Harry Triguboff at The Australian:
Billionaire apartment developer Harry Triguboff says average Australian wages are too low and are adding to the drag on the weakening housing market.
Prices for his new projects had dropped about 15 per cent in the past year, the Meriton founder said. “Buyers still say they can’t afford it,” Mr Triguboff said. “Wages here have to be higher.”
An average Chinese buyer can afford a unit in Sydney, but an Australian cannot, despite the falling prices, said Mr Triguboff, who also markets his apartments in China
Australia was losing skilled jobs, such as those for pilots, to countries where wages for such roles were higher, he noted.
Previously Highrise has been the immigration bull to end all bulls:
Billionaire property developer Harry Triguboff believes Australia’s population will soar to 55 million by 2050, but hopes it will reach 100 million.
With a new person being added to the country’s total population every minute of the day, Australia’s population growth is faster than Britain, the US and the EU.
The federal government favours a “big Australia”, and wants to increase the country’s headcount from 22 million to 35 million by 2050, largely by immigration.
Mr Triguboff believes that figure is too conservative.
“I don’t think there will be 35 million but about 55 million,” he said on The 7.30 Report.
And herein lies the problem. Sure you can have mass immigration to the moon. You just can’t have it and wages growth as labour market slack is never absorbed:
So, is the answer more immigration? More rich Chinese that can afford Highrise’s homes? Or is it maybe to reboot Australian income growth which cannot be done without capping immigration that will hurt hours prices?
This lose, lose equation captures something about Australia’s current growth model that is not often discussed. Bob Birrell appeared at The Australian on the weekend to ask a sticky question:
Bob Birrell, president of the Australian Population Research Institute, has warned that the eastern seaboard infrastructure binge may be overcooked because of the potential for fewer people to enter the country than under the existing intake.
Speaking after Victoria vowed to pump $50 billion into a new suburban subway system, Dr Birrell said too few people were prepared to question whether the forecast increase in immigration would remain at current levels.
He said the numbers were treated as “sacred’’ when people should be considering that in the past there were drops in net overseas migration, brought about because of changes in policy settings and community sentiment.
“My reaction to these grand plans is to look at the population assumptions beneath them and what we are seeing is just straight-line projections,’’ Dr Birrell told The Weekend Australian.
…Dr Birrell said there was the potential for fewer students to enter Australia and there was popular discussion about whether or not current immigration rates were appropriate.
Quite right Dr Birrell. It will stop and much more quickly than it appears. The polling makes it inevitable:
- Australian Population Research Institute: 54% want lower immigration;
- Newspoll: 56% want lower immigration;
- Essential: 54% believe Australia’s population is growing too fast and 64% believe immigration is too high;
- Lowy: 54% of people think the total number of migrants coming to Australia each year is too high; and
- Newspoll: 74% of voters support the Turnbull government’s cut of more than 10% to the annual permanent migrant intake to 163,000 last financial year.
This popular resistance already killed the Turnbull Government. Others will follow. We are already seeing desperate policy in Hail Mary spending and crazy notions such as “migrants to the regions”.
The problem is threefold. Population growth of the magnitude that we are experiencing has never been given a popular mandate. The mass immigration growth model that drives it lowers broad living standards, including per capita income. That means pollies must lie about it by referencing headline over per capita numbers.
As one reader put is last week, this is classic “gaslighting” of the polity by the elites, a kind psychological abuse as leaders disavow the lived experience of the people. It drives an unusually enraging wedge between the two which is the stuff of constant political upheaval.
Returning to the travails of Highrise Harry, his pincer between foreign buyers and falling wages is an illustration that mass immigration is actually a population bubble, based upon the unsustainable injection of ever more people to support politically unsustainable economic valuations to the locals. That stands as a warning for those most leveraged to it, via AFR:
Transurban’s eye-watering $9.3 billion acquisition of a majority stake in Sydney’s WestConnex toll road – almost double what analysts and the NSW government had expected – is based on the assumption that Sydney’s population and economic growth will continue for a long time yet.
While Australia, a country of 25 million people, debates immigration levels and what is the optimum population size for an island continent, Transurban chief executive Scott Charlton is banking on Sydney’s population hitting 8.5 million by 2061.
The listed company – which operates15 out of the 19 toll road concessions in Australia – predicts population growth in the WestConnex corridors is expected to top 2.4 per cent through to 2026 – well above the national average.
This adds further oxygen to the dynamics of the population bubble as such enormous firms become rent-seekers for its continuation, adding both to the need for more people, more lies to cover up the falling living standards and more fury that it is happening.
Like all bubbles, this can run longer than anyone expects then burst and collapse very fast indeed. A few years ago nobody thought negative gearing would be touched. Then nobody thought the banks would be touched. Until recently, nobody thought that gas and energy firms would be touched. Now nobody thinks that immigration will be touched.
It will be and the bubble will burst resolving Highrise Harry’s little dilemma for him.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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