tgladman said...
Because wa has a double brick mindset instilled in it by decades of money hungry brick suppliers. This will change over the next decade with energy ratings increasing rapidly and a shift toward greener building driven by legislation.

dmitri said...
i am not complaining about very expensive RE, but

how come they build solid double brick houses in wa when in victoria they build $hity boxes made of ticky tacky and the prices pretty much the same !

that is the weirdest thing about the australian housing that i can't comprehend.

Neither, I think you might find that it might have something to do with the type of land that they build on.
WA- sandy soil
Vic-more clay content than sand.

FormulaNova said...

kiteboy dave said...
^^^ just to clarify for our australian listeners, what happened in the US will never happen here. Our property markets are entirely different. Our property laws are entirely different. Our mortgages are set up differently. Our economies are different. Our people and their attitudes to housing are different. Every single factor that influences a property market is.. wait for it... entirely different.

So while it's interesting to hear Beagle describe what happened there, keep in mind that it's entirely irrelevant to our situation.

Is does make you wonder though. Even though we can't just walk away from our mortgages, I wonder if the banks here were lending easier than they should have been? It seemed very easy there for a while for people to get 'no doc' loans, and IF there were huge drops in the values, then they would be risky.

I am just annoyed though, as I had to provide a few years of tax returns and documentation when I applied for a loan, only to see a few years later banks allowing minimal documentation or low doc loans (with a higher rate of course).

Aus banks had and still have a very stringent lending policy, whereas the US banks were lending >100% of loans without 'bricks & mortar' security, that is why we'll never go down the same road as the US. The other reason is that our (main) banks are gov't backed. My wife was a home finance manager for 15 years and although I don't delve into the subject too much (it does my head in), she's 'enlightened' me on the differences on a few occasions when people have asked the question.

Re; homes - Aus is still holding it's own and although some 'big-ticket' properties have dropped, the median prices across the board haven't dropped much. The building industry has slowed, whilst the population is ever increasing. Demand for housing will bottle-neck imo & another property boom is coming, but it will be a while and will also depend on if the money is about to fund it. If not - the increasing demand & lack of coin will force the hand of the government's building legislation (structural standards, energy efficiency etc.) will be dropped to allow another generation of 'very' cheap homes as were built throughout the 70's/80's & early 90's. I hope not!

As a 'drafty' doing custom residential building design work, most of my work has gone from >$600k homes & >$200k renovations to <$400k homes & <$150k renos. The big homes are still being designed & built, but not as common as they were a few years ago & the focus is back on not over-capitalising, whereas that went out the window from about 2000-2008. Most people are now a bit more budget conscious & frugal with their spending. This trend results in smaller homes, that are energy efficient and economically built.

Btw dmitri - WA brickies are cheap, VIC builders are exxy - that addresses the cost. From memory WA is mainly double brick due to the brick supplier & perhaps due to the lack of plantation forestry (?), but I was under the impression that it was also due to the high termite issue - Perth especially.

Macroscien said...

dirtyharry said...
Something seems not quite right there

Now imagine that government decided to buy Chinese solar panels instead of Chinese glass fiber.

For the proposed 100 bln $ to be spent on National Broadband Networks we could put

100,000,000,000.00 Watts panels in the middle of Alice Springs ( do I have this numbers right Hary ?) at a $ 0.5 per meter plus next $0.5 a meter to put it down and plug in.

100,000 MW or just 100 GWatts x 5 per daily output x $0.06 per kilowathour x 365 days in a year = $ ??

At 182 Terawattshour output per year it is still short of our total electricity consumption standing at 257 TWh/p.a but at least we could close down the dirtiest coal plants and then send reaming excess of our dirty coal to China in return for clean solar panel.

And government don't need even to pay them self 40% taxes on profit so could fund us schools hospitals and police.

Macro, solar peak is at noon. At night, there is no output. What are you going to do with such inconsistent energy supply? You need to store it, but such storage hasn't really been developed yet. The closest we have at the moment is heliostats heating salt towers during the day, then using the stored heat at night. It's reasonably efficient, and addresses the storage problem, but not nearly as simple as a PV panel... BTW, SI convention is to capitalize the acronym for a unit named after a person, but not the full word for the same unit (e.g. watts, W)

d1 said...

