http://www.theguardian.com/business/2014/feb/14/australia-housing-bubble-ready-burst
We have spoken about this before but this time I found the link and the impressive form of its Author
Can we avoid a bubble? forever?
I can only judge on my state NSW and houseing not out of the ordinary selling for a million dollars.
And the strange thing is, in part Chinese investing in our housing while their country has thousands of brand new empty apartments.
So it is my view in time this prediction just has to come true.
Housing in Australian city,s is pricing low and middle income family's out of ever owning a home.
And investment in houses may face difficulty's sooner than we think.

And investment in houses may face difficulty's sooner than we think.
Belly,
investment is not good thing long-term especially housing. Need a home, buy a home. Don't need a home let someone buy who needs it.
The evil that is investment is coming home to bite us in the butt. Ask yourself this, why don't those investors invest in our young ? Well, those young will before long turn around & tell us to go & get .....
Rightly so but the trouble is that those of us who do care get dragged down as well.

Dear Belly,

Here's an earlier link to the one you've cited -
and it shall be interesting to see what does happen
with the prices of housing in this country. I personally
feel that predicting the future is a risky business at the
best of times. Circumstances can change quickly.
If this country continues to lose industrial productivity
and unemployment rises as indicated by recent figures,
logic would dictate that average housing prices would drop
in keeping with the affordability of workers.

http://www.theage.com.au/money/borrowing/us-experts-claim-property-bubble-is-set-to-pop-but-have-they-missed-something-20140128-31jaz.html

Belly, not a dig, but I'm never sure what anyone is talking about when they mention low & middle income families.

Please tell us what to you is the actual income of each group you are referring to.

I was tidying up a house yard today and the neighbour came in to make me a very enticing offer. My answer was no and we agreed that the inner city niche it is in will continue to have steady growth.

He and his wife (both professionals) with their two infants are well representative of the families who are buying. We also have an interest in some apartments/town houses that will sell like hot cakes because they are well situated, luxury and are uncompromising on privacy, space, fittings and comfort.

I don't know who the 'investors' are who are supposed to be buying and forcing up prices. As far as I can see and I have plenty of other friends who would say the same, there needs to be some understanding that there is no one property market in Australia, there are many and to generalise as this Yank did is fraught with problems.

The prospective buyers I encounter have the money to call the shots and they know what they want. They don't want the sort of homes that dad and mum bought, they want lifestyle and that requires lots of features that cost money. Not huge homes but clever design to complement a chosen lifestyle.

It is bollocks that 'investors' are forcing up prices. No investor could buy most homes on the market at any time and make money. Niches maybe but not to buy and hold because that is far higher risk than the paltry returns (if any) of rentals might support.

I suggest that a lot of the bubble talk which has been going on for decades is just parlor talk to fill in time and columns. Only a complete idiot would put off buying his/her desirable, well-located property. Good property will never be available at a discount. The properties that are discounted always have negative features, most often to do with location.

onthebeach,
In our area rents & property prices are actually in decline since the 'pay any price for public servant's accommodation' crowd was replaced by the more accountable Coalition.

As an investor myself, having bought and sold many properties, my advice is you only invest in two areas at the present time, CSG mining, and cities close to transport. Also keep an eye on Chinese tourism but tread carefully as tourism real estate is very risky, whereby you need to get in and get out at the right time.

The other point is that QLD is about to boom, especially the capital and major cities as the flow of CSG royalties is about to kick in.

As for a bursting bubble, we've just gone through one and the only real problem I see moving forward is if they remove negative gearing as that will kill the market stone dead overnight. Won't happen though.

As for affordability, many wannabe home buyers can afford A house, they just can't afford THE house, and that's the problem. They are just too fussy.

remove negative gearing as that will kill the market stone dead overnight.
rehctub,
Yes & no, it'd knock the investors but the market would not suffer. On the contrary I believe housing would settle at more realistic levels. Ideally it should be a need based market not a greed or want based one.
Investment does cause artificially higher prices as it is not based on recovery of cost & reasonable profit but on opportunism. It is akin to blackmail.

Indy I am confident morals and investing do not mix, for most.
Hasbeen low income is not hard to define, some just live in government housing ,some find it hard even to pay rents.
I think those earning say $25 to $30 an hour are just below middle income.
Foxy thanks but history has a warning for us all.
The link was long but informative and well worth the read,and too understanding his past predictions and why he thinks as he does.
How many of us saw the GFC coming.
How many saw the housing prices and those who borrowed byond thier means,before it took place.

I have felt for sometime we must one day,confront over investing and over pricing faces a correction in our housing market.
We must consider interest rates what if they went up 2 percent in the next three years.
What if the rise was 4 percent?

Belly,
yes. Actually, it would probably help our economy but not so much the investors (sorry, buy lottery tickets) if interest rates were to be set just prior to the beginning of a new year & locked in for 12 months. I believe economic stability is achieveable rather than the system we have now. Wnat to make money in a country then be a citizen of that country & pay tax like everyone else. That way your managerial prowess will come to light rather than all the devious writing off at everyone else's expense. Need a house for your family then build or buy one, don't buy up hoses just because you can afford it by ripping off taxpayers by write offs thus denying young couples the opportunity of settling down. It's because of of those callous investors that we now have a society of mistrust & opportunistical greed merchants.

Dear Belly,

In Melbourne - Chinese investors are currently driving prices
up - and forcing young married couples out of the
market. You can go to any auction within the eastern suburbs
and see that if there's any Chinese bidding - you don't have a
prayer in ending up with the house or unit you're after.
That's the reality. Especially in the desirable suburbs.

Only a few months ago I offered an agent 125 thousand for a block of land which she advertised for 145 but I knew that the owner had put on 130. She wouldn't sell to me but recently sold it to a friend of mine for 105. The new owner said he's not doing anything with it except wait till the price goes up again. That's the sort of thing that's ruining it for all.

Everyone seems to forget that without investors, no rental housing.

Thanks Belly, I do find it hard to think of someone on $50,000 as a low income earner, I guess I'm a bit out of date.

I don't know what everyone is getting their knickers in a knot over, investing in rental housing is a mugs game, you should be sorry for those who do it. You are entirely dependent on price appreciation to make a profit from it, & it has to be decent appreciation to make it actually better than money on bank deposit, & you have a fair chance of having the house trashed. Today either of them often don't keep up with inflation.

We have a satellite city development to total 50,000+ residents about 12 kilometers from us. Granted it is pretty horrible, with all those houses jammed onto the modern small blocks, but it does have more open space & parks than old suburbs.

You can buy a house & land package for less than $300,000, about the same percentage of wages as my first home was. It was on a decent size block, but then it was a second hand ex housing commission house, in a less than great suburb, & no where near as grand as the bottom end today.

