 100 IQ wealthy Chinese... I'll take the Chinese.
existing home or new construction...how is either different when it comes to price dynamics. new 3000sqft homes appraise at the same price as existing. when new homes go up 25%, all similar homes will go up. laws are meant for piss ants...they mean nothing....
We're credit-rich; fundamentally poor. Soon the credit will disappear.
Look at the percentage of workers in those areas compared to the working population. Just a concentration in that area of people getting paid above average middle class wages. $15,000 a year in 1965 was very doable with a high school education. Now that would be about $114,000 or so. When you blow $150,000 on college, you'd better get out and earn a pile of money, or you are much stupider than your sheepskin says you are. So a 200K salary can totally screw up the local real estate market when enough people are earning it. But those places are just dots on the map. Most Americans are in the dumper, for sure.
Find your answer in the debt/credit space. Also how effective are the snake oils when it come to preys.
Jack Burton re "I have trouble figuring this out ..." :
You've been here a while so I thought you would have figured it out by now. Anyways:
I hate plugging books and every time I plug these ones, I feel like some kind of JW, but here you go:
"Liars Poker" and "The Big Short (Inside The Doomsday Machine)", both by Michael Lewis.
There are other books / articles that can explain what happened but in my opinion these two books are the best for information, clarity and a great read. If you don't want to buy them then borrow them from the library.
In short, the banksters started selling the home loans - probably to your pension fund - and at that point no longer cared whether or not the home-owner went bankrupt. The more money they lent, the more they got paid (lending is, of course, how banks make money) and so they just kept lending. If you are dumb enough to borrow, they are dumb enough to lend to you. On top of that, the way they structured the mortage loans they were selling, the ratings agencies didn't know how to value the structure, so the agencies simply rated them AAA so everyone thought the mortgage bonds were safe. Why rate them AAA without all the correct information? Well, the ratings agencies like to get paid and who pays them? If they say nasty things then they might not get more business.
2008 and the chickens came home to roost and the banksters should have gone bankrupt from people being unable to make repayments, but instead the banks got bailed out, and the rest of the shenanigans you can read about in old ZH articles.
Read those two books. Find out what are Mortgage Bonds, Collaterallised Debt Obligations (CDOs), Credit Default Swaps (CDSs) and Synthetic CDSs. You can Google those words but I still say those two books will explain it much better, plus show you how they came about.
You are right. The numbers do not add up. They will never add up until banks stop lending money to idiots (Idiots because they do not understand what they can and can't afford to borrow) or idiots stop borrowing. Idiots, by definition, will not stop borrowing until forced to stop. Why would they want to face reality? Then they wouldn't have nice things and their material status would reflect their social status. By borrowing too much, they can pretend they are richer than what they really are. Banksters won't stop lending to idiots because there is more money in lending to idiots. A smart guy earning a grand per week might tolerate a mortgage of $300 per week for 25 years. An idiot on the same money might tolerate $600 per week forever. So the smart guy either goes homeless or else he has to act like an idiot to compete with the idiots.
After you've read "Liars Poker" and "The Big Short", google "Linda Green" of mortgage fraud and financial scandal infamy. Not long after the Linda Green scandal, ZH ran an article about an ad they noticed for an accountant, "We don't care what your grades are, even if you got a C, as long as you can sign your name."
Back in 2004 I was freaking out. Minimum wage in Australia was $400 (after tax), the cheapest house in the cheapest suburb in Perth was $250 000, which translated to a mortgage of $400 per week for 25 years. So who the fuck lived there? You could say that a double income couple could buy a house, but this was the cheapest house in the cheapest suburb i.e. a fixer upper in a shitty environment. Add in the second wage for repairs, rates, utilities etc - it sure as hell wasn't going very far. At the time the average house cost approx 80% of average weekly earnings, which told me that the average person was fucked. I've never understood why no-one noticed or complained. It's seriously freaky when you can see such obvious anomalies and no-one else seems to notice or even care. Using the numbers from 2004, only doctors and lawyers could afford to comfortably buy the cheapest house in the cheapest suburb, but obviously they weren't buying the cheapest. Nothing made sense then and it still makes no sense now.
When Elizaebth Warren made this speech:
https://www.youtube.com/watch?v=akVL7QY0S8A
I thought, "At last! I've finally found another human that gets it." These days I have met a couple of young guys who realize they are screwed, but not many, and despite all of us going to school for ten or twelve years and learning lots of mathematics, I am totally blown away by how few people actually apply that mathematical knowledge when it comes to their often-greatest expense - their home.
