Yes Virginia , prices DO always go up ...

[see_change]

I don't think the Chinese come here for jobs . They've made their money in China and now want to live in Oz .

Same will apply to what ever group you want to name.

Which ever race you talk about , they're all people .

Cliff

 

[2FAST4U]

Which means less jobs for white collar workers (aka people that buy houses) here in Australia.

In the future a lot of people are just going to avoid living in places like Sydney. Young professionals will either move overseas or chose to stay in their home states where they can enjoy far greater lifestyles.

 

[Corey Batt]

In the future a lot of people are just going to avoid living in places like Sydney. Young professionals will either move overseas or chose to stay in their home states where they can enjoy far greater lifestyles.

Agreed. As an example Adelaide which has had a problem with the brain drain for decades has finally seen its interstate migration balance for the first time - I have no doubt a lot of this is due to affordability concerns outweighing any opportunities which may be present interstate.

 

[aaronjod]

They came here looking for work. Why would they move here when the work is coming to them?

Incidentally, my opinion is that a strategy of buying posi properties (AirBnB, for instance), with little reliance of capital growth is the way to go.

I'm not talking about this happening overnight, my speculative view is it's going to take upwards of 20 years.

Mr Fabulous, have you taken an overseas trip lately? Would you rate it compared to where you live and why?

I always used to say things like "I want to move to America" before i'd actually been. I finally made the trip, and living there would be the last thing on my list. Where we live is one of the best places on earth, this is why so many people want to migrate here...

When you compare somewhere like Sydney to New York, prices are cheap...
If so many million people live in New York in they're crappy snowy climate (my biased opinion) what makes you think someday Sydney won't be the same? I know for sure our harbour is much nicer than anything in New York. This is what would drive demand to live here, rather than counties you mention. (Although I haven't been to them).

Sure, some of our jobs are moved offshore but there are still plenty more created.., Times will change and people will adapt. (Find new jobs, retrain etc) We're basically sitting on a gold mine of land that everybody else would love...

 

[bez23]

Agreed. As an example Adelaide which has had a problem with the brain drain for decades has finally seen its interstate migration balance for the first time - I have no doubt a lot of this is due to affordability concerns outweighing any opportunities which may be present interstate.

Interesting. Care to quote the source?

 

[natedog]

Past performance may not guarantee future returns, but as Cliff says past "human behaviour" tends to repeat.

Whether most like to admit it or not we are just one big herd of people making decisions based on our own frame of reference, and for ALOT of people that is going to be what's drummed in by media and friends and own experience. That goes for probably the majority of newbies on this forum also....I am guilty of being suckered into thinking I might be missing the boat on some areas sometimes also, it's a battle i am learning to win with myself

Alot is based on emotion and not logic and that is why we will see people's
Behaviour in regards to thier property buying decisions repeat over time, creating a "cycle" of some sort.

Expect the "illogical" to always happen in regards to property prices, and then look back in hindsight and say "that actually made sense".

I love these debates, keep em coming, it's the diverse point of views that keep our oz property market interesting no matter where and at what stage of any cycle!!

 

[sash]

Natedog....you have identified the cause of boom and busts...it is human psychology.

As I have said before the FOMO (Fear of Missing Out) syndrome is causing people in the current Sydney market to act irrationally. This causes prices to overshoot significantly and then a big correction to happen. If you bought your property 2010-2013 you are probably ok....but if you bought in the last 6-8 months...hold on...you maybe in for a rocky ride.

Whilst...I don't see a place like Sydney drop like a mning town...I do see anyone buying now likely to get burnt.

Like you pointed out...it is the newbies who have no experience with cycles. This in my opinion is the classic near top of cycle. Lot of people in the market, people paying silly prices in secondary locations, low interest rates, etc.

It will be interesting to see what happens in another 3-5 years....

Past performance may not guarantee future returns, but as Cliff says past "human behaviour" tends to repeat.

Whether most like to admit it or not we are just one big herd of people making decisions based on our own frame of reference, and for ALOT of people that is going to be what's drummed in by media and friends and own experience. That goes for probably the majority of newbies on this forum also....I am guilty of being suckered into thinking I might be missing the boat on some areas sometimes also, it's a battle i am learning to win with myself

Alot is based on emotion and not logic and that is why we will see people's
Behaviour in regards to thier property buying decisions repeat over time, creating a "cycle" of some sort.

