Weekend Links 2nd-3rd May 2015

reynard

Global Macro / Markets / Investing:

Americas:

Europe:

Asia:

Terra Ironoria :

Random/Interesting:

Weekend Face-Palm:

  • Tesla unveils battery to ‘transform energy infrastructure’ – France24 and Inc and Wired  .. FFS! The fact that Germany, the country in the middle of Europe, is the “leader” on solar and renewable infrastructure and is seen as a “target market” for this tech  just feels like Australia has again stupidly given up an opportunity that we could have won without even trying very hard.

For Laughs:

 

Comments

    • Ah Gunna wont happen. the RF energy required at the transmitter for these passive RFID transponders is so high, (to achieve an effective range of say 2m) that people will be winging about RF energy causing all sorts of cancers. WW

      • Not quite WW, I have micro-RFID tags from Hitachi that at 0.3W we can read at 50cm. Other MONZA-4/5 chips are read at 3-5m and our best on metal passive tags are read at 10m at 1W (912-928MHz). This is all using Japanese spec which have lower excitation power. Read range was higher with the US readers when I tested there. We work closely with GS1 in Japan and this is something that is getting real. Personally been working with RFID for over 15 years in both passive and active. Our latest is a micro tag for dental implants and crowns. Now that tag in the mouth can only be read at 5-7mm 🙂

      • John,thanks, the problem with those high frequency tags is they don’t range well , 2 to 3mm, when they are hard up against a metal coke can, for example.WW

      • We use on-metal passive tags from Xerafy (http://www.xerafy.com/catalogue/catagory/metal-skin-series/1) that give excellent results when you select the right tag/product combination. For construction equipment rental tracking at the largest supplier in Japan, we use a mix of the Xerafy pico-wedge (http://www.xerafy.com/en/catalogue/product/pico-wedge/33) and NanoX II tags (http://www.xerafy.com/en/catalogue/product/nanosupxsup-ii/12). Read range quoted is pretty accurate tho some have been read at over 12m with an experimental system X-Array we trialled from Impinj 18 months ago (http://www.impinj.com/products/gateways/xarray-gateway/). Read range used to be in the mm on metal. Some really interesting advances in on-metal tags has greatly increased the range. Check out this tag from Hitachi (https://www.youtube.com/watch?v=fQsqJJ-GU1M). With out metal, read range is mm but place a small wire filament on the tag, and read range increases to cm’s, 15cm was our best read with a hand-held scanner. This is another tag we partnered with Hitachi to deploy in the US and Japan.

  1. http://arstechnica.com/information-technology/2015/05/01/teslas-new-powerwall-home-battery-will-cost-3500-for-10kwh-units/

    Tesla’s 10kwh home batteries are $3500. 3 of those and a decent solar setup, and you’re off grid.

    Yet again I laugh at the lack of vision and inability to understand the implications of exponential improvement in tech displayed by conservatives.

    Solar can never displace base load, they said. Ha ha!

    And Australia completely missed out! Ha ha ha!

    • I just did a back of the envelope calculation. For my 3BR house in Oz, using 20kwh per day, assuming 4% interest rates, and $2000 per year in grid power bills, a $20k system will pay off a loan used to purchase it in around 15 years, assuming no rise in grid power prices. Factor in rising grid prices, and it’s less.

      It’s the end of the grid as we know it (and I feel fine).

      • It is possible to decrease the 20kw/h daily use over time as well. When you are running on solar and most probably battery, energy use habits change, decreasing energy significantly. Given the changes in energy efficiency, pay back could be even quicker than that.

      • Jonny G Banger

        i paid 15K (cash) for a 5kw system on my place in townsville when the gov scheme was available. i used to pay about 4K/ yr on average in electricity. now i don’t pay any bills and usually get about $1000 back per year. Its been a good investment.

      • LD,

        A 15 year payback would fail to pass most investment committees.

        What happens when you connect your EV? You will need the grid.

        If you buy an EV, will you also buy the batteries, (note: extra PV and batteries to cover the EV will be a very limited market – many will get excited – most will balk when they see the price).

        There is much sense in outsourcing your RE and in long term, storage.

        BTW – you can do better than 20 kWh in the house.

        But – how do you run – say Olympic Dam – that draws 140 MW, 24/7?

        Oz sells > 1 million cars pa. Lets say, in time 20% are EVs. Let say that after 10 years we have 1 million EVs on the road and each requires 15 kWh/day of recharge. If the recharge occurs over 8 hours that’s roughly 2 GW of load. Not also though – that those cars could also provide 5 GW of peak. Yes I know everybody tells me that EVs are mostly one-way – but that is easily addressable technically, (the Tesla roadster was two way), with 5 GW of peak on offer – the market will find a way. Though – must will just want to sell more a batteries. But after market mods will fix that two and he will get on the bandwagon and probably lead that as well….

        My hit prediction is;
        – the grid death spiral will march on for the next few years
        – EVs will revive demand on the grid – but not replace past demand levels
        – there will be storage on the grid and possibly for example off-river PHES.

        The grid will persist – but it will look very different.

        Many opportunities for the innovative – but most of Australia will miss out.

    • Mining BoganMEMBER

      Pfft. Our Tony will have Tesla labeled as a terrorist organisation. No brave new world for us.

      Hey, who was it here that wss getting themselves a Tesla? Have we had a road test report?

      • I believe that was me who was getting the Tesla! I won’t go on about it too much as I have a tendency to lapse into zealotry, but suffice it to say it is truly unbelievably good. It is astonishingly powerful and responsive and I hate driving anything else now. The range is a complete non-issue for me – I rarely have the time to go on long drives, but if I did I now have my mobile charging cable. The supercharging network is being rolled out across Australia slowly but surely as well.
        I’ll be the first to admit it’s a very expensive toy, but I genuinely feel that I’m doing something to improve the world by supporting Tesla as a company. I can’t wait until EV technology is mainstream. Once you can buy an EV with decent range for $30k the idea of buying a stinky noisy rattly ICE car will just seem ridiculous – especially factoring in fuel costs. Tesla still haven’t revealed how many Model S’s they’ve sold in Australia, but I see them everywhere now. I’m guessing there are now close to 500 in Australia since launching in December.

        As far as the new Powerwall battery goes, I genuinely want one but I think they’re still a bit too expensive. They will certainly come down in price once the gigafactory comes online in a year or two (Elon called it gigafactory 1 in his presentation yesterday!). Once they’re down to A$2k I can see myself getting at least 5 of them and a bunch more solar panels (I already have 5kW) to get my house and car as close to 100% solar powered as I possibly can. I’m in the process of eliminating gas from my house (because screw you AGL!) and will soon be replacing my hot water with electric heatpump and my stove with electric induction. The gas-ducted heating is a bigger problem. I have reverse-cycle ducted aircon but it doesn’t do a good job of heating with ceiling vents unfortunately. I plan to get electric heat-pump hydronic heating but a good system doesn’t yet exist (coming soon though I’m told). This will need a lot of solar panels and batteries to run along with my car!!!

      • You bought a hundred thousand dollar Model S, but the $3,500 battery is too expensive?

      • Solar battery’s payback in a couple of months if you use weekly property capital gains in Sydney

    • Ah, LD. Big hole in your story, you need sunlight every day for that to work
      2 cloudy days and you are in the dark…..again.WW

      • It is good to see the technology moving. Not sure what the Australian government is meant to be doing to promote it though. This type of progress shows the stupidity of subsidising inefficient and uncompetitive technology like that installed on the rooftops of Australian homes.

        Would some of the money (and ongoing savings from using existing infrastructure) be better used in moving towards a real solution like where this battery technology is moving? Instead of moving towards a real and sustainable future industry – the ‘feel good’ crew has spent millions on junk technology requiring the rest of the market/community subsidises their folly.

        The grid will still be required for a very long time yet. The appeal of this stuff once it gets cheap enough will be the ability for smoothing demand across the day – reducing overall generation requirement – a large percentage of the world population live in apartments.

        The price will have to drop by a large amount before it actually makes sense to deploy it in a broad fashion with or without personal solar. The payback of 15 years needs to drop by at least a half I would imagine considering the 10 year warranty. Setting aside the point that the warranty is only as good as the company backing it. 4% interest rates are heroic too.

        Well done to Musk and Co for being first mover with commercial intent. Anybody know what elements are in these batteries? Does it sound like these elements are going to be pervasive for some time or just another stepping stone?

      • 5/8. the batteries are Lithium Iron.
        A number of Aussie companies on the ASX involved with lithium exploration and on the move.
        The killer for these batteries is that they require a recharge every day, IF you were designing a stand alone system to be reliable and with no generator backup, you need to allow for 7 to 10 days of no input from a solar system. So you need 7 to 10 sets of these batteries.
        The answer is an LPG internal combustion generator, water cooled,2 to 5kW to supply hot water for the house as well. They are about 2K. With auto start on the generator, you are back to only needing 1 set of batteries.WW

      • WW i think the interesting part is that he has developed versions of the batteries for utilities. this will allow integration into the grid and a way of smoothing power use from intermittent renewables. They are only first generation so there are a lot of efficiencies to come.

        Given that our grids are based around a central source it is hard to go totally off grid in the city. Too many weather variables, however it is realistic to expect that for a large portion of the year that a house could be self sufficient. Key will then be understanding the gap in generation which utilities will be able to plug via alternate generators in other areas to mitigate weather risk.

        This is still a while off however it is not unreasonable to expect that utilities in a short period of time 5 – 10 years will be struggling even to cover costs as more and more people take advantage of the sudden decrease in battery storage costs the Musk has created. Remember he has dropped the cost of batteries by at least a half and this is the first generation product and full production and scale efficiencies have not been realised as yet.

        So in summary, the idea that someone can go totally off grid is unreasonable, however it will see the utilities marginalised in a quicker period than previously expected forcing them to rapidly alter their business models, whilst the generators and electrical infrastructure businesses will have to radically change the way they operate. All in all it is rapidly moving in the right way.

