MB Fund Podcast: How long can Australia’s property boom run?

In today’s investment webinar, Nucleus Wealth’s Chief Economist Leith Van Onselen, Head of Investments Damien Klassen, and Head of Advice Tim Fuller disucss the quarterly MB Australian property report.

As we round out what has been an incomparable financial year in so many ways, our focus today is fixed on Australia’s favourite asset class – property.

All capitals ended the financial year with double-digit price growth except for Melbourne and Perth, and nationally, dwelling prices jumped by 13.5 per cent, the highest annual growth rate in 17 years.

But will the reluctance by both mainstream political parties to let housing behave like a healthy market and fall, resetting the market, exacerbate Australia’s housing affordability problem and allow the gap between the home ownership haves and have-nots to widen?

On the agenda:

  • Strongest property price growth since 1989
  • Mortgage market booming
  • Economy booming
  • Lack of supply
  • How long can the boom run?
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Tim Fuller is Head of Advice at the MacroBusiness Fund, which is powered by Nucleus Wealth.

 

Tim Fuller

Comments

    • Agree. My first thought was end times.
      Forever.
      Until time runs out.
      When the stupid basket is full:))

      • strange economicsMEMBER

        Until a month after the kids ask you to buy them a house from your capital gains tax free profits…

  1. TailorTrashMEMBER

    It’s a neat trick ……inflation channeled into houses and disguised as wealth ….,quite brilliant way to fool a stupid people

    • reusachtigeMEMBER

      Even if you are correct it does not matter to those in the game. Only to those that aren’t. And that’s the difference between winners and loosers!

    • Jumping jack flash

      This.

      The best trick though is the bank’s nonproductive debt is relabeled as “wealth”, the act of attaching it to houses causes the price of the houses to grow, the debt grows fast enough to repay itself, the debt grows forever, and the banks get richer forever as everyone buys more and more of their debt.

  2. MathiasMEMBER

    ‘Interest rates are 90%’… hrm.

    > How long will the Boom last?

    Well, if this is true, then I guess we are predicting when this chart ends:
    https://gyazo.com/e09a6568ffbce29fdece21b6e1ee4143

    I can only suppose the answer would lie in either Demographics or Politics ( will a politician actually do something ).

    So um, in that case, without political intervention, I think bonds / interest rates will be falling till 2028 – 2038.

    Assuming we still have Business’s and a Currency left by then ( can a currency survive at -5% interest rates? ), then my prediction of Baby Boomers dying and young suicides rising off the scale is going to explode. In the future that I see ( and Im no economist but it just seems like common sense ), Australias going to murder off half its population to house prices.

    If Leith is right about Demographics and the Boomers leaving inheritence to the young ( which I dont see being evenly distributed ), then Boomers will start to kick the can around 2008 and ‘magically’ things just get better.

    If I was right that I there’s an iceberg beneath the water filled with social issues that wont be fixed that easily, then 2038.

    When you consider that Australia has already destroyed the past 20 years of young life, I think most young would rather suicide then buy a house in this future. Without change, I think suicides and death rates between now and 2038 are going to be phenomenal.

    If we consider 7 million ( 1/3rd ) of the population are Baby Boomers who will be dead by 2038 and 3-7 million young people suicide, then my guess is your looking at Australias Population being cut in half by 2038. Your looking at around 10 – 14 million Australians dead in 17 years.

    On the bright side, I think Australia will see a reduction in population because Im pretty sure there are young today who have absolutely no intention of buying houses at expensive prices, and would gladly choose suicide before they bought a house.

    Its pretty much, now the politics of murder.

  3. MathiasMEMBER

    According to Leiths demographics, if Boomers die around 2028 and the young receive all this inheritance, Australia will be dead before 2025.

    In my opinion, Australias Currency will be cactus around 2025:
    https://gyazo.com/1584d50d86ce9ec51b6c2e53a42fd5a8?token=1ab0572063b704d7b42116eafbb2a28a

    I believe you guys at MB have also made predictions that are far worse then mine. I believe Dave is predicting AUDUSD at .30 cents by 2023 ( which is 2 years earlier then what Im saying ).

    Australia will run out of money long before the Boomers die.

    Without Political Intervention, we are walking into a wall of suicides. I do not believe Australia will last that long.

    My guess is we will be in a state of ‘National Emergency’ long before 2028.

    Australians will be dead.

  4. MathiasMEMBER

    When it comes to Suicide, I believe its a persons right to Choose.

    Over the years, I’ve seen many men attempt suicide in the most horrible of ways. The worst, would have to be pouring petrol over yourself and lighting yourself on fire. I know a guy who tried, failed and now spends the rest of his waking day in life in pain.

    If somebody comes to me and says, ” I want to suicide ” then of course, Im going to let them. If the Government was serious about keeping its citizens alive, then it wouldnt be doing everything in its power to murder them off in the first place. Instead, we get all these bullsh*t mental health programs, none of which actually fixes the root cause of any of the problems people are actually complaining about. We are a society of hypocrites and liars because when push comes to shove, we ignore the real issues while pretending we care with all these bullsh*t mental health incentives.

