Welcome to the world’s first Propertocracy

One the best economic bubble analysts in the world, Doug Noland, describes how the development of investment manias is often interrupted along the way by well meaning people. But, when they do intervene, bubbles by their nature are already so large that their burst threatens to pull down the system around them, so every effort to prick the bubble only ends in even more resources being sucked into supporting it.

Yet I doubt very much that Mr Noland has ever seen a bubble so expansive and complete as the one that has now engulfed Australia. What began as a turn of the century property fancy in Olympic Sydney has been prompted, plumped, supported and fluffed so may times over so many cycles that it has become Australia; our society, our economy, our politics, our very culture. I once described this as the “politico-housing complex” but this is no longer sufficient. Our country has become the world’s first Propertocracy, a nation state whose full faith, credit and power exists in some large part to support one impossible outcome: interminable rises in property prices.

You think I’m mad, I know, but bear with me. Edmund Burke theorised that a state was made up of “four estates”: the clergy, the nobility, the commoners and the press. For contemporary Australia we can adapt that to mean our culture, our leadership class, the battlers and the media. And when we run through the state of each you’ll see what I mean.

Culture

In 1997 a low-budget Australian movie dominated the national box office. The Castle cost $500 000 and took nineteen days to shoot. The movie’s title was drawn from the platitude ‘each man’s home is his castle’. Its major theme was an examination of the rights and value pertaining to home ownership.

The lead character, Darryl Kerrigan, was an iconic figure of Australiana: working-class, egalitarian and down-to-earth, someone who might have been described as a ‘good bloke’. He was played by the lanky, laconic Michael Caton, whose moustachioed credulity encapsulated Australia’s most adored self-image. The film held an ironic mirror up to Australia. On display were those dimensions of the nation that did not fit with its self-image of giving everyone a ‘fair go’.

The Castle’s launch coincided with changes that curtailed the realisation of traditional, passionately held goals of home ownership. That great Australian (or American or British) dream was mutating into volatile and dynamic asset trading. There is no better symbol for this shift than the subsequent career of Michael Caton.

After the success of The Castle, he was recruited to host a major television series called Hot Property. In a case of life ignoring art, the man behind Darryl Kerrigan, the embodiment of passionate owner-occupation, became the face of asset speculation. The program offered tips on how to buy, renovate and sell property. This theme grew so strong with passing seasons that in 2000 it was renamed Hot Auctions. This was the very opposite of the quaint owner-occupier culture venerated in The Castle.

That was just the beginning. The lifestyle television revolution grew and grew through several phases of mass cultural event: first it was a DIY boom, then reality television, more recently it branched into whacky choreographed competitions using real people. These are now the biggest budget programs on television and the biggest advertising generators outside of sport as well.  The travails of the contestants are reported in the broader media as news, as if they’re real, as we’re drawn further into what is an huge myth-making exercise about home ownership and its paraphernalia.

Tradies have become celebrities and celebrities have become tradies and both are the pivots around which we wrap our tastes, personal goals and identities.  The Castle has morphed into a spiritual guide book with chapters on everything from property tax-avoidance to kitchen couture.

Leadership class

Any leadership class is made up roughly of two halves. The first is the executive, the formal institutions of power: government, regulatory bodies and law. The second is more nebulous but just as powerful in civil society. It is the normatives of the nation’s elite, those that set the agenda for others, often expressed in the intelligentsia, non-government sector and lobby groups.

The Australian Propertocracy is nearly complete in the first half. At all levels of government and regulatory enforcement, real estate rules supreme. At the Federal level it guarantees and protects too-big-to-fail banks, drives rampant population growth and shields legal loopholes for criminal property activity. Regulators are only nominally independent from this, offering further uber-generous banking supports, little or no transparency as they endorse gaming of international rules that would impinge on property rent seekers. At the state and local levels it is planning restrictions, supply side bottlenecks, developer kickbacks and demand side stimulus measures.

All are designed, in one way or another, to keep property prices high.

Australian civil society is not much better. While it agonises over global warming, asylum seekers and aboriginal fates, it gorges itself on the property ponzi, forcing its children into levels of debt servitude far beyond prudence and their parent’s experience, pushing many offshore to find careers that might pay for a small plot of land back home. The intelligentsia is polarised by party politics that has poisoned the marketplace of ideas with bizarrely simplistic platitudes about the benefit of respective economic systems, and by career paths that demand conformity to the executive point of view.

The non-government sector is paltry and ineffectual while the lobbies that drive property interests hold privileged seats at the policy table.

Australian civil society has become a dinner party pissing contest that gawks greedily at its own financial genius, generally doing nothing to reform a system that it prefers to internalise as a badge of its own investment prowess. This is new in the broader scheme of things. In the nineteen nineties it did not exist.

The battlers

Australia is fortunate to not have a true “commoner” class. We are still, socially at least, relatively classless. But that does not mean that the Propertocracy is not at work shaping our blue collar caste and vice versa. Battlers are no longer workers. They have become “aspirational”; a nebulous term designed to capture a worker that no longer cares for trade unions or his industrial relations rights.

The aspirational battler votes Liberal, a lower class that gleefully endorses laissez faire economic policies designed to denude him of income. He does this because in return, so runs the message, he gets lower interest rates (and lot’s of middle class welfare to boot). That, in turn, enables our propertocratic proletariat to “get ahead”, a political dog whistle for investing in property using tax lurks freely offered by the state.

Who exactly he is getting ahead of is no bother to the aspirational battler. He may be ascending upon a tide of disaffected and disenfranchised neighbours that he is locking out of home ownership, not to mention his children and, God help them, grand children, but that is not of relevance.

What matters in the propertocractic state is that our heroic battler is rising and the unpropertied underclass he is creating are just “doomsayers” and “leaners”.

The media 

The fourth estate used to be the press. Or the news. Not any more. Those quaint notions are long gone. The media is now an ubiquitous and full blown propertocratic trivia factory running 24/7 on devices, planes, trains, automobiles, TVs, radios, buildings, public spaces, toilet walls, the sky, you name it.

In terms of ownership, business models and editorial point of view, Australian media is dominated by the duopoly of Fairfax vs Newscorp. The two fastest growing profit centers of both are Domain and realestate.com.au. Actual journalism that seeks truth has become a liability to these operations.

On the Fairfax side, journalism is nothing more than a loss leader to attract and dumb down eyeballs into property speculation. Thus a fine journalist like Michael West is no longer wanted because his “skill set” to seek truth and hold power to account upsets the endless lifestyle rituals that give meaning to the meaningless pursuit of property.

On the Newscorp side, whatever gets in the way of Murdoch profits, including governments and policy, is mowed down like chaff. The current “Duncan” spectacle is outright bullying, some poor sod who dared put his hand up and declare that he was missing out in the Propertocracy, butchered by Murdoch’s billion-dollar human harvester.  At stake is a Prime Minister that Murdoch wants to see returned to protect his monopolies, as well as the perpetuation of a value system that pretends meritocracy while handing him economic rents.

Fundamentally, it is the media’s job to offer the nation an independent political and ideological centre where its myths, ideas and plans can be thrashed out. In the Propertocracy, the media’s governance of this collective fora has become a kind of electronic God perpetually regenerating the property myth in the name of its own horribly conflicted profits.

The propertocratic election

And so, when we tie these strands of our political economy together, it is no wonder that in the end we should come to that point when power in its most obvious form – a Federal election – will now be determined by property prices. Having infected all other parts of our society, real estate will now control your vote as well.

On the one hand we have a Labor Party governed by a terribly unpopular, backstabbing unionist. He is old Labor not new, espousing fairness not meritocracy, protection not productivity and tax rises not spending cuts. He has, however, one redeeming feature. One epic policy gamble that changes everything, a reform that shoves a large pin straight into the bubble heart of the Australian Propertocracy and, in so doing, transforms his entire platform, far beyond what even he himself seems to understand. Scrapping negative gearing turns Bill Shorten from a vestigial socialist into an historic economic reformer with far greater liberal quailities than the Liberal Party itself because once property prices stop rising, as they must, it means Australia will have to earn its way in the world by competing.

On the other hand, we have Mad King Malcolm, a man born to rule if there was ever one, who has the knowledge and intelligence to know full well that the propertocratic state is not the Australia it pretends to be. It is not meritocratic, egalitarian, dynamic or clever in any of the ways that it says it is. It is a bubble and he knows it, indeed has stated it openly.  But in his desperation to retain power he is resisting Labor’s negative gearing reforms, standing shoulder-to-shoulders with realtors, and in the process positioning the Australian Government and the office of the Prime Minister directly behind guaranteed high property prices. This is a real estate apotheosis unique in the world.

Australians typically are rather unAmerican about their PM’s office. No matter what idiot occupies the Oval Office, the seat and seal of the President remains somehow revered. But, I put it you, even Americans would be appalled at such a degradation of their seal of power. The Office of the Prime Spruiker may reflect the Propertocratic citizen – or perhaps vendorzen might be more accurate – but anyone with a degree of national pride will recognise a base distortion of the role of the PM. The rule of a prosperous and modern nation is literally being handed to the spiv at your local shops. What’s next? Deploying the army at auctions to coerce higher bids at the point of a bayonet?

Our nation is at a crossroads. It faces an existential crisis that could not be more prosaic. We are not threatened by an overwhelming external enemy, a plague, or economic depression (yet!). We are not defending our territory, forging a visionary path, wrestling with the great challenges of our times or taking control of history. The enemy we face is a banal insurgency of self-serving salesman that are bleaching us of consequence and substance.

The Propertocracy is deeply unworthy of the former liberal democracy known as Australia.

Comments

    • Strange Economics

      Its more than cultural, its a religion, and the country is a Property Theocracy. After listening to more otherwise normal people over dinner trying to convert me again to their religion of investment property will save us, its clearly the one true religion. “Don’t worry about the price, it will keep going up 10% a year forever. We regret not buying more…etc”. Aristocrats think are the better rulers, we follow the high priests of property, as you say, the Prime Spruiker, proud owner of 10 properties.