Macro, solar peak is at noon.

right
and the noon is at 12:00
and

12:00 is every hour

just in different place

and you could send electricity by the cable with the speed of 1,080,000,000 km/h

that will be slightly faster that Earth rotating at 1,666 km/h

Now you could build thick, thick cable circumnavigating the globe and forget about any storage forever.

One more. Tesla loose Edison wins. You are going to build DC transmition lines
not AC,
because soon upgraded to superconducting cables doesn't convey alternating at all
plus more likely you could just plug in solar to DC line directly saving a lot on inverters.

Beaglebuddy said...
The bubble completely deflated and values were cut in half in many places.

And that is possibly the smartest thing the US did since II War beside sending people on the Moon.
By deflating INFLATED real estate prices they directed again cash flow in right direction.
US still remains possibly the place where:

production cost could be the cheapest in the world ! Look and compare petrol and energy prices in US and Australia. At least half.

and not because the labor is the lowest ! ( Maybe the tradie earn less in $$ but possibly could buy more in Walmart then in in Coles and Bunnings)

but:
commodity- material prices are the lowest in the world
output or productivity is the highest
quality is superior so you don't need to buy 3 items in hope that one will eventually work

but things make change and other countries learn fast..

Macroscien said...

Mobydisc said...

Ths thread is getting way off track here.

maybe, but the keeping the real estate prices high in not the smartest move even if we could do so for extended period...
we just bleeding our money to overseas bankers

Who is keeping the market high? I think the Australian property market is reasonably free. Yes there are many ways governments can and does influence and direct prices. But the buying and selling is usually a matter of negotiation between the buyer and seller. There is no government or commercial agent putting a gun to either parties head, telling them to make a deal.

The rental market in Australia is quite a free market so higher rents indicates a shortage of supply, despite negative gearing if anything, increasing the supply of rentals.

Actually you are richer if your house or anything else you own goes up in value and you sell it. Of course you will need somewhere to live so if you buy another comparable house then you won't be any richer. If you choose to live in a caravan you will have quite a lot of money to spare based on your example.

Mobydisc said...
The main reason is that the land out there is pretty poor and can't support many people. So the supply of land is fairly limited in Australia.

There was pretty cheap dirt , pure desert in California near Vegas, Nobody want to live or work there.
You could buy it for a penny....
till they discovered that solar farm is quite good investment..
prices sky rocket...
I did calculations above. Sell your home in CBD, set solar panels in Alice Springs,
cash out 250k profit a year and we don't need complain that good money are in the city only.
BTW solar panels are not like live animal stock that need feeding every day.
You could spent your free time on Bahamas or Maui.

Mobydisc said...
I don't think you could set up a solar power plant in the middle of nowehere and expect to sell the power easily. It would take a lot of money to connect your powerplant to the grid.

That is good point but we do not expect to build and own infrastructure : roads, transmitting lines, railways.
There is government for to build such or listed companies that compete to do just that.
Multiply small investors like yourself with 500k coming to Alice Spring desert or even closer any Queensland open wide dirt by 10,000 -100,000 similarly smart thinking investors and they will build infrastructure for you in no time.
Under one condition - NO RED TAPE and you don't have to pay for Aussie desert $1,000 per square meter, then Greens will not chase you for dislocating lizards bathing on the sand with million dollar compensation claim.

marco thats not the landed price for panels.
DC transmission lines. You are dreaming. Superconducting cables, works great when as close as possible to absolute zero.
The harsh realities of all these things are very different to theory.
Hows that magnificent catamaran going? Decided it was a bad idea yet?

See the world.

edit: wow, what happened between page 1 and here?

myusernam said...
Hows that magnificent catamaran going?

a bit delay due to even craziest project.
I bought this aluminium house boat 9 meters long by 3.6 meters and 10 kw electric motor 48V taken from forklift...
but that is indeed beyond my means ( to finish it out) so I need to get rid or sink it


At least my houseboat fit nicely under our topic subject here. How to sink a real estate

Mobydisc said...

Macroscien said...


the III will be won by the smartest folks on planet

Ths thread is getting way off track here.

Anway analylists and punters who say the Australian property market a market bubble usually compare Australia to the USA.

