Kohler’s housing shit sandwich hits the fan

If you get five spare minutes today, make sure you watch the above tirade by Alan Kohler on Australian housing , whereby he cheers on Australian house prices and effectively tells first home buyers to eat shit.

While there are many disgraceful quotes in the video, these ones below are perhaps the worst:

“[Is it] all that bad if prices are high? Everyone’s complaining that Australian houses are overvalued. And I’m saying ‘yeah it’s bad for first home buyers’… [My kids’] are complaining to me that they can’t buy a house cause they are having to rent all the time. Well, actually is that so bad? So rent!”…

“The fact that house prices are overvalued is great for retirees. So then they can support their poor renting kids… But the kids don’t really need to buy a house”.

He goes on to joke that the youthful  interviewer couldn’t afford his home anyway.

Seriously, you cannot make this stuff up – it is one of the best examples of baby boomer self-interest that I have seen.

Watch it for yourself and literally feel your blood pressure rise.

Comments

      • Alan Kohler has just inserted himself into Australia’s economic history. This will be known as the turning point, not HnH’s SELL call.

        Ireland’s putative crash catalyst was their cardigan clad central banker doing a doorstop interview that shattered confidence. This clip is ours.

        The withering contempt of this Baby Boomer scion for the economic injustice young adults and the landless are subjected to exposes the whole fraudulent Ponzi scheme.

        If any have puzzled over my enthusiasm for land tax, wonder no more. Such a measure is not the means of destroying the proud, but of preventing the excesses we currently endure – an Australia of debt-peonage, tenantry, great wealth for some and pointless toil for the many, including those foolish Negative Gearers.

        And guess what, Alan Kohler, the blame will be heaped on you. Unfair? Misplaced? Meh!

        Don’t Buy Now!

      • Worked up, mig, I’m furious.

        The founders of this, our country, battled to create a society, no, a civilization, free of landlordism, rent-seeking and class-based power. They had escaped these tyrannies in Europe and vowed to never allow them here.

        They wanted a nation where families could own their own land, however modest the slice, freely and independently, and not be obliged to pull the forelock to any man.

        Just go back to the words of Robert Menzies:
        http://www.liberals.net/theforgottenpeople.htm

        Menzies preached robust Presbyterianism. He knew the history of Scotland, the land clearances and the concentration of land ownership. He wanted none of it.

        And now the Liberal and Labor parties have taken us to the brink of financial ruin. We owe overseas lenders $880 billion, all due at call, and we splurged it on selling each other second-hand houses.

        To this very moment, the Reserve Bank of Australia deny there is a problem. Well, events are about to slap their faces.

        Don’t Look Down!

      • Rousing words David!

        Cogent, enveloping a dragons fire when spoken out loud, I hope as many hear them with the clarity that I do.

        BTW are you a member of the Melbourne Athenaum? I’ve not been back in a few months but I’m guessing Henry Georger’s assorted works are represented…

      • Well put DC – there is absolutely no point swapping between the divisions of the modern Laberal party their fingerprints are all over this mess. They are setting themselves up as the new propertied lords.

        Voters have to start looking for other options.

      • @ Collyer

        + many….hear hear.

        I’m angry too. Kohler is no fool, and so the smugness on display here is even more grating. The PHC pyramid scheme has the entire country in a choke hold – where any further growth DEMANDS yet more debt (or foreign loot). And instead if using his position to call for sanity, we get this.

        Kohler says people are ‘whinging’ about the FIRB – says it all. Meanwhile, young (and not so young) can’t buy without handing their balls to Megabank in a ziplock bag – never to be seen again, and Kohler says….problem? Suck it up.

        Looks like we are not just becoming, but have well and truly become a country that embraces, no celebrates, a class system. Smug windbags like Kohler are trumpeting the real national anthem to the new landed gentry: “We’re on board, pull up the life ropes.”

        The whole thing is bordering on criminal.

      • Fuck, that five minutes was the living embodiment of the cranium in the cloaca world Australia’s business media has become, seeing some upside to those rapidly growing polyps in the colon……

        It is also the babyboomer wet dream, with the young fella adopting the suitably junior but respectful tenor while the long respected éminence grise of Australian economic commentary laid his claim on some promo work for the dementia society in a monologue which wouldn’t have made any less coherent sense if he had started babbling about blue bottomed baboons.

    • Not sure what all the angst is about? He is just stating the facts, which most people seem to agree with… I admit I rent, paying silly amounts granted (but far less than if I bought). But be assured, I have no intention tying up all my capital in a house here in Sydney – and working the next 30 years to pay it off. Think about that – how stupid would I be? Given LT studies demonstrate that house prices large matching increasing incomes. I think people have to think outside the box a bit.

      Not to be a bit of a downer, but in Europe, its considered normal to rent your entire lives (until you retire at least, and many move into the country). I suspect I am a similar age to many of the bloggers here – and I have to ask, whats the big deal guys?

      Don’t be stupid and buy a house. I did once and lost a bunch of money – now, I am simply resolved to go and make some serious dough instead!

      • Do you blame him? Mum and Dad bought a house in Perth for $400k in the late 1990’s – sold it 10 years later for $1.4m. its probably worth double that now…

        In either case, a major property correction is coming. Many places (particularly Sydney and Perth) could conceivably drop 20-30% over a relatively short period (especially near the top end of the market).

        You have to be absolutely bonkers just to consider it…

      • The point AK seems to have missed is if the offspring cannot afford to buy and therefore rent, what yield is he going to get and what will maintain the upward pressure on prices? The Chinese?

      • The Traveling Wilbur

        @RT – That is a good question. What is the point in buying a house. Especially if you have bought one in the past and lost money on the deal when selling up. Been there, done that myself. Yet the answer is relaitvely simple, but it’s premised on one *very* important difference in the way things are vs the way things were when people never even contemplated asking the ‘why buy’ question. That difference is: IT’S NOT SUPPOSED TO BE LIKE THIS. Of course no one should buy a bluddy house right now; or two years ago. With very few exceptions that would have been just stupid financially speaking. E.g. anywhere in Perth right now if someone needs an example of that which has come home to roost.

        Us old farts remember when you spoke to the bank manager PERSONALLY before they would even consider giving you a home loan. Times have changed. Government policy has changed. Protecting the debt laden and/or financially unaware from predatory practices they would not contemplate an insitution like a bank would employ is not an imperative of the government. Financial institutions no longer even care about giving the thinking man or woman the *pretence* that they’re in it for you as much as themselves.

