Labor in office, what will happened to property investment?
- Thread starter DonkeyKong
- Start date
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Dear Beef_Hooked,
Perhaps, you may want to consider the following feedback and concerns given by the Small Businesses in Australia:
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"Re-Election Jitters Strike Australian Businesses"
Published 24th November 2007
(SYDNEY) Confidence among Australian small business has slumped dramatically ahead of today's vote which could end the 11-year rule of Conservative Prime Minister John Howard, a new survey has found.
The Sensis study of 1,800 small and medium-sized businesses found that confidence had dropped 16 points in the three months to October to 43 per cent.
The decline is the biggest one-quarter fall in the survey's 14-year history.
The author of the survey, economist Christena Singh, said that with Mr Howard trailing badly in opinion polls, businesses were predicting a centre-left Labor government headed by former diplomat Kevin Rudd would be elected.
'What we are finding is that small businesses are telling us that their confidence has been impacted quite dramatically in the lead-up to the election,' she told national radio.
'The main factors influencing that are a potential change of government, with the key issues small businesses are looking at being industrial relations and economic management.'
Mr Singh said that while business people were also concerned about other factors, their primary preoccupation was today's election.
http://www.businesstimes.com.sg/sub/news/story/0,4574,257851,00.html?
If some people need a reason to underachieve, what better than to blame the Labor party in power.
Most people will find anything to hang their failure to achieve on. They will blame anything except themselves.
Successful people will succeed regardless of which party is in power, the state of the economy etc.....not find excuses.
IMO there might be a short term effect on the property market/economy but then it will business as usual.
Most people will find anything to hang their failure to achieve on. They will blame anything except themselves.
Successful people will succeed regardless of which party is in power, the state of the economy etc.....not find excuses.
IMO there might be a short term effect on the property market/economy but then it will business as usual.
just like they did in the 80's?
Dear Beef_Hooked,
1. It is further known that major Australian home-grown-businesses, like Qantas and including the 4 major Australian banks are fast increasingly "exporting" out more of their jobs overseas in search for more competitive-priced labour.
2. Many Australians strongly dislike "Work Choices" introduced by the Liberal Coalition Govt and have reportedly voted them out of the Government during this Federal Elections today because of this highly un-popular policy concerning work relations. This is as suggested by Julia Jillard.
3. Yet, the often painful but real harsh economic realities which are often left much "un-said" and silently wished away by the more popular leaders is that:-
" Australian workers are now actually "forcing" their own major home-grown highly successful Australian companies, (like Qantas and the major banks etc) to export out, their jobs overseas because of their own high labour costs, back home in Australia."
4. Consider the u/m SMH news report extract below:
5. For your further comments and discussion, please.
6. Thank you.
Cheers,
Kenneth KOH
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"ANZ plans to shift more operations to Bangalore"
Danny John
November 24, 2007
THE practice by banks of shifting operations overseas is to be accelerated by ANZ Bank, which wants its financial processing centre in India to drive further cost savings.
The new chief executive, Mike Smith, has identified the centre, in Bangalore, as an opportunity to increase efficiency as rivals such as National Australia Bank, Westpac and St George look to use overseas suppliers to replace back-office staff.
"Bangalore, where almost 2000 people work for ANZ, will be an important part of that strategy and he intends to expand its use."
"Yesterday's switch came in the same week that NAB revealed that the work of 400 of its 2700 IT staff in Australia could soon be exported."
"Similar steps have recently been taken by Westpac and St George, with only Commonwealth Bank holding out against the trend."
http://business.smh.com.au/anz-plans-to-shift-more-operations-to-bangalore/20071123-1cgv.html.
1. It is further known that major Australian home-grown-businesses, like Qantas and including the 4 major Australian banks are fast increasingly "exporting" out more of their jobs overseas in search for more competitive-priced labour.
2. Many Australians strongly dislike "Work Choices" introduced by the Liberal Coalition Govt and have reportedly voted them out of the Government during this Federal Elections today because of this highly un-popular policy concerning work relations. This is as suggested by Julia Jillard.
3. Yet, the often painful but real harsh economic realities which are often left much "un-said" and silently wished away by the more popular leaders is that:-
" Australian workers are now actually "forcing" their own major home-grown highly successful Australian companies, (like Qantas and the major banks etc) to export out, their jobs overseas because of their own high labour costs, back home in Australia."
