What's the catalyst to provide the next big jump in family discretionary income?

[Ausprop]

House prices have risen in proportion to discretionary income growth for a generation or more.

locations generally deteriorate over time whilst building amenity increases. as resources dwindle the building compenent may inflate too. the location of a 'median' home will continue to move outwards from the GPO probably to the point where people just move to a new town.

so we are not talking about the same home over the duration of time. house prices can and will rise even if wages hold constant

 

[Ausprop]

an IO loan is essentially an infinite loan (with rollovers), so loan term extensions are meaningless

 

[keithj]

the location of a 'median' home will continue to move outwards from the GPO probably to the point where people just move to a new town.

so we are not talking about the same home over the duration of time. house prices can and will rise even if wages hold constant

That's a v. good point.

The price of any well located house will rise faster than its citywide average. This means the specific house that you buy will rise faster than the city average in the long term. As new and relatively cheap houses are added at the outskirts, the house you bought becomes relatively closer to the CBD, and more desirable to more people. The new cheap houses pull down the average, and the rest (including your well located one) will rise faster. And as Ausprop said, the median will move further out, even if wages don't increase.

 

[keithj]

an IO loan is essentially an infinite loan (with rollovers), so loan term extensions are meaningless

But most of the population of PPOR owners pay P&I, they are the ones that drive the price rises.

 

[Perp]

- More skills: We are seeing a long term trend for a greater skill level of the average Australian worker whether in goods or service industries. It is one of our only enduring competitive advantages in the face of cheaper labour elsewhere. This will see average wages continue to outpace inflation, particularly with unemployment at these levels.

Agreed; we have to increase our skills level in order to maintain the standard of living that we enjoy.

One competitive disadvantage that we have over almost every other country is that we have no source of cheap labour for doing low-skilled jobs. (OK, some of our labour is cheaper than others, but by international standards, even our lowest paid workers are very well paid.) I think that as average skill levels increase, it will become even harder for people in low-skilled jobs to survive on the wages that those jobs will attract. I suspect that pretty much everybody will have to do skilled jobs to survive, and jobs like waiting tables, driving taxis, labouring, etc, will be performed almost exclusively by uni students and other part-timers. in other words, rather than there being 10% of the population who do these jobs, nearly all of the population will engage in them, but only for 10% of their working lives, whilst they're accumulating the skills required to earn a living wage. Those kind of jobs won't pay enough to support a family.

Either that, or we'll be forced to develop an "under-class", such as the immigrant workers in Dubai, the illegals in the USA, etc.

 

[Aaron Sice]

tax cuts. tax cuts. tax cuts.

IR rise. IR rise. IR rise.

no wage growth, no wage growth, no wage growth.

business hurts, business hurts, business hurts.

why me no job? why me no job? why me no job?

 

[steveadl]

I suspect that pretty much everybody will have to do skilled jobs to survive, and jobs like waiting tables, driving taxis, labouring, etc, will be performed almost exclusively by uni students and other part-timers. in other words, rather than there being 10% of the population who do these jobs, nearly all of the population will engage in them, but only for 10% of their working lives, whilst they're accumulating the skills required to earn a living wage. Those kind of jobs won't pay enough to support a family.

I've noticed that a bit lately. Jobs like taxi drivers and fast food places etc - many more immigrants to Aust. in these jobs now (and good on them). Which makes me wonder - where are all the 'aussie' 16yo working these days if not at Hungry Jack's?

 

[Ausprop]

dunno but it is annoying, what should be a quick tripto KFC turns into a prolonged ordeal in international relations

 

[RumpledElf]

Move to the country. Its all white as far as the eye can see, except the one Asian doc and one Indian doc, who were both selected by the (blonde, blue-eyed) woman who runs the medical center for their perfect accent-free English.

I'm sure there's a reason its white-on-white out here but I can't put my finger on it ... maybe the lack of a KFC and maccas?

 

[Aaron Sice]

maybe because australia doesnt recognise foregin qualifications and to get your visa you need to have worked min 3 months rural?

 

[RumpledElf]

Doesn't explain why everyone *except* the two docs are white though, that just explains the outliers. And those two have been here for years.

 

[topcropper]

Move to the country. Its all white as far as the eye can see, except the one Asian doc and one Indian doc, I'm sure there's a reason its white-on-white out here but I can't put my finger on it ... maybe the lack of a KFC and maccas?

We have an Indian doc and a Middle Eastern doc in town, but I go up the road to Tamworth to the Chinese doc.

I suppose in developing nations, to improve your lot, you leave rural areas and move to the big city. So, immigrants from developing nations, they obviously want to improve their life, [that's why they come here], so they are not likely to want to go to rural areas. They want to go to the big city, so they do.

Yet we seem to get Poms, Kiwi's etc moving rural, plus all the established white Aussies from the city doing the tree change. Will make for interesting demographics in the years ahead.


See ya's.

 

[RumpledElf]

TC, you're probably completely right on the mark there

And *that* head doc had another trainee today. Young, white Aussie fella. She's a very fussy woman. We got the big speech on her pride of choosing doctors when we dared suggest going to the big smoke to have the baby. Its kind of a novelty to have a hospital and medical centre where everyone speaks very good English though so you can see her reasoning, especially in an area with an abundance of old white codgers (we have a fairly hefty aged population here in a couple of retirement homes - they ship them in from all over).

 

[asdf]

Will make for interesting demographics in the years ahead.


See ya's.

Tell me about it, I struggle to find a Smith at Chatswood these days.... And a Wong or Singh is nowhere to be found down the coast.

 

[sanjayag]

Move to the country. Its all white as far as the eye can see, except the one Asian doc and one Indian doc, who were both selected by the (blonde, blue-eyed) woman who runs the medical center for their perfect accent-free English.

I'm sure there's a reason its white-on-white out here but I can't put my finger on it ... maybe the lack of a KFC and maccas?

Hi Elf,
India is a country in Asia.......So an Indian is an Asian also.

 

[BayView]

House prices have risen in proportion to discretionary income growth for a generation or more.

We've had inflation lower than wages growth which has given us exponentially bigger discretionary income.
We've been relying on dual family incomes.

But what's the catalyst to provide the next big jump in family discretionary income ?

Most people could increase their discretionary income instantly by reviewing every single day-to-day item that they spend their money on.

Food, drinks
Cars
Clothes
House or accommodation
Household items such as cleaning products and the like
Holidays
Entertainment.

The aim is to not be tight and spend no money - the aim is to have the best lifestyle you can on the least amount spent. The ego and "keep up with the Jones" mindset has to go in the bottom drawer here.

For example; we never buy our 8 year old son "brandname" clothes. Never have. Always at places like Savers, or on specials at Target and KMart etc.

Why?

Because he doesn't know the difference, he will wear them out/grow out of them in 3 months, and we don't care about other people's opinions of our child's wardrobe and our social standing in their eyes.

The money we have saved on his clothes (when invested ) will pay for his high school fees.

Hard?

At first; yes - and this is why most don't do it.

But, you get better at it as you go if you stick at it.

 

[topcropper]

never mind.............way off topic.....