    • The Patrician

      REA Group Ltd and its subsidiary companies, known as the REA Group, make up a global online real estate advertising company headquartered in Melbourne, Australia. The REA Group is public company listed on the Australian Stock Exchange (ASX: REA), REA Group is majority owned by News Corp Australia, a subsidiary of News Corp. Newscorp’s digital real estate division, which includes earnings from REA Group, grew 28 per cent to $US73 million, compared with $US57 million in the second quarter of last year. It is one of the few profitable divisions of Newscorp.
      The Group grew from realestate.com.au, Australia’s largest property website with 4.4 million unique browsers each month.However, the strategy has been to aggressively expand the group internationally through acquisition.The Company now operates property websites in 10 countries that are used by more than 19,000 real estate agents.

  1. Good, but you missed out one major fundamental thing: the accounting profession. Most i know personally who got into property were accountants themselves or were advised by accountants. Nearly everyone I know (older generation) that had significant savings in the 00s was advised to invest in property by their accountants or financial planners. You have to remember, the people are taking this professional advice thinking they are doing the right thing, as it came from a CPA. No one is investigating this. We even had family friends in the 1970s who went overseas, but when they were in aus, they were advised to buy property. shares were seen as too risky and they had no idea on how to invest. If only the share market was not about timing and casinos and something more trust worthy maybe things would be different. Or if there was another way to raise capital that was about nation building instead of short termism and quick meaningless returns.

    How did we get the money to build the Snowy Hydro Scheme? People used their savings to buy govt bonds right? Imagine if we were a nation of savers now instead of private household debt peddlers. There would have been opportunity for govt to say – this is our plan, we need to build x billion dollars worth of renewable energy industry/infrustructure. Opportunity to buy bonds and nation build.

    RWNJ dont build anything – the future does not exist to them. There is no vision. Now i am going to go into skippy mode: what were the changes that occured over the last 50 years which created this profit above all else mentality – which then influenced our culture. It was not always this way:
    http://www.ips-dc.org/history-shows-us-dont-need-billionaire-doctors-make-medical-breakthroughs/

    • notsofastMEMBER

      It’s got to the case now that most road and rail infrastructure proposals aren’t so much about fixing congestion and bottlenecks as connecting real estate so its value can increase and so that more real estate can be made available for high rise unit development. The country has become a very, very sad joke.

    • Accountants made these recommendations mainly as a way of drumming up ongoing business for themselves.

      The exemptions Peter Costello gave property in 1999 restricted what people could assert with respect to other assets, vis a vis specific advice.

      Once property was in the fray, clients then tended to need tax advice to maximise the benefits of invest property, namely deduction schedules.

      • Coolhand: i posted that after 1am with some red red wine in my system. it was only after i pressed post that i though it came across as too acerbic towards accountants and not critical enough of the system which they work under which determines the advise they give to their clients. But i was so tired to edit, i just went to bed after that. You have a point. I concur. My bad.

      • notsofastMEMBER

        Agree Coolhandluke. Except I think we can and should hold the leadership of the accounting community to account (no pun intended on such a serious topic) if it transpires that taxation and accounting policies were wrong and not the right ones for the counrtry. But I agree that Accountants are in noway responsible for the mess Australia finds itself in.

    • ErmingtonPlumbingMEMBER

      Jeez Eco-Fart, that link of yours has filled me with dark murderous thoughts towards many of my fellow humans.

      “Consider the gold that awaits Joseph Papa, the new CEO at Valeant Pharmaceuticals. Papa’s new pay deal, notes Fortune magazine, will hand him a stunning $500 million if Valeant’s stock price hits $270 per share, the company’s share price territory last July.

      The prospect of a windfall this huge gives Papa an enormous incentive to hike Valeant’s share price by whatever means necessary. The greater the profit he can squeeze out of the drugs that Valeant markets, the greater the personal windfall he gets to pocket.

      Valeant is already squeezing at a phenomenal pace. The company specializes in buying up drug patents, then quickly raising the prices of its new drugs to whatever the market can bear.

      Under current patent rules, this strategy makes eminent business sense. The returns can be other-worldly. Since 2013, for instance, Valeant has hiked the price of Cuprimine, a drug for one rare condition, by 5,787 percent.

      The resulting profits have made Valeant a hedge fund favorite. Patients and their families — and the doctors who feel a real professional responsibility to them — have less reason to cheer.

      “We spend a lot of time with our patients talking about options based on what they can and can’t afford,” explains Dr. Richy Agajanian, a California oncologist. “As doctors, we are constantly juggling what’s best for patients versus what they can afford.”

      With Cancer so widespread, and increasing numbers of Children also suffering from it, I just don’t understand why people like Joseph Papa aren’t being Murdered in the street.

      If my Kid died because of a lack of affordable access to Cuprimine, Id make it my life mission to kill that Cunt.

      Those plutocrats must throw down some good money on private Security,…or do they?
      The State seems to be doing a good job at protecting them, everyone else can die.

      • You make a good point Ermie, and as per above I believe it’s because the narrative is never written this way. The prevailing narrative is always that these people are giants of the free market, pulling themselves up via their bootstraps and fighting the twin evils of government regulation and taxation.

        BTW Vote LibNat!

      • You’d be pleased to know that Valeant share price is down 90% since that peak then,

    • Just love some of the comments. Wonder if this individuals family are racking up the negative gearing losses and living in houses rented below the market rates?

      “Maybe people need to understand exactly who gets charged land tax! I have a property that I purchased and my parents have a property. We live in each other’s property, I live I. Theirs and they in mine. No rental gain, just a switch. Because we do this and are not living in our own mortgaged house, we have to pay land tax! I think that each case should be assessed and if there is a financial gain, then land tax should apply. Parents helping kids and vice versa should be exempt. Not all cases are rich getting richer, sometimes it is just trying to survive the times.”

      • Rage,

        A nil exemption land value tax would change the state of play in this country in a heart-beat.
        People don’t realise that it isn’t just housing that gets distorted due to this mania.
        Businesses can’t start, staff can’t be hired, and parts of the city are just left to rot.
        It would be interesting to see those that get the biggest free rides, like the Catholic Church, come at the government that dares suggest they contribute back to the society from which they have taken so much.

    • The Patrician

      +1
      The WA govt revenue is falling like a stone and these shysters want land tax cut?
      Crank it up Colin.
      They are screaming like stuck pigs BECAUSE it is such an efficient and effective tax.
      Nowhere to hide boys.

  2. Great summation of Terra Specufestoria.

    But I bet skippy will object vehemently on your portrayal of the boomer battlers.

    Who exactly he is getting ahead of is no bother to the aspirational battler. He may be ascending upon a tide of disaffected and disenfranchised neighbours that he is locking out of home ownership, not to mention his children and, God help them, grand children, but that is not of relevance.

    HnH is deviating from the script here. He is supposed to portray the boomer battlers as unknowing, mindless victims of “neo-liberalism”, not as voters who willfully and repeatedly voted in Little Johnny for 11 long years.

    • “mindless victims of “neo-liberalism”, not as voters who willfully and repeatedly voted in Little Johnny for 11 long years.”

      To be fair, I think many people (including politicians, journalists and economists) were sucked into believing that “neoliberalism” was largely unproblematic. Most still refuse to see its significant flaws. As for boomers, while I often find myself making harsh generalisations about them myself, you have to admit Skippy does kinda have a point. We really should be careful when making generalisations about any one generation or age group. That said, all bets are off when it comes to judging Howard supporters. My tolerance and understanding has limits!

      Only joking (sort of).

    • Mav….

      The drama is your reductive over simplification of dynamic events over decadal periods of time, compounded by your need to pin shit on a demographic w/out a sound methodology, not to mention completely ignoring well known historical, sociological, social-psychology information to the contrary. Just the concept that you can pigeonhole – compartmentalized so many millions into a convenient Goebbels-esque meme to square and equally Bernays narrative ascribing agency is / says more about those that weld it than it does about the intended scapegoats.

      Worse is… in the past some have make statements about responsibility for everything being attached to voting in elections, contrary to the stocked pond or hand picked candidates proffered, information arb or election fraud. Which smells a lot like libertarian views on democracy at the end of the day imo.

      Then there is the obvious negativity associated with the pop term boomers e.g. might as well call them chinks, slopes, wet backs, nig*^#+, dune coons, et al…. no need to actually define personal characteristics when you can infer it…

      Disheveled Marsupial…. you might as well just shout the Carthaginians eat baby’s, Philistines are at the gates or Commies want to take all our property, freedom and liberty’s ….

      • Oh please. Now the Boomers are being racially abused! Skippy…Watch out for the real culprits: The ratings agencies.

      • The Rating Agency are a derivative of events and not the fundamental problem.

        Never said anything about racial abuse, convenient pigeonholing to ascribe intent and as such ownership of events is not racial abuse.

        Disheveled Marsupial… Again the mid 70s was a pivotal point in time, tho events were unfolding shortly after WWII.

      • Put it another way Kodiak. Gen X are up to their necks in it, the pre-boomer Thatcher and Reagan age group were up to their necks in it.

        Put simply, most of the anti-boomer stuff comes from hypocritical gen-x types who are just as guilty as boomers.

      • Mav…

        Got anymore sound bites or fat fingers to deploy in lieu of a more comprehensive purview of events….

        Disheveled Marsupial…. I unpack a lot more than your lazy thinking, so the quip about shooting you is not indicative of my actions…

      • notsofastMEMBER

        Skippy, The people of Carthage may have been defamed by the Romans with that charge but I think the historical evidence is pretty clear that they did have some form of the very Barbaric practice of child sacrifice. And by perhaps by pointing out the Barbaric practices of Carthage the Romans felt they could put some of their “less” Barbaric practices as a somehow more favourable alternative and a civilisation more worth of dominating the Mediterranean Basin.