Also:
Property investing. Go to a "Get rich with property investing" type seminar:
"Old style" property investing: If the mortgage and expenses costs $100 per week and you rent it out at $200 per week then you are "Winning". Very hard to find positive cash-flow property (maybe impossible these days, but I can't say I know), plus you pay tax out of your profits.
Property investing "a bit smarter": Don't worry so much about positive cashflow, concentrate more on capital gains. Negative gearing - sure you have money coming out of your pocket but you also get a tax deduction, plus you claim depreciation so now you can afford to buy a bigger property and instead of getting 10% growth on say, a $100k property you get 10% growth on a $200k property - winning.
Property investing where we are today (if you know the right people): Negative gearing is smart but you are limited by how much property you can buy by how much money you earn from other sources to cover the shortfall. So don't bother covering the shortfall. Who cares if you're taking on an extra $10k per year in debt if you are gaining an extra $40k per year in capital gains? There are "Property Investment people" who can set this up for you right now, and now is a good time to learn about Hyman Minsky, Minsky's definitions of "Hedge Borrowers", "Speculative Borrowers", Ponzi Borrowers" and "Minsky Moment". Oh look, here it is:
https://en.wikipedia.org/wiki/Hyman_Minsky
Why do they do it? Well, working for a living sure ain't worth it these days. There's a bit of a social stigma (and a lot of hardship) associated with being homeless. And most people simply don't care that much about numbers, and if they're getting away with whatever-they-are-doing then I guess I can't blame them.
How do businesses grow? They borrow money. Fair enough. Why save up $100 per week for a machine that costs $100 000 if the machine can make you $1000 per week? Better off to borrow money, buy the machine and get the machine to pay off it's own loan much faster than what you could save, or put the extra $900 (minus interest) in your own pocket from day one. Okay, now we know why most businesses carry debt. What happens if there are no customers? The banks repossess something to get their money back. The machine probably isn't worth repossessing because it didn't make any money after all. That leaves the land that the factory is sitting on. Now we know why both banks and businesses want land prices to be high. If real estate prices go up, a companies assets go up, their liabilities stay the same and now they can borrow more money (presumable to buy more equipment, sell more stuff and make more profit, not so the CEO can buy back their own shares, increase EPS and pay himself a bonus for being so clever...) If real estate prices go down, suddenly assets are lower, liabilities are the same and if assets are less than liabilities then the bank worries about whether or not it can get its money back, especially if cashflow isn't doing too well. Now we understand why businesses want real estate prices to go up, banks want real estate prices to go up, politicians want real estate prices to go up (more property taxes, stamp duty etc) ... and that explains why house prices are going to go up whether the little guy likes it or not, whether the little guy can afford it or not, and whether the mathematics makes sense or not. Mathematics is a tool for people who have no charm or violence, and for most people it is no defence against charm or violence. You will continue to be screwed until either you screw back or until it is in the best interests of one oppressive bully to fuck-over the bully who is oppressing you.
Through charm and violence, rich, powerful people decide the prices. Then they pay Economists to dream up bullshit excuses as to why things are the way they are and how things are going to get better real soon, any minute now. As long as you are waiting and hoping, you are not rebelling.
Are we filthy rich or poor? Mainly poor. Some poor people manage to scam the system ( who was it who comments here who says their next-door neighbour / sister / friend has lived mortgage free for five years due to banks being unable to provide documentation to prove they own the house to the foreclosure courts? ) because the way to keep house prices high, apart from rich foreign buyers and launderers of drug money, is to keep the foreclosures off market.
If Capitalism worked as advertised then high house prices would mean more builders building more homes until the over-supply brought prices back down to normal levels. Not happening. Land. They're not making any more of it. Some land has a natural limit to supply eg inner city or any land near where people work. Some land is held off market to keep prices high. But as I explained above, TPTB no longer care. Land is now an enslavement mechanism. Rent or buy, you're still exchanging the hours of your life for a roof over your head and as long as people put up with it, nothing changes, even if the numbers don't add up.
Read Liars Poker. Read The Big Short. They are the beginning. Everything is now charm, favours and violence. (Or as Radical Marijuana keeps saying, lies and deceits, death and violence). As long as the peasants are happy to go along with the fraud and the bullshit numbers, nothing will change. Good little bankrupts will be allowed to borrow more money because, face it, they are the only ones borrowing. If every week people borrow an extra thousand bucks to buy their groceries even though they only earn $200 per week, well if the people are dumb enough to do it then the banks will be dumb enough to lend it to them. Sure, the cashflow side of it doesn't make sense TO US, but to the banksters and fraudsters shuffling derivatives and phoney capital gains amongst each other - its making them super rich. If you're dumb enough to buy it then they are dumb enough to sell it to you. The true horror is the people who can see the fraud and don't want to be a part of it. Through wreckless borrowing, enabled by the bailed-out banksters, the idiots control the price of everything and they are pushing prices UP. You either succumb or starve.