      • 8s,

        “Not sure what the Australian government is meant to be doing to promote it though. This type of progress shows the stupidity of subsidising inefficient and uncompetitive technology like that installed on the rooftops of Australian homes.”

        How do you think these technologies’ costs have fallen so far and the production reached maturity?

        The volume growth in both PV and wind has been driven purely by global government support. Name me one single jurisdiction where high levels of PV and wind penetration have occurred with out supportive action by government?

        The fact that the technology is where it’s at id down to government support. The industry has said for 20 years – we need gov support to drive up volume and bring down the price. And this is absolutely, precisely what has happened.

        I agree with everything else you said.

        Organisations like ARENA have in their remit – support of research into the technology that supports RE – so storage. So yes, we should be focused on storage and not just batteries. There are cheaper options.

        Look at off-river pumped hydro electric storage. Park a crows nest dam on the top of high hill. It does not have to be huge. On top of hill does not, require flood mitigation, expensive civil engineering and is environmentally benign. Plenty of options there and relatively cheap and ALL the tech is already mature, for reals BTW – I’m not just a naive/disingenuous clean tech spruiker on that….

      • HR – I understand what you are saying – but at the end of the day this artificial demand has allowed factories in China to scale-up to provide wasteful products (not benefitting any Australian’s bar the installers and those lucky enough to now have their power bills funded by people unable to install/afford solar).

        Industry is never going to turn down a subsidy to scale up but what is the point if you are scaling up stepping stone technology that would have best been left in the lab?

        The Tesla cars are awesome but they are totally uneconomic and impractical – like most of the solar installed over the last decade. From solar perspective, Australian society is funding the select few to have a Tesla in their garage, for no discernible benefit to Australians.

        The technology advancement being pursued by Tesla and many others will achieve its market sufficient to scale into once it has reached the point of being attractive and economic to a market of sufficient size.

        Private enterprise appears to be doing a pretty good job here on its own. If government wants to help it should reduce the distortions in the market not create handicaps.

        Maybe a tax free economic zone to promote a Gigafactory being built locally? No income tax for employees, no corporate or payroll taxes – force them to be based out of the cities?

    • The other big hole is how many batteries can we actually build sustainably? I remember how the price of rare earth metals shot up when the iPhone was released.

      • ff, I think the issue with ‘rare earths’ (used in the control electronics) isn’t that they are particularly rare, but that the Chinese had cornered the market by price dumping, and put alternative producers out of business. I’m sure I read something about the US military getting a couple of US mines running again, so they aren’t utterly dependent on Chinese producers.

        It was someone on here the other week pointed out that Lithium itself is fairly abundant, and thus the battery tech is quite scale-able, and that isn’t even allowing for alternatives that are under development.

        edit: It looks like it was R2M that told me that.

      • @Hamish,

        It should be factored in that America [and others] thought the toxicity was better over – there – and not in its own backyard [legacy costs] and it should be noted this type of extraction process is water intensive – meaning you have to have heaps – spare capacity to support this activity.

    • drsmithyMEMBER

      Tesla’s 10kwh home batteries are $3500. 3 of those and a decent solar setup, and you’re off grid.

      Most people can’t do this. What happens to them ?

      • no need to try and get off grid totally. One battery pack will do a house most of the time. This battery pack is at least half the other ones on the market. This is a big deal.

        They will be aggressively marketed. I remember when i put solar panels on my house roof over 12 months ago, the solar installer was talking about massive pent up demand for small scale battery packs but the price was prohibitive. He was hanging out for Telsa to make a move. One battery pack with solar given the amount of sunny days per year we have will see even greater decreases in energy consumption.

        There is plenty of technology surrounding smart and micro grids and integrating large scale renewable generation being developed around the world. The interesting part will be to watch the development of the first generation utility grade storage develop over the next 10 years. That will be really interesting. Electricity companies though will have to be careful how they invest as it is hard to reliably predict the amount of base load power that is going to be required as solar and storage packages are brought out.

      • Dr

        For the rest…. Their electricity charge will double because governments will allow full cost recovery on the remaining users and or where power generation is owned by govt – other taxes will rise to offset revenue losses Eg land tax, stamp duty etc

      • They’re going to get cheaper. Companies can install these systems for people who can’t afford them for free and then sell them the electricity cheaper than they could buy it from the grid. This is what SolarCity (and other companies) do in the US.
        I’m unaware of any company in Australia offering this but the economics are surely almost here. If I had a more entrepreneurial bent (and time!) I’d look into starting this myself.

      • drsmithyMEMBER

        They’re going to get cheaper. Companies can install these systems for people who can’t afford them for free and then sell them the electricity cheaper than they could buy it from the grid. This is what SolarCity (and other companies) do in the US.

        It’s not really a cost issue.
        * If you rent, you almost certainly won’t be allowed to install one, and the place is unlikely to have solar anyway. Even if you can install one, you’ll assuredly end up in a shitfight with the landlord when you want to take it with you. (A standardised connectivity platform that would allow ideally a normal person, but at worst an electrician for a small fee, to connect a battery pack to an existing property would work around some of this.)
        * If you live in apartments/townhouses or similar, you probably won’t be allowed to install one for just your property (if at all) and, again, the place is unlikely to have solar.
        * If you live in a house that is unsuitable for solar due to layout/orientation/shading/latitude/etc, then the benefits are minimal.

        My belief is that, even before we get into costs, the above three demographics constitute most of the population.

        My overarching point here is that the grid shouldn’t be going anywhere. It should be a publicly owned utility facilitating the transfer of energy between individuals.

    • It’s still being sold.

      Just another revenue for the government to get addicted to, that prevents the sale of Australia ever stopping until there’s nothing left to sell.

    • Yes Tom, about time. But only 3%? The inflationary effect of these flows is much more than that.

      As Stomper suggests, compliance is the issue. But it is not about luck, it’s will. The state has regulatory control over many of the stages in these transactions. Easy.

    • The Patrician

      Interesting.
      How will it be enforced?
      At what point in the purchase process will proof of residency status be required?
      Will other states follow suit?

    • GunnamattaMEMBER

      I have also just been reliably told that the federal government will today announce penalties of up to 40,000 for individuals and 200,000+ for corporates for anyone helping foreign nationals to illegally buy Australian real estate they arent allowed to (presumably existing RE)

      ABC News radio is now reporting it. They are also talking about jail terms

      and

      Tony Abbott and Joe Hockey announce crackdown on illegal foreign buyers

      http://news.domain.com.au/domain/real-estate-news/tony-abbott-and-joe-hockey-announce-crackdown-on-illegal-foreign-buyers-20150502-1my7ga.html

      • Who actually wants this? We have a coming monster CAD to fund. How are we going to do that? So who wants to clamp down? Government? RBA? Banks? Treasury? Economics Professors? You stop this Foreign RE buying caper and all these frauds will be revealed for what they are! It will be revealed that everything any of these crooks have said in the past 50 years has been one big stinking pile of bull excrement! So how about investors? Home owners? Westfield? Westfarmers? You have to be joking!
        I know it MUST be done but I doubt many understand the consequences in this insanely distorted economy.

      • GunnamattaMEMBER

        well the truth has to start somewhere flawse. Yep it is going to be painful, and the start is pretty small, but i reckon it is a start.

        Besides there is nothing stopping foreign nationals buying as many new constructions as they like.

        Next step is to force state governments into building more – either remove urban growth boundaries, and expedite planning and zoning permissions (as well as provide services), or do something about nimbyism.

      • What you say is all true Gunna. However this one has to go as well “Besides there is nothing stopping foreign nationals buying as many new constructions as they like.” One way and another this just kicks the can down the road. It’s time we saved and built our own houses for our own people in a sustainable economy and society.
        The post by Hugh below is worth a read. In the BIG picture city house prices are linked to CAD’s and debt, parasitism of rural and regional areas, societal structure and, in the end, the corruption of our democratic process.
        http://www.kiwiblog.co.nz/2015/05/guest_post_investing_in_a_better_understanding_of_aucklands_housing_problem.html

      • Good start to involve the ATO. That will crackdown on near penniless permanent residents laundering their parents money to buy properties.

      • Gunna, a thought, do you think this proposed crackdown might be a result of the libs constituency getting priced out of the suburbs and houses they consider desirable, and perhaps entitled to? I mean, they couldn’t give a f*(k about the average punter being priced out, especially if they are making a cut on it, but god forbid johnny foreigner outbidding them..

      • AU$40000 penalty for foreign cash on a AU$2mil house is not a real penalty.

        Gaol term is redundant if the government makes it possible to seize any illegally purchased property and holds liable those that aide illegal purchases by the percent of purchase price (e.g. 10% or 20% of the purchase price)… but it’s only a dream.

        I can bet the loud talk is more like a scare crow tactic and nothing more.

      • Let’s see if passports start getting inspected at auction’s next week …

      • I agree with hamish’s comment. The overseas investors’s hold in Sydney and Melbourne is so strong (doubled since last year) it’s undermining local elite punters. I also suspect that the Chinese government has asked the Australian government to take a stronger stance since a significant amount of money is flowing out of the Chinese economy.

    • The amount they want to tax foreigners needs to be 5x the amount they suggest.

      If they have the cash to splash, it should be taken from them.

  2. pyjamasbeforechristMEMBER

    30/04/2015 – “Vale is operating at under US$ 20 per ton (FOB, all in is more like US$41): costs and production ramp-ups are the highlights of 1Q15″ – http://www.vale.com/en/aboutvale/news/pages/confira-resultados-primeiro-trimestre-2015.aspx

    22/04/2015 –Vale 1Q15 Production Report – pdf – http://www.vale.com/EN/investors/home-press-releases/Press-Releases/ReleaseDocuments/PREPORT1T15_i.pdf

    30/04/2015 – Vale 1Q15 Earnings results – IFRS – USD – pdf – http://www.vale.com/EN/investors/home-press-releases/Press-Releases/ReleaseDocuments/vale_IFRs_USD_1t15i.pdf

    • Egomaniac…….Hang on Rich, is this coming from someone whom not long ago describe himself as incredibly intuitive and highly intelligent? 🙂

      • @dennis. “whom not long ago describe himself as incredibly intuitive and highly intelligent?”.