      • ErmingtonPlumbingMEMBER

        Yes I’m with you notsofast, the Romans were much more civilised,…and unlike the Carthaginians the Romans weren’t a bunch of Lebanese boat people!

        😉

      • Skippy, if you have issues with what HnH said, you need to deal with him. All I did was identify the group that he was referring to. The term Howard’s Battlers is a matter of historic record – How many of Howard’s battlers were Gen X/Y? Definitely not the majority.. Were the boomers the majority of Howard’s battlers? Definitely.

        Obviously, not all boomers are bad. But the majority seem to lack that self-awareness about their own actions and its impact on wider society and their own children.

        Gutless Marsupial does not seem to have the guts to take HnH on and instead tries to shoot the messenger.

      • A more nuanced view…

        http://phys.org/news/2014-01-ancient-carthaginians-sacrifice-children.html

        http://www.historyisnowmagazine.com/blog/2015/8/1/child-sacrifice-in-the-ancient-world-did-it-really-happen#.VzkrXL7CdsU=

        To summarize… history must be contextualized in the reality of its – own time – and not that projected upon it by those examining it far off into the future. Like or not our species and society formation has deep links to all kinds of sacrificial practices. BTW Romans BBQ’ed quite a few Christians to include kids in order to scapegoat them for problems of the state [waves at Mav et al], which in turn Christians have their own human sacrificial past. Some of which are still observed in ritual acknowledgement i.e. Jephthah’s sacrificing his daughter, Easter, et al.

        For all the dramas wrt humanity’s direction at the moment, one has to wonder what dominate forces help shape the framework and the optics by which to view the picture [utopia]. I have to ask myself what agency had the means and intent to pull it off….

        The Road from Mont Pèlerin

        The Making of the Neoliberal Thought Collective

        What exactly is neoliberalism, and where did it come from? This volume attempts to answer these questions by exploring neoliberalism’s origins and growth as a political and economic movement.

        Although modern neoliberalism was born at the “Colloque Walter Lippmann” in 1938, it only came into its own with the founding of the Mont Pèlerin Society, a partisan “thought collective,” in Vevey, Switzerland, in 1947. Its original membership was made up of transnational economists and intellectuals, including Friedrich Hayek, Milton Friedman, George Stigler, Karl Popper, Michael Polanyi, and Luigi Einaudi. From this small beginning, their ideas spread throughout the world, fostering, among other things, the political platforms of Margaret Thatcher and Ronald Reagan and the Washington Consensus.

        The Road from Mont Pèlerin presents the key debates and conflicts that occurred among neoliberal scholars and their political and corporate allies regarding trade unions, development economics, antitrust policies, and the influence of philanthropy. The book captures the depth and complexity of the neoliberal “thought collective” while examining the numerous ways that neoliberal discourse has come to shape the global economy.

        http://www.hup.harvard.edu/catalog.php?isbn=9780674033184

        Disheveled Marsupial…. or we can blame the commies… oops that’s off the list… socialists… opps most are ether embracing neoliberalism or imploding due to trade shocks and foreign dominated debt…. hay I know… boomers did it… chortle….

      • Mav….

        Don’t pawn off the meme you [and posse] have been broadcasting for yonks on H&H. Again your memory is not serving you well, as I have had words with post authors about this issue. Be that as it may, its the wind up apparatchiks that go for the gusto, with the get them – all – spittle flying out their mouths, that I give a serve too…. like kids egging on a fight at the play ground… so they can watch… feeling smug and superior about themselves afterwards…

        Disheveled Marsupial…. not much of a value added effort over some time Mav, same reductive memes and tropes used to simplify complexity and events…. rather than going out and seeking information and assisting in unpacking it.

      • Ok, skipster.. So according to you, who is the aspirational battler that HnH is referring to in his essay? If they are not “boomers”, you can identify this group by some other characteristics.

      • @skippy
        Ceterum censeo Carthaginem esse delendam
        “Furthermore, I consider that Carthage must be destroyed”

      • Mav

        Apologies if that seemed aimed at you! You generally apply a bit of thought! Unfortunately however there is a mindless anti-boomer thread through MB that just simplisitically blames the generation rather than identify what is really wrong. For myself……..
        ‘Down with categorical imperatives!!!!!”

      • Mav…

        Just from the stand point that the erroneous term boomers is actually two demographic groups with over laps at both ends, I mean, how does one even decide on the methodology to make such decisions about what dates to red letter. I’ve produced a plethora of links which delve into the wonkyness yet you and others just cling to your stakes in the ground without ever actually dealing with all this information, just brush aside or make statements about myself in some milquetoast insinuation about me protecting ev’bal doers…

        Which still does not even begin to deal with your posses attempt to ascribe singular agency in a global conspiracy theory, voter fraud by its self negates that perspective, if not the complete consolidation of MSM et al. Michael Hudson amongst others provide a more accurate historical accounting imo.

        China-Bob…

        Cato the Elder…. eh…. funny about that hatred of Hellenistic politics…. hay isn’t one of those right wing think tanks also called Cato…

        Disheveled Marsupial…. the most disturbing aspect about those that utter the term between clenched teeth is the desire to take them out behind the wood shed and off them. Especially from an historical perspective where this age cohort was the first time in history that more rights, more income, wealth, and better health out comes. Something I would think later age cohorts would want to have access too, but no, some want to go back to what transpired before, two tiered society of extreme wealth and everyone else.

    • I’m with Skippy on this. Blaming a group of people feels good but is ultimately counterproductive, and feeds right into the hands of people who seek to control by sowing conflict and dischord.

      People from any generation/group are basically motivated in the same innate ways to greater and lesser degrees. If there has been a failing in the motivations of a demographic, it is the sum of their experience that has led them – mostly the cultural attitudes they are exposed to. So if there is a failure it is with the broad spectrum of cultural inputs which can be nudged in one direction or another over time by media, power, laws, taxes, religion etc. An effective government uses these channels to move groups of people in desirable directions. So by influencing the way people think about something you can change their behavior, and vice versa – change their behaviour… This process is organic for the most part (consider the wide variety of cultural practices around the world).

      Look at cannabis vs alcohol. Neither is evil, but alcohol is undeniably far more damaging for health and society as a whole. Yet a lot morr people associate cannabis with being evil in some way, while happily knocking back drinks after work with colleagues.

      Another example is Negative Gearing. By offering an incentive to treat property ownership as a business, people will believe that it is valuable to society (especially when property is BY FAR the most rewarding investment class in Australia). The important thing here is that these aren’t “conscious decisions” in the way we typically think about them, they are more akin to people justifying their existing behaviour. Back that up with positive media and political affirmation and yoj have a strong cultural effect. This is not some generational abnormality. Seemingly small cultural inputs like tax can strongly influence behaviour, training people to like or dislike something.

      Blaming a generation is like yelling at a dog that does exactly what it was trained to do.

      • “Blaming a group of people feels good but is ultimately counterproductive, and feeds right into the hands of people who seek to control by sowing conflict and discord.”

        It feels damn good, but you’re right, need to stay focused on the ones really pulling the strings.

      • ErmingtonPlumbingMEMBER

        “Look at cannabis vs alcohol. Neither is evil, but alcohol is undeniably far more damaging for health and society as a whole.”

        I don’t know about that Randal, the long term mental health issues around Cannabis abuse are becoming more and more concerning. I come from a 20 cone per day cohort (in my late teens and 20s) and have seen in many the development of mental illness, not to mention the great personal tragedy of wasted potential.

        This drug has ravaged the boomer cohort as well, Just look at Skips estranged twin brother in the clip below,…a long time puller of the bong for sure.

        https://youtu.be/Fi8ZX9L953o

        A more serious discussion on Cannabis legalisation.
        Don’t give in to “BIG DOPE”.

        https://youtu.be/0pkKmqT7edc

      • EP, I think its great that you are concerned about substance-abuse, it’s a serious social issue. It’s also completely beside the point I was making

      • a dog that does exactly what it was trained to do.

        Wow.. that’s worse than anything that I ever said about boomers.

      • LOL.. skippy, are you now claiming boomers lack agency.

        Ever considered what you have been trained to do…

        I have no one else to blame but myself for my actions. Does that clarify? 🙂

      • drsmithyMEMBER

        I was under the impression research is showing that marijuana just exposes (and perhaps exacerbates) underlying medical mental illness issues in a minority of the population, it doesn’t create them.

      • ErmingtonPlumbingMEMBER

        @ dr smith

        The same can be said about asbestos.
        It seems that only a small (unknown) percentage of the population can actually get that hard to spell lung disease.
        But as there is no test to discern who is predisposed, its caution for everyone.
        Should be the same for mull.

      • There is a specific schizophrenia that is induced by cannabis when smoked in the teenage and early twenties before the full neural pathways have been bedded down. PubMed it. I must not the term schizophrenia is a general term for a number of distinct mental illness’. It bring on other mental illness bu these have not been researched enough to find any causative links

    • @VAM — The backward One
      “Who exactly he is getting ahead of is no bother to the aspirational battler”

      Mind numbing bull shit – if you’re already senile I’m sorry — IF not wise the FU !

      Reading further down (from your 1st Idiot post)
      – – you describe yourself as a “messenger” only.
      What a lying POS you are. EVERY post you’ve made over the past 12 mths has ‘had to have’ the word Boomer in it. It’s stupid & untrue so that makes you a goose & an annoyance. STFU

    • As I’ve been at pains to point out all along simplistically blaming the Boomers for all the ills is completely missing the point and just sets us off down another road of debt and entitlement thinking. Now did this really start to evolve under the Boomers rule – you’re darn right it did! But what’s at play? What’s REALLY happening?
      There are millions of boomers, including rural people, factory owners and workers, the prudent, who have been absolutely crucified by the processes that you blame on Boomers. It is totally pointless to blame a generation without thinking about what really happened.
      Unfortunately following generations have picked up the baton of debt entitlement and run with it – and they seem to be going at greater speed down the same road as the preceding boomers did.