P.S. I meant Synthetic CDOs, not Synthetic CDSs.
Meanwhile, the Reserve Bank of Australia has the gall to claim inflation in Australia is only 2.1 per cent.
How's the housing market in Canberra, does anyone know?
The Aussie central bank learned their moves from the US Fed Reserve. Using ridiculously manipulated numbers for low inflation while printing presses are running full tilt. The US has exported much of their "inflation" to the rest of the world since we can print without retribution (so far).
Canberra is actually a more affordable city. It's Sydney and Melbourne that have been the epicentres of chinese immmigration/money laundering. Selling future generations out by mass immigration seems to be the prevailing economic policy here!
More affordable, but barely, and not for much longer. Houses on the edge of the ACT are still priced at $400K+, and if you want to buy the land it's on, then add another $300K. New apartments start around $350K and go to the moon from there.
The problem Canberra (and Newcastle) face is that as "investors" look at places other than Sydney or Melbourne, they're going to send prices up there too. It's also not JUST Chinese investors (although there are a shit ton of them). Investors from SE Asia, the US and UK are buying stuff, and Australians are dipping into their superannuation funds to get a piece of the pie, because it's "safe as houses", until it isn't.
This shit makes investing in Tulip bulbs seem like a conservative, safe investment!.....
And yet I drove less than an hour north of Adelaide, Australia, on the major road, and tool a break for 10 minutes. I stopped in the middle of the road. Hadn't seen a car in either direction for the past half hour, and not another car the next hour and a half.
Those housing prices are only in a couple cities, mainly in Sydney, because of limited land area and only a coup major roads in and out.
Unfortunately, that's because the bulk of the work people want is in those two places. Besides, 2 hours out of Adelaide and you're in the desert. No one wants to live in the desert.
You also forgot Perth. Prices have gone bonkers there too. They are on the way back down though, 'cause diggin' holes ain't what it used to be.
Perth housing prices are digging holes for those that bought at the top, some areas are down 20-30%. Area I monitor is off nearly 10% with rents off >10% as supply increases. Mr negative gearing bites if you dont have a tenant and the banks here dont do the jingle mail.... full recourse loans. Deals like no rent for a month and free gift cards being tossed into contracts as incentives to sign. Too many miners heading back to the east when the mines got mothballed or cut back.
You heard the Douchebag Realtor..
It's gonna go up 4 eva.
Watch Corporate earnings Bitchez
It's caused by inflation, which is caused by the central banks. Now pay your taxes like good little "citizens of the US" slaves who don't have a clue.
This is a distortion that simply can't last. The real estate agent thinks this will continue on forever. Not likely. Also, what happens if the interest rates finally go up? What happens when a mortgage is 6 or 7 percent? Major shakedown. I think those companies are on a thrill ride. People will eventually back out of all the tech, because it so disconnects you from a real existence. Temporary. Not that all tech will disappear, but it will regress back to something that makes more sense, people will be happier. I'm not anti-tech. But when I go up on a trail hike in the mountains and the twenty somethings panic when their phones stop working, I mean, WTF?
I thought the distortion could not last 15 years ago. I was wrong. I am still wrong. The numbers still do not add up. We need to find other information to get the real picture.
A divide by zero error often means there is no correlation. You are concentrating on the wrong variables.
DC equations are of little use in an AC circuit. You need the AC equations.
Simple transistor equations will give you an exact answer in a feedback circuit. And that answer will be 100% wrong.
When the numbers don't work, it means there are variables you should not have ignored. There are assumptions you made that are not true. You have to find the real significant variables.
ALL THE IDIOTS THAT KEEP QUOTING CENTRAL BANK INFLATION FIGURES....IS IT WAGE INFLATION OR CONSUMER GOODS INFLATION. most inflation numbers by the central banks reference wage inflation WHICH IS NONE EXISTENT RIGHT NOW. IT IS NOTHING......I DONT THINK I HAVE EVER SEEN THE FED REFERENCE THE INCREASE IN THE PRICE OF MILK...they dont care...! they fucking print free money...! LOL
If the gov't would do their job and promote, and fund, mas transit alternatives so living in the extreme suburbs could be a feasible alternative to the expense of owning, parking and insuring a vehicle. If the gov't would invest in infrastructure this country and these cities wouldn't be in such crisis and I might have a well paying job.