        Correct dennis, but I use my talents for “good”, not self indulgent “evil”.

  3. Many MB pieces have highlighted the failure of FIRB in regulating foreign purchases of existing housing stock. Kelly O’Dwyer’s parliamentary inquiry was just a warm lettuce leaf slap.

    I’ve mentioned the need for ANAO to conduct a proper audit of FIRB.

    ANAO audit reports make interesting reading across a wide range of public sector operations. There is something of interest there for many of us

    http://anao.gov.au/

    ANAO powers are appropriately strong.
    http://anao.gov.au/Publications/Corporate-Publications/Guidelines-for-the-Conduct-of-Performance-Audits

    One topical to MB is the current inquiring into aspects of the East West Link
    http://www.anao.gov.au/Publications/Audits-in-Progress/2015/Spring/The-Approval-and-Administration-of-Australian-Government-Funding-for-the-East-West-Link-Project

  4. Big four banks hit iceberg after APRA’s Wayne Byres talks mortgage risk weights … Australian Financial Review … behind subscriber wall … h/t James G

    http://www.afr.com/business/banking-and-finance/big-four-banks-hit-iceberg-after-apras-wayne-byres-talks-mortgage-risk-weights-20150501-1ms1sr?stb=twt

    The result should not, though, have been surprising. One only needs to read Westpac’s response to Murray’s report. The $114 billion bank revealed it only holds “capital of 1.32 per cent” against $468 billion of home loans (see second chart). That means Westpac is leveraging its wafer-thin equity 77 times when extending half a trillion dollars of finance to home owners, which is exactly the same leverage estimate we calculated in this column in July last year. Imagine how Westpac would react if you told them you could only provide a 1.3 per cent deposit for your home.

    • … continued …

      When a loan goes into default, most investors and rating agencies assume “loss severities” of about 40 per cent. So Blind Freddy can figure out that Westpac only needs to suffer an increase in its residential mortgage default rates to 3.3 per cent before it wipes out all the equity it holds against these assets. That default rate, by the way, is less than levels experienced by British banks during the global financial crisis, and a fraction of the rates recorded in the US.

      Byres is not, however, beyond reproach. At the summit he counselled that “when it comes to capital adequacy, both banks and insurers are currently operating comfortably above minimum requirements”. A top institutional investor countered that “looking at Byres’ chart, APRA’s minimum tier one capital for all banks is just $105 billion in 2014”. “This is to support $4.3 trillion of bank assets and implies APRA is comfortable with the banking system being leveraged a maximum of 41 times!” This banking expert added that “this is no better than the leverage ratio in 2004 when there was minimum total tier one capital of $41 billion supporting $1.7 trillion of assets, which represents maximum allowable leverage of 42 times”.

      • Thanks Hugh! I used try to calculate what sort of a fall in RE values was required to wipe out the Banks. Memory fades! I thought it was 10% but it might have been 20%. Somebody reckoned I was wrong for some good reasons. However without bending my brain to the task on this beautiful morning you numbers might suggest that is not far out.
        I suppose it doesn’t matter. We’ll get thrown under the Bank executives bonus bus until the whole country is an economic AND social ruin.

      • I wonder if someone @ westpac starting entering data from the mining belt into their model and went ooopps…

  5. Who’s fault is Baltimore ? … The Burning Platform … an essential read …

    http://www.theburningplatform.com/2015/04/30/whose-fault-is-baltimore/

    I’ve seen the liberal lying MSM pondering how WE could allow the riots, looting, burning and lawlessness to happen, as if it is our collective fault. Obama stands before his teleprompter and pontificates about the need for us to end the poverty that supposedly led to Purge Night in Charm City. That term cracks me up. The city has so much charm, its football team once snuck out of town overnight and headed to Indianapolis. It has so much charm its baseball team was forced to play a game with no fans in the stands. … read more via hyperlink above …

    • drsmithyMEMBER

      When “the liberal lying MSM” is the opening sentence, it’s hard to believe anything further in will be worth reading.

    • On the subject of Baltimore, if you really want to understand the problems then watch The Wire. Probably the cleverest crime TV show ever written – characters mostly based on real people, with real police tactics etc etc (see the “Style” heading in the wiki here for some background) and it is set in Baltimore. It might also tell you a bit about where some of our cities might be heading to. It’s not a light watch and it rewards only those prepared to invest some time and effort but, you will understand perfectly what Baltimore’s problems are by the end of it (not to mention those of many big cities) and why governments seem so incapable of dealing with them.

  6. http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion
    “The case for cuts was a lie. Why does Britain still believe it? The austerity delusion – Krugman, Guardian…huge read…”

    Huge read – my arse! Strewth DE! Krugman wrote that crap and never one mention of the CAD and resulting Foreign Debt that would go hand in hand with his mad moar! moar! moar! printing regime. When governments print it is NOT money for nothing.
    The UK runs a CAD of about 100 BILLION POUNDS. Now you take an economy with an whirlpool of 100 Billion Pounds, that is running negative RAT, with it’s main source of ‘prosperity’ a RE bubble more or less like Sydney then you print even MORE!!!!! What the hell are you going to get? You get an even more catastrphic CAD! You get more Foreign Debt that is partially covered by flogging London Real Estate to foreigners at prices that few UK born and biref citizens can even dream of having a home!

    For once…just damned one again…can we get down to facts about this stupidity of Magic pudding BS!

    Krugman is a fraud! The whole Magic Pudding/Bernanke/ Krugman baloney is just plain fraud perpetrated by these clowns to cling on to their over-paid positions.

      • DE 🙂

        You’re wi8se! When you see ‘Krugman’ you know it is a waste of time! I only read when I have the bit between my teeth! I wish we could dispense with all teh crap…them i realise we have to deal with it because it is the mainstream thinking! 🙁 Despair!

    • GunnamattaMEMBER

      Flawse, Krugman slapped out 5000 words.

      He didnt mention CAD. OK, I buy that. If you can find mainstream commentators talking about CAD anywhere then you are a better man than I – and I go through a disturbing amount of global business media. If I was to count people out for not counting CADs I am instantly eliminating the bulk of commentators.

      Then just look at the environment he is talking about in not mentioning CAD, the UK. It has had a trade deficit for the better part of 100 years, it has made that up for most of that time in ‘invisibles’ which on the one hand I agree with you is perhaps bullshit, but on the other hand it has been good enough for London to continue as a centre of global finance, if not the centre. It is the centre of that magic pudding world you are on about, Krugman lives in the other magic pudding centre of New York. The reason these guys are oblivious to CADs is essentially that they have continued happily on their magic pudding way for the better part of a century. I am not saying that is right I am not saying it is infinitely continuable, but I would be prepared to accept a commentator from those locales pointing to the scoreboard and saying ‘it has worked thus far we will take it further for now’ – I am looking beyond those obvious limitations if (like you) I would like a look at the significance of national balance sheets (which i suspect are far more important here than they are there).

      After that (and I write as someone who has a lot of contact with the UK) he is essentially on about the myth (prevalent in the UK) that somehow George Osborne’s fairly pernicious budget measures are behind what is (very speciously in my opinion) being lauded in some circles as an economic turnaround of sorts. He quite meticulously dismantles that assumption. If I dont necessarily buy his lack of reference to the significance of a CAD, I weigh that up against his exposure of a number of equally fallacious nuggets of bullshit trotted out by those wanking on about tighter budgets [generally in the context of them waging some sort of class warfare on those underneath them] without sharing in the tightening themselves.

      Against that backdrop I thought, and still think, it is a huge read. If not necessarily flawless.

      If we are going to address the bullshit then we need to address all the bullshit IMO.

      Therein lay the reasoning behind my comment and reference to that piece. I think it is a good read. When I do links I generally dont just load up links that I agree with, I load up links which I think lay out a narrative or conceptual train of thought which has coherence (even if I disagree with it) and I consider worth thinking about. I’ve even loaded links I did think utter bullshit (or spruiking) just to provide a frame of reference to that which I considered influential – so that people can look at the fucking contentions chew them over in their own minds and say yea or nay.

      I would observe that if you dont like the links DE (or I) load up – and they do take some effort to get together – then why have a pop at the fact the article has been loaded as a link, unless you wish to close your mind to all else.

      • Grrrrrrrrrrrrr…Gunna! Let me first say i DO appreciate weekend links and think you do a great job. I was having a bit of a light-hearted jab at DE for seeming to put aside his own fundamnetal good sense to call the Krugman article a good read. However…………………………………
        1. I do read. I had read all sorts stuff – that’s why I read that damned Krugman piece. The issue is that it is fundamnetally the same as every other damn piece of his i’ve read in the past five or six years with the same ‘print and inflate to infinity’ crap.
        2. I wasn’t criticising your posting the link. I was criticising the recommendation for it – which seemed to me to be higher than that given to anything else that was put up.
        3. It’s not the CAD itself that bothers me – It’s the causes and effects!
        4. You said “If we are going to address the bullshit then we need to address all the bullshit IMO.’
        = That is PRECISELY what is wrong with Krugman – he just spins a BIGGER web of bullshit than the one already spun. Increased government spending, in an already badly distorted economy, running a negative RAT IR policyjust increases the debt – in particular the foreign Debt.
        5. The UK CAD is NOT covered by Invisibles!!!!!! It is covered by debt and RE sales! That is the whole point of taking note of the CAD numbers, which everyone seems to ignore in favour of Balance of Trade etc.
        6. Th ESSENTIAL issue with Krugman is that he ignores the consequences of what he recommends. I wasn’t arguing FOR Tories or anything else. I argue AGAINST Krugman’s fakery – and it IS fakery! I was arguing for a bit or TRUTH from Krugman – something he now seems to be totally incapable of – or he is just plain stupid. Somebody tell me which it is with this damned profession!
        7. Re the 100 years thing we now have this sort of thing http://www.theguardian.com/business/2015/apr/07/bank-of-england-warns-on-risks-from-current-account-deficit which is a real laugh given that it is the BOE that has largely engineered the damned CAD with its low negative RAT) interest rate policies.
        The UK CAD is being financed by debt and property sales. The ABC programne on Saturday night was exactly to the point on the effects of this. Young people who are not senior in the financial centre, cannot afford a home, apartment or even a dog box! You posted on it here http://www.theguardian.com/commentisfree/2015/apr/30/housing-crisis-first-time-buyer-affordable-homes-london Does nobody link the two – the CAD and the house prices? It’s a Link clearly demonstrated with a very high correlation in a number of papers in the past few years. (Sorry i don’t have ready Links but I could find if you need)
        Note here the CAD is not the CAUSE as such. The policies that produce a CAD also cause higher house prices as well as there being a self-reinforcing loop.