      The consequences of the past 60 years are building and building. Do I have sympathy for the sort of Aus that young people will inherit – you betcha! But standing around mindlessly ranting at a past generation is not going to build anything or reform anything.

      I find it disconcerting to be on the same side as skippy in any debate – but there it is!

      • Of course, I am not blaming all boomers, flawse. I am blaming those boomers who are not self aware and utterly selfish.

        As an example, look at the Aurules above, one of those aspirational battlers – he seems to be unaware that I merely quoted HnH’s words verbatim. He sees the words “Who exactly he is getting ahead of is no bother to the aspirational battler” and lashes out at me. He cannot see beyond his own nose and feels threatened.

      • “I am blaming those boomers who are not self aware and utterly selfish.”

        Am I to understand Mav that your saying some people are self aware and some are not, but only as it applies to boomers in your beliefs. Btw how do you quantify self aware, by what method and metrics do you know someone is or is not self aware…. and are you the sole arbitrator of that observation…

  3. Those who have encouraged the gradual lowering of interest rates over the last 30 years must share in the blame of this situation.

    Pension funds and the insurance industry are now in deep pain due to the very low interest rate.

    Central banking has created this disaster without thinking of any exit plan.The head of our own central bank has designed his personal exit plan without coming up with one for his own country.

    • notsofastMEMBER

      I think there is an exit plan. Unfortunately its becoming increasingly clear that the plan involves slavery, our children and selling…

      • A bit worried about all the discount sleepers here…apparently it’s not very good for our health.
        But this comes of worrying about the next generation and the one after.

      • Athalone, go to sleep man. I am fairly confident Labor/Greens will win. RC into banks should be enough to swing the balance away and it will also drag Glenny out of retirement.

      • Hi Mav,
        I think you are right…but I’ll take a saver with Affordable Housing Party in the Senate.

      • The RC into the Banks is going to do absolutely nothing to alter the fundamentals of the problem. They’ll trot out a few rogues so that everyone can be indignant at the ‘bastards’ The RC will NOT be charged with examining the fundamental economic system and education wherein the problem lies.
        In any case it can’t be fixed. To bring it to light and try to fix it will result in a depression that will last generations. It has taken generations to get to this disastrous situation and it would take decades to recover from it.

    • athalone….

      Sorry central banks are not autonomous beings… CB are staffed by humans which respond to events with whatever ideology or methodology is dominate at the time… Hence just saying its all Central Banks fault leaves a massive amount of history and evidence edited on the floor. Just to get a handle on things one has to look at the entire history of Central Banks and at least a hundred years before. That’s not to mention the advent of neoliberalism in the mid 70s and how that changed the previous operation of Central Banks along with dominate economic school[s during that time and till today.

      Just the observation of Volcker cramming down labour due to political dramas wrt taxation and expectations of hyper inflation tell a completely different story. Not to mention Greenspan’s antics, which is compounded by Bernanke’s time and the lack of a real fiscal stimulus. All which were the result of ideological capture and powerful vested interests and not just Central Bank actions.

      Disheveled Marsupial…. one would reasonably think the economics of this period have more to due with events than – just – Central Banks, which is made manifold by the dominate ideological agenda being broad cast via full immersion propaganda.

      • athalone…

        Don’t know how you arrive at the conclusion that we agree on CBs or much else.

        “Pension funds and the insurance industry are now in deep pain due to the very low interest rate.”

        The industries you point out have more problems with bad investment [PE], fee structure, and executive looting than IR dramas.

        Disheveled Marsupial…. “keep it brief”… um no… devil is in the details and sound bites has a lot to do with how we got into this mess to start with. Be great if’n you could elaborate a bit more than making unsubstantiated comments which require faith of reading in to quantify…

    • When it comes to choosing a successful career, Malcolm recommends the real estate industry to “get ahead” job

  4. -Its not a bubble.
    -Negative gearing is a gift
    -Property prices are so high because there’s too much demand
    -I mean property prices are so ‘normal’ because there’s so much demand
    -You can’t go wrong with property
    -3 million for an asbestos pergola in Thornbury is the buy of a lifetime
    -Don’t be silly, everybody’s doing it
    -If these trends continue……..
    -The neighbours 8 month old has 3 investment properties. So hurry up.
    -The member for Golden Harbourside Mansions is smart, and rich. Shut Up. Buy Property.
    -Its not debt. Its nothing. Don’t even think about it.
    -The mortgage broker says you can borrow that money. The mortgage broker knows. Take the money.
    -Don’t worry, if it all came crashing down, you won’t be the only one in the shit, so you won’t feel left out.
    -Imagine how you’d feel if everyone was bankrupt except for you. Call MortgageSluts now!
    -Property is money. I mean, its like cash. Its an ATM. Its like Gold.
    -Did you know good looking people renovate houses on TV?
    -You should renovate too. DO you think you’re better than them?
    -If you don’t buy property your a communist.
    -They know about you, you know.

    • LOL nice. 😂

      Unfortunately though, without this housing bubble, and without the Asians buying our pulverised rocks, we got nuttin’ 😯

      • notsofastMEMBER

        R2M,

        Maybe this is true now but it ignores the fact that not only does the Housing Bubble limit the ability to pursue other economically productive pursuits in Australia but that many with a self interest in the Australian housing bubble have actively sort to destroy these other economically productive pursuits with the aim of making the Housing Bubble the only game in town. It also ignore the fact that a Bubble, that is any type of Bubble, doesn’t go on forever and will eventually burst…

    • notsofastMEMBER

      “If you don’t buy property your a communist.”

      Now that the MSM is no longer ignoring the Australian Housing Bubble or laughing it off as ill considered speculation, the prevailing narrative in the MSM is definitely that
      1) if you don’t blindly support the Australian housing bubble,
      or
      2) if you don’t support every rule, law and regulation to assist asset price inflation in Australian real estate,
      or
      3) if you seek to challenge people with the ideas that not only did Australia not have to have a Housing Bubble but that now most Australians as individuals would be in much better financial positions if the country had chosen a different path in the late 1990s and more recently,

      then ipso facto you must some kinda commie…

    • Jumping jack flash

      Haha!!
      you forgot the latest one: To become really productive and competitive all you need is more debt, faster.

    • You missed my favourite, uttered by an auctioneer before the sole bidder, who had only placed 1 bid, then outbid HERSELF by another $60k.

      – It’s only money.

      The free money train has stopped. Now it has to be paid back, which in Australia is mathematically impossible considering how it was all wasted on bidding up houses. Depression is near.

  5. GunnamattaMEMBER

    definitive example of what you are on about (which is perfectly true)

    Australia’s politicians have no greater engagement with the country they lead than an auctioneer with the property they sell (as long as they get their cut)

    Election 2016: Negative gearing scare campaign self-serving: Labor

    http://www.theage.com.au/federal-politics/federal-election-2016/election-2016-negative-gearing-scare-campaign-selfserving-labor-20160515-govjjb.html#ixzz48l7vMwL0

    Mr Symond appeared on Seven’s Sunrise program on Sunday to warn of a potential recession if Labor’s plan to limit negative gearing to freshly constructed dwellings from July 1, 2017, goes ahead.
    “Who knows? I don’t know whether prices will drop 10 per cent, 20 per cent or more,” he said.
    “It is frightening and it will frighten others . . . and it creates this stampede. And that’s my concern that there could be a glut of properties come on the market, force the prices down, and then all of a sudden it could be Armageddon with the housing industry that’s propped up the Australian economy the last four years.”

    ……..many of the major real estate firms campaigning to retain the status quo, are hardly “grassroots”, having been generous donors to the Coalition tipping in some $450,000 in the past decade compared to around $20,000 to Labor in the same period.

    • You have to chuckle…residential property should have gone down by 40% in 2008/9, and by now would have to go down by 60%.

      Disappointing that Labor is so fearful to call out: “of course property prices will crash when we touch negative gearing …idiots”.
      That’s what is needed.

      Why won’t central banks allow markets to clear?Why are we so fearful of a depression if that is what’s required?

      • You might want to read up on some of Taleb’s books if you truly want to know more.

        But in ELI5 summation: the point of CBs is to smooth out the extremes in economic cycles; but in trying to impose control they actually make it worse.

      • Tony…

        Yes to some degree, tho CB’s were never intended to replace fiscal policy, yet some wanted that removed for broad social stabilizers, albeit were fine with it for vested interests.

      • Strange Economics

        +1 . Sydney – a 2 bedroom 50yo tiny apartment in the inner west now goes for 750K plus and rents for 500 to 50a week. . “Tell them they’re dreaming”.
        The discussion now is never mind the price, its going up. 15 years ago these were 5 times graduate earnings , now they’re 10 times plus. Yield and Fundamentals don’t matter don’t you know….

    • So $450K over 10 years, by an entire industry is the price of a sellout? That’s it? A ramshackle 2 bedroom crappy unit in Western Melbourne buys you political favours all too numerous and profitable to mention. That would be one of the best investments ever made. Seriously, how cheap are our politicians?

      As for Symond, he needs to be careful not to cross the hypocrite line;

      http://theconversation.com/its-time-we-incentivised-affordable-housing-investment-19969

      ‘Even Aussie Home Loans founder John Symond has acknowledged negative gearing is skewed towards high income earners and should be addressed as part of a tax system review.’

      • Symond: “support negative gearing or it’s Armageddon”.

        I love that he actually used the word ‘armageddon’.

        Basically, Oz is now sitting out in the bush with zero chance of rescue, with a hand crushed under a boulder, and a blunt pocket knife. It’s early days, so using the knife is unthinkable.