    There was a guy called Dr Philip Nitschke who was a specialist in ‘Assistant Death’. He is also the author of ‘The Peaceful Pill Handbook’ – https://exitinternational.net/docs/PPHBflyer.pdf

    If someone comes to me and wants to suicide, obviously I’ll tell them ‘Life can get better if you give it a chance’ but if they’ve thought about this a lot, then who am I to tell them they cant? Its there life and its there choice.

    Australians can get a drug called Nembutol. In fact, it can be bought off the internet and delivered to your front door ( for a price ). Its basically used in Euthenasia and its easily accessible to anyone who has the internet.

    If someone wants to suicide then its there choice. If Australians are angry that I would offer this information freely and find it upsetting that would even suggest people have the right to suicide, then maybe they should stop being hypocrites by forcing people to suicide in the first place.

    Im not suicidal personally ( just waiting for some moron to attack me personally ) but its an important topic and if someone wants to suicide, how are you going to stop them?

    Im less interested in stopping people from suiciding and more interested in making a better Australia where people dont want to suicide.

    If you ask me, I think most Australians are hypocrites.

    I dont know every single young person in Australia but what I do know, is if you’ve spent the past 20 years paying off Baby Boomer Debts and no longer have a future to look forward to, you arent going to be buying a house later on in your life. If the Government doesnt come to the party, then Im pretty certain there will be consequences that are going to be felt in Australia for a very long time.

    I watched Scott Morrisons speech on television today. His first item on the agenda was ‘Veteran Suicides’. So yeah, Australians need to stop being such hypocrites about this.

    • Maybe it’s time to invent a suicide booth?
      https://youtu.be/EbmQxZkSswI

      Ah dear me, someone already has! There’s a vid on yt but it has no “share” option (grr yt censorship) Look it up: the “Sarco euthanasia machine is ready – modern day gas chamber”.

      We just have to figure out how to monetize this.

      • MathiasMEMBER

        The Young are Australias Future.

        If you want Australia to Survive, then the Young must Survive.

        Its common sense.

        There are no winners when it comes to death. I’ve seen enough of it to know everyone loses.

        Australia is sacrificing the lives of its young to keep its elderly alive.

        Do you think our spending into Health Care at the expense of Young Education is in Australias National Interests?
        https://gyazo.com/2581971f5909e3dfad426b61c98dba2c?token=acbf41c9b61b42059f708f9a1b684dd9

        Its only 2021. Australia will not survive the next 17 years. We will run out money before this happens.

        The young who have been denied a LIFE are only getting older. Eventually, they will have nothing to live for and without some kind of future ‘hope’, they will just suicide.

      • MathiasMEMBER

        According to Psychological Studies in Trauma, ‘ Death of a loved one ‘ is one of the hardest things for any human being to mentally process.

        Over the next 17 years, 7 – 15 million Australians are going to die.

        These are parents, familys, friends and associates. It might be your best mate who hangs himself in the next few years.

        In the future, todays young are likely to be homeless, single, unemployed, lacking government support and without any kind of welfare.

        We have dismantled every single safety net the young could depend on in the future and replaced it with nothing.

        Has anyone actually considered how tommorrows young are going to cope?

        or are they just going to suicide?

        Do I need to answer this?

      • MathiasMEMBER

        In the future, I see interest rates falling through the floor.

        I see the Australian Dollar being worthless and abandoned. It will be backed by very low negative interest rates and a tonne of debt. People will just abandon Aussie Money for something else.

        Many young are going to see no future and will probably suicide. Australia will end up in a state of National Emergency.

        Australia does not have the money and we will not survive the coming years ahead.

    • People don’t suicide because they can’t afford a house.
      They suicide because their thinking is disordered, and they have no support.
      My grandparents never owned a house – they lived with us til they died.
      Forget about economics, we need a social revolution.

  5. reusachtigeMEMBER

    It’s always boom times except for slight negative sideways movement. All good people know this!

  6. SnappedUpSavvyMEMBER

    Where’s mb afternoon I need some laughs this lock down is starting to suck the a rse of a homeless man

  7. SnappedUpSavvyMEMBER

    Who’s gunna star in Scotty from marketing’s vaccine ads. Greg Hunt in a nurses uniform I’m guessing

  8. Jumping jack flash

    Houses can grow as long as the banks give out debt at the correct rate so the growth in debt is enough to repay the last round of debt’s interest, plus enough left over for capital gains and spending (i.e wages growth).

    We’ve been flying very close to the sun lately, and it shows in the desperation of the banks: the systematic cutting of interest rates over the past decade or more, the absurd shenanigans they’ve invented to appease the banks, and most recently with the trillions of stimulus in the name of COVID. All of these with the intention of kickstarting debt growth to the level it needs to be.

  9. Lord DudleyMEMBER

    Until China tapers iron ore purchases, resulting in trade deficits for Australia. Until then, you can pull all kinds of shenanigans, but they mostly don’t matter while you’re running trade surpluses because you can still afford to import.