        So where does that leave people who WANT to get a home loan so they can find a permanent place near a school and shops that they can send their kids too (the school, not the shops)? Up nutella creek with two incomes (for now) and a massive mortgage or two. All thanks to 25-years of predatory evolution of the organ we refer to as megabank. And thanks to an obliging [insert own adjectives here] political class too of course.

        The ‘funny’ thing about this is that the forthcoming (but no longer going to happen) Paid Parental Leave scheme might just have been perfectly timed to help out a serious number of families in the hard times to come. But Captain Australia couldn’t even get that right, could he.

      • The only reason I bought a house at all is because renting in Au is nothing like renting in Europe.
        Almost all managed by RE who hate animals with a burning passion. Hard to get a decent length lease so lots of uncertainty and expensive moves. Terrible experience which came down to buying a house or living in a caravan or having the dog put down so we could get a rental.

        In Europe its very hard to get a lease for less than 1-2 years and it’s normal to have a nice undisturbed tenancy without moronic evil RE agents trying to make life difficult.

    • Oh no – but then – if then the boomers don’t get their prices because there’s not too many buying, then it’s the buyers’ fault for not buying… even if they can’t afford it, anyway.

      Oh – and then watch him go in circles on this one!

      What d-bag!

    • At least they both kind of acknowledge the absurdity of the whole giant steaming heap in the last few seconds…

      HOST: “Who’s gonna buy all these expensive houses off you boomers in the future??”

      AK: “F*cked if I know!!”

      (Both laugh as the lights fade down)

      • What is not heard in the fade-down transition is:

        AK: (after short pause) “… and f*cked if I care anyway”

      • @mig thanks dude – been on holidays for a month. Long-service Leave is good, mkay?

        Northern Rivers is a nice place, pity jobs are not paying nowhere nearly as well as the house-prices around there would have you believe. I mean – fuck – $500K for a hovel in Ashby?!

        But aaaanyway – back on the parapets now. Yay!

      • @lno – depends what job you’re after.

        A job with NSW LLS as a comms officer (marketing and such) was offering 85k+super. 9 day fortnight etc. Sadly I am too can do for the public service :sadface:

        Where were you looking?

    • @mm
      You got it!
      It’s starting to dawn on folk like AK and the reader/followers, that the boards above the ‘stumps’ are not analogous to ‘price’ floors.

      The propaganda campaign that AK’s generation consumed that debt = wealth and freedom ( and intelligence) still has a few chapters left in the glossy brochure; but its not what they expect.

      To ‘realize’ the gain, one needs to sell.If he(they) thinks he’ll be ‘selling’ to kids using scarcity mentality propaganda that hoodwinked him, he’ll be very surprised.

      Soon, the auctioneers will be decreasing the price bids and the pretty smart kids will keep their arms folded. That ‘smug’, supercilious demeanor IS part of the market price in case they didn’t notice.

  1. With all that supposed cash he’s made he can’t even sling his kids a few quid to help them out? Or are his kids smarter than he is by not buying in? Tightwad.

    • I don’t see what the problem is.

      He later explained that renting wasn’t that bad for other people to do. And don’t forget that posters here have a chart about how renting is so wonderful.

    • ..shortage of houses for investors to buy or shortage of houses for people to live in? If there are investors with multiple IPs and then renting it out them it’s ok…people will have a roof over there heads, that’s what negative gearing is meant to achieve, right? If there is a shortage of houses then wouldn’t we see a whole lot of people living on the streets?

      • If there is a shortage of houses then wouldn’t we see a whole lot of people living on the streets?

        A very good question. I am glad you asked it.

        When the supply of modest housing is outstripped by the demand of modest housing due to high immigration and choked supply I call this a shortage. This shortage does not cause a whole lot of people to live on the streets immediately, but could eventually.

        There is a device known as a 747 which some people can use to escape an area with a shortage of housing (and concomitant high rents and prices). Less fortunate people are unable to escape the area and some of these do indeed end up living on the streets. If you look for them you can find them. Alternatively, if you are too lazy to look for them personally, you could ask charities who support the homeless about the numbers of such people. Alternatively, you could read a few articles online.

        source theage /victoria/affordable-housing-a-distant-memory-in-areas-once-considered-cheap-20140908-10e1mo.html
        The Tenants Union is among a dozen housing, academic and community groups presenting on Tuesday at the Melbourne hearings of the Senate’s inquiry into affordable housing…Among those lucky enough to get a public housing apartment was Donovan Willis, who spent a year in and out of homelessness last year, while also caring for his nine-year-old daughter.

        Wentworth Park homeless raising ire of community
        source smh /nsw/wentworth-park-homeless-raising-ire-of-community-20140910-10bb51.html
        The pair are at the front line of the schism that develops when a city’s homeless population surges…There were 296 rough sleepers on the night of August 12, when the council performed a head count – up 16 per cent on winter 2013.

        [posted with full links and it disappeared]

  2. reusachtigeMEMBER

    When’s the revolution coming? We need to knock-off the old greys!! (A collapse will do… /proud crashnik)

      • reusachtigeMEMBER

        Yep, totally given up but that doesn’t change how I feel. I just laugh it all off now and put no timeframe on it ever happening… and feel better for it. Clearly, it drove me crazy! 😉

      • Well I think that we would disagree on almost everything re housing, but I do enjoy your sense of humour.

        Cheers, I’ll buy you a beer one day.

      • Dunno, if I’m in a bar where there are people dressed like that I get the feeling I’m not the target market and make for the exit.

      • Really? I’d make for the Courvoisier cognac and tip my tophat as I dangle the monocle absentmindedly about my waistcoat…

        “Jolly good show that, what? We hunted those heathen Scots before we’ll do it again; Gafaw gafaw”

        Am I in Reusa?

      • @mig,

        I think we’re in very different bars.

        I always thought Reus looked like the Colonel from Abode

      • people who are normal are the most boring people to drink with, reusachtige can come to the bar dressed like that.

        I’ll be there.

    • Well reus that kind of talk sounds like you missed the train! You should definitely hurry down to the bank and get yourself a mega mortgage so you can invest in housing like all the smart and attractive people do.