  6. An announcement by the NSW liberal government yesterday suggests that despite Malcolm and Morrison’s raging against the fading of the property light, the ducks are being lined up.

    http://www.smh.com.au/nsw/foreign-buyer-crackdown-as-new-identity-rules-applied-to-sydney-property-market-20160514-gov65h.html

    And this looks like the bill referred to

    http://www.legislation.nsw.gov.au/bills/5d78a43b-bc4e-4624-aa86-a6e4ab37b756

    After 1 Jul it will become very difficult for anyone with illegal property holdings to transfer them in NSW.

    Sellers will need to establish their identity and status (resident or foreign – visa conditions) to obtain a Land Tax clearance certificate and buyers when paying stamp duty.

    All of that information will be sent to the ATO to add to their newly acquired database of property transactions and holdings over the last 32 years.

    It will not be difficult for them to check who is selling or should never have bought in the first place.

    That database also includes rental bond records so undeclared income from properties can also be checked.

    Though Scott Morrison may be talking a good game of bubble fever it is clear he and govts across the nation intend to milk that cow very hard as other revenue sources start to dry up.

    Though with households maxed out on debt that poor cow may be in some pain very quickly. Extracting more revenue from property will not be good for property value friskiness.

    And dont forget that smary industry dude on Qanda last week was talking about reintroduction of a Commonwealth land tax. First time I had heard that get raised outside of MB threads.

    That brand new ATO national property register would make it very easy. Just like the ATO monitors all your banks account interest income.

    • Ronin8317MEMBER

      It should also stop many cases of people selling someone else’s houses by deceit. Currently a lawyer can transfer your land title to someone else with no identification.

    • fitzroyMEMBER

      Similar laws have been in Victoria since November. The question remains whether conveyancing companies provide a loophole for the unscrupulous.

      • How?

        If proof of identity is required for the registered vendor or buyer it will not matter who is handling the transaction – lawyer or conveyancer.

        The most likely gap will be enforcement by the ATO.

        While they will probably look hard and check who is buying – whether they bust vendors who are selling stuff they should never have bought or should have sold earlier – is another question.

        Even more interesting is whether they chase foreign vendors who were collecting rent and not declaring it whilst being the illegal owner of property.

        I suppose it depends on how hungry Morrison is for cash and whether chasing this cash will bring down the “build skybox for foreigner” industry.

        Morrison may be opposed to the ALP policy but that doesn’t mean he doesn’t plan on milking property in some other way after the election.

      • Vic laws come into effect from 1st July as well and no conveyancing companies and lawyers will be held liable in case they don’t comply. As part of the legislation, they need to check and attach a copy of the identity docs to the transfer.

      • fitzroyMEMBER

        The solicitor puts his or her training and practicing certificate on the line, what does a conveyancing company risk?

      • Fitzroy,

        Conveyancers are individually licensed as well so they would be putting that at risk. I doubt either group is likely to put their license to work on the line for some dodgy client.

        Their clients of course may give them forged identity documents etc but that is on the client. In most cases lawyers or conveyancers will not know (and will not ask) if their clients are using forgeries.

        But as we know enforcement of the law is often a much bigger problem than simply making something illegal.

        Having said that requiring identification is a big step forward especially if the documentation is subjected to some decent scrutiny.

        The problem for crooks who are using false ID to buy Australian property is that if they are discovered they can hardly pack it in their suitcase and flee off shore.

        I suspect that we will find foreign interest in buying skyboxes in Australia will wane significantly once superior means of extracting revenue from foreign property ownership are fully implemented by our pollies.

        What softer tax target can then be than rich non-voting foreigners with immmoveable property holding.

        It will make slugging smokers seem like hard work!!

      • fitzroyMEMBER

        A two year course? The fee need not be the costs of a conveyancing transaction; it could even be in cash.

  7. FYI – Meritocracy

    “Etymology

    Although the concept has existed for centuries, the term “meritocracy” was first coined in the 1950s. It was used by British politician and sociologist Michael Young in his 1958 satirical essay[3][15][16][17][18] The Rise of the Meritocracy, which pictured the United Kingdom under the rule of a government favouring intelligence and aptitude (merit) above all else, being the combination of the root of Latin origin “merit” (from “mereō” meaning “earn”) and the Ancient Greek suffix “-cracy” (meaning “power”, “rule”).[19] In this book the term had distinctly negative connotations as Young questioned both the legitimacy of the selection process used to become a member of this elite and the outcomes of being ruled by such a narrowly defined group. The essay, written in the first-person by a fictional historical narrator in 2034, interweaves history from the politics of pre- and post-war Britain with those of fictional future events in the short (1960 onward) and long term (2020 onward).[20]

    The essay was based upon the tendency of the then-current governments, in their striving toward intelligence, to ignore shortcomings and upon the failure of education systems to utilize correctly the gifted and talented members within their societies.[21]

    Young’s fictional narrator explains that, on the one hand, the greatest contributor to society is not the “stolid mass” or majority, but the “creative minority” or members of the “restless elite”.[22] On the other hand, he claims that there are casualties of progress whose influence is underestimated and that, from such stolid adherence to natural science and intelligence, arises arrogance and complacency.[22] This problem is encapsulated in the phrase “Every selection of one is a rejection of many”.[22]

    It was also used by Hannah Arendt in her essay, “Crisis in Education”[23] which was written in 1958 and refers to the use of meritocracy in the English educational system.”

    How a satirical essay became a “how too book” and then some are confused because the results are contrary to expectations is absurdly delirious, bad as Michael Hudson’s ‘Super Imperialism’ where the book clearly points out the folly of such only to have made a road map to the future.

    Anywho…. The False Promise of Meritocracy

    Managers who believe themselves to be fair and objective judges of ability often overlook women and minorities who are deserving of job offers and pay increases.

    http://www.theatlantic.com/business/archive/2015/12/meritocracy/418074/

    Disheveled Marsupial…. the Mc’crazypants part is the libertarians pushed the home ownership meme rifting on the old only property holders and tax payers should have voting “rights” thingy, pushed suburbanization as preferred societal template, all whilst unleashing the finalization beast to seek its rewards…. and now need to find convenient bag holders…

  8. Jake GittesMEMBER

    Apparently it’s the pivot to the new innovative Australia. It proves the cant of the political class; the speculator the punter is the Australian entrepreneur. Betting on the Dapto races or Caulfield should perhaps have tax breaks too.

    • Roflol…

      And America [ground zero for the GFC] does not have its issues or how about PIIGS, south – central America, et al….

      Disheveled Marsupial…. so it must be something in common with all of it…

      • The irony is that the most idiotic reactionary Aussie nationalist is some “on the spectrum” knob from California.

        What’ the future here when everything productive has been sucked into the housing vortex?

        How do you think that Australia is any different to the conditions that caused the GFC? By doubling down on them?

    • I have been relatively quiet in the last two weeks, absolutely baffled by what I am witnessing.

      I have said it before, and people are probably sick of me saying it, but no way I will have my kids grow up in Australia. It started with worries about education and opportunities, now it has expanded to worries about what type of person they would grow into, living in an environment where such vile things happen as what happened to poor Duncan.

      Europe is not fantastic, there are many things I rather not expose my kids to there either, especially the latest bout of xenophobism. That said, nothing destroys the soul as much as the subtle undercurrent of unfairness and corruption, together with what seems to be a complete lack of effort to advancing the nation and making our kids’ lives better and easier.

      Australia, the country where people talk about mateship and fair go. A country which supposedly is classless. Well, bollocks.

      I now think that our move was just a couple of years too early. Just a bit later and it would have been more obvious what Australia really is, as opposed to what it was, and I would never had made the move in the first case.

      • I hope if/when the recession/depression times arrive in the land of Oz that our culture and values get the deserved wake up call & changes. This needs to have sustained “pain” so that it is felt and remembered for generations. Not sure of the chances of this outcome happening but I live in hope!

      • AnonNL, is there a social democracy in Europe without the shitty cold climate? 🙂

        I would like to move there for the sake of my kid.

      • The Euro Crisis and contradictions of Neoliberalism in Europe
        Engelbert Stockhammer
        7 January 2014

        http://www.postkeynesian.net/

        For those that think Northern Europe is not following neoliberalism or sliding into it one only has to look a Sweden and the Swedish Social Democracy party…

        How Swedish Social Democracy became neoliberal

        https://louisproyect.org/2015/11/10/how-swedish-social-democracy-became-neoliberal/

        Disheveled Marsupial… tho vestiges of the European brand of social liberalism – libertarianism* can be found. [*] not to be confused with the American version.

      • fitzroyMEMBER

        Mav, try one of the ones protected by razor ribbon.
        Don’t try France
        https://youtu.be/UKAQX74yRyc
        Or Germany
        See Above
        Or the Uk
        https://en.wikipedia.org/wiki/Rotherham_child_sexual_exploitation_scandal
        1400 Children is a lot.

        Abuses described by the report included abduction, rape and sex trafficking of children.[6] The inquiry team found examples of “children who had been doused in petrol and threatened with being set alight, threatened with guns, made to witness brutally violent rapes and threatened they would be next if they told anyone”.

        And certainly don’t try Sweden
        Even the Swedish police don’t dare go there
        https://swedenreport.org/2014/10/29/swedish-police-55-official-no-go-zones/
        It is a little chilly.

      • I lived in the UK for about 2 years in West Yorkshire, a suburb away from where the London bombers lived. I am not returning to that wasteland any time soon.

        I think part of Australia’s problem stems from a sense of cultural cringe.

      • Europe is certainly not as socialist as some people tend to think. Neoliberalism has made significant inroads. It is the other reason for the surge of populism in Europe and why populist parties in Europe are left-wing when it comes to welfare and right-wing when it comes to the issue of migration/refugees.

        No decently run European states with decent weather Mav.

        On the UK: I have noticed that migrants from the UK generally tend to love it here, or rather, be very happy they are no longer in the UK. All Dutchies I have met have their doubts and some have already moved back. Europe is certainly not homogenous and every country has its pros and cons.