Expect the "illogical" to always happen in regards to property prices, and then look back in hindsight and say "that actually made sense".

I love these debates, keep em coming, it's the diverse point of views that keep our oz property market interesting no matter where and at what stage of any cycle!!

 

[hugh72]

Hi Cliff, re-read your initial post. Frankly, I think if you believe this is accurate, you're living in the old world.

For at least the last 20 years, blue collar jobs have been moving offshore. For the last 5 - 10, white collar jobs have (slowly, but with increasing speed) also been moving offshore.

The reasons for people to come here to live are becoming less and less. Why would people move here when they can get the jobs that were previously only available here where they are now.

As I stated in another thread, offshore outsourcing is providing jobs to workers in other countries at rates, that whilst they would be considered low here are great over there. So those people, that might have come here once upon a time are choosing to stay home.

Not to mention that the jobs that would have been filled by Australians at one point in time are now being sent overseas. Those jobs are not being replaced. The fact is that a shrinking number of the populace are able to afford to buy, which is going to have massive effects on capital growth.

With the tax incentives currently in place for property investors in Australia, capital growth is their one hope for achieving wealth. The ABS figures show that - already, right now - less than 1% of Australians retire on an income of 50K+. The way the world economy is going, that number (in Australia) is going to get smaller.

We live in a very different world than we did even 10 years ago. The people that bury their heads in the sand and think things are going to keep on going the way they have are going to get left behind.

If we were having this discussion in the 1970s we could have been concerned about the state of the economy with a continuous cycle of recession with some spikes in unemployment. There was a massive oil shock with rapidly increasing prices and rampant inflation. Lots of jobs in certain industries were lost never to return, the whole dynamics of the economy changed as there was a loss in large scale manufacturing. There was the fear of nuclear war and terrorism.
As jobs are lost others are continuously created in industries none of us are aware of, the market is always rebalancing and some skills become very much in demand while others fade. It's a cycle which will repeat in the future in my opinion and I don't share your D&G. The economy may be struggling in some sectors but as some sectors decline others will improve it isn't so black and white. The population is growing strongly, all data indicates this and it will continue into the future. People will always want to come to this country for many reasons and many are not economic. This will continually improve our demographics helping to ensure the population doesn't age too quickly and it also means people with fresh ideas, innovation and energy. Every generation likes to think this time it's different, maybe it will be.
Things might not be great at the moment but I don't share your lack of optimism.

 

[natedog]

If we were having this discussion in the 1970s we could have been concerned about the state of the economy with a continuous cycle of recession with some spikes in unemployment. There was a massive oil shock with rapidly increasing prices and rampant inflation. Lots of jobs in certain industries were lost never to return, the whole dynamics of the economy changed as there was a loss in large scale manufacturing. There was the fear of nuclear war and terrorism.
As jobs are lost others are continuously created in industries none of us are aware of, the market is always rebalancing and some skills become very much in demand while others fade. It's a cycle which will repeat in the future in my opinion and I don't share your D&G. The economy may be struggling in some sectors but as some sectors decline others will improve it isn't so black and white. The population is growing strongly, all data indicates this and it will continue into the future. People will always want to come to this country for many reasons and many are not economic. This will continually improve our demographics helping to ensure the population doesn't age too quickly and it also means people with fresh ideas, innovation and energy. Every generation likes to think this time it's different, maybe it will be.
Things might not be great at the moment but I don't share your lack of optimism.

Great post!

 

[Big Will]

https://www.immi.gov.au/media/fact-sheets/15population.htm

At 31 March 2013, the estimated Australian resident population was 23 032 700 people, representing an annual increase of 397 400 people (lets call is 400k, see below) or 1.8 per cent.

http://www.tradingeconomics.com/australia/unemployment-rate

Same unemployment rate back in 1980 but is significantly lower than 10%+ of the mid 80s and early 90s.

Jan 2014 was 6% Jan this year was 6.3% which can look bad but think about it there are potentially 400,000 more people looking for jobs than 12 months ago. So that .3% increase in 23M is 70,000 more people unemployed but even if half of the 400,000 are working age than there has been 130,000 more people employed.

TLDR - More People & Jobs than 12 months ago