      • darklydrawlMEMBER

        Oh come on Tony. You cannot be serious. Have you seen reusachtige’s photo. s/he is already very smart looking and attractive 😉

        hehehehe…

      • reusachtigeMEMBER

        My Grav is a very sexy property investor who has made a mint off Sydney housing and has loads of friends (at the special bar).

    • Have you considered that when the old greys start to die off is when the crash will come?

      We could be waiting more than a decade – and that is a lot of waiting.

    • Only when applied to investment profits, capital gains, or land. Taxation of labour is A-OK by the investor class.

  3. There is a an absolute disaster heading to the housing ponzi – no two ways about it.

    I used to be up and down about it as the fall out is going to REALLY hurt the economy – now – screw that.

    Seriously SCREW THAT.

    Bring it on.

    The overshoot on the down side is going to be horrendous – people are going to be absolutely smashed – and quite frankly – fantastic.

    Sickening disdain for the rest of society has set in and it is absolutely grotesque.

    My family has HUGE interests in property and will be smashed kingdom come – so be it. Best we have a reset.

    .

    Realy disturbing trend beyond extreme narcissism into out right sociopath and even worse.

    Just appalling.

    • +1 infinity, Leviathan

      I’m prepared: I’ve got my own red stamp which reads “Fuck-iT” with a little window underneath to write the date.

      Bring it on.

      • The Traveling Wilbur

        Your’e 13 days too late. The key date was September the 5th. It’s here already.

        People had to look backwards to figure out what REALLY happened in 2009 (which was really trigerred in 2008). It’ll be the same this time. If further confirmation is required on this, H&H is already pushing the sell button. Harder and harder each day it would appear.

        Assuming you are happy to backdate, stamp away.

    • Yes, it would appear Mr Kohler believes there are only two types of people in this world:

      Really rich boomers like himself, or really rich boomer offspring who have gap years and spend 10 years at uni studying ancient history, all funded by mummy and daddy.

    • Hill Billy 55MEMBER

      Yes it is a shame that the allegedly objective commentators just do not have any empathy for the poor, the unemployed or anyone who may be adversely impacted by their desire to capitalise on the profligate lending practices of the banks.

      Unfortunately, you are right, the crash is coming and will arrive sooner than anyone thinks.

      I was expecting increased unemployment to precipitate the crash, I’m now inclined to the view that the “black swan” effect will bring the crash, thereby feeding unemployment and exacerbating the property crash leading into the depression.

      One thing the video does, is show the lack of confidence of the positive spruik for increased property prices. So far, confidence is all that seems to hold up the prices, as Kholer so nicely put it.

      What the “black swan” is, I have no idea (see above), but there seem to be a number flying, IO, terrorism, war, reversal of population ponzi, poor govt finances (particularly WA), shorting of Aussie stocks, increased interest rates, confidence fairy leaves town, plus plus. Which has the wings, don’t know.

    • Ahmen! Couldn’t agree more and its what I’ve been telling Lorax. Its got nothing to do with me personally buying a house, its got do with every conversation you have you people you know turns into how much did prices move this month, or gapping at the RE [email protected] in her S320 – no one seems to wonder why a early 30s chick putting up signs drives as S320…

      Sickening and pathetic and Im over it.

      • +1. Smarmy half wits living a life style of doctors warrants a depression, world war 3, a few nukes, a pandemic, and a few serial killers in itself!

      • Yep – it’s not about envy, but the inherent duplicity of the whole pyramid scheme that relies on duping new suckers that they’ll be rich, so that the early players can continue to cash in. It’s parasitic and lacking in any morality whatsoever. More wealth transfer dressed up as wealth creation. F*ck em all.

      • @migtronix

        A friend of mine just sponsored his gf (whois from the UK) to stay in Aus, she’s desperately trying to climb the RE ladder because of how lucrative it is. Crash can’t some soon enough.

      • “If they’d cracked down on the corporate whores and their entitlements we’d have given them gay marriage, no one gives a shit about that anymore…”….

        Astute comments Mig…100% accurate….I know I said fck them because of what they wanted to spend all their time on ..

    • It is beggar they neighbour stuff and the greed and distain for the losers is sickening to the extreme. The financialisation of housing is not a win-win business transaction. It is a win-lose transaction. By design this system creates losers.

      I’d like to see it correct by 70%, and every grubbily little landlord rent seeker and debt peddler wiped out. But that’s not what will happen.

      What will happen is a population ponzi of epic dimensions and a currency degradation at any point it is necessary to protect asset values.

    • Mining BoganMEMBER

      Stuff ’em. Hope their home values collapse and still nobody wants them. They want to eat they can replace their stupid bloody roses with tomato plants. The real kind..

      I’m going to offer a carton of two minute noodles for their porsches. Always wanted one. Gonna drive past their worthless homes every day and wave at them while they’re ripping the roses out.

  4. It’s a series of non arguments, or propositions, that are made as assertions, that are strung together to appear like some sort of view on the housing issue.

  5. WOW such insight into innovation and how to make the world a better place.

    So sad that someone gets to his age and all that comes out his mouth is garbage but that is pretty common these days in Australia!

    Well, the mining boom is gone, jobs are being lost, commodity prices have now tanked so it is looking like the beginning of the end for the housing market anyway.

    GAME OVER (Insert coins to continue)

  6. We should feel honoured to have Alan share his advice with us. He is after all an expert on overpriced assets.

    • darklydrawlMEMBER

      hehe… Ol’ Rupert buying ‘MySpace.com’ cheered me up more. Or perhaps more accurately Rupert selling MySpace.com…. 😉

      News Corporation bought MySpace for $580m in 2005, when it was bigger than Facebook. However, in 2011 it offloaded the company to a consortium led by singer Justin Timberlake after it plummeted in popularity for $35 Million.

      Mr Murdoch later admitted that News Corp had “screwed up MySpace in every way possible” and learned lots of “valuable, expensive lessons” in the process.

      The $580m News Corp spent on MySpace was just the start of the money it wasted.

      At the time of purchase MySpace traffic was bigger in the US than Facebook’s.

      How times have changed.

  7. Mr Kohler has forgotten that he doesn’t live forever and that his kids and grandchildren will not remember him well.

  8. Few boomers downsize. At least the older ones I know of. They live on the pension! Paid for by gen x & y.

    But they got their houses for about $60k-$200k in today’s money.