    • fitzroyMEMBER

      Correct Kodiak. The problems begin at the top with the lack of talented politicians. It used to be that manufacturing, technology and effort were rewarded, not now. Social cohesion used to be important, not now. We have seen the rise of the accountants and the spivs, the suppliers of branch stacks and the special interest groups with their totalitarian beliefs as to what is good for the rest of us without our consent.

  9. Richard CampbellMEMBER

    Astringent, eloquent, but we are not alone. The Dutch are just as drugged and London is a vortex of property speculation aided by Russian thieves called oligarchs.

    • True, the housing markets there are in another crazy boom. But nowhere does property dominate culture and institutions as it does in Australia.

  10. AlbyManglesMEMBER

    This is EPIC writing

    Our nation is at a crossroads. It faces an existential crisis that could not be more prosaic. We are not threatened by an overwhelming external enemy, a plague, or economic depression (yet!). We are not defending our territory, forging a visionary path, wrestling with the great challenges of our times or taking control of history. The enemy we face is a banal insurgency of self-serving salesman that are bleaching us of consequence and substance.

  11. As LD says it’s just a brain bug, probably incurable and definitely infectious, maybe the CDC can help..but I doubt it because the nation is not ready to take the medicine even if a cure were to be discovered.

    What continues to amaze me is the fixation the rest of you have on this topic. As I see it many (most if not all) of you want to own more Residential RE and price is the only thing holding you back, in economic terms we call this latent demand. Fear appears to be the only force holding you guys back at the auctions, from memory you were all equally if not more fearful 4 years ago when prices were about 1/2 to 2/3 what they are today. Yet still you bang that same value drum, makes no sense.
    As an investor I find lots of over valued assets in the market but that does not mean that there are not also undervalued assets available, If I’m Value -investing than my job is to sort out the undervalued from the overvalued…but I don’t dwell on what’s over valued, I identify it and move on.
    I can’t possibly change this RE obsession but I can profit from it indirectly by actually doing the jobs left undone by a property fixated Aussie populace. This single minded Aussie fixation leaves other paths to profit completely unprotected…that’s what I call opportunity…and it’s knocking very loudly in Australia.

    • bzunicaMEMBER

      I think many on here are wanting to buy a property to live in but know that it is out of reach at current prices and are hoping that the bubble pops so they might be able to purchase their own home. This mainly because they want to stay in a house for many years on end and not have the insecurity that comes with renting. This has been the issue all along, that housing has becoming something of an investment plaything rather than homes for real human beings.

      • Honorable intent maybe but doesn’t change anything that I’ve said.
        When I’m denied one path to wealth creation, I can either sit around and cry OR I can see what other paths to profits are left unattended and unprotected. When I identify another path I take both my human and monetary capital and invest them in the pursuit of profits through this venture. Sure I need a house to live in but it’s the confusion that exists between Investment and Shelter that’s creating this bubble, Thus denying the market your latent demand is probably the number one thing that we can all do to reset this Bubble. You can best deny the market this latent demand by shifting your focus and your capital out of the control of the banks and into your own control.
        My advice: Find your dream and Invest yourself fully in your dream!

      • ErmingtonPlumbingMEMBER

        “As LD says it’s just a brain bug, probably incurable and definitely infectious,”

        Bob, With your “My advice: Find your dream and Invest yourself fully in your dream!” you seem to be infected with your own little “brain bug”/meme brother!

        They are quite powerful these little brain bugs/memes,…just look at that Monotheism one, been infecting weak minds for over 2500 years!

      • @EP Fair call: I have been banging on about this topic a lot of late. In part this is in response to the frustration I hear in the voices of those that “only want to buy a house”. I hear again and again that they can’t move forward with step two of their lives until step one is complete yet step one is now impossible.
        What I’m saying is that with current valuations Step-One (buy a house) is not a prerequisite to Step Two (start a business) matter of fact completing step one (at current valuations) more or less guarantees that you’ll never ever get to Step Two, or by the time you’ve paid down that $1M plus mortgage you’ll be too old and staid to ever risk it all on your own venture.
        Looking forward the consequence of over valued RE will be a dearth of new business formation creating a high likelihood of better than average returns due to the reduced level of competition. In this environment YOU have a choice, you can follow the herd and get a Mortgage OR you can seek to create your own value. Unfortunately the third way, the MB way : Talking down the Residential RE market is a loose loose strategy. You develop nothing of enduring value yet see your savings washed away by RE Inflation.

      • @China-Bob I understand your sentiment but like… the barriers to entry re start-ups is pretty extreme for anyone without pre-existing wealth. Even if you have a great idea/business plan – go get a business loan without any equity? Ya sure… Then the extensive list of business start-up costs in this country thanks to all the red tape… seems to me all the regulation achieves only one thing – impedes those without wealth/means. I am not convinced you fully appreciate the opportunity cost differences between the generations… if you are an average single professional without access to any assistance through family – you really are just treading water re cost of living. Attempting a start-up without much you can afford to risk is daunting in this country – something only available to the exceptional and very much not practical for most, failure can seriously set you back financially, potentially for life. And then imagine if you have or soon will have a family to support too, hah!

        You are very much exceptional and I don’t believe you can fully comprehend what it is like for so many that just want a conservative life with a little financial security. What does the average 35 and under do exactly to generate wealth in this country if they had not already jumped on the RE train?

      • Locus of ControlMEMBER

        I’m kind of late to the party with this response, but here’s my two bob. Actually, i don’t want to see house prices decline for personal reasons (i.e. Because I want to buy my own), but because lower land/ housing costs would free up capital for investment in innovation. Right now people are splurging much of their disposable income on housing & all you have to show for it after thirty years is the same house you purchased thirty years ago, except now it’s old & the colour scheme is out of date! A person might earn $2 million in their lifetime. Imagine, if rather than spending $1 million on a house in their lifetime ($500,000 mortgage + $500,000 in interest payments), they spent half that amount instead ($500,000 on housing equally split between mortgage & interest payments). That would free up $500,000 in capital that otherwise wouldn’t be available for your average Jo to plough into their own education, the education of their children, travel, or a business venture. & if it failed or realised no return, so be it, you would be no worse off than if you’d spent twice as much on housing ($1M versus $500k) & you’d have that extra life experience/ knowledge to boot.

        Personally, I’m indifferent to whether I rent/ buy – I treat it as a cost-benefit thing. To some extent you rent everything bar your food & drink which you do consume. Every personal effect, your house, the land you live on – you can’t take it with you beyond the grave. So the price you pay for it during your lifetime is in effect a rent of sorts.

        Further, the gross financialisation of property extends waaaay beyond residential. Productive farmland is exorbitantly priced these days; one bad season can tip a farmer into bankruptcy, they’re so heavily mortgaged. It shouldn’t be that way – farming is an uncertain business with seasonal fluctuations: farmers should have to indent themselves to the extent that one or two off-seasons can see their livelihood repossessed, yet that’s what the banks do. Commercial property, for those that need a physical space to operate out of, is also highly priced. This kills wannabe businesses with no starting capital stone-dead from the outset or can be the make -or-break that breaks them before they get their name established. Even if you want to operate out of your spare bedroom, the house will cost you $500k on average and a $1m if you live in Sydney.

        I guess my point is, in summary, it’s not just high residential property prices that curb investment/ innovation, it’s high land prices full stop.

      • bzunicaMEMBER

        There is a couple of things I can say in reply. Firstly, I guess need to realise that there are other places in the world other than Syd and Melb to find work and settle down. Secondly, it is really hard to mentally give up on the home ownership thing, but it is something that I’ve come to terms with and I’m onto stage 2 (which is not a business for me but a phd, so I’m sinking about $100k in lost earnings doing that). The sad thing for me is this – I’m a high school teacher who, through facebook and keeping up with past students, have seen many of them in their early – mid 20’s standing in front of houses with massive grins because they have just closed the deal. You go to realestate.com.au to find the sale price and often it is north of $1m, never below $700k. So these young couples who earn $55 – $60k per year and have just walked into a $700 – $800k mortgage. They are slaves, they will have financial insecurity for decades to come, it saddens me deeply. I rent, but I have over 3 years of living expenses in savings to see me through if everything went wrong and as such, money is not an immediate concern. Yes these guys can sell their houses and at this point get their money out, but as we know, prices can’t rise forever.

    • Locus of ControlMEMBER

      Is it a brain bug? Or is it a free lobotomy with every property purchase/ mortgage you take out? I’m wondering if it’s the latter. Along the lines of “but wait, there’s more, sign up to debt servitude for the next thirty years now and we’ll throw in a free set of steak knives, a VW and (whispering by this point) a lobotomy”.

      • Yea can’t argue: I’d much rather have a bottle in front of me than a frontal lobotomy.

    • Strange Economics

      Great article – we are surrounded and surrender. Resistance is futile, join the cube, as property will only go up forever…

    • “When I’m denied one path to wealth creation, I can either sit around and cry – -bla bla ”

      I usually agree with your well thought out posts But not this one. I think you have summed up incorrectly.
      Most here including myself recognise a bubble & are waiting (been a l o n g wait) for House prices to fall . NOT to purchase to rent out (that would be stupid in present market) – – BUT buying to Live in.

    • @China-Bob

      “but I don’t dwell on what’s over valued, I identify it and move on.”

      For the majority of people property is a major living expense. If you dont come from a privileged background your first and foremost concerns are basic ones such as food and shelter. Property isn’t just a type of investment which you can just walk away from if overvalued.
      It’s a basic consumer good necessary for survival.

      People like you will never understand.

      “I can’t possibly change this RE obsession but I can profit from it indirectly by actually doing the jobs left undone by a property fixated Aussie populace.”

      good for you.