        Again Gunna- I know you and i agree pretty much on the state of things. My argument is with Krugman’s B…..t!

      • Ha… Krugman is an IS-LM fanboy which makes him a neoliberal apparatchik with a milquetoast conscious.

  7. IMF to probe Australia’s record property and debt levels


    The International Monetary Fund is sending an economic team to Australia to examine the risks posed by property speculation and record-high household debt as part of a broad health check-up of the sagging domestic economy.

    ….

    The household debt-to-income ratio has risen to an all-time high of 153.8 per cent, making Australians among the most leveraged people in the world, behind only Denmark, the Netherlands, Ireland and Switzerland, according to the most recent figures from the OECD.

    http://www.afr.com/business/banking-and-finance/financial-services/imf-to-probe-australias-record-property-and-debt-levels-20150501-1mxjmi

    • Sounds like a nice holiday junket for a few IMF staff. The causes and links between debt, CAD’s and house prices are well established and researched. They could sit in their lounge at home and write this report in a day.
      Is the IMF wanting a few prime time TV shots to try to tell the stupid Aus people what is coming down the pipeline? They’ll be disappointed. They’ll be hunted down and criticised by every economics professor, Bank Economists, RBA and Treasury. We’ll have 20 secs of some bloke from the IMF trying to spell out the dangers followed by two hours of our ‘wise’ men telling us the IMF is wrong. Then to cap it off we’ll have Barnacle Bill et al telling us that running a prudent economy is actually wrong. We need, by both government and consumer, to spend! Spend! Spend! Spend you ba….rds!

    • WOW Somebody making really good sense re this city stuff!
      “The difficulty we have with talking about the effects of large complex systems is that all too often it is reduced to bite-sized discussions about specific aspects of the system in isolation, largely because it is difficult to talk about the system as a whole in the same detail. It is an issue this piece also faces in the interests of remaining relatively concise. A result is that solutions and criticisms are suggested in isolation of their impact on the system as a whole.

      I now live outside of New Zealand, but I believe strongly that the regional processes leading to the rapid growth of Auckland and decline of rural areas should be an issue of national interest.”

      Absobloodyloodle! The apparent economic benefits accruing to cities is not because cities are some creative stimulant. It’s because they parasitise the regional areas. They dominate rural and regional areas politically so they are willing to run the rest of the nation into oblivion for their own welfare. Auckland is probably a good example but Sydney and Melbourne are classic examples!
      If we talked about Australia (or NZ) we need to talk about what sort of nation we would have if we were actually running a sustainable economic and social model. But screw that! One side of politics wants to talk about how great RE, Banks and Foreign Investment is. The other side wants to shut down all the farms because, somebloodyhow, they are the source of all the damned pollution!
      The really really really BIG problem we have is getting a sane discussion going is that ALL the damned major media lives in big cities!

      Edit: Bloody hell! I started reading the comments! Really not a single one that I could see actually grasped the nature of the discussion that needs to be had – back to the same shallow old BS – more infrastrucutre! Open up more land! etc etc etc…All of which are pretty meaningless in the big picture!

      • drsmithyMEMBER

        The other side wants to shut down all the farms because, somebloodyhow, they are the source of all the damned pollution!

        WTF are you talking about ?

      • You don’t know because you haven’t wanted to know. There are examples of it all over rural Australia. If you lived there, or took any interest whatsoever in the plight of rural Australia, you’d have a clue. You, patently, haven’t wanted to know so let’s leave it at that!

      • Flawse … sorry old chap … but the socialist grand plan approach, loved by clueless academic types, doesn’t work.

        Preference always trumps policy.

        Herding the great unwashed out to the gulags isnt the trendy thing to do these days.

        Cities are opportunity magnets !

      • Good grief “socialists” … you have 50ish years of increasing neoliberalism yet some are still banging on about “socialists”. Best part is “Free Markets” was the Bernays style sloganeering neoliberalism evoked to forward its agenda. The other fun bit was equating home ownership [in a mobile workforce] as a ruby member prerequisite [ask Milton], which then leads to Peggy Noonan’s “it would be irresponsible not to speculate” missive, forced [super or 401k] investment into the bottom of the barrel investments that are equity’s [residual claims on profit but not assets].

        Next mind implosion is to group all academics as clueless lefties and not wise rational actors with heaps of bizness experience, like Buffet et al. When at the end of the day Government, is and has been, responding too the wise bizness rational actors aka corporatist or through their intermediary’s [polemic economists] they fund after privatizing the academic sector. Not to mention the ring fencing of governments by lobbyists [revolving door] and industry think tanks {cato, heritage, et al].

        Skippy… yet to a fault none have discussed the most fundamental issue… jobs…

      • skippy – when you contribute the good sense Hugh provides around here I’ll take note of your criticism of his occasional loose nomenclature. We’d be better off if you actually addresed Hugh’s thinking.

        Hugh – I suggest the word ‘Bourgoisie’ a better term. We have them everywhere on the political spectrum protecting priviliged position – perhaps including skippy!
        Think about it skippy. What you now are opining is different to what you said yesterday!

      • drsmithyMEMBER

        You don’t know because you haven’t wanted to know. There are examples of it all over rural Australia. If you lived there, or took any interest whatsoever in the plight of rural Australia, you’d have a clue. You, patently, haven’t wanted to know so let’s leave it at that!

        Fucking hell. It’s like trying to have a conversation with a teenage girl. “What’s wrong ?” “If you don’t know I’m not going to tell you. What would be the point anyway, you’re just a moron, you could never possibly understand.”

        Grow up.

        If there’s so many examples, you should be able to list a couple really easily, off the cuff, so we can have even a vague inkling of what you’re talking about.

      • @Flawse,

        Your feeble attempt to be the judge of commonsense [throw away phraseology better described as bias conformation] along with the use of the Royal “WE” to buttress your previous first person dislikes, is noted.

        ‘Bourgeoisie’ – groan… blind broad bushing to top it off.

        Hugh has been at it a long time beating the same old drum – http://www.sunshinecoastdaily.com.au/news/coast-less-affordable-new-york/334095/

        “New Zealand is a very dynamic democracy, where people can openly express their views without being intimidated. Its history of often being at the forefront of political reform speaks for itself.”

        http://www.nbr.co.nz/opinion/eleanor-were-not-even-close-neo-liberal

        Hugh is just another property spruiker with a side of tax minimization.

        Skippy… Thomas Sowell boom bust is on his site…. that is Rush Limbaugh territory and loon pond LewRockwell territory. ‘Bourgeoisie’ – I think some read a book or two and feel into the narrative and can’t get out, never left a bread crumb trail.

        PS. What you now are opining is different to what you said yesterday! – its up to you to prove it.

      • If there’s so many examples, you should be able to list a couple really easily, off the cuff, so we can have even a vague inkling of what you’re talking about

        Ah yes, Flawse with his flawed arguments. Flawse specializes in handwaving — a real master of the craft.

      • Stupid tree legislation – for the really big one – but of course you’d know EVERYTHING about it You wouldn’t need to talk to anyone who suffered its practical effects or actually talk to any of the real resepected range land scientists.
        As for the rest of your stupid petty insulting bullshit – shove it. yes i do think you are a moron who WILL NOT see out of his petty city based coffee shop ideology! It is a waste of time trying to explain anything to you because you are just full of arrogant bullshit.
        That’s why i was just trying to be polite to you and ‘pass’ on this inevitable crap from you.

      • Tree legislation? More handwaving from you, Flawse. Tree legislation has not shut down any farms.

      • Garnaut
        “Australia’s per capita agricultural emissions are among the
        highest in the world, especially because of the large numbers of sheep
        and cattle.”
        Duh! Interpreted as we need to get rid of them along with coal exports – we don’t need no damned exports!

      • R2M That just demonstrates how little you know of its effects. You haven’t talked to anyone – nor did the politicians. It was hastily drafted and unscientific and involved the complete confiscation of property rights – but it got the big support of urban voters because it was designed to only impact the ‘bush’. In the cities everyone could drive down to the coffee shop on Saturday morning and congratulate themselves on how environmentally conscious they were. Labor and greens got all those votes while not losing any becuase the bush didn’t matter a RA.
        Just an example of the sort of crap that was pulled. There was a meeting of producers in Charleville. I was not there but friends were and i forget the occasion and who was there of importance from the government. The place was in uproar. Speaker after speaker related the effects the legislation had on them. One of the local dept blokes reported non the meeting in which he gave a reasonably detailed account of the concerns of the producers. He was sent back to him to rewrite. This process was repeated several times until he just wrote ‘The meeting was well attended” It was then accepted.
        A colleague of mine, a world-wide highly respected arid and semi-arid rangeland scientist opposed the legislation from a scientific viewpoint. The (Labor) government, in response, confiscated his Superannuation. He had to go to the High Court to get it back!
        R2M Country people are not heard. The MSM don’t live there. They have no votes that count. So please don’t sit in Sydney or somewhere and try to tell them that it had no effect on them or their welfare.

