It's the economy, stupid!

 
  wobert Chief Commissioner

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  Carnot Chief Commissioner

Have a gander at this : https://www.macrobusiness.com.au/2018/10/australia-hits-peak-stupid-land-titles-privatisation/

And this : https://www.macrobusiness.com.au/2018/10/the-amusing-lifespan-of-a-victorian-gas-molecule/
wobert
A wasteful use of resources to prop up the gas cartel.  Yep, it needs strong regulation now.  Or someone to plug the pipe between Moomba and Queensland....

Reminds of the AFR article last year: https://www.afr.com/business/energy/gas/huge-jump-in-gas-being-pumped-to-qld-lng-leaves-sa-vic-dry-20170314-guxjp7

What's ScoMo doing about it?
  Carnot Chief Commissioner

Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
  don_dunstan Minister for Railways

Location: Adelaide proud
You only have as large a mortgage as you allow yourself to take on. Nobody forces anyone into taking on any mortgage. House prices will only rise to the level that buyers are prepared to pay. Many houses on the market here, because the asking prices are too high.
Graham4405
Yeah but say that to someone who has grown up in Melbourne or Sydney - they feel the need to put their roots down where they are from. A million-dollar median house price in those places means that's what you're up for.
  speedemon08 Mary

Location: I think by now you should have figured it out
Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
Carnot
Some countries in the EU were already headed towards this target anyway
  Graham4405 Minister for Railways

Location: Dalby Qld
You only have as large a mortgage as you allow yourself to take on. Nobody forces anyone into taking on any mortgage. House prices will only rise to the level that buyers are prepared to pay. Many houses on the market here, because the asking prices are too high.
Yeah but say that to someone who has grown up in Melbourne or Sydney - they feel the need to put their roots down where they are from. A million-dollar median house price in those places means that's what you're up for.
don_dunstan
Again, nobody is forcing anyone to do anything...
  RTT_Rules Dr Beeching

Location: Dubai UAE
Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
Carnot
End of large scale petrol and diesel manufacturing is somewhere in the mid 2030's, small volume will continue for 10-30 years beyond for remote applications.

However, the EU is being very quick to want to kill of the internal combustion, but has yet to fully address a world of 90% cars being EV, ie energy source, waste disposal etc.
  RTT_Rules Dr Beeching

Location: Dubai UAE
You only have as large a mortgage as you allow yourself to take on. Nobody forces anyone into taking on any mortgage. House prices will only rise to the level that buyers are prepared to pay. Many houses on the market here, because the asking prices are too high.
Yeah but say that to someone who has grown up in Melbourne or Sydney - they feel the need to put their roots down where they are from. A million-dollar median house price in those places means that's what you're up for.
Again, nobody is forcing anyone to do anything...
Graham4405
interesting, over last 8 weeks I've made contact with my old Year 12 (about 140 of us), having only kept in contact with one for 30 years. I went to school on the North shore but lived on Central Coast along with 20-30 other kids. What surprises me is how little so many have moved. Some have not moved more than one block from the house they grew up in. My 30 years friend at least moved to Dubbo/Orange/Trangi region.

However, I've said it before and I'll say it again. If you make yourself effectively the working poor by living in a multi million dollar real estate sucking up your hard earned cash and ultimately lack of savings, then don't expect the rest of us to pay for food to be put on your table.

I think the govt should offer an incentive scheme for those retired to quit their high value real estate and move to a lower cost area and place their savings in a annuity fund or something like Super where the tax on interest earned is tax free or 50% discount. This would help increase the available housing in places like Sydney, increase population in rural/regional areas and thus provide extra demand on existing retail and other services thus making them more viable. Also potentially reduce welfare payments as they live off the equity previously locked up in their house.
  don_dunstan Minister for Railways

Location: Adelaide proud
Have a gander at this : https://www.macrobusiness.com.au/2018/10/australia-hits-peak-stupid-land-titles-privatisation/

And this : https://www.macrobusiness.com.au/2018/10/the-amusing-lifespan-of-a-victorian-gas-molecule/
A wasteful use of resources to prop up the gas cartel.  Yep, it needs strong regulation now.  Or someone to plug the pipe between Moomba and Queensland....