  12. This is great but HnH consistently overlooks the equity aspect of our political economy.
    Top notch global economists- Piketty, Branko Milanovic, Stiglitz are now pointing out the systemic links between capitalism, political capture and inequality.
    Australia has doubled down on conditions that lead to greater inequality over the past three decades – deindustrialisation, a massive shrinking of union density, a grossly inequitable tax regime, and a wholesome adoption of aspirationalism.

    Addressing inequality and the conditions that lead to it shouldn’t be simply dismissed as ’70s socialism’ by thinking people.

    • ErmingtonPlumbingMEMBER

      Well if more “thinking people” spent a little less time obsessively following professional sports, the latest fads and celebrity cult factoids, then maybe they would have some time to contemplate Inequality and redistribution. But the truth is most of the population has been reduced to apathy and ignorance by choice. Much easier to join a tribe and have “your opinions” thought out for you by another.

      If you want any kind of change, then participate, join a party and be vocal and listen.
      A proper functioning Democracy requires PARTICIPATION!

      https://youtu.be/ljaXy1t0I44

    • adelaide_economistMEMBER

      Yep – we really have been living off the legacy of those ‘socialist’ tendencies we all seem embarassed about today. The problem with this of course is that those same balancing tendencies have been eroded and are not being replicated so who knows how things play out in future.

      Australia was – in retrospect – a radically different place in the 1990s. We were definitely ‘poorer’ but a lot of that is simply a mirage because there wasn’t so much cheap tat from China. Houses were rational as a ratio of income, there was a better tradeoff between ‘the market’ (which politicians seemed more likely to understand were self-interested people at work rather than some benevolent gas cloud) and protection of the individual. Organisations like the IPA were merely a curiosity rather than a driver of government policy.

      I remember Australian economic debate in the early to mid 1990s being heavily fixated on the idea that commodity prices only decline long term (which remains true, despite our decade long interruption) and therefore we genuinely had to work out how to be a smarter and more productive society. We’ll end up back there – just with a much more fractured, angry society.

    • “Addressing inequality and the conditions that lead to it shouldn’t be simply dismissed as ’70s socialism’ by thinking people.”

      That we have such a paucity of acceptable ideas is a very big problem for Australia. It is very easy to fall afoul of others in a conversation just for introducing something that they haven’t come across before. This occurs a fair bit with myself, and often with people who are generally more switched on then I am.

      Right now, we are stuck in Plato’s cave, looking up at the shadows and thinking that it is the reality of the world, and when offered to be taken outside we look around for permission to go.

      Thankfully, sites like this one are helping to break down the conversational taboos.

  13. Emess, this is not tacit support for Skippy but the statement “…most of the anti-boomer stuff comes from hypocritical gen-x types who are just as guilty as boomers..” needs to me ammended. Most people, regardless of cohort, who have a property or more in their (OK, the banks) possession, has been cheering the boom (I know plenty of gen-y´s like this, with and without the help of “bank of mum and dad”), and most of those who don´t, have been blaming just the boomers. Having said that, the majority of people (greater fools) who jumped in and are/will be under stress with a massive mortgage will be the gen-x´s or gen-y´s. So, on average, the boomer generation may deserve some of the protestation from the average x and y generations. Having said that, when the () hits the fan, nobody will be fully spared.

    • Bollocks. Most of the anti-Boomer stuff comes from milennials who’s Boomer jackboots are on their necks whilst they piss down their backs and tell them it’s raining.

      • Kodiak, gen-y´s are, by and large, the progeny of boomers. Cria cuervos y te sacarán los ojos.

      • That may be true, but they don’t care about anyone outside their own pampered snowflakes.

      • I can´t comment on what they are like as I don´t know enough of them. However, if you consider that they have grown up raised by a distinctly materialistic cohort and during the most materialistic period in human history, I would say their expectations are not going to be met and that will result in interesting times. Many of the populist groups in S. Europe derive most of their support from this group.

  14. Cost IndexMEMBER

    All very factual and apt observations, this piece completely nails Australians identity and how we so easily let ourselves be led. You rightly point out its vested interests in all facets… these are by definition, authoritarian popularist and therefore socialist. Liberal, Labor and Greens, they’re all popularist and are therefore only interested in protecting their tribe.

    However it is a popular meme, increasing perpetuated here on this blog that’s it’s an evil neo-libs and capitalist ideology. Very Occupy-ist chic.

    We do not live in a true Capitalist society nor even remotely Laissez-faire Capitalism, far from it. To be blame it is disingenuous at best. We live in a crony-capitalism Corporatist world, itself created and enabled by the popularist “progressives” themselves.

    Houses and Holes et al, you nailed it all except the origination, think about where the blame lies and don’t follow the herd…

      • The “No true Scotsman” fallacy.
        There’s nothing wrong with capitalism it just hasn’t been tried yet. Ha Ha.
        Similarly there isn’t anything wrong with Nazi’ism. Hitler just got it wrong. He wasn’t a true Nazi.

      • Cost IndexMEMBER

        Capitalism helps to allow the individual to make free choices, Nazi’ism does not allow any individual free choice amongst many other horrors

        Unbelievable, what an irrational thought bubble and lame attempt at trying to draw parallels, seriously

        The true Scotsman fallacy is a simplistic circular logic slur

  15. via John Mauldin
    http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/160514_TFTF.pdf

    (In society today) there are the protected and the unprotected. The protected make public policy. The unprotected live in it. The unprotected are starting to push back, powerfully.
    The protected are the accomplished, the secure, the successful – those who have power or access to it. They are protected from much of the roughness of the world. More to the point, they are protected from the world they have created., and have for some time.
    They are figures in government, politics and media. They live in nice neighborhoods, safe ones. Their families function, their kids go to good schools, they’ve got some money. All of these things tend to isolate them, or provide buffers. Because they are protected they feel they can do pretty much anything, impose any reality because they’re insulated from many of the effects of their own decisions.

    • R2M,
      A thought has been bothering me and you seem to be the person to ask about it.
      When we think of change, we often think of it being consistent over time.
      But, since the climate is complex system made up of many elements, does that mean that there can be triggers of sorts? By triggers I mean an event, or even moment, where everything switches on, or ramps up, so that all of sudden the change is greater than it was before that event.
      I hope that is clear enough for an answer of sorts.
      While a warm May in Melbourne does not an apocalypse make, it has gotten me thinking about the above.

    • I guess this means that the Victorian Desalination Plant will be put into SOME use.

  16. moderate mouse

    This country jumped the shark long ago. We are cactus. All our flag-draping, self-congratulatory cockiness won’t save us from what’s around the corner. Even children understand the term ‘don’t put all your eggs in one basket’. Amazing that a whole nation could do such a thing for 20 years and not expect it to go tits up. There will be many, many people standing around with empty pockets in the years to come saying “what the hell happened?” You were lied to, that’s what happened. By your government, the media, the banks. I don’t say real estate agents because they believe their own bullshit. But the others, no excuses.

    • Jumping jack flash

      Mate, there’s quite a few more years left.

      And they’ve got as many tricks as there are problems to keep the thing afloat. Afloat for much longer than I can keep my desire for buying a property some day.

      • I’m not so sure about there being “quite a few more years left”.
        Things could potentially get “very interesting” within a 3-4 years depending on what happens with China.

    • I contest that we weren’t just lied to.
      We were lied to and BOUGHT; by Howard and Costello.
      The Desiccated Little Coconut and Cheshire Cat Treasurer rode the economic tailwinds and a once in a Lifetime/Century mining boom and bought their way into popularity and a record breaking term of office.
      They had the foresight of a junkie.
      Having said this, what followed from Labor was second rate at best.

  17. ErmingtonPlumbingMEMBER

    Good work H&H, a hundred comments by lunch time!

    Im now way behind on my invoicing and I got 2 chokes to attend to this afternoon. Bloody MB!

  18. This from a post by Leith is worth repeating every day until people get it:

    This is why Core Logic-RP Data’s February Housing Market and Economic Update valued Australia’s housing stock at a whopping $6.4 trillion, or roughly 4.0 times GDP.

    US housing is around 1.5 times GDP. Ours is 4 times GDP. Someone needs to remind Turnbull of these numbers as he continues to spruik innovation while at the same time defending high house prices. You simply can not have both and he’s smart enough to know that (but apparently the sheeple in this country are not and he’s just telling them what they want to hear).

    • Jumping jack flash

      He’s doing what must be done.
      Otherwise, as the article states, we must become globally competitive.

      No way that’s happening, work is for suckers. Much easier just to borrow whatever money you need, or, better yet, have someone else borrow it and give it to you.

  19. Brain Bug….

    This series is about how those in power have used Freud’s theories to try and control the dangerous crowd in an age of mass democracy. Sigmund Freud, the founder of psychoanalysis, changed the perception of the human mind and its workings profoundly.

    His influence on the 20th century is widely regarded as massive. The documentary describes the impact of Freud’s theories on the perception of the human mind, and the ways public relations agencies and politicians have used this during the last 100 years for their engineering of consent. Among the main characters are Freud himself and his nephew Edward Bernays, who was the first to use psychological techniques in advertising. He is often seen as the father of the public relations industry.

    Freud’s daughter Anna Freud, a pioneer of child psychology, is mentioned in the second part, as well as Wilhelm Reich, one of the main opponents of Freud’s theories. Along these general themes, The Century of the Self asks deeper questions about the roots and methods of modern consumerism, representative democracy and its implications. It also questions the modern way we see ourselves, the attitude to fashion and superficiality.

    Happiness Machines. Part one documents the story of the relationship between Sigmund Freud and his American nephew, Edward Bernays who invented Public Relations in the 1920s, being the first person to take Freud’s ideas to manipulate the masses.

    The Engineering of Consent. Part two explores how those in power in post-war America used Freud’s ideas about the unconscious mind to try and control the masses. Politicians and planners came to believe Freud’s underlying premise that deep within all human beings were dangerous and irrational desires.

