(1) interest rates under Hawke / Keating were 17% or so. After a decent Govt came and fixed things up suddenly everyone could get a McMansion

(2) laws that allow people to treat housing as an investment for tax writeoffs combined with the low interest rates meant all the baby boomers could go and buy multiple properties and fk it for the rest of us


(3) mining boom.

If an above average income earner can't afford a below average house there is something very wrong with society.

Mark _australia said...

(1) interest rates under Hawke / Keating were 17% or so. After a decent Govt came and fixed things up suddenly everyone could get a McMansion

(2) laws that allow people to treat housing as an investment for tax writeoffs combined with the low interest rates meant all the baby boomers could go and buy multiple properties and fk it for the rest of us


(3) mining boom.

If an above average income earner can't afford a below average house there is something very wrong with society.

Yep, what he said...

And, to add to (2), good ol' supply and demand. Demand for available land for building is high. It flows through...

Government schemes/scams(?) always over-inflate the target part of the market, e.g. first home owners grants increases the prices paid for property in the first home owners target market, say $500K.

In Perth, I think we have seen a big correction to prices since 2007/8. The reality is government driven corrections (i.e. the release of more land) need to be slow to avoid a crash that could see those in the game becoming insolvent - which would be a whole lot worse for everyone.

a sh!t of mine is when coles/ safeway realised they had bugger all competition and both kept putting their prices up way in excess of national cpi.

in three years the price of goods had risen almost 100%

thankgod for Aldi !!!

Taxation policy that rewards spending and not saving.

Neg gearing.

Investment allowance.

Stimulus package.

Relaxation of foreign investment laws (sell the farm, house and mines to OS investors)...

No competition.... re banks, grocers, petrol, pharma etc etc etc....

Middle class welfare....

Greedy state govs unwilling to give up duties tax for GST as agreed...

etc etc etc....

Sandy says: Abolish neg gearing on housing prorata - only tax concessions for low income housing projects... not for anything else... REGULATE banking and open up more OS banking providers to encourage competition, assist local credit unions with less red tape.... break up the "Too big to fails" so the risk is mitigated across 10 entities and not just one...... DISALLOW controlling foreign ownership of key national assets and services....

Even organic gardens (free market) needs someone to go throw and get rid of the weeds and pests.....

theDoctor said...

pierrec45 said...


(Conspirationists need not reply...)

awwwww

I reckon it's because of all those free t-shirt they was givin away...

felixdcat said...

Greed??

I agree. But we may not feel greedy if we have the same amount of stuff as the neighbours do.

My thoughts on why Australia is an expensive place to live is, thanks to marketing people like Adolf (they help us think for ourselves), that we all want and expect so much more in the year 2011.

* Big houses, new cars (and the Sunday cruiser),

* Fabulous holidays to far away exotic destinations.

* A massive array of electrical and computer based consumer goods.

* We now expect to eat out regularly and often.

* Nearly every child receives more stuff than the richest kid did in the 80's. And the list goes on...

It's all stuff people (even the very rich) in the 80's could not dream of having. And we all have it now. This is the world we have been striving for since the born of time. This is what economic success looks like.

In 1984 you probably had a shared flat, one car, a jaffle maker (yum, cheese and tomato cooked between 2 slices of bread) and had dreams of owning a microwave one day.

Sure life may have been simpler, even happier, but the stuff you wanted/needed in 1984 simply can't be compared to the stuff people think they require in 2011.

Just got this from The Daily Reckoning. Goes a long way to explaining why prices go up and also points out where the oney goes. Juliar pockets some of it. Half a million a year! Fancy how her pension is going to look,

"You'll recall that this series began by pointing out how worthless most “theories of government” really are. They're not theories at all. They don't explain anything. Instead, they are just wishful thinking...flattery...and apologia for the elite who use government for their own ends.

The “social contract,” for example, is a fraud. You can't have a contract unless you have two willing and able parties. They must come together in a meeting of the minds — a real agreement about what they are going to do together.

But what is the 'social contract' with government? There was never a meeting of the minds. The deal was forced on the public. And now, imagine that you want out. Can you simply “break the contract?” You refuse to pay your taxes and refuse to be bossed around by TSA agents and other government employees. How long would it be before you got put in jail?

What kind of contract is it that you don't agree to and can't get out of? They can dress it up...print out a piece of paper...have a solemn ceremony in which everyone pretends it is a real contract. But it's not worth the paper it's not written on.

Also, what kind of a contract allows for one party to unilaterally change the terms of the deal? Congress passes new laws almost every day. The bureaucracy issues new edicts. The tax system is changed. The pound of flesh they got already wasn't enough; now they want a pound and a half!

Every theory of government we've come across is a scam. So we offer a better theory: government is just a way for the insiders to take advantage of the outsiders.