The biggest difference between the USA and Australia property markets is the amount of land available for housing. There are thousands of large towns and small cities across America. Many of them are reasonable places to live and work. Most of them have reasonably priced real estate. The supply is huge

Compare to Australia. Most people live in five or six big capital cities. The majority of the rest live on the coastal fringe, ie within 200kms of the coast. There are few larger towns or small cities beyond that 200km. The main reason is that the land out there is pretty poor and can't support many people. So the supply of land is fairly limited in Australia.

Aus and US are quite similar just on a different scale. The usable land area is similar per population density.
In the US most people also live close to the coast and in and around big cities.
There are vast areas in the US that are very arid and one would not think they are habitable but they are and they have even figured ways to irrigate for crops so if you think vast areas of Aus will never be populated you might want to rethink that. There are people in charge in your gov't right now who are thinking up ways to allow vast numbers of barefoot third world peasants into your country to fill up the no man's land.

Paradox said...

kiteboy dave said...
^^^ just to clarify for our australian listeners, what happened in the US will never happen here. Our property markets are entirely different. Our property laws are entirely different. Our mortgages are set up differently. Our economies are different. Our people and their attitudes to housing are different. Every single factor that influences a property market is.. wait for it... entirely different.

So while it's interesting to hear Beagle describe what happened there, keep in mind that it's entirely irrelevant to our situation.

Agree - very different dynamics. One of the key differences is that in the US people can just walk away from a house mortgage. Any difference between loan and house sale price is the banks problem. Just that factor alone makes prices very sensitive to a bust. Here - no one will sell for less than they owe unless they are forced to, and in those cases bankruptcy usually follows close behind.

OK, in the US foreclosure law varies by state and there are 50 of em'
Some states you can walk away free and clear but almost as many you could end up with an asset judgement or a lien on your taxes in that the difference will be reported by the bank to the gov't as income and you will be liable for taxes on it.
In the real world when people go under like that and can't make the mortgage they are essentially flat broke and as you know you can't get blood from a rock but if you do have some assets in these situations it's quite possible the banks can come after you.
As for selling for less than you owe, that's called a short sale and you have to get the bank to go along with the deal. The bank must be willing to accept the offer for less than the amount owed and that does not always happen.
They can also accept the deal and slap an asset judgement on you or the tax reporting as described.
In most cases people just stayed in their homes for as long as they could without paying the mortgage and usually after 1 or 2 years and in some cases even longer the bank finally kicks them out and the people have completely ruined credit, no one will lend them anything for many years, but because they lived rent free for several years they were (hopefully) able to save up some cash.
Some of these people took cash out of the house in a loan when the values were very high and bought vacations, sports cars, jet ski's, RV's, breast enhancements, liposuction etc... then lived in the house for free for several years until the bank took it back and walked away with only ruined credit so now just work and pay bills on a cash basis.

Beaglebuddy said...

Didn't somebody say no doc stated income loans were being done? Be afraid, be very afraid.

Yes, they exist. Usually at a couple of percentage points higher than a normal loan, and requiring a hefty deposit to ensure there is some equity there.

I think it comes down to how much equity the banks need, and I guess they were tying it at 20% deposit in order to protect themselves.

Macroscien said...

Beaglebuddy said...
There are people in charge in your gov't right now who are thinking up ways to allow vast numbers of barefoot third world peasants into your country to fill up the no man's land.

You may fill in Australia outback, but you need to build at least cheap railway there.
That is how America was build if I remember.

We can not afford to carry everything in planes or trucks to Alice Springs.

Rail is almost not existent here.
We are sending all iron ore overseas then close our steel mills because they don't have anything to do.
If we build electric rail to the outback:
a) we could could employ immigrants in steel mills
b) create demand for steel
c) open huge terrains for urbanization
d) we could settle boat immigrants here for penny instead in overseas curorts,
Instead of unrealistic slogan Turn the Boat ! lets say Land the boat immigrants in Alice Spring for 5 years and then they are free to go,

'We' are closing our steel mills because it is cheaper to export the iron ore and import the finished steel. Not because they have nothing to do. Don't ask me how that works, but that's it. Ditto for copper and probably most other metals.

As for the idea of opening up Australia for third-world people to live there, it's been thought of before. It's not a particularly easy place to live otherwise people would be living there already.

Why would you want to do this anyway? Their way of life would be no better than if they were at home, they improve nothing here, and our legal system would then make sure their living standards improved and they be allowed to live where ever they wanted. At which point they would move to the coastal cities like most other people...