    There is a Policeman Inside All of Our Heads, He Must Be Destroyed. In the 1960s, a radical group of psychotherapists challenged the influence of Freudian ideas, which lead to the creation of a new political movement that sought to create new people, free of the psychological conformity that had been implanted in people’s minds by business and politics.

    Eight People Sipping Wine In Kettering. This episode explains how politicians turned to the same techniques used by business in order to read and manipulate the inner desires of the masses. Both New Labor with Tony Blair and the Democrats led by Bill Clinton, used the focus group which had been invented by psychoanalysts in order to regain power.

    http://topdocumentaryfilms.com/the-century-of-the-self/

    Disheveled Marsupial…. those willy boomers…. they were plotting before they were even born – !!!!

      • The association of agency to boomers or any other attempt of obfuscation wrt events – when – ascribing agency…

        Disheveled Marsupial…. Mav says boomers…. some say its all the politicians fault… I show why this is not an accurate depiction of events from a more in depth historical perspective…

      • Perhaps it’s better to frame it as chronic laziness on the part of Aussies.. Although part of what we’re witnessing exists in some shape or form (to various degrees) in other countries, we managed here to engrave rorting the system in stone over the years. We coined the term “Education export” which no other country uses.. We mastered the art of taking a basic need and turning it into a fraudulent money making tax avoiding scheme.. From education, to housing, to banks, to 457s, to small business tax concessions, to the media.. you see rort everywhere you look. We’ve became so accustomed to this that it eroded our moral compass across the board (from the small guy, to the politician, to the business man..). This rort became so big, that our growth became dependent on it.. No rort no growth.. this is the dilemma we’re in now..We either need to unwind the rort or keep feeding it in the hope that things unwind on someone else’s time.. Indeed, It’s never been a better time to be an Australian..

      • “Perhaps it’s better to frame it as chronic laziness on the part of Aussies”

        See its stuff like that… where your personal bias is the corner stone to all your other opinions… contra to everything I just proffered above..

        Disheveled Marsupial…. ‘Century of the Self’ does a much more granular unpacking. with showing where the intent is and the self interest that drove events… but naw… its all Australian laziness…

      • Dude.. every one is entitled to his opinion. I would not be interested in a world where skippism is the dominant dogma.. You can take your granular unpacking and shove it..

    • Both New Labor with Tony Blair and the Democrats led by Bill Clinton, used the focus group which had been invented by psychoanalysts in order to regain power.

      Good lord. So the boomers were hypnotized en mass and their consent manufactured? Is that what you are trying to say?

      • Are all the humans living in the ME born terrorists…

        Anywho can you use a more evidence based approach Mav, social PR and social psychology are a well understood means of manipulating populations.

        Disheveled Marsupial…. look billions are spent on advertising because it works, to the degree of hiring the best child psychologists to go after kids as young as 4 to introduce brand recognition. Are you going to argue a kid 4 years old has the capacity to understand what is happening and make infromed decisions about it – ???????

      • Hmm.. then tell us how 18-45 year olds snapped out of this mass hypnosis and voted en mass for Bernie in the US and a similar age cohort in Aus are now supporting negative gearing changes after decades? Did my generation and those following swallow the red pill?

      • “Are all the humans living in the ME born terrorists…”

        No, Arabs can be born in London, Paris, Brussels, etc and still be terrorists.

      • Mav…

        Snapped out of it – ????? – what like occupy did or unions did before that….

        Btw Sanders is getting a lot of the 2nd group of boomers and increasingly so, not only that but Sanders is old and his economic advisors are the ones I’ve been hanging around before I even came to this blog, have worked with quite a few here and there over the years…

        Rusty how about all the American terrorists….

        Disheveled Marsupial…. that means MMT and Democracy….

      • “Are all the humans living in the ME born terrorists”

        Americans aren’t born in the middle east.

      • Rusty…

        “No, Arabs can be born in London, Paris, Brussels, etc and still be terrorists.”

        Are only humans from the ME terrorists…

        Dishevels Marsupial… is Blackwater / Xe operatives terrorists….

  20. The structure is all still too loosely informal to withstand the travails of popular opinion and market activity

    Next step in our country’s glorious destiny comes the re-booted Anti-Financial Terrorism Act, used to safeguard homeowners and investors against individuals or organisations that seek to undermine the financial security of this country by championing, proposing or disseminating information on policies that have the potential to reduce the price of houses or otherwise negatively impact perception of housing.

    Australian needs high house prices ! will be the cornerstone of our cultural identity, embedded into the New Republic’s national anthem. Citizens will be called upon to report un-Australian activities to their local branch of the Property Council.

    Treasurer and Special Minister for Financial Security Scott Morrison will head up a Star Chamber to prosecute offenders, the ALP and Greens will be outlawed as political organisations, teachers prosecuted for instigating contextually misleading discussion of Menzien liberal values in their classrooms

    Immense billboards will be erected in public places depicting LNP frontbenchers smiling proudly at a golden, swollen, bursting, magic pudding, and holding out spoons for the grateful masses.

  21. Jumping jack flash

    This is a brilliant article. Thank you.

    I have suspected this for a long time, and once you embrace the notion that we are essentially a debt bubble in the disguise of an economy; realised through property “investment”, supported and guaranteed by the banks and government at the highest level, almost all of our policies, at least since 2008 – and quite possibly almost all of Howard’s policies before that – make absolutely perfect sense.

    • The Patrician

      Ahh Roger can see oversupply in a city with a 1.7% vacancy rate
      He can see “already cooling” prices in a city where house prices have increased over $70,000ytd,
      No doubt he can see some free promotion for Montgomery HQ by spinning this same old crashnik rubbish…or is it a slow melt?
      Its like 2012 all over again except the houses are $300k more expensive

  22. So the article is all emo re ‘the castle’ and sydney olympics somehow stirred some collective national impulse for every Australian to have an irrational impulse to own property and created the worlds largest trillion dollar bubble.

    But that’s nothing like the real facts is it?

    The emotion is more like young & poor Australians feeling their government has sold them out, and the rest who do have a property either on a scary debt treadmill worried sick about it, or some feeling smug they got in while they could afford it.

    Underlying root cause of the bubble.

    2.3 million guestworkers.
    $105 billion underground industry run by foreign criminals.
    10% of all people living here.
    98% rent in “private accommodation” cord for slum share.
    1 in 6 in sydney.
    Where do people think they all live ?
    No one built a matchbox them, (well maybe NRAS where Tanya gave the Asian criminals $4 billion of taxpayer funded housing to run their brothels aka Uni lodge / Central Park)

    So the Chinese became their slum landlords.

    Sydney Olympics.
    Chinese swarmed in and the PRC realised here was a silly naive country ready to be looted as well as to wash and hide away their stolen Chinese money.

    Facts are that since then the Chinese with criminal looted laundered money have bought over 225,000 established old run down unit or house hovels to run slum bunk & mattress share to house the 2.3 million foreign guestworker and today collect $22 billion cash income – from typical old CBD unit or 2 bed fibro humpy pulling $2,500 cash no tax a week housing 10 SE Asian student vice workers or 15 or more Indians or Nepalese in our great single national industry – fake visa and no tax on rent subletting scam.
    Say a third of the buyers.

    Often with their tainted greedy grasping hands out for a negative gearing claim as well.
    And that alone dispossessed over 600,000 Aussie young couples or lower income families from any hope of either renting or owning affordable housing.

    Nothing very Australiana about Chinese converting our dwellings to be slum housing for blackmarket & vice student & working holiday or NZ backdoor guestworkers.

    And then add in later the DYI super scammers colluding with the banks to turn their preserved super into larded up debt speculation also jumping on the bandwagon.
    Many also chasing cash in hand or illegal use of the ‘investment’.
    That’s say another third of the buyers.

    Neither of these are particularly Australian emotions or values.
    Just lack of regulation failure.

    Leaving the genuine Australian citizen young couple and or low income family rooted.

    And anyone else paying two or three times to much as the slum and humpy market then pushed up all the other housing layers above it.
    Then add in low interest rates and banks on debt heroin and too big to fail or even slowly ease the bubble. And yes it’s now an almighty big dirty fetid pulsing boil ready to burst..

    because :
    Unemployment is going up. Education is roote. Our cities are squalid third world slums.

    The backlash against the uncontrolled and fake visa 2.3 million guestworker invasion is happening. It’s not just housing they have totally corrupted but also jobs, education, quality of life and living standards.

    And that old dirty rundown 2 bed unit in Broadway or the small fibro humpy in Auburn the Chinese or DYI super scammer paid $900,000 is only worth a quarter of that if it can’t be crammed in with 10 or more foreign guestworkers paying $2,000 cash rent a week.
    It’s worth maybe $300,000. That’s all.

    So inevitably some govt is going to have to act to slow down the guestworker invasion, remove work rights, crack down on money laundering, the $36 billion being sent out each year, the foreign criminal underworld running their rackets.

    And as soon as that happens – the nutrient is gone and that’s the end of the bubble.

    My point is this. It was never a bubble driven by patriotic Australian sense of nationalism..

    People are in one of 3 Groups :
    1. Smug if have a place, low or no mortgage, sense of inflated worth.
    Chinese doing great job stoking prices.

    2. Intense worry and two jobs and in debt to the eyeballs to try and stay in the game.
    But wanting the Chinese to keep ramping it otherwise negative equity and personal financial disaster looms.

    3. Outright hopelessness and they can’t even get into the game.
    Hate the govt and all the criminal Chinese & the 2.3 million unskilled foreign trash who sneaked in to allow this to happen.

    Eventually 3 gets to be the majority and force the issue.
    That’s where we are today.

  23. Doug Noland of Prudent Bear fame!
    Hnh ” The bride stripped bare”
    Together: The prudent stripped bare.
    Propertocracy: An Australian word for the “seven deadly sins” in one word and can also be substituted for the word worship.
    Bravo! Masterful!