4. Consider the u/m SMH news report extract below:
5. For your further comments and discussion, please.
6. Thank you.
Cheers,
Kenneth KOH
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"ANZ plans to shift more operations to Bangalore"
Danny John
November 24, 2007
THE practice by banks of shifting operations overseas is to be accelerated by ANZ Bank, which wants its financial processing centre in India to drive further cost savings.
The new chief executive, Mike Smith, has identified the centre, in Bangalore, as an opportunity to increase efficiency as rivals such as National Australia Bank, Westpac and St George look to use overseas suppliers to replace back-office staff.
"Bangalore, where almost 2000 people work for ANZ, will be an important part of that strategy and he intends to expand its use."
"Yesterday's switch came in the same week that NAB revealed that the work of 400 of its 2700 IT staff in Australia could soon be exported."
"Similar steps have recently been taken by Westpac and St George, with only Commonwealth Bank holding out against the trend."
http://business.smh.com.au/anz-plans-to-shift-more-operations-to-bangalore/20071123-1cgv.html.
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Dear Evand,
1. Successful people will invest where they are most likely to succeed; not when they are likely to fail.
2. Consequently, each time when the basic investing/business operating environment has changed fundamentally from being pro-business to be "anti-business" hostile environment or/and a significant change in its political leadership and ideology, it is always timely and wise for prudent investors/business people to review their original investing/operating strategy and be daring to exit out from this particular hostile market where neccessary, in search of a more pro-investment/pro-business and more friendly investing/business environment where foreign investments are openly welcomed and encouraged and where our businesses/investing activities have higher and improved chances of succeeding.
3. The immediate short term impact on the Australian property markets and on the Australian Economy might well be the very trigger that actually breaks the camel's neck;- just like what the recent Sub-Prime Credit Crunch has done to the US and UK housing markets.
Cheers,
Kenneth KOH
Just as they have done at any time in modern history. Smart people became millionaires in the great depression.
This labor/union stuff is a dead set joke and as i said just a subconscious excuse for people to underachieve.
This labor/union stuff is a dead set joke and as i said just a subconscious excuse for people to underachieve.
As a foreign investor in Australia you are a GUEST. In polite society guests don't criticise their hosts so vocally.
You guys amaze me. We have just had the longest campaign in history and the result was the most obvious for decades. (Living in denial is no excuse for poor reading) Dump your shares and property on Monday if you wish but the professionals buying will laugh at you.
I will join them.
Our discussions since the "result" was known has centred more around mining and the impact a labor govt will have there. Possibly more unionised, increasing overheads, reduced production...all leading to higher costs for the mining companies with less profit for the shareholders. Other industries and small businesses may well be likewise effected.
Can we expect more of our tax dollars going to social services (a la Whitlam's era), and what impact will that have on housing? Increase in subsidised rent...would that be good for landlords?
Will labor be able to make any impact on interest rates and curb a spiraling increase? How much of an increase over the next 3 years can the average home owner (not investor) handle, without a glut of properties coming onto the market?
What impact will labor have on our overseas troops? Will they pull out of the middle east? After all these years of trying to increase our armed forces, will funding be curbed, with an ensuing decrease of ADF numbers, and consequence job attrition not only for the ADF but for the industries that support them?
Just a few thoughts....
Can we expect more of our tax dollars going to social services (a la Whitlam's era), and what impact will that have on housing? Increase in subsidised rent...would that be good for landlords?
Will labor be able to make any impact on interest rates and curb a spiraling increase? How much of an increase over the next 3 years can the average home owner (not investor) handle, without a glut of properties coming onto the market?
What impact will labor have on our overseas troops? Will they pull out of the middle east? After all these years of trying to increase our armed forces, will funding be curbed, with an ensuing decrease of ADF numbers, and consequence job attrition not only for the ADF but for the industries that support them?
Just a few thoughts....
Are you perhaps over-analysing and reading too much into labour victory..? Why would anyone want to "exit" investing just beacuse a different gov gets in.., when most of us are in the game for the long haul ?
Why would you think of Australia as "hostile environment" due to a different gov
Your logic in this thread is sort of beyond me..
Exactly! It is terrible timing to be taking over government. Over the next 3 years Costello will be busy making the "link" between curretn economic problems and labor even though there is no such link. It may even be only a 1 term government.
Dear Shane,
1. Thank you for sharing your a/m interesting article with us, entitled, "Investments Returns Under Right and Left Wing Government in AustralAsia" by Hamish D Anderson, Christopher D Malone and Ben R Marshall..