I have a neighbor renting a couple of doors down. Despite earning over $100,000 & his wife earning $50,000, he tells me they will never be able to buy a home. I have not suggested that with no kids & their income, they probably would be able to buy, if they sold her 3 horses, horses float, & land cruiser wagon to tow it, his 20Ft boat & the big Ford F150 to tow it, his 2 jet skis, & 3 motorbikes, & other assorted toys.

I do find it hard to be as sorry for many people as they are for themselves.

Everyone seems to forget that without investors, no rental housing.
Hasbeen,
under the present system yes, if we look at housing as a business then it would be totally different. Investors aren't business people, they're scammers with the sanction of legislated loopholes. There are many who own flats & houses to provide a service & there are those who buy/sell houses with not an ounce of thought for providing a service. It's an entrenched mentality & only necessity will eventually change that. The changes which will hit the investment market in the not so distant future are presently unthinkable. I see changes in our small area already where want/need rather than provide value for taxpayers funding are the norm. As the return for outlay becomes more & more unacceptable, rents & housing are already veering towards a 180.

Much rental housing is owned by aspirational mums and dads who could not be considered to be investors, more hopefuls. Few of them recognise the high risks and poor returns. Otherwise they might choose another form of investment that also allows them to sleep at night.

Governments cheat by having them (mums and dads landlords) provide the lion's share of welfare and low income housing, which is even higher risk. As well, government regulators ensure that the rental regulations favour and 'empower' 'vulnerable' welfare tenants. In effect, hand over the keys and ownership at the same time.

Nowhere is this more apparent than in the interpretations of the rental tribunals who regard owners as millionaires and tenants as 'informationally disadvantaged' (!) and vulnerable. 'Wear and tear' is now a licence to live as a grot and be hard on the home and fittings. As Hasbeen has intimated, it is a fool's game for those mums and dads 'investors'.

Incredibly, the many (but not so many as years ago) tenants who pay their rent (eventually is good these days) and don't trash the property are obliged to pay higher rents to support the losses from the many tenants who know how to work the system.

It is only jealousy that calls for the removal of 'negative gearing'. But jealousy of what exactly? Few are prepared to go the hard yards with blocked toilets on the weekend -modern tenants do regard toilets as more convenient for rubbish than the bag that needs to be put in a bin. As for the returns from rental property 'investing', that is a joke, yes?

It is only jealousy that calls for the removal of 'negative gearing'.
onthebeach,
I have no doubt that some see it like that. Decent people see it as a rip-off loophole that's costing those who don't get a share in the profits.
I simply cannot subscribe to someone wanting something & expect others to pick up the tab because that's precisely what ngative gearing is in its full run. Like those "generous" who "give" to charity & less than a second later claim it from tax. Very noble indeed.

Individual on this one you have the wrong end of the stick, or the bull by the horns.

Rather than see negative gearing as a subsidy to investors, you should see it as a sugar coated carrot to the foolish. It sucks the foolish into buying rental properties, & providing housing to the rental market, that otherwise would have to be provided by government.

If government did provide those rentals, we would not just be broke, with the cost of doing business by the public service, we would be totally bankrupt. I have done business with them in 3 states, & have direct experience. You have to see it to appreciate just how much they can waste.

So mate, you have to see negative gearing as a subsidy to the renters. Without it rents would have to exceed the gross income of many renters, & private owners could not do it at all.

I looked at real-estate investment some years back, when the prospects were much better than today. The only investment available to investor with less than tens of millions available for large shopping centers, was industrial sheds.

So many people don't realise that tax deductibility is only of any use if you have tax to pay. That requires you are making a taxable profit to start with. Even with warehouses, maintenance costs can quickly eliminate any profit.

You are spot on Indi, as one of the problems with business is the not knowing what your debt servicing costs are going to be in six to twenty four months.

Businesses borrowing tens of millions have to factor this in, a move that drives costs up as they have to think worst case in most instances.

As for negative gearing, I have to disagree, because if people can't afford a house at say $300 K, chances are they can't at $250K and, I have no doubt that if you chase the investors away, one, you kill the building industry, two, rents will skyrocket and three, where will people who can't afford rents now, live?

One option for housing affordability is to rent the land (government owned) where home owners can build their house.

Then, people can sell their homes and upgrade, but not the land, as the land collects a very nominal rent forever and a day.

You see all governments lack foresight, with the home owners grant being a classic example.

Had that grant been an interest free loan, repayable when either the home was sold, rented, or borrowed against, those billions of dollars would have been spread a lot further and in fact the loan could have perhaps been even larger. But no, it was used once and never to be seen again.

Meanwhile, many who used that grant, have since cashed it in and made good TAX FREE MONEY, whike the tax payer who paid for it receives next to nothing.

There is no easy fix to a lot of things, but the hand outs simply have to stop, even sooner now given our debt position.

Debt position. Negative gearing was not always the case, what that done was kill of builders building spec houses.
Debt is growing every minute of the day 60 billion since Abbott took over. 150 million / day is what they whinged about, but they do nothing.

I can grasp what the last three posts are all about but & this is the but I'm on about. This unaffordability for the 300K house would not be the case if negative gearing were to be done away with. That 300 K house would not cost 300K in the first place & that's the point. If we want to discuss the merits of no negative gearing then we must do so by disregatding the present values. Without negative gearing there would be a totally different pricing structure, in fact everything would be vastly different for the better, especially if the idiotic tax system were to be changed also.
Unfortunately, it would also mean hat those who made it under the present system would be forced to either work harder or get smarter. Overall though we'd end up with a better situation. Imagine the many Lawyers having to drive a Mercedes instead of Lamborghinis. Well, they can't buy an australian car now can they thanks to our negative gearing & tax Laws.

In the end affordability and those unable to get in to the market are likely to play only a minor role in any price fall.
We cannot be sure cost cutting across the board will let negative gearing remain as it is.
It fuels investment and price growth.
We need to think about price fluctuations in so many other things and ask will it bring housing down.
If unemployment rises the defaults that may take place could start the ball rolling.
Wheat wool sugar have in their history seen great rises and great falls in price.
As for safe areas? well in country towns we never truly got on the price train and may not suffer.
Home owners of the house they live in and intend to stay in will not be afected no matter what the price fall.
Hasbeen 50 grand is not a high income, some blue collar workers in highly skilled and demand areas get more than double that, then become middle income.
If the question asked here was can housing prices continue to rise forever I think most would say no.
If it was will housing prices ever fall my bet would be certainly, only when is unknown.

Belly, "If the question asked here was can housing prices continue to rise forever I think most would say no. If it was will housing prices ever fall my bet would be certainly, only when is unknown"

You do enjoy speculative gossip.

What do you say about wages falling and Centrelink payments falling as well? Because it is wage rises and government taxes that result in higher prices of materials and land.