Why do we need so many tall buildings right next to each other in the middle of the city? Why can't we have offices out in the 'burbs? Then people can travel five minutes to work instead of two hours peak hour every day. What happened to "tele-commuting" and "tele-conferencing"? Actually, working from home would be a pain for some people - if the wife and kids don't shut-the-f-up and just let them do their job. I understand living a good distance from an industrial area - where the factories are dirty and dismal or the air polluted, but do all the workers in a city really need to be stacked next to / on top of each other??? Is the whole city really that interconnected? Or is it just a Ponzi scam using real estate as a prop? The taller my building, the more tenants I have, the more valuable the land is, the more money I make. Hell, if I've got to buy an office anyway, I may as well put it where I get the most Capital appreciation so the damn thing makes me money instead of costing me money ...
What is the real reason for the long commutes?
Australia’s dirty little secrets. Property “investors” are allowed to take income losses from their property “investments” and deduct them from other sources of income (resulting in several property millionaires paying zero income tax). Unlike in the states, owner occupiers cannot deduct mortgage interest. Property “investors” also get a 50% discount on capital gains made from their “investments”. The result – property in Australia is very affordable and lucrative for millionaire property “investors”, but the average young worker is hopelessly priced out of the market. The kicker is the justification for these policies – to encourage “investment” in order to make property more affordable. You couldn’t make it up. The policy is supported by all of the political parties (one guess why), plus it’s illegal for Australians not to vote. That’s right, the police will ultimately turn up with guns and take you by force if you don’t vote for tax apartheid.
Yes. Hook us onto investment pools that are dedicated to these rips. It takes a long time for Aussie sheep to close loop holes and State Bureaucrats have to protect vested interest. Remember a Prime Minister displaced when he tried raising Miners' taxes in good times. Caveat is that in this twin economy (mining and the rest), there is no need to rush in as collapsing commodity prices exacerbated with their concentrated buyer (China) has only just begin to tear
Luckily, you can vote in secret and the ballot is a piece of paper. You can hand it in blank, you can cross everyone's name out and write on it, "You're all a bunch of thieves. I vote for no-one." You can write on it, "Debt is NOT Affordable". You can write whatever you like on it. Sure, no-one will give a shit, but they weren't going to anyway. Point is, it is compulsory to get your name crossed off a list and put a piece of paper in a box. You are still free to write whatever you like on that piece of paper.
If one person does it, nothing happens. But perhaps if ten million just crossed out all the names and wrote, "Debt Is Not Affordable" ... shit, it might just get a mention on the telescreen.
If you walk around San Jose and Frisco, you can still see a TON of poor and indigent people. How are they affording rent at these prices?
I suggest that the answer isn't the blame-the-chinese trumpian answer, but more a blatant example of the failure of marxism. The fewer people pulling the cart, the more they have to pay to keep the cart moving. I wonder how this really compares to foreign investor money.
If we had real journalists in this country we could answer that question.
Have you checked under the HWY overpasses recently? Or the back alleys etc....Heck even the cardboard dumpsters at the major stores... How about access tunnels under the city for cable and fiberoptics etc...
Most but not all of them are in a drug or alcohol-induced stupor. Some just unfortunate and others mentally ill. They are homeless more often than not because they stole from a relative and now are blackballed from the family. It is expensive trying to stay numb during waking hours. Damaged people are hard to be around if they are not open to at least trying to rehabilitate back into a sober state.
Would rather get a lot outside the city, park a Trailer, and commute.
Better still, I'd rather not live in CA at all. Oh, wait, I don't. Not any more. Pheww, close call.
It all depends where the job is and your commute time.
Wrong clip .. You need to to post the job interview complete with the fart at the end ..
Murcans don't seem to be grasping the reality that it aint the asbestos shacks and hovels that are expensive...it is simply the obvious fact that their Weimar style Zimbabwe Saudi Mercan petroscrip dollah is no more than blood spattered, s#it smeared toilet paper mounting ever higher in the fast approaching mother of all tsunamis of toxic derivative filth heading home to drown US.
S#it ahoy!
Crime will follow. Remember the words of Willie Sutton, "I rob banks because that's where da money is."
Well, I'm in Melbourne, and the Strayan angle on this story strikes me as bullshit: finding a couple of ads aimed at couch-surfers is not evidence of a lack of 'affordable' rental accommodation in or near the CBD for genuine professionals.