      • “Ah yes, Flawse with his flawed arguments. Flawse specializes in handwaving — a real master of the craft.”

        OH Yes! Just ignore the fact that i happen to know a fair bit about this. Ignore the fact that i happen to have lived amongst the people who were affected. Ignore the fact that i did work in these areas.
        \You just sit in your lovely cosy urban environment with your nice salary and nice lifestyle and decide how everyone else should live to suit you!

      • Right, now we finally see why you said “the other side wants to shut down all the farms”.

        It’s a bit of a leap to take Garnuat’s noting of methane emissions from some types of livestock to the shutting down of the ag sector, but we all know how you do not resile from such acrobatic leaps. 🙄

        Interestingly, Garnaut got it wrong on methane. The situation is far worse than he stated.

        So please don’t sit in Sydney or somewhere and try to tell them that it had no effect on them or their welfare.

        I live in rural Australia. You assume far too much.

      • Get a grip flawse…. I grew up in the sticks and have more family here and back in the states engaged in Ag – cattle than you might like to know. Born in Iowa with family farming for over a 100 years, grew up in Arizona, Cattlemen for over a 100 years. Grandfather operated a classic farm with cattle, pigs, chickens, geese, rotating crops, 1/4 acre garden [canning], prolific wildlife, in both Iowa and Missouri etc.

        Most of my wife’s family are or were farmers and graziers, Murgon, Taroom, et al, most got rich selling product to the yanks in WWII with POW labour and then had to struggle through the drought years post WWII. Some were lucky wrt the gasfields and pipe line and sold out. Heads up… Oz environmental conditions are not the same as the northern hemisphere and as such will never be able to operate or enjoy the same attributes [close to markets, etc].

        Additionally both here in OZ and in the states Ag and animal husbandry is heavily subsided, hence your constant bleating about extraction is a myth.

        Skippy…. family’s old cattle feed lot and cotton property in Arizona is now a golf course in the middle of urban sprawl and in the middle of a bowl in the desert that is Maricopa county, hilarious….

      • Here all you blokes who know everything about rural people and their problems. This was part of a broader submission. It is written by a bloke who was, another, Senior figure in arid and semi-arid rangeland management. He has a PhD in the field. (Probably doesn’t mean much compared to a degree in journalism or polics) Tell me and him how this is all good! That the whole effing mess implemented without consultation, and policed and enforced, by cops with truncheons and shotguns in their cars visiting farm families! I kid not!
        “a. Queensland Vegetation Management Act (QVMA)

        There exists a considerable body of research on native vegetation thickening and its economic effects, such as the Productivity Commission enquiry. More is available on request.

        The Regional Ecosystem mapping used with this act was supposed to take into consideration the history of use of the land and its condition – which were largely ignored, as were errors in the mapping. We had an area mapped as brigalow – without a brigalow tree in it. And we only got this accepted and changed in 2013!

        When one considers the land use history here and its condition then our “remnant areas” are about as pristine as a recycled virginity.

        The economic damage of this is of longer duration and more insidious. Our 21,000 acre property is about half freehold, half leasehold. My wife and I bought other family members out and aimed to develop the property to its potential. That was to around 7000 dry sheep equivalents estimated with the Charleville Pastoral Laboratory Safe Carrying Capacity estimation method. The restrictions of the QVMA have reduced this to about 4000 dry sheep equivalents, with drastic effect on our potential cash flow and on our commercial value, as illustrated by two neighbouring land sales.

        One, on our north west corner, is mostly cleared and developed to buffel grass. It last sold for above $100 per acre.

        The other, on our southern boundary, is leasehold and was bought in the clearance of the former ostrich farm for its development potential – which was stymied by the changes in the QVMA in 2004. The then owners forced a buyout and were paid $60+ per acre for development potential foregone. In the subsequent sale the Queensland Trust for Nature got $17.50 per acre, giving a market assessment of the value of land with untouchable trees on it. And I point out that the various conservation organizations valued it at less than this as they did not purchase it to preserve the sacred tree..

        On the arguments used by government in If you find yourself in a fair fight, you didn’t plan your mission properlyassessing “unimproved capital value” , as we have smaller blocks and are closer to town our commercial value would be higher than that above.

        As we have around 10,000 acres of mostly undeveloped leasehold land between these two properties on their sales we are looking at a loss of around a million dollars in commercial value. Plus the ownership of a now marginally viable property, (now deemed unviable so ineligible for current drought assistance) with the losses of production foregone as well.

        family members out and aimed to develop the property to its potential. That was to around 7000 dry sheep equivalents estimated with the Charleville Pastoral Laboratory Safe Carrying Capacity estimation method. The restrictions of the QVMA have reduced this to about 4000 dry sheep equivalents, with drastic effect on our potential cash flow and on our commercial value, as illustrated by two neighbouring land sales.

        One, on our north west corner, is mostly cleared and developed to buffel grass. It last sold for above $100 per acre.

        The other, on our southern boundary, is leasehold and was bought in the clearance of the former ostrich farm for its development potential – which was stymied by the changes in the QVMA in 2004. The then owners forced a buyout and were paid $60+ per acre for development potential foregone. In the subsequent sale the Queensland Trust for Nature got $17.50 per acre, giving a market assessment of the value of land with untouchable trees on it. And I point out that the various conservation organizations valued it at less than this as they did not purchase it to preserve the sacred tree..

        On the arguments used by government in If you find yourself in a fair fight, you didn’t plan your mission properlyassessing “unimproved capital value” , as we have smaller blocks and are closer to town our commercial value would be higher than that above.

        As we have around 10,000 acres of mostly undeveloped leasehold land between these two properties on their sales we are looking at a loss of around a million dollars in commercial value. Plus the ownership of a now marginally viable property, (now deemed unviable so ineligible for current drought assistance) with the losses of production foregone as well.”

      • Flawse it sounds like you should be barracking for the TTP so you could claim the loss of expected profits or valuations.

      • Great response skippy – gratuitous insults are as good as logic in your world.

        You just reinforced my argument but because you are busy preparing your insult and can’t be bothered reading properly you wouldn’t realiuse it.
        Waits for the responses of the other two who know everything about everything!

      • You cut and paste an argument put by a fellow whose get-rich-quick scheme (of overstocking sheep on marginal, arid land) was stymied by legislation arrived at by a large group of scientists and agronomists, and you expect that to be convincing? Do you know that most sheep farms in Qld are facing severe drought and closing not because of “tree legislation” but because of climate change, the same climate change that you don’t believe in?

        Ye gods…. 🙄

      • drsmithyMEMBER

        It is always somewhat surreal to see flawse accuse other people of throwing insults around.

    • Yes. But we all know that! Anyone who doesn’t, doesn’t want to know. And most people who do know, also don’t want to know….. Especially Joe.
      But the comment “There might be work back in Melbourne…” ties in nicely with Hugh’s article above re Auckland. It’s not just Melb or Auck…it’s all our major cities…worldwide…who are being swamped by the desperate ‘looking for a job/better paying job’. Where will that lead us? Poverty and crime on a scale we haven’t and don’t want to see in our major cities. Baltimore might just be the first of our templates….

      • “Baltimore might just be the first of our templates….”

        That’s the point! However I see no way out of this. Any attempt to correct the distortions is going to result in Baltimores. Postponing reform results in Baltimors everywhere later!

      • Baltimore never recovered from its earlier riots of 1968, its slowly become a plantation economy where local gov and law enforcement use the poor as a income stream through fines – fees and industrial prison complex.

    • That really sums up everything Macrobusiness have been saying for 5 years………

    • The Patrician

      Yes Hockey’s NG position is dishonest and appalling….but it is explicable given his constituents
      How do you explain Bowen’s reluctance to reform this tax shelter for the rich?

      • GunnamattaMEMBER

        No idea on the ALP federally. Somewhere along the line they have coughed up on social justice and economic reform – though credit needs to be given for the Vic State crowd and Timbo Pallas for starting on coming to grips with the blight of real estate speculation

    • StomperMEMBER

      The tide is starting to turn and the housing bubble is being seen by many for the malinvestment it is. In the last few months/weeks/days we have seen…

      -likely reversal if smsf rules allowing gearing per Murray enquiry
      -Labor floating a change to negative gearing
      – VIC Labor raising a 3% foreign investor tax
      – APRA raising bank capital adequacy requirements
      -Crackdown on illegal foreign ownership
      – Federal FIRB application fee
      – upcoming May budget and further fiscal deterioration

      This week the Senate report into housing affordability will be released.

      Slowely but surely the beast will be slain.

      • GunnamattaMEMBER

        Trouble is the bubble needs to be defused before a coherent economic narrative can be put in place.

        And those trapped in the bubble will be loathe to see it dismantled.

        My money is still on the economy comping completely a cropper, and taking the bubble down with it. Though I think the current economic settings of both the Torynuffs and the ALParatchiks are about placing a poultice on our festering economy rather than cleaning out the pus and dressing it properly.

    • The Patrician

      “Anglicare’s Kasy Chambers argues that negative gearing should at least be allowed only for socially desirable development.“Negative gearing should be for new builds…”

      Yay, go Kasy

    • From article:
      “Only about 2.3 per cent of all rental properties in Australia were affordable for a single person on the minimum wage of a little over $33,000 a year.”

      This is the saddest part. What kind of policy/politics allow this to happen in a country. That’s not what Australia used to be.

  8. This inhabitable used shed on a useless 405m2 block in Brisbane (Wynnum) next door to us, just sold for $562,500 or 7.5 times average salary.

    http://www.realestate.com.au/property-house-qld-wynnum-119498659 .

    Lots of ugly young couples bidding for a roof over their heads until it went over $400k, then the sexy boomers took it to $562,500. Ready to flip it when the Asians arrive. This society is broken. I don’t know how much longer i can take it………

      • Its a free-standing 3br house one block from the water for $562K. Do you have any idea how much that would be in Sydney? Not that $562K is cheap, but have some perspective. That would be $2M or more in Sydney.