That and the 'Big Australia' immigration of the Rudds of the world. Australian taxpayers have to stump up for new infrastructure and Centrelink payments for a new migrant population of around 200,000 a year which would be the same as building several large coastal cities every year.

Yet you foolishly believe that it is 'investors' and 'negative gearing' that are responsible for price rises, and that those mums and dads who 'invest' and supply the welfare housing your own Labor/Greens government refused to provide are wealthy capitalists.

You wish for a price collapse to hurt those aspirational mums and dads, but you don't imagine for a minute what effect that would have on business and workers. Or would you want government to artificially prop up such failing businesses so that union officials still have a job?

Honestly, get a grip.

Dear Belly,

Here's another link you may enjoy:

http://www.abc.net.au/news/2014/02-11/investors-at-decade-high-drive-growth-in-home-lending/5252294

Thanks Foxy, a telling link, remember my view on ignoring some.
While I have felt for some time a crash is coming, it is information such as that in the links here that gave me those thoughts.
We should confront the levels of debt worldwide and ask can that be kept under control.
To see the GFC is far from the only time massive investment firms went bust taking investment capital with them.
I fear some are not looking at the fact the world has a history of boom and bust.
A good tip most never ignore in investing is look for good advice from professionals who can be trusted.
But too be warned they too have rotten apples .
Impacting on a possible bubble burst are many different things.
But if unemployment5 leads to some defaulting, and higher interest rates to more we could see the first rock fall.
Much more likely and hard to avoid, is if China badly stalls in its growth another event that surely will come.

In our area the previous Fed & State Governments paid whatever rent was asked by the landlords. Some 2 bedroom flats went for $1600/wk & that rent was paid even if the public servants weren't living in them for various reasons such as only visit for a week or two every two months or someone left & no new tennant moved in for a year. That made renting unaffordable for all private enterprise workers. Naturally enough our private enterprise is all but gone. It's only now since the more sensible Governments got in that we're seeing these insane rates go down. Fifo does exactly the same to many of the outback communities. A near total collapse is imminent & then we the taxpayers are again forced to pick up the tab. Just wait when this high erner fifos can't pay the mortgage on their mansions & the landlords in the communities because the pay is drying up. Theose public servants who get $500/wk rental assistance to live in their own houses are of course ok.

Dear Belly,

You're right - it's hard to predict the future
with any certainty. We'll have to wait and see
what develops. Hopefully, we'll have a government
in place that will see us through any crisis that
comes, as happened with the GFC recently.

see us through any crisis that
comes, as happened with the GFC recently.
Foxy,
Where will this new Government find a futures fund to buy us through another GFC like the previous Government ?

Dear Individual,

They could do what they've always done -
sell off the assets of this country,
let infrastructure go to rack and ruin,
privatise government services, making them
available only to those who can afford to pay,
and they could even try to stop distributing
the wealth and privilege only to the upper-echelons
of our communities so that the gap between the rich
and the poor would not continue to widen substantially.

Indi, the other way to look at negative gearing, especially if it is responsible for housing prices, is that withoutnit, so many other businesses, and ultimately, the economy, would have not flurished the way they did.

You see, many investors wait until the equity is high enough so they can buy another investment home. Now along with that purchase also comes the builders wages, the wages and business profits that go into furnishing it, the list goes on.

Home owner occupiers also use the equity to buy goods, cars, boast, holidays etc, so many of these new cars/boats/holidays wouldn't have been sold, resulting in less jobs created.

I dont think a healthy economy is one where prices stay the same for years/decades, or is it! Because that would also mean wages would not increase.

But, the underlying problem with removing incentive to invest (NG) is where will people who can't afford to buy, live.

I firmly believe that without NG we would be in much poorer shape, as our population would have still grown to what it is, yet housing numbers would have been far fewer than they are today, simply because investors would have invested elsewhere, by that I mean in another median.

Belly, true astute investors are not dills. They don't care how much they owe, they only care about equity/debt ratios and, they make sure that when the signs are there, that they bail, or at least consolidate so what's left has a buffer.

Not meaning to crow, but I saw the GFC coming, and at the time I had a couple of parcels in the Whitsundays, which I sold, then less than 8 months later that market crashed, mainly due to the decline in tourism. It is only just now showing strong signs of growth but to this day, relies heavily on discounted air fairs, something that is very vulnerable to energy costs.

Right now Bill Shorten is doing a speech on ABC 24 for the Adelaide election. I've only been watching some 3 minutes & this is in my opinion one of the most integrity devoid, callously hypocritical raves I have ever listened to.

rehctub,
I know how it all works, I just don't subscribe to it. I believe there are much better & fair systems out there waiting to be used. Yes, I know it's worked like that for a very long time but it is nearing its use-by date. It is no good anymore as can be deduced from the situation we're finding ourselves in now. If it is as good as you believe then why isn't it working anymore or are the present economic indications just a figment of the imagination of those who lose out ?
The present system is not a sustainable system. It's like many other things that work for only so long. You can't on one hand talk about fairness yet on the other hand you promote negative gearing. The unions have never understood it nor have many managers. The only reason many businesses survive is because of the writing off bail-outs. Anyone could make a profit if they had to pay less tax.

Foxy,
Why do you think people changed the Government if things were so good ?

Rechtub not having a shot but for generations those truly astute investors have been sent broke by the unexpected.
I did not start the link to express a wish for a bubble burst, no way I deal here in rumors or phantoms.
In fact if/when the bubble bursts it may have nothing to do with rent prices or such.
But if rents continue to rise common sense should say how many can pay them.
I put forward an opinion from a man much more in touch with such things than any of us, his history is full of predictions that came true.
If a Bubble comes/when it comes, it will be fed by the self assurance of the astute investor, and too fed on his/her investments not mine
As my home is home not an investment.

As my home is home not an investment.
Belly,
Cheers for that. I wonder how many will understand that.

Dear Individual,

Part of the reason as one author pointed outs
"is that the Labor Party failed to
remind voters that the government policies they rely on
for the success of their communities exist because of the
Labor Party. Policies like Medicare, a strong public health
system, a workplace relations platform which gives workers
safe, fair and stable employment, disability support,
nation building infrastructure, environmental protection,
and a strong, regulated and growing economy are all
because of the successful work of Labor governments."

It was Labor's communications failures, as well as the
inept and corrupt reporting of politics by our
mainstream media that contributed to their failure.
A case of a "bad sales pitch spoiling a great product."

The Libs on the other hand expertly mislead ( a misleading
sales pitch for an awful product). However, the Libs
now have to deliver the goods. And rhetoric will have to
be replaced by governing. It weill be interesting to
see how voters react over the next couple of years when their
lives become personally affected by the cuts, slashes, and
burns of government services. When they have to wait 18 hours
in the emergency room of their local hospital because there
are no nurses or doctors available to see them. When their
child's class at school suddenly has 45 students per teacher,
instead of 20. And so on.