    The younger boomers paid about $200-$500k in today’s money.

    So they might be more likely to do so.

    Kohler and his boomer ilk would rather maintain the status quo rather than have a depression. Quite frankly that might be better than the slow melt half of you lot espouse too.

    • I wouldn’t mind betting this is partly a response to the ‘sh8t sandwich’ post and comments the other day.

      At least the fight just got more honest.

      • Yeah – I twittered him on the topic yesterday and he retweeted it. Spent the rest of the evening dealing with property ponzi believers who believe all that is needed to own a house is avoid buying a new iPhone…

      • The Traveling Wilbur

        @DS -you’re right. That’s an upside to the forthcoming carnage that I hadn’t contemplated; far far fewer iPhone sales in Oz than there otherwise would have been. Awesome.

    • They also can not give more than $10k per year to the kids without it effecting their pensions. Nope, they invented the disgusting SKIN and we must introduce an asset test for the PPOR, anything above the VG value of $500k, towrads the pension.

    • Few boomers downsize. They live on the pension! Paid for by gen x & y.

      That’s because frickin’ Costello, Howard and Abbott let them take their entire super balance as a tax free lump sum, so they can splurge it on the house, new car, grey nomad gear, trip down the Rhine, whatever, and then go on the bloody pension! No wonder the boomers vote 60-40 for the LNP.

      Its criminal Bluey, and yet you insist on supporting these pricks.

      • Its criminal Bluey, and yet you insist on supporting these pricks.

        So do you.

        Anyway I don’t really because I vote SPP.

      • No I’m pretty sure his issue is ALP didn’t do SFA about it and were too busy with gay marriage or whatever.

        First thing LNP do is kill the carbon tax and we’re supposed to believe Labor can’t do it to all the perks? Of course they can they just don’t want to! So they ARE to blame ffs Lorax

      • She’ll never get it Mig.

        That’s right. Labor/Greens had 6 years to fix it. Did nothing. Blew it up further.

        FFS indeed.

      • It goes like this Lorax; the only reason people pushed back against gay marriage or whatever on the day (cough Bolt) was because Labor weren’t doing anything for anybody, they were letting the corporate shysters run the place just the Libs. So they thought, f#ck you if you’re going to be just like the libs be just like the libs don’t give us this airy-fairy bullsh#t!

        If they’d cracked down on the corporate whores and their entitlements we’d have given them gay marriage, no one gives a shit about that anymore…

      • Tend to agree with you Bluebird on this one – Boomers to the left of me, Boomers to the right.

        One lot will screw you by stealth, the others don’t even give a fuck about trying to care. Don’t know which is worse.

      • Ha ha ha just 3 days ago you were calling Bluey a shrivelled boomer frontal lobe.

        I LOOOVE this place ha ha

      • No it was Costello that made super lump sums tax free and it was Swan that tried to introduce a tax on super income over $100K and the LISC.

        All you can do is choose the less bad option, and the LNP are definitely worse. The LNP go into bat for rich boomers at every opportunity.

      • There’s good and bad bits on both sides Lorax. For instance being an actual capitalist(not a crony capitalist like the libs) I believe in rewarding people who work hard to get their $100k+ and not taxing the shit out of them like you do.

        You’re just cheerleading Greens/Labor who have shown that in practice they are pro ponzi.

        I don’t give a fuck what one or two of them said here or there that gave you an inkling of hope that there might be a miniscule chance that they’ll think about doing something in about 50 years if there’s a blue moon on Christmas Eve at precisely 10:48 and 36 seconds and a black cat near by.

      • Bluey, what they proposed was a 15% tax on every dollar over $100K of *income* earned from super. Below $100K was still tax free. I’ll let you think about what kind of super balance you need to generate $100K of income.

        Hockey knocked this on the head and repealed the LISC. That is borderline evil.

      • It is evil. There’s still no way Lab/Greens will make house prices go down though.

        Lab/Greens have their own evils.

        Like claiming inner city areas as their own villages. Or giving us a sob story about being chucked out of a rental then giving us the first home vendors boost, Chinese buyers, smsf buyers, and a doubling of immigration.

        Fuck em all.

      • the only real answer is la revolucion…..

        and that will require a sacrifice of some sort or another.

        But if nothing else it underlines the desirabilty of some form of correction – for yea verily this crowd is not going to reform and they will sell everything else out to remain at the trough.

      • It’s not a wasted vote if it undermines the stability of the system. You sure care about my one in eleven million or so vote Lorax.

        Yes we need a revolution or preferably a new party. There is a good one and I vote for it.

        If the polls are right you’ll get Shorten in a couple of years Lorax so you can rejoice. Doesn’t look like Abbott will be able to do too much damage regarding welfare and the like without the Senate.

      • The Traveling Wilbur

        @Lorax – They may not be going to reform, I get that. But under the heading of ‘grab the popcorn’, at least we’ll get to see a Treasurer sweat more than ever any Treasurer has sweated before. Say at the first media conference after the first set of numbers from the ABS that show a drop in sales in Sydney housing. Or at the following budget. That man could sweat for England.

        If only there was someway I could go long on deoderant. Or kebabs.

      • Lol – wasn’t me who had your witty FU comment censored turdling, why would I? it left my reply orphaned. Yes sniping can be fun, as i am generally pressed for time. But for the likes of yourself I much prefer to lob hand grenades and let others do the work, especially when the only trophy to bag is a head as thick as yours – who would want that hanging on the wall?

        That aside, I do find myself agreeing with you occasionally (which at least has you ranking slightly above 3dogs1sprog), for instance I think you are right, it is possible to destabilise the system – late stage Ponzi economies require constant access to growing credit. If you can destabilise the system enough that those investors star to doubt your ability to repay them, it can start to unravel pretty quickly.

        In fact I think that is the main tactic that young people should be taking, keep throwing sand in the gears until the whole fucking boomer enriching scheme falls in a heap. After all, we’ve got a lifetime to rebuild, which is the one thing the Boomers no longer have on their side.

    • Everyone downsizes to an urn or pine box eventually.

      The mortality rate rises pretty quickly after the age of 50 in Australia.

      • @mig

        Indeed. Also, unless you did something miraculous for society, the only trace that you were here will be in your offspring.

        Something we should try to remember more often.

      • Most of the boomers I know are fat with diabetes.