        Oh and coolnik give it a rest mate. Just because I don’t want to see an economic cataclysm doesn’t make me a spruiker FFS.

    • The Patrician

      The median household income for Wynnum is $66612…..that puts your ” inhabitable used shed on a useless 405m2 block” at 8.4x

      • I didn’t think it would be possible to leverage a ‘Blind Pension’ that high?

        Who on earth would pay to live in that squalor?

        Great louvers and what a bathroom – to share in a 3 bedder…

        Imagine dealing with that disgusting carpet when you are $200,000 in negative equity?

      • Even better! I went for the Brisbane average, as this place is only a 45 minute commute to the CBD!!!

      • The Patrician

        aah Wynnum Rd 8am on a weekday…..good times…worth the 8.4x investment all on its own

      • C’mon fellas – There has to be something good about this…surely? I mean at least Reus just got better looking! Something???????

        Edit: Actually that might be quite a bargain! A few weeks ago at the League I talked to a bloke who installed water metres. He was telling me they are working on the Northside Bris installing meters on 1100Sq M blocks. These would have to be an hour out of the CBD.
        So lever up you blokes and get with the good looking people.
        Remember every Central Banker in the Western world is intent on sending the value of the currency to ‘near’ zero!

    • Nice yard. Not $562,500 nice, but a lot nicer than a lot that I see about.

      Driving around Melbourne for my job and seeing the newer housing estates I am always flabbergasted that people would live in houses where the eaves almost overhang the fence. I’d rather live in an apartment in Docklands.

      • The new housing estates have houses that swallow up the whole block and the eaves of the roofs almost hang over the fencing.

      • I have friends that have just bought a place like what you describe in Melbourne (I say that loosely, as its in Point Cook) – Melbourne is like Simple Jacks younger brother, and will suffer the same fate as Simple Jack himself (Sydney) – It’s hereditary in Australia.

      • Ever shrinking block sizes make new houses look too big, in the same way that standing next to Tom Cruise makes the average bloke look tall…

  9. Randon/Interesting: Enter the Graphene Era.

    ” Governments are laying down huge investments in the race to be at the forefront of the graphene era. In the UK the $120 million National Graphene Institute is due to open this year. The Graphene Research Centre in Singapore has been built with funding of more than $100 million.”

    Tony Abbott to kick start a ‘Graphene Research Centre’ with 1 mil non renewable grant.

    • Nah – Tony Abbott will burn the graphene to make electricity. Graphene is good for humanity – you see…

      • Abbott would only show interest in graphene if it could be mined and shipped.

        Because graphene requires brains, scientists and research, it will never feature in Australia as anything other than a future import. 🙄
        ——————–

        On his Facebook page, Adam Bandt asked “Graphene- is there anything it can’t do?”

        Someone answered: “Make Tony Abbot a better Prime Minister.” 😀

  10. This is an interesting article from Fairfax on middle class financial issues in Sydney. The tip of the iceberg really. As the economy progressively worsens more and more will fall:

    http://www.smh.com.au/nsw/the-creeping-danger-of-australian-households-love-affair-with-credit-20150501-1mx5a5.html

    Adam Mooney, chief executive of Australia’s largest microfinance service, Good Shepherd, has observed a growing number of middle class households finding themselves with unmanageable levels of debt driven by aspirations they cannot afford.

    “A lot of marketing these days is specifically designed to make people feel like they’re not keeping up with the Joneses,” he said.

    “That’s a phenomenon around the world – people want the nice home and the nice car and the kids in private schools. At the same time you have big mortgages and a rapid rise in cost of essentials such as utilities and telecommunications. It takes one unexpected event, such as someone getting ill or losing their job, and the debt becomes a problem.”

    The report financially stressed households owed an average of about $7000 on credit cards, $250,000 on mortgages, almost $100,000 on investment loans, $12,000 on personal loans and $18,000 on student loans.

    http://www.smh.com.au/nsw/the-creeping-danger-of-australian-households-love-affair-with-credit-20150501-1mx5a5.html

    • GunnamattaMEMBER

      Classic read, cheers…..

      The little graphic on Mr and Mrs average Sydney and their outgoings is terrifying in its implications…….

      Those who think fueling real estate speculation is a substitute for a competitive economy should go and live with Mr and Mrs average Sydney. As should just about everyone in Australian politics, the RBA and Treasury (as well as the banks etc)

      • Bah, people on incomes that low do not have $2k private health insurance, IMO

      • R2M, I agree, however add the health insurance back in, it still doesn’t leave much.

      • Gunna,
        You are very welcome to have Sloppy Joe move in and start raiding your refrigerator. I will leave you to pick up the tab, and the heavy lifting. Just think of the stimulus to the workers at your local Coles.

      • truthisfashionable

        @R2M
        If that $2k for private health covers Mr & Mrs and the 2 kids, sadly that is quite cheap.

    • Andrew LeesMEMBER

      While I believe negative gearing must be removed or at least severely curtailed, I think that a sole focus on it as a single evil is rather missing the point. What we need is a tax/grants/incentives system that significantly privileges *productive* investment over unproductive. So, for example, disallow the 50% capital gains discount for existing property investments, perhaps allow some discount on new build and value added developments, and allow 50%+ discount on investments in young companies up to say 10m capitalisation (some classes of enterprise like coffee shops excepted!). Lets get real incentives lined up with what is known to create new jobs and real wealth.

      • Let them burn dung!

        Or forests!

        If you can’t afford renewballs – starve or freeze

      • Imagine if the Greens were just an environmental party? They’d be running Australia. No more coal mines.

        Instead they have all these micro social issues that make them unelectable. Result? We destroy Australia.

        Fix Australia’s environment and help the global environment? Start by destroying the Greens.

        How can “keep it in the ground” work? They move their money out, share becomes cheap and others buy it. While there’s demand, companies will mine it.

        It has to be political. Destroy the Greens.

      • @rich42,

        Actually I agree with many Green policy’s because, the fact that they are not condition, on it being a “market solution”.

      • Greens don’t ‘invest’ – they ‘fund’ – with other people’s money of course

        Leave it in the ground, ffs.

        Living in a country 95% fuelled by natural gas and too small to physically host the solar required to fuel demand – I am intrigued what these bozos suggest as a solution? Import batteries?

        Actually, I know, it is to kill all industry and live like Tasmania.

        The Greens – idealistic young ignoramuses and comfortably retired boomers filled with guilt.

      • 8~

        The “other peoples money” is incorrect, just from the perspective that people don’t create it in the first place. You need a new meme 8~.

      • Leave it in the ground, ffs

        So you’d rather dig up and burn fossil fuels, for short term gain? And to hell with the long term consequences, eh?

        That’s called short-sighted, myopic, visionless. 🙄 It’s called spoiling the ship for a hap’orth of tar … and in this case it’s almost literally true (you could substitute “tar sands” for “tar”).

        But anyway, thanks for commenting. I like to know how conservatives and riffraff think, even if it’s usually depressing. 🙁

      • Short term gain? Like civilization?

        Explain again how to power Asia without natural gas?

        Oh, and I will accept riffraff, but conservative is offensive

      • Short term gain? Like civilization?

        So there was no civilization before fossil fuels? Pray tell us more 🙄

        Explain again how to power Asia without natural gas?

        Small scale solar is good for the masses. If the Germans can do it, so can the Asians (unless you’re a racist who thinks Asians are inferior to Europeans?)

        Oh, and I will accept riffraff, but conservative is offensive

        Usually synonymous 😉

      • I wont bother to comment on how ‘good’ civilisation was pre-electricity.

        Household demand in Singapore is only 15% of total for electricity demand and 4% of gas demand.

        Some countries still have industry. Small scale or any scale solar for that matter is not going to cut it.

        Germany burns wood for 20% of its renewballs… what a triumph. 4% of its energy is from (what must be extremely inefficient considering the climate) solar. They import a large amount of their electricity (a lot of nuclear) and have prices 20% higher than Australia.

        Green paradise

      • I wont bother to comment on how ‘good’ civilisation was pre-electricity.

        Oh, now suddenly “pre-fossil fuels” means “pre-electricity”. I suppose you don’t know the very first electricity generating station was built on Niagara Falls in 1881, pre-dating coal power stations. You don’t need fossil fuels for electricity, bub. 🙄

        Some countries still have industry. Small scale or any scale solar for that matter is not going to cut it.

        About 75% of the US population, for instance, lives within range of ultra-high voltage DC of practical geothermal. The USA has the technology to generate geothermal more cheaply than hydro, and more cheaply than any fossil except shale gas — but this kind of gas is the most price volatile commodity in the history of the market, and requires pipelines to transport, not power lines — so fully costed with infrastructure, geothermal is the better buy most of the time.

        Add hydro, including pumped hydro, to arbitrage peak solar and wind, add tide and offshore wind if they ever get good enough, and the US has plenty of power to meet its needs without a molecule of fossil carbon burned.

        Germany burns wood for 20% of its renewballs… what a triumph. 4% of its energy is from (what must be extremely inefficient considering the climate) solar. They import a large amount of their electricity (a lot of nuclear) and have prices 20% higher than Australia.

        Germany is 25-30% renewable, but emissions are flat, because they chose to phase out nuclear first and coal later. Obviously if they chose to phase out coal first emissions would be reduced accordingly. In the case of Denmark, they were nearly 100% coal powered in the 80s (emissions 1000g/kWh), today they’re nearly 50% renewable (emissions 400g/kWh). Renewables obviously work.

        China Could Get 85 Percent Of Its Electricity From Renewables By 2050, Report Finds

        Church Of England Divests From Coal And Tar Sands, Citing ‘Moral Responsibility’

        The Massive New Online Course That Every Climate Science Denier Should Be Very Afraid Of

      • So move Asia closer to Niagara Falls, US geothermal resources and France’s nuclear generation and all will be well?

      • China was agrarian for thousands of years. Explain why moving back to this lifestyle is a complete disaster.

      • Do you want to swap?