And what a wonderful job they did on all those you mentioned Foxy.

Disability care, unfunded!

A strong public health system, what a joke!

Strong, fair workplace platform, yea right, for the workers perhaps. Have you noticed unemployment going up, not down and, Ford, Holden and Toyota have not left yet.

National building infrastructure, you mean the one that is riddled with union corruption.
The strong economy you point to is only there because of the billions tipped in, then achieved nothing in return apart from a few unfunded dreams they conveniently passed on.

....It was Labor's communications failures, as.....

Yes, and of cause their arse whipping in the polls had nothing to do with the $400 odd billionnthey wasted, or the numbers of illegals they welcomed ashore, did it!

So, in less than six months, Tony has STOPPED THE BOATS, and found out that the only reason the car industry was here was because of the UNCONDITIONAL gravy train labor was offering.

As far as governing is concerned, if we use labors past six years of,lies, deceit and in-house back stabbing, that sets the bar pretty low for the libs if they need to improve.

About the only saving grace is there's no money left to waste, because your beloved labor has wasted it all, and some, and some, and some.

Your unconditional support is touching to say the least.

Dear rehctub,

I'm not going to go through your post point by point.
Because I know that it would be a waste of my time.
All I can do is politely suggest to you to diversify
your reading to include more than just what comes
down the colon of the mainstream media. You just
might actually learn something from the BS that's
being spouted. Anyway, try googling Mr Abbott's
100 days in Parliament and read the assessments being
made. If you still think that the current government
has been a success - well then I too have to admire
your loyalty as well (though not your thinking).

Never did Mr Abbott articulate a vision for Australia.
All we know was what he wanted to "stop" or "end."

Stop the boats (didn't happen despite what Scott Morrison
would have us believe), stop the waste, stop the spending
(it's increased), end the carbon tax ( Senate still has to
vote on that) end the mining tax (Senate has to vote on it),
Stop the NBN (Ha!) and overall stop the so called
"socialists" from ruining the country for good, simple,
"honest" people like the PM and his ministers -
(with more rorting sagas than you can throw a cheque
book at from him and his ministers - fun-runs, bike-rides,
triathlons - all on the public ticket). All these vanished in
a mist. I'll bet Craig Thomson and Peter Slipper wished
they had control over the media. Then we have -
Christopher Pyne's flip-flops
on Gonski and the "piece de resistance - Treasurer Joe Hockey
goading Holden to stop manufacturing cars in Australia.

Certainly a "strong" 100 days - however the nation will certainly
need to be strong to endure 100 more.

Remember - voter support is ever fragile and
re-election is never a foregone conclusion.

Interesting times ahead.

I will not rehash the polls here have put my heart in to it in CFMEU Ostrich thread.
But on my knees beg all pro Labor people to understand the polls are voters intentions.
Shorten has come a gutzzer he bought it on himself, and too on us, ignoring our own problems is self destructive.
Without true reform true accountability Labor is doomed under this man and his right wing union power base.
However the threads intended direction has little to do with both sides of politics.
Just as Labor did not bring on the GFC if the bubble bursts soon it will not be one party,s fault.
Apart from Negative Gearing it is investors not governments who play with the housing market.
I think investors should look deeply at the potential for a crash before not after it comes.

http://www.smh.com.au/business/two-super-saturday-auction-days-on-the-way-20140216-32tu6.html
The link is not evidence either way but it shows a market still on the way up, for how long?

Stop the NBN (Ha!)
Foxy,
Well, for a three days anyway the other day when our optic fibre cable was cut AGAIN. You should have seen the mayhem. Our area came to a standstill, we couldn't even go shopping.
Yes, great technology indeed especially when there's no plan B.

Belly, the labor party sealed their fait when they ignored there own members and placed Shorten ahead of the members choice, Albo.

Same unionionised thugs in control of the puppet they elected as their leader.

. Just proved that the leopard couldn't change it's spots

Foxy, if Abbott sits back AND DOES NOTHING we will still be better off than we were under labor.

The boats. About the only defense labor lovers can come up with is 'its the monsoon season', which pretty much means they truly believe there has been no monsoon season for the previous six years.

NBN, Gonski, NDIS, all unfunded dreams whereby labor planted the seed for Abbott to take the fall.

Sorry, won't wash because people are not stupid. Besides, had labor made an error or two, perhaps that could have been overlooked, but history will forever show that the Rudd/Gillar/Rudd fiasco was the worst ever, most wasteful government in our countries history.

I am sorry to inform you that your party, at least as you know it, is dead.

Belly can see the light, so perhaps you can grab your life jacket and jump from your now sucken ship.

Foxy,

I see that the topic of the thread being housing pricing has not deterred you from your customary tirade against the coalition, and as per usual, your continuous diet of far left polemic blogs seems to have sheltered you from reality.

Some facts that seem to have eluded you:

1) There have been no boat arrivals in 8 weeks, better than the 1 boat a day under labor.

2) The spending has decreased slightly with the scrapping of the climate change activist committee and the reduction in corporate welfare, but will increase as soon as the left whingers in the senate learn to say something other than NO. This goes for the carbon tax and mining tax too.

3) The NBN once the books were opened made it clear how badly Labor had cooked the books, and that it was headed for tens of $bns of over expenditure, and many years of delay.

As for the beginning of Abbott's term, the Neilson poll shows that the voters give it a big tick, and Electricity Bill the big flick.

I gave up trying to predict housing bubbles about 15 years ago.

You see there was exactly the same talk then, & I was talked out of buying a nice little high set home in Beaudesert. All the talk convinced me it would be a losing proposition.

So I didn't buy that house for $31,000, & put the money somewhere else. In that time it has grown to $52,000. Good deal you say, I've done well.

Like hell I have. That nice little house recently sold at auction for $298,000.

If St Peter himself had given me a gold plated guarantee that house price, [I won't say value] could go up so much in 15 years I still wouldn't have believed it.

Still when you think about it, with much government help the price of the land has gone from $10,000 15 years ago, to $60,000, 7 years ago, to $190,000 today. Building that same house has gone from $29,000 to the best part of $200,000, so I guess $298,000 is actually cheap.

I can't see prices coming down much Belly, while building is so expensive. Four bed largish houses on a postage stamp block in the new satellite city near us are selling like hotcakes for $450,000, in house & land deals.

While these costs & prices are putting such a high floor in the market, prices for existing houses won't drop. Perhaps if the younger generation were happy with the style & size of house I grew up with, & owned as my first homes, prices could come back a bit. However while governments, state & local, want to rip $100,000 out of every new block subdivided, prices can't move down very much.