        Does anyone know if they are they going to live longer than the WW2 gen?

      • There was talk a little while ago that obesity trends meant that trends in improving longevity might reverse.

        Still talk though – as I understand it the trend is still for longevity to be increasing, and increasing faster than earlier.

      • mine-otour in a china shop

        For sale – investment pine box in Sydney. Great starter opportunity for the after-life. The box costs $4.2mn with lenders mortgage death insurance thrown in.

        The banks just need to hold $4.40 capital on this disposable asset.

        Sorry just sold for $6.4mn according to the coffin clearance rate data to an investor with 73 other negatively geared boxes.

    • Awesome generalisation.

      I know many who don’t. Self made wealth, refuse to take the pension

      Maybe it was just my grandparents.

      • Most of the “self made wealth” of the ones I know was via property.

        But not really self made is it. Stolen from their children.

        So they’re either on the pension living relatively modestly or living large via property investments.

        Is it ok by the progressives to generalise about anything? I’m sure there are some grasses that aren’t green.

  9. Kohler just made a right dick of himself in that interview. I wonder what his children thought when they saw the clip!

    what an embarrassment

    #douchebag
    #abcnews
    #generationY
    #BabyBoomersLegacy

  10. Reminds me of Spain in 2006 when the then Minister of Housing (kid you not) decided to hand out 10,000 pairs of sneakers so FHBs could “hit the streets” and look for affordable housing. Of course, back then properties couldn´t go down in Spain either because they too were special…

  11. I actually feel sorry for the gullable sods the swallow all the doom and gloom comments and hold off from buying a house to live in.

    If you think its bad now, just wait until India joins the party and starts knocking on our door.

    • It’s not just the doom and gloom that was the problem, there was also a trust that the social contract would stay intact. That the boomers would seek to leave a better place for their kids.

      I agree, don’t Think Europe for Australia, think Brazil. Its going to be one crazy population ponzi from here on.

      The response to the GFC was the warning shot across the bow – if you didn’t go out and get a house then you missed the bigger picture. There might be a shock when China has a hiccup but that will quickly be brought under control using the debt/money supply.

    • Yeah when you can show me any kinda market in wages or work longevity – quality, houses might be nice.

      skippy… RE has only been around since post WWII in its present form. What if its the biggest tulip mania eva~

      • I think it is. The problem now is that it’s collateral for the entire western (and now eastern) capital edifice.

        They will break the currencies long before they can let this correct.

      • aj… sad bit is the vanilla stuff worked… till the lunatic looters went on a crime spree and now run the joint.

        skippy… Blazing Saddles… “hes going to get it” – gun to ones head comes to mind

      • Debt created as sui genesis non coporea was always a bad idea, I don’t care what fancy gimmicks grew up around it’s worship

      • They will break the currencies long before they can let this correct.

        Only if they can also stop wage inflation. Otherwise you are just adding zeros. Heck the retirees will hate them for it because their non-volatile sources of incomes will dry up pretty quick.

      • HUH? – sui genesis non coporea

        skippy… “5000 years of Debt” amongst other forensic anthro reduces that line of inquire moot. Hell even the last few hundred, lays that silliness to bed.

        Seriously Mig the tool has never been the problem [in its many forms], its the human agency as product of ideological rigidity which keeps our potential hamstrung. Object fetishes are a nasty psychological impediment imo. Kinda like always blaming the gov, when noone seems to want to look behind the curtain, to see the strings.

        skippy… man the wars and devastation hard currency – monies brought upon us, WWI and WWII for most recent egregious examples.

      • Sorry skip you can talk about the wars that hard monies yadda yadda but the war the fiat petro-debt brings will annihilate whole civilizations!!

      • Petro dollar… good grief have you been lurking over at ZH to long, resulting in believing the FRN is backed by oil. The FRN was made reserve as a form of tribute to service its roll as the Anglophone Praetorian guard. Oil just happens to be a strategic resource, which since the cold war, is highly contested for in order to keep the geopolitical-playing field the way some want it.

        Saying an autonomous monetary sovereign is broke, is like saying the well of contracts has run dry for the living

        I’ll direct you to a comment by just bill over at NC.

        What you don’t seem to understand is the difference between a currency issuing government and a private firm. The whole rigamarole about the ‘deficit’ is nonsense. Our economy functions because money is continuously created. If it isn’t created by government spending, it must be created by bank lending. Today, bank lending only fuels speculation and usury. The debt carrying capacity of private individuals outside the 1% is exhausted. Only government spending can possibly get the economy out of this depression for the 99% which has been ongoing since 2008.

        Have you noticed that our Federal government now borrows at roughly zero percent interest? This means that even under our lunatic system under which government expenditures in excess of revenues must be “borrowed” from the already rich and the private banks, the borrowing is essentially free.

        http://www.nakedcapitalism.com/2014/09/deficit-disaster-never.html

        Skippy… you don’t have a system problem as much as a human one e.g. what humans are running the shop and what ideology compels them to act.

    • @BM

      just wait until India joins the party and starts knocking on our door.

      You obviously don’t know too many Indians or have been to India…

  12. But when? How? I feel like it’s going to be when 10 million people decide they don’t like being rich any more, and that’s not going to happen! This is too entrenched to be affected by nothing less that an outright zombie apocalypse! And even then I won’t be able to afford the houses in non-zombie zones. I want this to happen too much!

  13. Like a morphine addict who has too much, Kohler cannot differentiate between a bad economy hooked on housing and a productive economy that innovates.

      • Acid is fantastic for gaining perspective, insight and appreciating the beauty of life, the mind and the universe. Only wowsers who have never taken it seem to use “must be on acid” as a derogatory term. That said, AK shows no signs of operating his grey matter at a higher level.

      • @Aaron what you say is true in part. Acid can also take you into the darker aspects of yourself. Set & Setting as the Master taught.
        Given the head space of AK for the past 30years an acid experience could produce the spray in the Vid.

      • He doesn’t. In fact I can’t find any record of Kohler having any academic qualifications at all. Apart from being an honorary “Professor” at VU.
        Can anyone assist?

      • Yes, he left school to become a journalistic cadet. He has no academic qualifications of any kind. Less formal training in economics than me even.