        But hey, at least you are honest in noting that the rest of the world not in a position to fuel their home with solar panels and warm inner glow can reduce their standards of living and health back to where they were 150 years ago.

        Let them burn dung

      • But hey, at least you are honest in noting that the rest of the world not in a position to fuel their home with solar panels and warm inner glow can reduce their standards of living and health back to where they were 150 years ago.

        With the benefit of modern technology, the masses in Asia will never go back to where they were 150 years ago. But neither will they ever live like we have in the West. And even we are going to live differently in the future.

        Let them burn dung

        Dung is too valuable to burn; it is fertilizer. You seem to know little about new developments …. Google “solar space heating”. Also look up “solar oven”.

        On the days there is no sun, they can heat and cook with biogas or (renewable) wood.

      • You continue to bring up localised small scale consumer power generation that is totally irrelevant to high density housing and industry (which in some countries makes up 90% of power demand).

        Solar oven ! Seriously? Is that how you keep your bong lit?

        I stand by my comment regarding Greens. Ignorant undergrads or guilt ridden middle class boomers.

      • You continue to bring up localised small scale consumer power generation that is totally irrelevant to high density housing and industry (which in some countries makes up 90% of power demand).

        Not in India it isn’t. In more urbanized countries, solar and wind can easily be shipped in to cities on HVDC lines. Google “HDVC” and learn something for once.

        Solar oven ! Seriously? Is that how you keep your bong lit?

        My solar oven is capable of cooking everything my mains electricity oven cooks. In undeveloped countries, you can make a solar oven for less than $3. Every time you open your mouth, 8888, you broadcast your complete ignorance.

        I stand by my comment regarding Greens. Ignorant undergrads or guilt ridden middle class boomers

        The irony is overwhelming 🙄

      • drsmithyMEMBER

        You continue to bring up localised small scale consumer power generation that is totally irrelevant to high density housing and industry (which in some countries makes up 90% of power demand).

        This from the guy with a go-to example of people burning dung to keep warm ?

        Hypocrisy much ?

      • Change the angle all you want – you still haven’t explained how to meet a country like Singapore’s energy demands without LNG. Next you can solve Japan.

        You keep coming up with first world solutions useless for people in high density living or third world solutions better solved by a decent power plant.

        And that is only residential demand – you haven’t even come close to explaining how the other 90% of energy is to be generated?

        I am further intrigued about how you assume you supply all the minerals required to manufacture all the plastics and metals required to run all your first world ‘off the grid’ fantasy world.

        Paper mache? Crochet? Woven baskets? How noble…

        Does ‘leave it in the ground’ include copper, lithium, alumina, nickel, oil etc?

        Will these elements be extracted using solar powered equipment, mills and smelters?

        If you have a different solution not requiring fossil fuels I am all ears.

        And drsmithy – this whole thing started with the premise of ‘leave it in the ground’ – no fossil fuels for anybody.

        There are only a few other options if you can’t afford renewables.

        http://usa.chinadaily.com.cn/opinion/2015-01/16/content_19333444.htm

        Offer them a coal fired power plant and I reckon they would jump at it.

        Back to the point Gentleman – how do I cool my chardonnay tomorrow?

      • Someone’s wrong on the internet, so here I am back to put him right 😉

        how to meet a country like Singapore’s energy demands without LNG. Next you can solve Japan.

        So now you’re taking refuge in tiny, densely populated enclaves, eh? Last refuge of the scoundrel, as they say. 😎

        Is Japan’s Offshore Solar Power Plant the Future of Renewable Energy?

        You keep coming up with first world solutions useless for people in high density living or third world solutions better solved by a decent power plant.

        A $3 solar oven is a “first world solution”? Solar or wind or geothermal or hydro power via HVDC lines is not adequate for people in big cities? You’re not paying attention 🙄

        Does ‘leave it in the ground’ include copper, lithium, alumina, nickel, oil etc? Will these elements be extracted using solar powered equipment, mills and smelters?

        You do know, I suppose, that large mining trucks run on electricity, don’t you? Granted, the electricity comes (currently) from diesel generators, but it doesn’t have to. 💡

        Back to the point Gentleman – how do I cool my chardonnay tomorrow?

        Pot in pot refrigerator?
        http://en.wikipedia.org/wiki/Pot-in-pot_refrigerator

      • I live in Singapore and it was the original example behind my question you never answered in your flurry of links

        Floating solar – got it – can’t wait to see the cost benefit analysis. Should we immediately start building it now or wait another decade or so?

        I’m just happy to know now that if imbeciles like yourself ever cut off the LNG I could head to my local park and cook a squid on an alfoil BBQ and cool my wine in a pond. Plenty of sun here – warm climates have their upside.

      • There are already plans for a network of floating solar farms in Singapore.

        Other than that, a simpler solution is to buy power in, using high-voltage direct-current (HVDC) technology. HVDC is being used around the globe to efficiently connect offshore wind farms with mainland power grids, to transport green electricity over long distances with minimum loss and to link regional power grids with one another.

        Singapore could be very easily supplied with power from solar and wind facilities on mainland Malaysia.

  11. Strong language from Hockey on foreign investment.. Live announcement now.. he says 100 cases under investigation and foreigners who broke the law have until Nov to come forward without prosecution.

      • Agree StatSailor. FIRB is not resourced to police the regulations entrusted to it; it’s has a thalidomide investigatory arm. Better to frame legislation and use the points already used in these transactions – e.g. titles offices, real estate agents, lawyers, banks – with heavy penalties for them not ensuring compliance.

      • Agree StatSailor. FIRB is not resourced to police the regulations entrusted to it; it’s has a thalidomide investigatory arm. Better to frame legislation and use the points already used in these transactions – e.g. titles offices, real estate agents, lawyers, banks – with heavy penalties for them not ensuring compliance.

  12. HAHAHAHAHAH

    http://news.domain.com.au/domain/real-estate-news/classic-redbrick-house-in-eastwood-soars-200000-over-reserve-at-auction-20150502-1myfxy.html

    “The buyers, kitted out in matching lumberjack hoodies​, were accompanied by their parents who were visiting from China.”

    “Underbidders, Belinda and Anthony Grava joined the bidding at $1.44 million but were pipped at $1,515,000. Their disappointment hardly registered. “Looking at the crowd, we were prepared to be outbid,” said Mr Grava.”

    HAHAHAHAHA

    Look at the photo. Classic communist party look about them dont they. Peasant farmers a few generations back.

    When will Joe Hockey send the AFP to bust down their door

    • truthisfashionable

      Eastwood is a whole separate kettle of fish. I think Mr ‘cracking down on illegal foreign purchases’ Hockey could probably accuse the whole suburb of being owned illegally by proxy purchases. Macquarie Uni seems to be one of the largest citizenship for full paying degree universities in Sydney.

      I’ve heard (been offered) for $100k a very nice chinese lady will pay an Aus citizen to marry her and assist in bringing her family over here, including the purchase of a family home in the suitable suburbs of Eastwood and its surrounds.

      To be honest, it sounds like a good deal, why should the Government be the sole beneficiary of this bullsht

      • StomperMEMBER

        Is it a guaranteed pathway from fee paying foreign student to permanent residence?

      • truthisfashionable

        @Stomper – I wouldnt say guaranteed, but very few seem to be knocked back. I just recalled accounting is apparently in huge demand by the foreign students.

        So… Accountants know how to structure trusts and such to reduce exposure to taxes and legal ownership transfers.. I think we may have found the foreign loophole.

        Send your kids to Aus to study accounting, they then have the knowledge of how to bring money into the country reducing tax and to keep it looking Australian, and have the opportunity of getting PR because they paid full fee at a Uni..

      • @truthisfashionable 4 Corners a couple of weeks ago covered some of the issues surrounding the international student market, particularly things like soft marking and rampant plagiarism.

        I work in the tertiary sector, and have friends who work in the Unis, and our dealings with international students indicate they are in general more interested in residency than the qualifications they get. This dovetails nicely with Universities desperation for income due to sustained under-funding from the federal government, creating the perfect environment for the corruption of our Tertiary Education sector.

      • The only way to stop this is, mass opposition to population growth (73% and growing)

        Hockey will get an email “fix this housing thing” from the corporations.

        Wake the fuck up Australia. Especially GenY. You are being robbed and have stupidly been indoctrinated into not opposing your biggest threat X 100000000.

        Population growth.

      • Hamish concur and second your observations.

        Skippy…. thank you John Howard for opening the flood gates and diminishing our education system… bang up job.

      • unfortunately this is the guts of it. I worked in the visa div of a large firm many years ago, and it was an open joke then. We don’t sell degrees, we sell visas that come packaged with a degree.

        Take the degree out of this product and there isn’t much demand. In this sense academia is perhaps complicit in the high population growth (faster than infrastructure) story.

      • Take the degree out of this product and there isn’t much demand. In this sense academia is perhaps complicit in the high population growth (faster than infrastructure) story.

        That’s exactly what has happened. The initial changes were brought on a few years back but then 457s and a few other bits have kept the demand steady about a big drop. However student numbers are significantly lower now than they were are the GFC upto 2009.

        It is no longer a guarantee that it was when I finished my degree (2006) that you will get a PR. Personally though, the biggest problem was with the so called skilled list. You could get a PR if you finished a 9 month cookery course but not if you did a PhD, 12 month hairdresssing course but not if you were a engineer (certain types).

      • Flyingfox, I can confirm that the international enrolments in courses like CIII Cookery & Hairdressing plunged when they were taken off the skills list a few years back, they had been booming prior to that. It even caused a number of Private providers to close their doors (no great loss given how shonky many of them were). Anyway, that really highlighted the relative importance residency vs skills gained from the course.

  13. Australia plans fines, jail for illegal foreign home purchases | TODAYonline

    http://m.todayonline.com/world/australia/australia-plans-fines-jail-illegal-foreign-home-purchases

    SYDNEY — Australia will jail foreigners who purchase homes illegally as the government seeks to slow a surge in house prices, Prime Minister Tony Abbott said.