2. From the research studies by Hamish et al, I observe its following conclusions:
a. inflation (and thus the corresponding interest rate) in Australia, have been found to be much higher under the ALP Govt than under the Liberal Govt from 1910-2006 study period.
b. the median inflation rate in Australia averages 6.06% under the ALP Government as compared to the average 3.03% median inflation rate reported under the Liberal Government.
c. the Australian stock market has performed better and given a better return under a Liberal Govt than under the ALP Govt by about 5.68%p.a. (Page 14)
d. there is no evidence to support the hypothesis that housing prices and housing yields in Australia will perform better under the ALP Govt than under the Liberal Coalition Govt. (Page 15).
e. In fact, the same study further reveals that average annual returns for property during the Liberal Govt is 15.53% as compared to 14.87% annual average returns under the ALP Government.
3. Consequently, from the research studies, we can all expect that current inflation and interest rate in Australia, is likely to further rise under the new ALP Govt as led by Kevin Rudd, in the near future, all things being equal.
4. Likewise, it is also quite likely that under the new ALP Govt led by Kevin Rudd, the stockmarket returns and the ASX may not (continue to) perform in the immediate near future as compared to previously, during the past few years while under the Liberal Coalition Govt, all things being equal.
5. Thus, beside the present global financial/housing crises risks factors, because of the likelihood of having a higher inflation rate and corresponding a likely higher interest rate under the new ALP Govt led by Kevin Rudd, in the immediate near future as suggested by these research study findings, and with the prevailing high Australian median housing price and its strong A$ Currency, there is now siginificant increased risks in investing in the Australian residential real estate now as compared to a couple of year before.
6. Will we soon likely to see a repeat of the high interest rate environment evolving out in the immediate future under the new ALP Government, as headed by Kevin Rudd?
7. Will we likely to see another "foolish"/futile attempt by the ALP Government to tamper with the Capital Gains Tax Laws again in the immediate near future?
8. With the present increased household debt levels, a small increase in the inflation rate and interest rate under the ALP Government, can have serious adverse ill-effects for the property investors in Australia.
9. Consequently, I do forsee that investing in the Australian real estate is now fraught with many more new risks and dangers.
10. In the past, many investors have lost their entire hard-earned property portfolio during the high interest rate environment seen during 1989-1990 period while the ALP Govt is in power.
11. Are we likely to see this unfortunate history repeat itself again? Will some of less experienced investors in our midst suffer the same fate again, soon?
12. For your kind update and further discussion, please.
13. Thank you.
Cheers,
Kenneth KOH
1. Thank you for sharing your a/m interesting article with us, entitled, "Investments Returns Under Right and Left Wing Government in AustralAsia" by Hamish D Anderson, Christopher D Malone and Ben R Marshall..
2. From the research studies by Hamish et al, I observe its following conclusions:
a. inflation (and thus the corresponding interest rate) in Australia, have been found to be much higher under the ALP Govt than under the Liberal Govt from 1910-2006 study period.
b. the median inflation rate in Australia averages 6.06% under the ALP Government as compared to the average 3.03% median inflation rate reported under the Liberal Government.
c. the Australian stock market has performed better and given a better return under a Liberal Govt than under the ALP Govt by about 5.68%p.a. (Page 14)
d. there is no evidence to support the hypothesis that housing prices and housing yields in Australia will perform better under the ALP Govt than under the Liberal Coalition Govt. (Page 15).
e. In fact, the same study further reveals that average annual returns for property during the Liberal Govt is 15.53% as compared to 14.87% annual average returns under the ALP Government.
3. Consequently, from the research studies, we can all expect that current inflation and interest rate in Australia, is likely to further rise under the new ALP Govt as led by Kevin Rudd, in the near future, all things being equal.
4. Likewise, it is also quite likely that under the new ALP Govt led by Kevin Rudd, the stockmarket returns and the ASX may not (continue to) perform in the immediate near future as compared to previously, during the past few years while under the Liberal Coalition Govt, all things being equal.
5. Thus, beside the present global financial/housing crises risks factors, because of the likelihood of having a higher inflation rate and corresponding a likely higher interest rate under the new ALP Govt led by Kevin Rudd, in the immediate near future as suggested by these research study findings, and with the prevailing high Australian median housing price and its strong A$ Currency, there is now siginificant increased risks in investing in the Australian residential real estate now as compared to a couple of year before.
6. Will we soon likely to see a repeat of the high interest rate environment evolving out in the immediate future under the new ALP Government, as headed by Kevin Rudd?