Dear SM,

You of all people have no right to accuse others
of any sort of bias. I shall respond further
when you surprise me and actually say something
intelligent. In the meantime I shall leave you
to continue singing from your party's song sheet.

Dear rehctub,

Thank you for your opinion.

Some of us may benefit from a walk in the worlds news papers.
Some are free to read and if not other sites exist that are.
Goggle England edition could be a start.
Today in another British news paper this subject, in regard to England's housing market is under review.
The fact we do not want a bubble in no way stops one.

I note some are focusing on my post about Shortens purely dumb act, ignoring ,as the polls say over whelming numbers of LABOR VOTERS want the Royal Commission.
He gives us zero choice, in ignoring his rank and file and the public's gutfull of a bent system blasting us constantly, is he aware his actions seem to say *tell the mugs any thing they will follow*.
Can he think we do not know he won not by our votes, but in spite of them!
His power base this morning again! the union right, suffocates the ALP!
Albo mate, please give the lost right the news they are fooling only them selves Shorten if you no longer have it! go now
If you owe so much to your power base the right wing unions that you hurt the Party go with haste and let reforms start.
Joe and Jane average should know Labors right is uninterested in reform, for their power has to go as first step!

As Dennis Pryor points out in his booklet,
"Political Pryorities: How to get on top of
Australian politics." :

"The problem with polls is that they are based on the
principle of asking a representative sample of the
populace for their opinions, for example, on which of
two politicians they would vote for, which they rated
higher in leadership qualities, honesty, capability,
and the like."

"The results from this sample are then taken as
representative of the community as a whole. The more
obvious deficiences of this method are that it depends on how
you ask the questions, on whether the sample is reliable and
whether the people asking the question are honest."

"Above all polling is based on the quaint notion that
people tell the truth, a notion contrary to the life
experience of everyone. Thus polling is a means of giving
mathematical respectability to a collection of anecdotal
evidence."

"Pollsters have no anxiety about the accuracy of their
political results. A classic example - at the 1987
election the final figures on the day before the election
gave Labor a lead varying between 2% and 14%. Faced with
any error in election forecasts pollsters have a repertoire
of excuses: the result was within the range of plus or
minus 2% which we allow for polling errors; the swing was
inconsistent in different electorates; the electors changed
their minds on the day of the poll," and so on.

Belly,

It looks as though Shorten's honeymoon with you has ended even faster than Juliar's. What do you now think of Rudd's amendments to party rules that makes it near impossible to get rid of him?

Foxy,

I was not accusing you of bias (though you clearly are) but rather of being a stranger to the truth.

I know you would like to dismiss the bad news in the latest polls, but polls are not as arbitrary as you would like to make out. The better polls have been very close to the final election results, as shown by your need to go back 27 years to find a poor example. I will however, concede that polls a long way out of an election are more dictated by recent events than serious consideration of voting, however, long term trends are difficult to shake.

The trends throughout Juliar's regime was 54/46 to the coalition, even though the polls moved from 50/50 to 58/42, at election day the final result was nearly 54/46. This session of parliament has just started, so elections in 2016 are too early to call.

Dear SM,

We're all biased to a certain degree - however
some of us are capable of having an open mind on
political issues - others are not. And therein
lies the diference between certain people.
And as I've pointed out in the past - voter
support is ever fragile and re-election is
never a foregone conclusion. It shall be
interesting indeed to see what happens next in
the political arena.

Foxy, I'm the first to admit that Abbotts success was largely due to labors failures, rather than his ability. Besides, I think any leader could have taken power away from the last labor government.

The real challenge labor faced was to show themselves as a 'new labor' ome that listened to the people, rather than the faceless men.

In my view they failed their first test when they ignored their very own faithful and went against their supporters wishes by allowing the faceless men, to yet again dictate who would lead the party.

They have also failed as they have been caughtout by the people to some degree, as their claim of 'we have created almost one million jobs' when what they should have said was, we have bought tens of thousands of jobs by subsidizing the car industry, at times to the tune of $1000 per week, per worker.

So if you take away the heavily subsidized jobs, then add to this the number of 457 visas they issued, one has to wonder if the really created any jobs at all.

So that brings us to the question of, what did they do with our $400 odd billion dollars?

I'm sorry Foxy, but they have been caught out.

Poor Bob must be holding his head in shame right about now, as in my view he was the best we ever had, in my time.

The race to the bottom continues.

could go up so much in 15 years I still wouldn't have believed it.
hasbeen,
Yep, unbelieveable alright. That's the money market for you, artificial value with real Dollars.
It'll burst soon once Fifo comes to a halt.

Dear rehctub,

Thank You again for your well reasoned response.
I don't pretend to have all the answers. But I
certainly am sick and tired of the blame and
finger-pointing that so often pervades our
discussions whenever politics is being discussed.
And I know I've been just as guilty of it as anyone
else. However, I often do have a re-think when
things are explained logically to me, as you've
done.
I hate it when things get turned into a "Left/Right"
divide because as we all know - who of us is really
one hundred percent on those sides - all of the time.
We all have our opinions, and they are capable of
changing as party policies change. Each of us supports
policies that make sense to us. Party politics to many
today are becoming less important than they used to be.
But here again, I could be wrong. I'm simply stating
what I notice among my friends and colleagues.

Anyway, Thank You again.

See you on another thread.

I did not start this thread to invite or wish for a burst bubble.
And not to share my small view it will come.
I with out the benefit of the knowledge my first links author has, think I know it must come, only when is unknown.
SM the Bill Shorten I knew would never be dumb enough to not know the public can see past his unions are clean junk ;.
I voted as did most rank and file for Albo, unions backed Billy.
Would like to highlight it was Bill who bought Rudd/Gillard down.
And with out action from him soon the ALP seems to be his next target!
Bill, like the Fonz from happy days has great difficulty even saying reform!
Post our loss in Tassy and South Australia he may learn to say it even if it is a whisper, doing it? hardly possible for the bloke!

The situation in China will drive our property market either up or down.
I attended a number of auctions last year and the Chinese buyers were
dominating the market.
My agent told me he could almost always know who the highest buyer
would be if the Chinese were there.
They were/are just doing anything they can to get their money out of China.
They have two concerns apparently, action by the Chinese government
tax & criminal depts and an economic bubble crash.

They are not too concerned about getting tennants, they may just let
their children or friends children use it while students here.

If the Chinese government takes up its threat to use the Australian
courts to get possession it could cause a panic.

The 'diversity-we-are-obliged-to-have-regardless-of-how-the-public- feel-about-it', combined with the offering of citizenship to foreign students as a reward for their propping up Australia's fourth largest industry, education aka giving foreign students places in our universities ahead of our own, will ensure that many Chinese and other foreigners buy houses. It would be very odd if they didn't.