    Sentences may stretch to three years and fines to A$637,500 (S$665,804) for illicit buyers, with penalties also on third parties knowingly complicit in violations, Prime Minister Tony Abbott said today (May 2) in Sydney. The steps are needed to give the public confidence that foreign-investment rules on property purchases are being enforced, he said. …

    … LEAST-AFFORDABLE

    Sydney ranked third among the least-affordable major metropolitan housing markets worldwide, after Hong Kong and Vancouver, according to a report in January by Demographia. http://www.demographia.com

  14. Jail for illegal foreign purchases? This issue must really be off the wall in the focus groups. They’ll have to build more jails.

  15. arthritic kneeMEMBER

    More anecdotal evidence of the madness of Sydney…
    The house opposite me (Chatswood district) was up for rent @ $850 a week, sat there for 6 weeks, no takers.
    Owners decided to sell. Traffic chaos on the first viewing day as over 50 groups turned up to have a look at the bland house on a tiny block, all seemingly not fazed by the $1.3 million range.
    Sold prior to auction to an astute investor, now up for rent @ $850 / week.
    Well played

    • Classic

      The Chinese muppet cash buyers will do their arse – who cares – crash course on capitalism

      But APRA watching on as the good looking local muppets borrow a bar to pay these idiotic prices from the banks who represent 30% plus of the assets of local super funds is a national disgrace.

      I seriously hope Joe Hockey is still around to eat a turd sandwich while he pulls out the Public chequebook to subscribe to the CBA and WBC rights issues at $1.

      • They aren’t muppets, they are buying to secure their ill-gotten gains in a thoroughly corrupted country that will also gift them citizenship as a way to escape prosecution at home. They do not care about yield.

      • they are buying to secure their ill-gotten gains

        A vault with gold bars and investment grade diamonds anywhere in the world will do the same. Mix it up with some bearer bonds and equities and you are diversified, liquid and almost untraceable.

      • Plenty of other asset classes to hold outside of China that are more liquid and not 50% over valued.

      • Try to see it from their perspective fellas; these other assets don’t come with a passport. Again, they are not here for the value investing. Also, there’s no point in being so concerned with the paper trail when there’s zero chance of extradition to a death penalty country.

        Edit: see also the comments a little below here re: ‘hedge country’

      • Rules apply to the poor, not to the wealthy. We will be able to argue all day long about how to get around the rules. Nonetheless, we also already know of other, perfectly legal ways this is done. Such as the child coming here to get a degree, being fast-tracked to citizenship while buying up property and then the parents coming later.

        This technique is so common that there’s an entire degree-mill industry that has built up around it in this country.

        Again, all legal and with citizenship at the end (and all protections afforded within) for everyone involved.

      • @Tony

        Rules apply to the poor, not to the wealthy.

        Huh? Under SIV you can buy a house as long as you also invest. I don’t understand what you are arguing … you don’t need 18 properties in Sydney, Melbourne or new york to hedge. You need one nice one and perhaps another for the kids. Same goes for when kids come over.

        What we are seeing is simply speculation … like it was back home …

    • 3.4% minus vacancy time, minus repairs, minus fees, minus rates, minus minus minus.

      Sydney has gone insane.

    • Making a profit should have never been an option on a forced sale. It’s no surprise our government would have no provision for this in place?

      • Also aiding and abetting a crime for those who allowed it to happen. Neuenburg defence wont wash either.

  16. Interesting read from The New Yorker (1 year old, but still very relevant)
    Real Estate Goes Global
    http://www.newyorker.com/magazine/2014/05/26/real-estate-goes-global

    Main point is that some global cities have become “hedge cities” (cities that offer social and political stability where rich people from around the world can park some of their cash and feel safe about it). These cities understandably have price-to-income or price-to-rent ratios out of whack because local factors are no longer the driving force.

    A recent paper by two Oxford economists bears this out, showing a tight correlation between London house prices and turmoil in southern and Eastern Europe. The real-estate boom in Miami has been magnified by political unrest in Venezuela. And Vancouver, which has a large Chinese population, easy access to the Pacific Rim, and nice weather, has become a magnet for Chinese investors looking for insurance against uncertainty. A Conference Board of Canada report found that Vancouver’s real-estate market is tightly connected to what happens in the Chinese economy.
    Sydney and Melbourne fit the bill. The article ends with: “As for the rest of us, we’d better get used to being tenants.

    • London goes up when south and eastern Europe are in trouble.
      Miami goes up when Venezuela is in trouble.
      Vancouver goes up when China is in trouble?? Or is it the inverse??

      • Not the inverse, it’s a tight correlation. Trouble in China leads to money flowing out of China leads to high real estate prices in Vancouver.

    • Another spin to this is that it’s important for Australia that Sydney and Melbourne maintain their status as “hedge cities” because this is why they are attracting foreign investors in the first place. This is why Hockey emphasized today that it’s very important to maintain the integrity of FIRB. If rich investors perceive that the rule of law is not maintained, then they will take their investment elsewhere. This is all in the service of protecting the investment of the current investors (both local and foreign).

      • It should also me noted that its not just an investment decision wrt price, its also a means to establish secondary living addresses as a hedge, pollution, crushing population, mature markets limiting entrance and growth, really egregious pay to pay [bribes], et al.

        Now think little old Oz with clean air, water, low crime, heaps of great beaches and rural areas to play, low cost education and health, markets that are not so saturated, et al.

        Skippy… going Galt down under… whom knew…

      • Yes, agree with Skippy here. Establishing a secondary residential address is at the heart of what’s happening. It’s really a no brainer if you’re Chinese living in polluted China, have lots of cash, and want a better future for your kids. A hedge city offers clean air, more space, better education and health systems, low crime rate, and rule of law. So currently used affordability matrix is no longer applicable in these hedge cities. The next time MB (or others) produce a price-to-income chart or a price-to-rent chart for Sydney or Melbourne, they’d better include Chinese income in their data in order to reflect reality.
        The flip side to this is that if you fast forward 20-30 years, our pristine and safe cities will probably lose their hedge city status because by then they would have become crowded, polluted, lacking infrastructure along with deteriorating health and education systems (if current trends continue).
        The level playing field Abbot talked about is not really leveled. A GDP of 1.5T and 23M people competing with a GDP of 10T and 1.3B people for the same real estate is not a level playing field.

      • What’s truly amazing is that there’s a lot of people still in denial that this is how the world works, and when you try to point it out you’re a racist or some other such.

    • Interesting article.

      “One option would be to severely restrict foreign ownership, but that’s politically difficult, and not great for a city’s economy”. Why? Politically it’s easy, Surely Xi Jinping couldn’t care less if an individula can’t buy a house in Sydney.

      “It might make more sense if the Vancouvers of the world simply charged foreign buyers a premium for the privilege of owning there”. Make it a revenue stream for government and government will find a way to trick Australians into selling the whole lot..

      “We’re one of the places where people seem to want to park their cash, and there aren’t that many of those places,” I’ve said that for a decade. Could we be the equivalent to Sydney people wanting to buy at Bondi?? i.e. The worlds rich consider Sydney one of their prime locations to buy and with no restrictions that’s what they do.

      “So let’s raise the parking fees.” As for the rest of us, we’d better get used to being tenants”. That’s BS, stop it happening.

      • tonyddMEMBER

        @rich42

        Mate the noise coming from Hockey is the result of having his arm twisted up his back on this. He is responding to political pressure, pressure which has only now beginning to build.

        This pressure will both increase and come from new sources like unemployment in the months ahead. Make investors build new will take up some labour slack.

        The point is, is that the voting public is having a change of heart on the existing ideologies and faith based economics. Be patient and hold the line.

      • @tonydd. I Agree entirely. The best place to read that coming has been (and always is IMO) in the reader posts in places like the SMH. Let’s hope it has momentum (I certainly fuel it as much as I can).

    • Interesting and I do agree with this. However, I suspect more is at work in Oz than just a hedge given the number of developments etc occurring. I suspect a sizable proportion is speculative investment and this is reinforced because it can move the market here.

  17. I’ve heard 3 of the 4 apartments in “The Block” were purchased by foreigners.

    Does this comply with FIRB rules given it wasn’t demolished, it was literally just a renovation?

    I’d love to see the parasites peddling this drug, fined the $42500 in such a public way.

    • Hang on a sec. $42k is comparable to their commission on large purchases.

      The fine should $420k, jail and loss of license.

      Yet another scam by our government?

  18. How is it okay to sell 100% of new builds to foreigners when our population is growing by 400k a year?

    Smart countries have quotas that have to be sold to residents.

    The government can smell the 73% and growing of us in opposition to population growth.

    Keep taking Hockey and Abbott and giving our lifestyle to more and more people and you and your corporate donors/bribers will pay the price.

  19. http://news.domain.com.au/domain/real-estate-news/new-property-taxes-a-king-hit-to-the-real-estate-industry-20150502-1mydop.html

    Link contains the usual whinging by vested interests. However, I note the introduction of an absentee land tax. I wonder if other states will follow this example?

    “Non-residents buying property will be slugged the equivalent of 3 per cent of the purchase price. The surcharge will apply from July 1. Also, an absentee land tax of 0.5 per cent will be applied from 2016 to foreigners who do not occupy the new or existing dwelling they have purchased, which Treasurer Tim Pallas said would deter so-called land banking.”

    • I’ll only be happy when we swap 10 vested interest whingers for every death row prisoner overseas.

  20. The Patrician

    So Joe’s plan is the ATO is going to take on the workload of enforcing the FIRB laws?
    This is the same ATO that Joe just cut by 3000 staff right?
    Don’t be distracted by what Joe says, look at what Joe does

    • Joe has a pretty good form in this area, look at multi-national tax avoidance and his G20 statements yet they’ve allowed the ATO to decimate the international arm that investigates, you guessed it, multi-national tax avoidance!

    • Another question – if the ATO is going to be doing the job enforcing FIRB laws, what are we still paying the FIRB to do?