7. Will we likely to see another "foolish"/futile attempt by the ALP Government to tamper with the Capital Gains Tax Laws again in the immediate near future?
8. With the present increased household debt levels, a small increase in the inflation rate and interest rate under the ALP Government, can have serious adverse ill-effects for the property investors in Australia.
9. Consequently, I do forsee that investing in the Australian real estate is now fraught with many more new risks and dangers.
10. In the past, many investors have lost their entire hard-earned property portfolio during the high interest rate environment seen during 1989-1990 period while the ALP Govt is in power.
11. Are we likely to see this unfortunate history repeat itself again? Will some of less experienced investors in our midst suffer the same fate again, soon?
12. For your kind update and further discussion, please.
13. Thank you.
Cheers,
Kenneth KOH
Hi Harris,Are you perhaps over-analysing and reading too much into labour victory..? Why would anyone want to "exit" investing just beacuse a different gov gets in.., when most of us are in the game for the long haul ?
Why would you think of Australia as "hostile environment" due to a different gov
Your logic in this thread is sort of beyond me..
Let me try to explain some of the logic. No party politics, just reasoning.
One reason for the uncertainty of investors going forward is the recent history of Labor economics. During recent Federal Labor govts, Interest Rates were very high and so was unemployment.
So, if as an investor, you are currently holding $500K or more in loans, and Interest Rates increase to above 10%, you will perhaps be forced to sell.
If u r forced to sell, you will get a low price. Possibly taking a loss.
If, even worse, unemployment starts to rise....then if you are an investor with a large loan and you lose your job, tax deductions will become meaningless. You will not be able to afford repayments, so again you will be forced to sell. This will result in a low price and perhaps a loss.
To guard against the first problem of high interest, you can lock in your interest rates to a fixed rate for 3 or 5 years if you wish.
If you lose your job due to whatever reason and can't find another, then u r stuffed. You will not be able to keep your investments "for the long haul" if you have heavily borrowed.
Anyway, those are the fears that people have.
As always, in times of uncertainty, CASH is king.
HTH,
JB
if the goal posts move - then we play by the new rules.
hubby has been offered a job in china and has until march 08 to decide which gives us enough space to see what direction the local job market is going in (why couldn't he get italy or france or canada?) ... so, if needs be, a few years in china could be the new rules we play to futher set up our investing future.
new game, new game plan
hubby has been offered a job in china and has until march 08 to decide which gives us enough space to see what direction the local job market is going in (why couldn't he get italy or france or canada?) ... so, if needs be, a few years in china could be the new rules we play to futher set up our investing future.
new game, new game plan
Forget most people. Let's talk about US. What if you've always built in stress tests of 3% immediate increase in interest rates and 6 months vacancy into your portfolio? What if you have a job that's less sensitive to the recession, in which case you're probably just looking at a salary freeze and no bonus? What if you already have a decent savings ratio based on your current salary, when everyone else is already spending at the edge? Worse case scenario, in my case, I can always go overseas to work. Japan is always looking for people with my skills (specific job skills + English + Japanese), so I honestly am not concerned about unemployment.
Look for the opportunities, guys. Recessions make fortunes for the people who are ready to take advantage of it. If other people are forced to sell, all the better: lower prices for us.
NOW is the time to get ready for it. Reval your properties and get some LOCs in place. Cut your budget to the bone to increase savings so you have more to buy with. Skill up (though you should have been doing this already) and, just to prepare for the worse, look at contracting or working overseas just in case it all goes pear-shaped here. We are always looking for opportunities to buy good assets at low prices as investors, right? If things turn out like people say here and labour wrecks the economy (though I think the credit crisis might beat them to it), then we WILL get that opportunity.
Alex
++++++++++++++As a foreign investor in Australia you are a GUEST. In polite society guests don't criticise their hosts so vocally.
Dear Sunfish,
1. It is true, as far as an Asian society is concerned.
2. I thought Australia, like most Western societies, you will encourage the home guests and visitors to honestly and freely speak up what are presently on their mind, don't you?
3. ... This is what I have gathered from the Australian family who has kindly accomodated my daughter for her one-year long intensive homestay throughout 2006.
4. Morever, this is a property investing forum, rather not a "courtesy" forum, isn't it?
5. As a foreign investor, I face more restrictions in investing in the Australian Real Estate, as compared to a local Australian investor, such as those imposed by FIRB. For example, I am presently not allowed to invest in buying old houses for resale purposes.
6. Consequently, my investing risks are much higher and I simply cannot afford a higher risk tolerance that many local investors can afford to do so.