        EDIT: Most of our ‘economics experts’ are journalists, and the younger ones do have degrees (i.e. in Journalism), so an Arts degree seemed about the right speed to be a ‘qualified economics expert’. People who have education in economics need not apply. Of course, there’s a school of thought that economics education reduces one’s ability to analyse and understand the economy:

        http://www.theguardian.com/commentisfree/2014/may/09/university-economics-teaching-lobotomy-non-mainstream

      • Interesting and disgusting. I guess your average economics person wouldn’t have the gravitas and acting skills to be on TV.

      • Is a recent lobotomy a help or a hindrance when one is making a TV appearance?

        Discuss with reference to current Australian commercial TV presenters

      • You need a big head that is very symmetrical and an iq around 100. Having ever exercised your mind with real academic work is a definite no no. The average Australian can spot that a mile off and will hate your guts. Straight to ABC Siberia for you. But they are paid very well so that’s ok.

        In the future presenters will have machines that will temporarily reduce or upgrade their iq in order to suit whatever propaganda they need to sell and the mood of the times.

      • In the future presenters will have machines that will temporarily reduce or upgrade their iq in order to suit whatever propaganda they need to sell and the mood of the time

        Hahhahahaha is it called an iPhone? Does it do the same thing to the viewers?

      • In the immortal words of Australia’s favourite living Scotsman, Mr Jiimmy Barnes “Fucking Claasic”

        😉

  14. Socially and politically we have well and truly crossed that threshold where those who benefit the greatest from the current distortion in investment are actively working against those trying to address the current state of disequilibrium and inequity.

    Kohler is symptomatic (indeed an icon) of the swathe of greedy, myopic, idiots intent on ensuring that none of their selfish, idiot brethren ever faces their day of reckoning, no matter what the cost to future generations. These fools are a danger to the viability of Australia as a fair and equitable society.

    They bang on about the sustainability of public education and healthcare, yet not a word for the sustainability of a shadow housing policy implicitly built around selling out future generations to prop up the wealth of complacent boomers who have spent four decades engorging themselves without the slightest thought for how they were ever going to pay the bill. What about sustainable f***ing negative gearing, there’s a thought for you.

    Every current politician and political party and media outlet not actively campaigning for an end to this madness is now complicit in this systematic debasement and corruption of our society. They should be treated with the accordant contempt and met with an equal and opposite political reaction.

    • Never been one for cheering on a housing crash, but such staggering insouciance is enough to make you wonder whether a crash is actually what this country needs to shake out the idle bogan-istrocrats gleefully beggaring everyone’s future.

      • Crash it or deprive it of fuel, but the important thing is to stop it.

        There is no painless way to do it, and as much as part of me wants to see Kohler and his smug, fear mongering ilk bear the searing pain of a sharp crash, the better outcome will be along the lines of a ‘velvet’ revolution. If we can’t politically abolish negative gearing, then just reform it for crying out loud. Take a leaf out of Abbott’s attempted reform of health and education. Tell ’em you’re committed to providing appropriate incentives to investors, but you want to ensure that future generations have the same opportunities to invest in and own their homes, therefore the key is to making negative gearing ‘sustainable’.

        Keep current arrangements in place for new builds, with a gradual reduction in capital gains discounts back to 25% over the next decade (reduce it within super funds as well, and make sure that reduced discount applies to all asset classes). Maintain arrangements for current investors in existing dwellings, but for new purchases of existing dwellings less than 25 years old, gradually reduce tax deductibility of depreciation, and also reduce capital gains discounts. For all new purchases in existing dwellings greater than 25 years old, require additional capital investment of at least 20% of the value of the purchase price within three years (that either adds bedrooms or improves overall utility) as a condition to obtain tax deductions and capital gains discounts. For existing negatively geared dwellings, calculate the taxable income offset at a maximum rate of 30%, regardless of the investors marginal tax rate.

        To protect renters against ambit rental increases, for any increases beyond CPI + 2% for the first ten years following these changes (not supported by capital improvements), the marginal rental income above this level will be taxed at the investors marginal rate + 50%, with the capital gains discount further reduced by half for any sale within the following ten years.

        Institute an additional tax of 3% of the property’s purchase price for foreign investors (or trusts/SPVs set up for foreign investors) and a flat land tax of 2% on dwellings owned by foreign investors. Properly fund and empower the FIRB to police their own goddamn rules, and legislate minimum fines of $500,000, including the seizing of their Australian property, and compulsory sentencing and irrevocable professional suspension for anyone who has breached foreign investment rules (real estate agents, solicitors).

        Too easy !

      • At least once it’s crashed we won’t have to talk about whether or not it’s a supply thing for at least a few years.

        Bliss!!

      • @ spleenblatt Yep. A crash is the only course left for Australia as it has failed on every other dimension to even acknowledge its situation. And if ti makes enough people angry it might see some change.

      • Australians have collectively created and fed a monster, and the only thing that will stop us from repeating that is if the monster bites those who fed it; in that case it will of course bite almost everyone else too, but that is unavoidable.

        Tweaks that bring in a ‘slow melt’ (which won’t really be a melt but more of a slow downward spiral) won’t convince anyone to really change anything. They won’t resuscitate productive enterprise; they will instead entrench the destruction of capital, just at a slower rate.

        It has to be sudden and hard to really change things. And as time goes on and we feed the monster more, that’s looking increasingly likely. That’s why I cheer the stupidity on. Feed everything to the bubble! Pay young people to buy houses! Remove all taxes on property profits!

        The whole paradigm our economy and society is built on simply doesn’t work; on a net basis, the old are cannibalising the young. Better pain now and a big change than a long stagnation.

  15. That he doesn’t see the fault in his own logic is just astounding – ‘parents need expensive houses, to support their kids, who can’t afford expensive houses, because parents need expensive houses to….’

    And WHY of all people are HIS kids renting? Didn’t he get like $8M for selling businessspectator and eurekareport to NewsCorp a few years ago? Wouldn’t a good dad who has been so fortunate help his kids out? I mean really what’s $500K to each of them for a 2bdr apt somewhere really going to cost him at this point anyway? He’d still be left with $6.5M + his insanely huge house + current NewsCorp salary to retire.

    Sad how selfish his attitude is.

      • I’ve seen off your kind before mighty mouse.

        I ask for the addresses so I can sanity check your claim. ABS produce some fine numbers, but it takes a brain to interpret them. A trained monkey can put up an excel chart these days.

      • @ Claw

        “ABS produce some fine numbers, but it takes a brain to interpret them.”