Reminds of the AFR article last year: https://www.afr.com/business/energy/gas/huge-jump-in-gas-being-pumped-to-qld-lng-leaves-sa-vic-dry-20170314-guxjp7

What's ScoMo doing about it?
Carnot
Trying to win the next election without fixing the gas crisis.
  don_dunstan Minister for Railways

Location: Adelaide proud
interesting, over last 8 weeks I've made contact with my old Year 12 (about 140 of us), having only kept in contact with one for 30 years. I went to school on the North shore but lived on Central Coast along with 20-30 other kids. What surprises me is how little so many have moved. Some have not moved more than one block from the house they grew up in. My 30 years friend at least moved to Dubbo/Orange/Trangi region.
RTT_Rules
I'd say the opposite - I grew up in country VIC and almost nobody from my cohort at school still lives in or around that town. I'm aware of about three or four people who never left the town, married locals and settled down there but the vast majority are either all over the country or overseas. The majority are in Melbourne (of course).
However, I've said it before and I'll say it again. If you make yourself effectively the working poor by living in a multi million dollar real estate sucking up your hard earned cash and ultimately lack of savings, then don't expect the rest of us to pay for food to be put on your table.
RTT_Rules
Umm... isn't your grandmother living in a million dollar house on the pension? Not having a go, it's just I recall you saying something like that a while ago.
  Carnot Chief Commissioner

Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
End of large scale petrol and diesel manufacturing is somewhere in the mid 2030's, small volume will continue for 10-30 years beyond for remote applications.

However, the EU is being very quick to want to kill of the internal combustion, but has yet to fully address a world of 90% cars being EV, ie energy source, waste disposal etc.
RTT_Rules
True that.  Still lots of questions about battery recycling, cobalt mining etc etc.

An interesting recent report by CSIRO: https://www.csiro.au/en/Research/EF/Areas/Energy-storage/Battery-recycling

The key will be efficient and cheap recycling as economies of scale improve.  And decent regulation to make sure it happens.

I tend to think that the higher costs of EVs will drive many people to public transport and other forms of mobility in the future.  And that's not a bad thing IMO.

Regardless, they'll still be plenty of demand for fuel oils in the aviation and shipping sectors for decades to come...
  don_dunstan Minister for Railways

Location: Adelaide proud
The Aussie dollar is scraping US$0.70 (three year lows) and the ASX is a sea of red today; apparently the Trump tariffs are to blame - although I think we have some endemic problems in this country that simply aren't being addressed.

The ABC's Ian Verrender wrote an interesting article yesterday linking the current economic slump with increasing interest rate pressures and the softening housing market (ABC);

While the Reserve Bank has no plans to raise domestic rates any time soon, it may be overtaken by global events.

The US has raised rates eight times in the past few years. It raised them again a fortnight ago and another is likely before year end.

Our major banks all borrow offshore. They will continue to pass on those higher costs, regardless of Reserve Bank movements, just as they did recently.

That doesn't bode well for Australian households.

It's the unemployment that will flow from the softening construction industry that's the biggest problem - 10% of our workforce is in construction, if the money keeps evacuating housing then expect unemployed building industry workers to start showing up on the figures.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
End of large scale petrol and diesel manufacturing is somewhere in the mid 2030's, small volume will continue for 10-30 years beyond for remote applications.

However, the EU is being very quick to want to kill of the internal combustion, but has yet to fully address a world of 90% cars being EV, ie energy source, waste disposal etc.
True that.  Still lots of questions about battery recycling, cobalt mining etc etc.

An interesting recent report by CSIRO: https://www.csiro.au/en/Research/EF/Areas/Energy-storage/Battery-recycling

The key will be efficient and cheap recycling as economies of scale improve.  And decent regulation to make sure it happens.

I tend to think that the higher costs of EVs will drive many people to public transport and other forms of mobility in the future.  And that's not a bad thing IMO.

Regardless, they'll still be plenty of demand for fuel oils in the aviation and shipping sectors for decades to come...
Carnot
The average Joe and Closed Eyed Greenie doesn't give a crap about the mining, out of site and out of mind.

EV prices will drop down to that of ICE prices before ICE cars disappear. Also note those targets by EU are so low that if they can make a petrol engine that efficient, the Env argument for supporting EV's starts to become very clouded.
  YM-Mundrabilla Minister for Railways

Location: Mundrabilla but I'd rather be in Narvik
Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
End of large scale petrol and diesel manufacturing is somewhere in the mid 2030's, small volume will continue for 10-30 years beyond for remote applications.

However, the EU is being very quick to want to kill of the internal combustion, but has yet to fully address a world of 90% cars being EV, ie energy source, waste disposal etc.
True that.  Still lots of questions about battery recycling, cobalt mining etc etc.