7. Morever, while I presently have plans to relocate my family to stay in Australia on a long term permenant basis, I guess that I have better get to know Australia and its Australian people well enough and more in-depth now by living among their midst, in order to avoid this kind of "culture shock" which you are suggesting to me now.
8. I look forward to learning further from you, please.
9. Thank you.
Cheers,
Kenneth KOH
G'day all,
at the end of the day, time will tell how we do after this change. The majority obviously wanted a Rudd government so thats what we have. No I didnt vote for him but its a democratic process so I have to live with the outcome. Will It be bad? I have no idea. Time will tell.
Me personally, have only ever worked, invested, owned a home etc under a liberal government. And I have had it great, and have always had it great really. Work has NEVER been an issue, buying a house never an issue, really NO issue's.
All I really know about the Lab gaverment is what history tells me about it. Iv never lived (really lived) under one so I cant come on here and say its no good for me. Am I concerned??? Ah yes, to be honest Im a little nervous. Reading the conflicting posts on here and media hype etc doesnt help, history's ugly picture painted during Lab government rule doesnt help. BUT its a new day, a new Lab government and im still young. I DO owe MORE than $500k in loans, ive fixed my IP loan for 3 yrs and I will monitor things regarding my PPOR loan. We have good jobs and earn good money (ok money) so as long as these things remain then we should come out ok I would imagine.
The main things that do concern me about a Rudd government is there connection (inbed) with the greens. This affects me greatly but nothing to do with my interest in property. Its a seperate hobby for a seperate forum.
Other concerns are when I read about them removing the 50% discount on CGT and possibly removing neg gearing. Will these happen? I have no idea, I just read it on here and in other places and that concerns me if it was to happen. Would I sell what little property I do own? NO, I would TRY to pick up a cheap buy if I could and hope to come out pritty (so to speak) in the future.
Anyhow thats my take on it so far. Which of you on here are right or wrong???? Ah time will tell and no amount of arguing/chatting etc will change that. Voting has closed, australia you have desided, sounds like bloody oz idle doesnt it. Atleast that didnt say "you will find out after the break", lol
Jayro
at the end of the day, time will tell how we do after this change. The majority obviously wanted a Rudd government so thats what we have. No I didnt vote for him but its a democratic process so I have to live with the outcome. Will It be bad? I have no idea. Time will tell.
Me personally, have only ever worked, invested, owned a home etc under a liberal government. And I have had it great, and have always had it great really. Work has NEVER been an issue, buying a house never an issue, really NO issue's.
All I really know about the Lab gaverment is what history tells me about it. Iv never lived (really lived) under one so I cant come on here and say its no good for me. Am I concerned??? Ah yes, to be honest Im a little nervous. Reading the conflicting posts on here and media hype etc doesnt help, history's ugly picture painted during Lab government rule doesnt help. BUT its a new day, a new Lab government and im still young. I DO owe MORE than $500k in loans, ive fixed my IP loan for 3 yrs and I will monitor things regarding my PPOR loan. We have good jobs and earn good money (ok money) so as long as these things remain then we should come out ok I would imagine.
The main things that do concern me about a Rudd government is there connection (inbed) with the greens. This affects me greatly but nothing to do with my interest in property. Its a seperate hobby for a seperate forum.
Other concerns are when I read about them removing the 50% discount on CGT and possibly removing neg gearing. Will these happen? I have no idea, I just read it on here and in other places and that concerns me if it was to happen. Would I sell what little property I do own? NO, I would TRY to pick up a cheap buy if I could and hope to come out pritty (so to speak) in the future.
Anyhow thats my take on it so far. Which of you on here are right or wrong???? Ah time will tell and no amount of arguing/chatting etc will change that. Voting has closed, australia you have desided, sounds like bloody oz idle doesnt it. Atleast that didnt say "you will find out after the break", lol
Jayro
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Dear Harris,
1. Maybe, I am.
2. However, similar quick response/concerns shown by the many small businesses in Australia seem to tell me otherwise.
3. As a small investor with limited funds, I simply cannot afford to take on these kind of unneccessary risks under the ALP Government, such as 18% high interest increase to be followed immediately by the "Recession that Australia need to have" in 1991 and ALP Government's trial-and-error attempt to tinker around with the CGT policy again.
4. Such things have happened before in Australia, under the ALP Government. Don't they?
5. History can and does normally repeat itself, don't they? Do you not agree?
Cheers,
Kenneth KOH