        It’s not my fault you’ve got no brain!

      • ABS produce some fine numbers, but it takes a brain to interpret them. A trained monkey can put up an excel chart these days.

        The irony in that is hilarious!

      • I’m a big believer in sanity checks. Shouldn’t really be that hard to get a few numbers Aus wide.

      • @mig

        Yes but you really need to get enough across the different suburbs etc to make sure you getting enough signal.

      • @mig,

        This is what that whole discussion was reminding me of:

        http://andrewgelman.com/2009/05/15/some_thoughts_o_5/

        A number of statisticians working in the area have pointed out that the current system of counting everybody produces a worse estimate than deliberately counting some subset of everybody. Apparently the US Constitution has it in for statisticians, though.

      • @ff one in each city would do me, its what Claw want its what Claw gets. But randomly selected from a set obviously

      • @mig

        Ok, I’ll start it off. 3 bed townhouse in SE melbourne. 500/week. No rent increases coming upto 3 years.

      • reposting about the sanity check

        “Hence why I have stated many times on MB that rents being stagnant at 20% of income for 20 years (ABS data) is a pretty good indicator that the ‘supply shortage’ is a fiction.” moderate mouse

        Over the years I have noticed common themes or characteristics that many shortage-deniers exhibit. One of these is a tendancy to search out any statistic that supports shortage denial and then hold-up this statistic as proof of no shortage, even though the statistic is obviously wrong or nonsensical.
        Take the recent case of moderate mouse claiming rent has been stagnant at 20% of income for 20 years. This statistic appears to suggest that 20 years ago a person with an ordinary job could rent a decent place for 20% of his income, and still can do so today. If this was generally the case then I would not be worried about the housing shortage. Clearly this is not the case, and moderate mouse does not care a whit about the truth.
        I challenge moderate mouse to provide the evidence of house renting in 1994 for 20% of a wage, and to provide evidence of a similar house renting in 2014 for 20% of a wage. If ABS did in fact make the claim that “rent has been stagnant at 20% of income for 20 years” then I would like to see the list of properties and rents and wages that they used as a sanity check for their conclusion.
        The claim is ludicrous. The rent for basic, decent or average housing has risen enormously over the years when compared to ordinary incomes. Ordinary people have compromised on size, on backyards, on commute times, on ammenities, on build quality and still pay more than previous generations.

      • @ Claw

        ABS: For owners with a mortgage and private renters, the proportion of income spent on housing costs in 2011-12 is the same as in 1994-95, at 18% and 20% respectively. http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/4130.0Main%20Features22011-12?opendocument&tabname=Summary&prodno=4130.0&issue=2011-12&num=&view=

        As for your sanity check – do your own grunt work. If you don’t believe the ABS, the onus is on YOU Claw to take it up with them, not me.

    • What’s funny is that cool million or so only buys a run-down sh&t box in the middle suburbs – still have to gear it up to a couple of mil at least.

      I can see the kids now. Daadd, as if 1 lousy million will get me anything nice at Bondi…

      • Alan must have heard it all from his “entitled” kids and is now hapily going deaf and senile in his twilight years.

        As misguided as his views are he has probably been inadvertently good to them by telling them to rent. You know, that’s just tough love rather than good financial advice.

        I think the sad part of it is that he can’t seem to resolve logically WHY they can’t afford to *get on the property ladder (*my most hated misnomer) and why this translates to a future in which the overvaluation and hence support for retirees through disposal of that single asset can not exist. It simply escapes him.

        With three kids renting one would think there’d be some battle stories coming through about decrepit share houses, horrible landlords and the ongoing saga of moving house every 12-18 months. Apparently he is impervious and unmoved.

        So if Alan has no sympathy for his own kids plight then its easy to imagine he cares not for the rest of us. So, FUCK YOU Alan. I hope they push you down the stairs and collect early.

      • True they’d have to go out to Castle Hill or something.

        Scrap that. $1m will only buy you an ugly 70s/80s thing there now.

        Bella Vista!

      • I hate the term “own my own home”.

        It was invented because people can’t help but put in that little bit of irritating smugness.

        People don’t say I own my own car. They just say they own their car.

        People suck.

      • @ Aaron

        “WHY they can’t afford to *get on the property ladder (*my most hated misnomer) ”

        Yep – hate that one too, along with “secure a place in the market” – yeah, real secure.

        Surprised they haven’t renamed the ‘property ladder’ the ‘magical wondersleigh to everlasting wealth and happiness’.

        Get on board Australia!!!

  16. A sharp interviewer would ask Kohler this:

    “Ever-inflating house prices are good for retirement nest-eggs, right? Young people who can’t buy, need to enjoy renting, most of the world does it anyway, right? So where are the retirement nest-eggs for the people that you are saying lifetime renting is good enough for”?

    I thought being devoted to social injustice this blatant, made one a non-person to the caring lefty mainstream media types.

    • Our perhaps just ask him if he thought his grandparents and parents hoped for him to one day own a home when he was little?

  17. ps. Speaking of tirades…Did any body else have the next video autoplay and catch the tirade on the bus? Stay classy girls!

  18. Can’t wait for the NBN in the Northern Rivers (even if it is only LTE). Watching that, whilst it buffered every 3 seconds, was painful,

    • Probably less painful than the clean stream dude, I’m guessing Alan’s absurdities punctuated by spinning disks as you awaited his next idiotic utterance could probably have been turned into a drinking game.

      But for everything else you definitely deserve NBN

  19. Of course Kohler can afford to stump up some of his hard-earned (cough, cough) to help his kids buy a house.

    Newsflash: he’s bullshitting.

    He knows full well that houses are overpriced and would be doing his offspring a grave disservice if he recommended they buy in.

    Really, why would they bother when they can rent for as long as it takes for whatever cheaply bought properties dad owns to come their way, together with a no doubt sizeable share portfolio.

    Haven’t you ever encountered those self-assured children of the wealthy who swan along through life without a care in the world, confident in the knowledge that even were dear old dad’s wealth to be cut in half, they will still sitting somewhere near the top of the (smaller) heap when it all comes their way. They’re just counting the days.

    Hell, truth be told there’s probably a few of them occasion this site.