Until the Industrial Revolution, the apologists relied on God to justify government. If one man bossed around another, it was God's doing they said. The Almighty got the blame. Which was neat and clean as long as you accepted the major and minor premises of it.

But the system came apart for two reasons.

First, it made God look like a fool. Monarchs governed in ways that must have been inexplicable to the “divine right of kings” theorists. Kings were frequently incompetent, murderous and venal. Finally, the theorists gave the theory and the kings the heave-ho at the same time.

Second, the rising wealth and power of the productive classes required a new idea.

Insiders always use government to transfer power and money from the outsiders to themselves. When wealth was easy to identify and easy to control — that is, when it was mostly land — a few insiders could do a fairly good job of keeping it for themselves. The feudal hierarchy gave everybody a place in the system, with the insiders at the top of the heap.

But come the industrial revolution and suddenly wealth was accumulating outside the feudal structure. Populations were growing too...and growing restless. The old regime tried to tax this new money, but the new 'bourgeoisie' resisted. It wanted to be an insider too.

“No taxation without representation,” was a popular slogan of the time. The outsiders wanted in.

There never is one fixed group of people who are always insiders. Instead, the insider group has a porous membrane separating it from the rest of the population. Some people enter. Some are expelled. The group swells. And shrinks. Sometimes, a military defeat brings a whole new group of insiders sweeping into power. Elections change the make-up of the core group.

But the genius of modern representative government is that it cons the masses into believing that they are insiders too. They are encouraged to vote...and to believe that their vote really matters. Of course, it matters not at all. Generally, the voters have no idea what or whom they are voting for. Often, they get the opposite of what they thought they had voted for anyway.

But the common man likes the humbug that he is running things. And he pays dearly for it. After the insiders brought him into the voting booth, his taxes soared. In America, with taxation without representation, before the war of independence, the average tax rate was as little as 3% or so Now, with representation, government spends about a third of national income. And if you live in a high- tax jurisdiction, such as Baltimore or New York, you will find your state, local and federal tax bill will run to nearly 45% of your income.

In short, the insiders pulled a fast one. They allowed the rubes to feel that they had a solemn responsibility to set the course of government. And while the fellow was dazzled by his own power...they picked his pocket!

It didn't stop there. Under the kings and emperors, a soldier was a paid fighter. If he was lucky, his side would win and he'd get to loot and rape in a captured town for three days. Relatively few people were soldiers, however, because societies were not rich enough to afford large, standing armies.

The industrial revolution changed that too. By the 20th century, developed countries could afford the cost of maintaining expensive military preparedness, even when there was not really very much to be prepared for. But the common man was skinned again. Not only was he expected to pay for it, still under the delusion that he was in charge, he also believed he had a patriotic duty to defend the homeland insiders! That is the real reason that the modern democratic system has spread all over the world. It allows the insiders to mobilize more of the resources of the country on their behalf. Nothing can compete with it.

But now the insiders are in trouble. The typical citizen is beginning to realize that he's been had. As long as the insiders could plausibly promise him more and more benefits, he was willing to go along. But now, growth has stalled. They can't deliver. The insiders keep borrowing — more than $10 trillion this year alone. Soon, they'll be out of credit...out of time...and out of luck.

Regards,

Bill Bonner
for The Daily Reckoning Australia "

Reminds me... how IS your gold going japie?

Al Planet said...


Australians love big houses, you've gotta think this trend has gone as far as it can and people will be looking for smaller houses.


The average floor area of new residential buildings increased by 37.4% (from 149.7 m2 to 205.7 m2) between 1984-95 and 2002-03. New houses increased by 40.3% (from 162.2 m2 to 227.6 m2) while new other residential buildings increased in average size by 35.2% (from 99.2 m2 to 134.0 m2) (table 19.8).

So true , people want to much in a first home , my first home was about 12 squares say 110 sq mtrs and 30 years old , it was all that was needed .
Now , gotta have the McMansions , with all mod cons and " alfresco " spare me .
We carnt all live like millionaires .

1. Negative Gearing
2. Negative Gearing
3. Negative Gearing

Dumbest tax policy ever. But now impossible for any gov't to change

felixdcat said...

Greed??

Agree Felix and there are no ifs or butts. Aussies in general are just a bunch of greedy bastards. Always looking for that bargain when buying, and looking for top dollar when selling. Simple,you can,t have the best of both worlds

slainte said...

felixdcat said...

Greed??

Agree Felix and there are no ifs or butts. Aussies in general are just a bunch of greedy bastards. Always looking for that bargain when buying, and looking for top dollar when selling. Simple,you can,t have the best of both worlds

As opposed to every other person in every other country looking to buy high and sell low?

I think i didn't think before I wrote!

EVERYTHING is half price overseas.

It's still half price if you post it across, as an individual item. I don't know what excuse retail has that isn't bull****.

Yeah I know mate. Blame it on the silly season