thefirstbruce said:
Kenneth, it is well known that the last boom was driven by a massive increase in investor activity, not by owner occupiers. A boom is when there are more buyers around than sellers. That drives prices up. First home buyers get frozen out of the market because they have to go back and save a bigger deposit for a few years, or maybe 10. If you think about it, this can have serious repercussions, like delaying the young from starting families, or deciding not to have children at all.
If you haven't thought about these things before, then that's fine. God didn't want them clouding your investment decisions.
However, recently, even Bernie Fraser has become sensitive to the social problems of freezing the young out of the property market.
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Dear thefirstbruce,
1. I can understand if some young Australians are getting frustrated and sensitive about being priced out from some of the more expensive property markets.
2. However, to blame all the investors in general, for such plight as faced by the young Australians, is totally a different thing, altogether. (We should be looking at problem-solving instead of "blaming" someone.)
3. It's like deliberately failing to understand the underlying operation of the human greed and fears and herd mentality, driving the market forces of supply and demand and house pricings in the Australian property markets.
4. If we examine it at the vary basica fundamental level, the people who are likely to get hurt are the very people who are ignorant of themselves or/and ignorant of the property market operations. Perhaps, it's time for them to realise the importance of such life education and to realise that this is another important aspect of life in a modern society.
5... Would you not have confidence in your own Australian Govt that they are still actively managing the situation well under its own control.
6.... Imagine the repercussions, if the investors' monies were to start leaving Australia for some overseas markets instead? Would Australians'welfare be better off and better served, as a result?... I am not sure if this will indeed be so!
7. In Singapore, the property market is almost "dead" - no market "pulse" so to speak;- as a result of lack of sufficient incentives for new investors to take the risks and as a result of the tight-control over the property market by the Singapore Govt. Many Singaporeans are now living with negative house equity presently, some 40% below their market peak in 1996. Yet the young Singaporeans also got priced out from their 1st home because of their falling wages and high housing costs too. So, is this really what you want for Australia too?
8. Likewise, Russia and China have similarly tried closing their doors before, to their own detriment. Now the 2 Communist Govt have also realised that they have to open up its economy to the global markets since 1990s.
9. I am wondering where you see God is, given the present situation and given your present line of thinking. To me, God is well in control of this situation. So is the Australian Govt, I believe.
10. It is indeed sad for a society when people decide not to have babies simply because it is "too expensive". In the longer term, can the Australian society truly afford this declining birth rate trend?... This is one important issue which govt in many developed countries are all trying to address, given the modernisation trend and change in the woman roles. To me, your Australian Govt has done well to a certain extent by encouraging skilled migration, beside trying to boost its local fertility rate with all kind of pro-family incentives and care arrangement.
11. For your kind update, please.
12. Thank you.
regards,
Kenneth KOH