However many who buy residential housing as 'investment' are young and they live at home or even rent cheaply in groups. The reason they buy for investment and not to live in themselves is that they are compelled by government emphasis on self superannuation to do so. Government has nagged and nagged that it will not be providing for its citizens in their autumn years.

Similarly, workers of all ages are compelled to invest to provide for themselves and in some cases for their children. Children are being required to spend far longer in education and may have interrupted earning later due to the proliferation of casual and P/T work. An unexpected and undesirable outcome of women's affirmative action is the abundance of middle class partners who block unemployed from jobs as they work out of boredom not necessity and to buy imported luxury goods (yay for those Audis) and international travel.

In a complex environment where ideology rather than good sense and evidence have driven policy, it is only to be expected that policians and their urgers would prefer to have a convenient whipping boy as represented by 'negative gearing' to blame instead. That certainly keeps the chattering mob occupied and away from things that shouldn't concern them. Feeding the chooks is easy, simple sensationalism in cut and paste form, please.

If the Labor-Greens Watermelons ever get in again, perish the thought, the push will be on to introduce Death Taxes, and to extend capital gains tax to residential homes. The kites were flown and new taxes are always the fix for over-spending by numerically challenged Labor and their lunar Greens Watermelon Party sidekicks. Maybe insulation for chook houses and a few lazy billions for more illegal migrants. It all costs money.

Bazz we should not forget the very nature of investing.
And in reminding our selves of China,s new rich understand we benefit from them.
Not maybe in housing but free trade rules, not xenophobia.
Worth consideration too is the number of Australian investors who bought American housing after the GFC and a far different way of buying a house failed.
It if it comes is not going to own Labor or Liberal pants.
World trade conditions and interest rates can do it in part.
An unlikely removal of negative gearing could.

But I see one coming and in the next two or three years.
Say one never comes, how then will renters and first home buyers live?
Current wages levels are constantly under attack so how do they buy/pay the rent?

Belly, 'It's all negative gearing's fault'

And the crowing of the rooster causes the sun to rise.

.....Say one never comes, how then will renters and first home buyers live?

The same way they afford it now, well most anyway, government assistance and/or investment incentives for investors, like NG.

You see back in 81, a house worth $40,000 rented for $80 per week, 10.4% return on investment.

Then along came negative gearing, the result being;

One, it increased prices due to investment incentives.creating thousands of jobs, jobs that would not have been created otherwise.

Two, it reduced returns on investments which in turn kept rents down.

Three it created thousands of building industry jobs, jobs that would not have been created as the demand, a least at this levels, would not have been there.

The unknown factor, one that will never be known is just how much house prices would have increased had NG not come in.

If you take that same house for instance, and say it returned 10.4% on investment, what would the rent be and what would the value be now, Another unknown, BUT, a large portion of the housing boom was caused by population growth and shift, and that would have still occurred.

Belly, it is my view that the only thing that will cause a housing bubble to burst will be interest rates, because many struggle today on just 6%.

But then, if interest rates increase to say 12% and NG remains, then rents will go through the roof simply due to supply V demand, and greed.

I know I sound like a broken record, but a true transaction tax, taxing every single transaction is worth a shot, as among other things it will remove negative gearing without hurting housing as everyone will have so much extra cash to splash around, including land lords, because the only reason they negative gear, is to minimize tax, and at 2% there would be no need for this. Look out accountants!

rehctub, "the only reason they negative gear, is to minimize tax"

While that view might be popular in some quarters, what if your assumption is wrong?

Onthebeach, why else would they negative gear?

No Rehctub, the reason houses shot up in price is the old more money
higher prices syndrome.
When the sisterhood forced the governments to force the lending banks
etc to lend on two incomes, then the old rule came into effect;

If you double the amount of money in a market then prices will rise to
meet the available money.

Pretty simple isn't it. If you were a builder wouldn't you take that
into account ?

rehctub,

Maybe you are thinking of the mythical doctors' wives who invest in real estate, pine plantations, the frock shop and so on.

Anyone who wants to retain more of a large income has other less risky, less exasperating and more lucrative ways of doing so.

Dear rehctub,

Here's another perspective:

http://newmatilda.com/2014/02/17/5-billion-entitlement-joe-hockey-should-end

Bazz you have the real problem at hand. The most realistic thing you have ever sayd.
Not only did it double housing rates it took the house wife with it.
No wonder the country is filling with mail order brides, they know how to look after their husband.

I stand by my thoughts buying homes as an investment drives the prices.
And negative gearing was introduced to lift building/jobs.
However many things may drive a bubble burst if however it comes it will not be driven by high rentals.

We should look at all forms of investment, and see both rises and falls in their history.
Nothing we invest in has not at times seen massive corrections.
I am not making a case/threat one is coming ,but produceing the views of others who see a very real danger.
One I have seen/think I see for some time.

Thanks Foxy, from the article....Economist Saul Eslake believes .....Such a generous tax concession might be understandable if it produced a social or economic good, but it's difficult to see the wider benefits of negative gearing.

But it does, it provides housing that would otherwise be unavailable to many and, as property values increase, the burden of NG on the tax payer decreases, as the losses are reduced.

......Supporters of negative gearing, such as the Real Estate Institute of Australia, argue that the policy helps to keep rental prices down by promoting the supply of new housing to the market.

It also allows for investors to accept a lesser return on investment, a situation that if removed, would see this burden placed on renters.

As for not providing the new housing it was supposedly introduced to, government red and green tape is what stems the flow of new housing, rather than NG often because councils/state governments can't afford the head works.

.....Although it's difficult to predict the direction of housing prices, commentators have begun to suggest that the housing market in Australia may be on the brink of collapse.

Except for QLD as it is about to see a huge cash splash from the CSG industry royalties that, if handled correctly could do wonders for this state

....If the federal government is willing to continue providing such significant tax breaks, they should be targeted at sectors that can provide a greater ongoing benefit to the nation. Like what?

What is more important than housing?

Furthermore, while it's all well and good for these people to point out the negatives about NG, I find it ironic that they call for a balanced approach, yet they fail to acknowledge the benefits of NG, such as the building industry and it's supply chain as just one example.

The reality is that investors WILL NOT invest if it means they do so with after tax dollars, then pay capital gains tax if they sell.

Tax,a transaction tax is a good area to start as it will also see an end to NG.

Bazz, are you suggesting that housing prices increased, simply because banks loaned more money.

If this is what you are saying, how then do you explain a market crash?

Do incomes take a dramatic dive?

Dear rehctub,

Thanks for making me think far broader than
I originally did.

Well yes Rehctub, that is exactly what happened.
It is the old old story, the market sets the prices depending on what
the buyers have to spend, and the developers knew they had two incomes
and the loans available based on two incomes.
I don't know from personal knowledge but it would have been difficult
to buy a house on one income.