As an example: we live in a 2-story, 180m2, 3-bed house in a nice wide-street, leafy part of town (6km from the CBD) and although it was bought for an absolutely retarded price (north of $1.5mil), we weren't the retards who bought it - we rent it (for $650 a week). Yes, that's outside of most people's budgets, but our household is pretty solidly in the top couple of percent by income. It's certainly not London or San Francisco rents - a place of the same broad design in London would be a couple of thousand quid a week (and median incomes are lower in London than Melbourne).
We're actually thinking of moving to somewhere slightly larger (and slightly less grand, and $80 a week cheaper) a couple of blocks away - mostly because we want the house cabled for ethernet and the landlord is reluctant to shell out for it.
Prior to our current place we were closer to the city (walking distance to the legal precinct), in a very nicely appointed modern apartment - again, someone paid retarded money to buy it, then rented it to us at a gross rental yield of under 3%. We had a 2 bedroom 60m2 apartment in a complex with a gym and pool, for $360 a week; again, nowhere near Silicon Valley (or even Paris) rental prices per sqm.
So 'no affordable rental property in Straya'? Bullshit.
The problem as I see it, is that the last 1-2 generations have been raised to expect to live at the top end of town by the time they're 30; that's simply not financially feasible (by which I mean 'with a debt-to-income ratio that is manageable under a range of non-ideal scenarios') unless you're among the top handful of graduates in a very narrow range of disciplines (e.g., Law, Economics/Finance/Accounting, Medicine). And it never has been - but dummies gotta play "Look at me, I bought this lovely house" (when actually the bank bought it), so they go balls deep into debt in ways that require ideal lives from that moment forward.
People have been conditioned to believe that the 1970s can be replicated in an environment where mortgage rates are variable - but folks who started the 70s with high debt-service to income ratios (and fixed rates) ended the 70s with a debt-servicing burden that had fallen by 2/3rds, because fixed rates did not move with inflation. That cannot happen when mortgage rates move with inflation (as they will if inflation is ever permitted to be seen outside of financial assets).
+1 for the first paragraph, -1 for some of the other comments.
Mortgage repayments on house of $1.5M @4%, 25 years --> $1800 per week.
(for comparison, 6% ----> $2180 per week
8% ----> $2590 per week )
You pay $650 per week rent, --> $1150 negatively geared --> minimum out of pocket $600 per week --> $30 000 per year. Property value needs to appreciate 2% this year to cover shortfall. That doesn't sound too hard.
Yes, the following figures are very rough as I have neglected maintenance and bills / rates (-ve) and depreciation (+ve). Plus I have no idea what size deposit was put on the property.
Yes it makes sense to rent when you get over a 66% discount over buying ... until inflation pushes the rents up and a few years later the mortgage is cheaper. I won't argue whether buying or renting is better as it could probably swing either way, depending on the particulars.
Using the above numbers, if you're earning north of $3000 per week then the answer is a no-brainer. Rent at $650 per week, invest the other $1150 per week and you'll end up ahead of someone who just buys and pays the $1800 per week (+ other expenses ).
But for the average yob earning $800 bucks per week, they'll just have to live elsewhere. For the yob on $1200 per week, he might decide that renting is cheaper and this is the place to do it, but he won't have an extra $1150 per week to invest like the guy on the big money, so his rent money is just dead money. He is fucked. Maybe he decides to live further from the city. If so, I hope his job is further from the city. There's no point wasting two hours of your life per day just travelling to and from work.
When you get to the poorer areas you will find that the advantages of the guy on $3000 per week have NOT scaled down. Last time I looked in Perth (haven't looked for a while), there were million dollar houses a few blocks from the beach renting out for $400 per week, but the cheapest rental ANYWHERE was $300 per week. The guy earning two or three grand per week is laughing, the guy on low wages is fucked. The rental is a large chunk of his income, the cheapest house an even larger chunk of his income, and even with the cheapest rent he will not be able to invest the "Money he saved by not buying" because he didn't make it in the first place.
The moral to the story? If you aren't rich then don't buy or rent. Stay at home with your parents or buy a tent and go camping. Don't bother working for minimum wages. The money you make is not enough to live on. By working for the minimum wage you are simply losing your youth and getting nothing in exchange for it. The housing market is a scam ,as I have mentioned in a different comment above.
Rents are cheaper in London than Sydney, not sure about Melbourn, but a small 3 bed unit in Ryde is ~$950/w ($4000/m). ~ same place in West Drayton (Middlesex UK) is GBP1230/month. Given the recent 35% devalue of the A$ makes Sydney only twice as expensive.