    • The Traveling Wilbur

      @3d1k – “having a bit of fun” was he? What’s next: making fun of pensioner’s that need to work on sex lines to make a living?; telling serving officers “sh&t happens” in response to their recounting of their service; explaining what mysoginy is to a woman while smirking through the whole question?

      I’m sure these were all examples of ‘having a bit of fun’ too. (I know I’m being slightly unfair about the second one – but they were HIS choice of words, not anyone elses). His mouth, his responsibility.

      Just like AK’s.

      Speaking of which, sometimes 3d you should know when *NOT* to go the apologist/minisation route for the powers that be and the status quo – lest you be tarred with the same brush as their underlying idiocy (no one ever accused you of being stupid – not litterally anyway).

      So to sum up: go away please.

      PS now I know you don’t have kids. The alternative to that in this context is that you have so much cash you can buy them all McMansions – but then you wouldn’t waste your time here in your current capacity.

    • This housing circus happens to be a serious breach of basic human rights … something clearly beyond the limited comprehension of Alan Kohler.

      As co-author …I touched on this within the Introductory Section of this year’s DEMOGRAPHIA SURVEY …

      http://www.demographia.com/dhi.pdf

      The purpose of the Demographia Surveys
      is to alert the public and policy-makers
      if housing exceeds 3.0 times annual
      household incomes, that there is
      institutional failure at the local level.

      The political and regulatory
      impediments with respect to land supply and
      infrastructure provision must be dealt with.

      Indeed – the United Nations within its 2007 World
      Population Report is very forthright when it states –
      “Once policymakers and civil society understand and
      accept the demographic and social composition of
      urban growth, some basic approaches and initiatives
      suggest themselves.”

      “These could have a huge impact on the fate of poor
      people and the viability of the cities themselves. “
      “Throughout the report, the message is clear. Urban
      and national governments, together with civil society
      and supported by international organizations, can
      take steps that make a huge difference for the social,
      economic and environmental living conditions of a
      majority of the world’s population.”

      “ Three policy initiatives stand out in this
      connection.”

      “First, preparing for an urban future requires at a
      minimum, respecting the rights of the poor to the
      city. As Chapter 3 shows, many policymakers
      continue to try to prevent urban growth by
      discouraging rural – urban migration…….”

      “These attempts to prevent migration are futile,
      counterproductive and wrong – a violation of
      people’s rights.”

      Hugh Pavletich

      • Hopefully … MacroBusiness Au readers make a point of drawing their friends and colleagues attention to this important article by Leith … and encourage them to do the same.

        The public conversation of this critically important issue is essential.

        Thank you.
        Hugh Pavletich
        Co author Annual Demographia International Housing Affordability Survey
        http://www.PerformanceUrbanPlanning.org

  20. From the video: “The kids don’t really have to buy a house. They don’t have to do it. It’s OK”.

    What a bunch of bullshit. He sounds like he’s talking about teenagers. The fact is, most people under the age of 35 are now priced out.

    This isn’t ‘the kids’ not buying. It’s people who would be forming families, but are doing so less and less. They’re also not starting companies, because they have few assets, less security, and poor access to capital. It’s a monumental disaster.

    Alan’s world looks a lot like Japan in the late 80’s. And we all know how that went (Japan’s fertility rate is 1.41). There’s also a very very good reason why the US grabbed the tech crown back from Japan; ask yourself if you could imagine Google or Tesla starting in Japan? I couldn’t! The same is becoming increasingly true of Australia.

    Every society that puts the wealth of the old ahead of opportunities for the young declines, often terminally. I suspect in Australia’s case it isn’t terminal, but the decline is definitely in progress.

    • Work harder/smarter buddy. Or failing that, move to TAS, there are plenty of cheap houses there for you.

      • … and no jobs or opportunities.

        I wrote a much longer response, but I got a “you have been blocked” page when I submitted it. Lame.

      • Oooh, that comment actually worked. So let me arduously retype my response from memory.

        Work harder and smarter? Let me tell you a story.

        In 2011, I lost my job as a software engineer because my company closed down the Australian operation because it had become too expensive. At the time, I had a wife, 2 kids, and an Australian mortgage on a house in Adelaide. All other jobs available were awful. The chances if I started my own business in Oz were similarly dire, considering that everything is stacked against anyone who tries to engage in productive enterprise there.

        We moved to California. I numerically earn over double what I earned in Oz, before exchange rate conversion. I save 40% of my income. In Oz, the mortgage ate it all. My chances of becoming redundant and not being able to find work are approaching zero. By the way, we sold the house in Oz about 4 months ago, thank God! I now have an American baby too.

        Why would anyone in my situation go back if Oz stays like it is? I can buy a house in Berkeley, California for a much lower percentage of my income than anywhere in Australia. My income is double what it would be in Australia.

        Unfortunately for you ‘bull market’ folks, what applies to me also applies to the immigrants that you’re expecting to save your property portfolios. If they can earn enough in Oz to be a miserable debt slave, they can earn enough in the US or Canada to live rather well.

      • And after giving you the satisfaction of a longer response, which of course you won’t engage with…

        You’re a troll… as in, I don’t think even you believe what you’re saying. “Work harder/smarter buddy” as a response to anyone who disagrees with your perverted world-view is the mark of someone who is simply posting to get a reaction.

        So please go away.

  21. We have been fighting economic terrorism for at least ten years. Welcome to the war. Australian youth certainly don’t need to travel to Iraq–the real battle is right here at home.

      • What is ridiculous is that our government has deliberately pursued policies that have caused rampant inflation in house prices and have colluded with bankers to create a private debt crisis that threatens to blow up the entire Australian economy.

        Savers have now become the next war casualty as emergency low interest rates rob them of their savings.

        It sure feels like a bloody war has been declared on the Australian public. So far bankers, speculators and politicians are winning.

  22. It’s all a hilarious joke if you’re a boomer… They all think they’re geniuses buying when housing cost were the historical norm (3x) and now they’re paper millionaires… because they’re all so smart!.

    They cut the interview off just when the smug comments might’ve turned to lame excuses.

    The boomers will shortly become net sellers as they try to cash in their retirement nest eggs… accept with current house prices at 10x income…. and demographically, there will not be enough buyers to meet demand..

    It’s all giggles sticking 2 fingers up and FHBs but who the hell do you think is going to be funding the eventual sales of these overvalued properties??? The very same FHBs!!

    Laugh it up dickhead!!! When the music stops the shoe will be on the other foot!