What was an unintended consequence was that women HAD to go to work as
if you borrow on two incomes you have matching double repayments.
Hence the large increase of working women and child care provisions.

It is known as the free market !

Small investors dominate, owning 1-3 properties apiece.

While some are aspirational mums and dads, many of the new investors who just as uninformed and financially naive as their parents were and are as easily led by over-optimistic entrepreneurs, are 'investing' in response to federal government demands that they provide for their own retirement. The latter group are likely to be renting themselves or still living at home, while they pursue their 'investing' in a renter. They trust the spin of entrepreneurs.

Subject to ATO rulings on such things as repair or replacement, all outgoings are claimable in the financial year in any event. To be able to have the taxpayer 'support' the investor, as the spruikers would have it, the losses must exceed all outgoings to be deductible from the tax on the 'investor's salary. In essence, to claim negative gearing the 'investor' must have deep pockets to cover the sometimes catastrophic losses resulting from the high risks of that form of investment.

Now honestly, if one can imagine the young investor trying to provide for her future old age or the mum&dad investor providing for children's tertiary education, it is highly unlikely they will be getting much 'advantage' from negative gearing anyway. When it runs at a profit they lose the negative gearing 'benefit'.

tbc

contd..

But in any event, these small naive 'investors' are the people who are being saddled by government with its welfare basket cases, while at the same time government makes it even harder for them through rental regulations that are heavily weighted towards the most 'vulnerable' welfare basket case. That is likely to be a drug using, alcoholic 'professional tenant' who knows every lurk and has the support of tenants' advocacy paid for by taxpayers including that mum&dad 'investor'.

Of course so-called 'investment' in rental housing is in a fragile state and for good reasons. A run from that form of 'investment' is on the cards.

As a test, how many tenants who post on this forum would put their own money, quality of life and free time on the line to provide a renter for someone else? 'Nah, they could trash the place and disappear owing thousands etc', would be the common reply.

Remember, the reason why government doesn't want to provide welfare housing itself is because it found it far too costly and impossible to manage. However government doesn't mind forcing those risks and more onto people who really are very vulnerable, especially to the regulatory change risk, but do not know that until the inevitable happens, or at best they have lived like church mice for years for squat.

Bazz/Rechtub in the case of the Australian market some investors say from China use us as a safe haven investment, an increasing pull on our housing market.
I still think a crash is something that we must watch for it can come without notice.

onthebeach, residential housing is the safest investment around, evidence being in the fact that most banks will lend the full 80%, even more with additional security, and/or mortage insurance.

Which brings me to another point, lowering if equity requirements.

This was a trend that happened in the 80-90's with the introduction of building societies, as it was they who allowed borrowings in excess of 70%, because prior to then, banks literally said, if you don't have a 30% deposit, we are not interested in lending you the money. Unfortunately, the banks caved in and started to relax their lending criteria to stay competitive.

As for young investors, I have often advised people to buy what they can afford, and rent where you wish to live because it's cheaper, mainly because the flash rental property has a 1-3% return on investment. Not as attractive when rates are low.

As for renters rights, I hear you loud and clear, that's why I have landlords insurance, however this is becoming expensive but it's also deductible.

Bazz
It's was difficult to buy a house on one income, I did it in 82, my first but, I did buy A HOUSE, whereas today, much of the affordability problems are caused through people wanting THE HOUSE, huge difference.

The latest boom, 2000-2005 started in Sydney, as do most and, to suggest wages increased by 300% in five years, in keeping with property prices pretty much blows your theory out of the water, because they didn't.

Doesn't matter how you twist it Rehctub, the market priced to the amount of money available.
A confirmation can be seen in the rise in the age of the first birth.

Bazz, there's no twist involved, as you are clearly stating that housing prices arelinked to dual incomes. That's simply not true, because it it was, wages between 2000 and 2005 would have increased by some 300 to 500%.

They didn't!

rehctub,

It is a pleasure chatting. I disagree with you on risk and we can leave it at that. Just as a helpful hint on tenant insurance, insurers are invoking conditions that will give you cause to wonder about its worth. On deductability, you have to earn to pay outgoings. Inevitably any payment is out of your pocket in some way or other since it comes off the top, your gross earnings.

Well Rehctub, perhaps the wages increased by only 100%.
I don't have the figures, do you ?
No doubt house prices went up, but I do not know how fast.
I find it hard to believe that the developers did not take advantage
of the extra money in the market.
I do remember the rise happening but I cannot put a figure on it.

Yes Bazz, there is no doubt developers/builders were guilty of gouging.

I say this because in a matter of about four years, 1997-2001 building prices went from about $800/m2 to around $1300/m2. Admittedly the GST came in then as well.

onthebeach, yes, you do have to earn the money first, but you get a portion of it back come tax time, if applicable.

As for being a landlord, the rewards are fast being swallowed up by the negatives and, if they do drop NG it will be the end of rentals as we know it.

I see a determination to say no bubble exists and no crash will come.
And I see many things blamed for housing price rises , clearly Rechtub is right wages in no way, contribute to the current increase price rises.
It seems true, that many have over committed, bought house that with the slightest change in their circumstances they can not pay for.
And how do we link Australian wages with the huge evidence Chinese are the biggest buyers in the Sydney market?
I think we should not ever forget every investment has the potentual to fail us.
The over committed are the first stone to roll, if we enter harsh times for jobs or interest rates

I remember that a long while back negative gearing was removed and
rental property just ended. The government had to reintroduce it again.
Must have been in the 70s I think.

If we do have the "crash" that everyone is saying will happen then as
unemployment rises either people will be living on the streets
or rents will fall
or the houses will stand empty
or many houses will appear on the market for sale.

Whichever way it goes then it will be recognised as a bubble burst.
It will all even out but the dollar value of houses will change but
the roof over your head will always have value relative to what
people can afford.

I think what I am saying is that those owing what in the new economy
will appear to be astronomical amounts of money will, if the banks
are still able to press for payment, face bankruptcy.
However the banks may be forced to write off defaulted loans.
The Financial Stability Board will probably use depositors money to
save the banks.

This is probably what will happen in the zero growth economy if it is
allowed to slip further and go into contraction.
Perhaps we need a lesson in the real economy, no one owes us a living
and the government is no ones mother's teat.

.....Perhaps we need a lesson in the real economy, no one owes us a living
and the government is no ones mother's teat.

And there in lies the problem Bazz, too many hands in the cookie jar.

Welfare must go back to being a HAND UP, as opposed to the current HAND OUT that it has become.

But, even that won't save us, we simply need a more efficient tax. One that is fair to all. With the exception of accountants of cause.

Rechtub while it is clear some want to, in advance, blame Government for anything this issue is not a government owned one.
Gee it gets hard talking to you some times.
And while my party drops its own support by not excepting its faults it hurts.
See welfare has nothing to do with this thread!
And the current war on wages,see Abbott/Hockey on SPC and other efforts to bust workers wages, those workers [lowest pay rises for ten years] confront the fact they never ever will own a home.
Make no mistake,Abbott and those who think like you are risking the lot on a class war yet to be declared but still it is there.
Work choices was a kindness compared to what Abbott seems hellbent on doing.
Now if we are to walk away from the subject be honest with me.
If it was under Labor not Liberal in control during the recent huge job loss you and Abbott would be screaming would you not?

You are right Belly in that the problem is not owned by any particular
party, but politicians are as a group all to blame for not taking
action more than 10 years ago when they were warned.

So I suggest that you forget history or traditional anti liberal cant
and adopt attitudes for the new economy which will be very different
to what has gone before.
Both Labour and Liberals and Nationals and Greens are going to be
forced into major change in their thought pattens.
Indeed political parties as we now know them are probably finished for ever.

Capitalism, will stay but it will be very small scale and socialism
will likewise be very local in scale.
There will not be the clash between them at all but a realisation
that they both will have their place in the new scheme of things.

Perhaps you & I might not see it but we are already seeing the early signs.

Bazz if only Liberals did not take too much
And Labor give too much
If only is a big word but I too think reform from both sides is coming.
It is my view the coming loss of two states by Labor, [not a traitor like act saying that just truth] The Royal Commission in to unions, will force reform on Labor.
I hold another view some will condemn me for but am unshakable in my belief.
Abbott has gone too far or intends to in time Liberalism will replace him and shudder to think of him.
But what warning ten years ago, what action could or should a government take to cool investments in housing?
We must not try to control free markets ,we bought NG to life, to increase investing and housing production, right or wrong it did its job.
If/when the bubble bursts it will be over investment and over committed investors who make it happen

.....If it was under Labor not Liberal in control during the recent huge job loss you and Abbott would be screaming would you not?

Belly, correct me if I'm wrong, but are you suggesting Abbott has caused this in a little more than four months? Surely you are not that neive to believe that.

All Tony Abbott has done, which by the way is how most business people would act, is to say no to further, unaffordable, unconditional cash hand outs, because after all it would appear that the formers governmentS have paid the floor workers wages, which meant that the over seas owners only had to fund the perks and overtime.

They have displayed that either they couldn't afford this, or chose not to once the gravy train ran dry.

Now as for your direct question, labors best option to encourage these mega businesses to stay, was to hit them with a great big tax, despite promising the opposite.

This effectively means that the cash splash has gone, but due to labors resistance, the huge tax remains.

So yes, I would have reacted to any such action by labor, on totally justified grounds.

You are getting overly excited about this huge big tax. If it goes it all of a sudden will not exist, it will not be found in the system. we are talking 8 %.

.....we are talking 8 %.

579, percentages are irreverent, Qantas for example paid a whopping $300 million last year.

That's ultimately $300 million plus that customers had to pay and no doubt it has added to it's wows.

I say plus, because most businesses can't operate on a cost recovery basis, so charges associated with this tax have to also be passed on, like admin and funding costs to name just two.

Sorry, but you don't create jobs by placing hurdles in the way.

Having been involved in small developments I would like to correct the view any might have obtained that it is pots of honey for little risk.

It is always high risk and any profit usually depends on the sale of the last unit. Contrary to what I have been reading here, the escalating costs have been due to delays on approvals, government requirements and taxes, and increases in costs of materials and labour. Some trades call it how they like it and even then try to renegotiate when they arrive on site.

Maybe the windfalls are in large developments? Maybe not though, considering the number who try and fail. As if there isn't competition, a fickle market and unsettling frequent changes by government.

To all who want to get into small scale development: go for it by all means, but come the end of the day you will lose your shirt and home too if you do not successfully manage those risks, and some luck always helps.

As for 'investing' in rental housing, and I am not referring to any posts here because I don't know the people, but very, very few people I have ever met have the cash reserve, gumption and stamina to realise a reasonable profit from that business. They don't even build properties that are simple and durable enough to keep repairs low given the inevitable hard use, and while fittings and appliances may last years where the home owner is in residence, any possible weakness will evidence very quickly and expensively where there is all care (maybe and hopefully) and no responsibility with tenants.

We are alive for three score and ten, but that is considerably shortened by any 'investment' in rental housing.

Hi onthebeach, it is always the jealous lefty mob, who never do anything, bitching if someone makes a quid on anything.

I always found it amusing when greenie ratbags who wanted jobs would bitch about the "get rich quick" developer. It didn't matter much whether it was an island or mainland resort I always wondered why anyone did it.

Keith Williams was the only one I saw who did not lose their shirt. Usually the second owner who bought in for half the development cost at the fire sale, still went broke, unable to meet borrowing costs.

It was only the third or fourth owner, who paid perhaps a third or a quarter of the initial cost, who could struggle through.

Investing in anything but industrial properties is a mugs game.

Hasbeen, "Investing in anything but industrial properties is a mugs game"

Agreed, however for low risk and high return the best investment is a job with a quango like the Human Rights Commission. Sinecures that keep on giving.

Talking about low risk employment, a job as a client of Wonderful Centrelink is tops, a beauty.

Do you ever imagine that 'Houso' clients of Centrelink would ever dip their thumbnail in the spillage of their bourbon and coke and figure what $amount they would need to invest to provide the inflation-proofed returns and entitlements eg medical benefits and rental assistance that they get from government? -Regardless of their non-performance as a citizen and in some cases, their flagrant disregard for laws, thus adding to the overheads of keeping them and any harm they cause others?

So true onthebeach.

Unfortunately I have never been far enough left to get a job on a quango, academia, or even the bureaucracy.

I doubt think I could stand the company. I have a cousin, thick as 2 corner posts, who got a clerical job with the Sydney County council, straight from school.

Kept his nose clean, worshiped the right people, & ended up third in charge at retirement. His pension is more than I ever earned.

Come to think of it, who is dumb?

http://www.theguardian.com/commentisfree/2014/feb/24/recovery-bubble-crash-uk-us-investors
Not trying to breath life in to a stalled thread.
But I have more to say on this subject.
The link, while not directly involved in this subject , may have a huge input if it proves to be true.

Noticed a warning about our economy and if I find it will post it too.
I feel a good investment portfolio should not be all in shares or houseing until we look at the emerging risk.

Belly, I think there is optimism in the share market inhabitants.
They generally think the signs they are seeing indicates that recovery is underway.
I find it hard to be as assured as many seem to be.
They will find later I think that it is a share market boom, and not much else.