An interesting recent report by CSIRO: https://www.csiro.au/en/Research/EF/Areas/Energy-storage/Battery-recycling

The key will be efficient and cheap recycling as economies of scale improve.  And decent regulation to make sure it happens.

I tend to think that the higher costs of EVs will drive many people to public transport and other forms of mobility in the future.  And that's not a bad thing IMO.

Regardless, they'll still be plenty of demand for fuel oils in the aviation and shipping sectors for decades to come...
The average Joe and Closed Eyed Greenie doesn't give a crap about the mining, out of site and out of mind.

EV prices will drop down to that of ICE prices before ICE cars disappear. Also note those targets by EU are so low that if they can make a petrol engine that efficient, the Env argument for supporting EV's starts to become very clouded.
RTT_Rules
Trouble with ICE cars is that they melt.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
Some countries in the EU were already headed towards this target anyway
speedemon08
Not hard when you can drive an EV from the centre of the country to the border and back in any direction on one charge. Smile
  Carnot Chief Commissioner

Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
End of large scale petrol and diesel manufacturing is somewhere in the mid 2030's, small volume will continue for 10-30 years beyond for remote applications.

However, the EU is being very quick to want to kill of the internal combustion, but has yet to fully address a world of 90% cars being EV, ie energy source, waste disposal etc.
True that.  Still lots of questions about battery recycling, cobalt mining etc etc.

An interesting recent report by CSIRO: https://www.csiro.au/en/Research/EF/Areas/Energy-storage/Battery-recycling

The key will be efficient and cheap recycling as economies of scale improve.  And decent regulation to make sure it happens.

I tend to think that the higher costs of EVs will drive many people to public transport and other forms of mobility in the future.  And that's not a bad thing IMO.

Regardless, they'll still be plenty of demand for fuel oils in the aviation and shipping sectors for decades to come...
The average Joe and Closed Eyed Greenie doesn't give a crap about the mining, out of site and out of mind.

EV prices will drop down to that of ICE prices before ICE cars disappear. Also note those targets by EU are so low that if they can make a petrol engine that efficient, the Env argument for supporting EV's starts to become very clouded.
RTT_Rules
I think the EU manufacturers will really struggle to meet those targets with the new WLTP standard, and not the old one which was easily 'tricked'.
  RTT_Rules Dr Beeching

Location: Dubai UAE
interesting, over last 8 weeks I've made contact with my old Year 12 (about 140 of us), having only kept in contact with one for 30 years. I went to school on the North shore but lived on Central Coast along with 20-30 other kids. What surprises me is how little so many have moved. Some have not moved more than one block from the house they grew up in. My 30 years friend at least moved to Dubbo/Orange/Trangi region.
I'd say the opposite - I grew up in country VIC and almost nobody from my cohort at school still lives in or around that town. I'm aware of about three or four people who never left the town, married locals and settled down there but the vast majority are either all over the country or overseas. The majority are in Melbourne (of course).
However, I've said it before and I'll say it again. If you make yourself effectively the working poor by living in a multi million dollar real estate sucking up your hard earned cash and ultimately lack of savings, then don't expect the rest of us to pay for food to be put on your table.
Umm... isn't your grandmother living in a million dollar house on the pension? Not having a go, it's just I recall you saying something like that a while ago.
don_dunstan
My school was stones throw from Hornsby, northern suburbs of Sydney.

What town?

My mum grew up in Inverell / Moree area. Finished year 9 Certificate, next day bought a one way ticket to Sydney and only went back for mandated family visits.

Sitting for dinner with some of my uni friends in Uni of Tas Lauceston weeks before end of uni (they were different courses, mostly Tasmanians), what are you going to do on completion? "Buy the first boat ride off this island"

Seems country raised kids want to leave the country, city kids stay, then retire to country.


Yes, my 101 year old grand mother up until 2 months ago was living mostly on her own in a old 3 bed timber house on a large block adjoining two sides of Lane Cove National Park with views of the Deburgs bridge from the Lounge Room. Following her fall, she is now living with her daughter in Mel. It is one of the few remaining blocks in Killara not broken into 2 and largest original block on street being corner block. They moved there I believe in the late 1950's. Officially my grandfather retired in 1982, after living in Australia for 33 years. He based away 7 years ago, my grandmother has lived on the pension for longer than they lived in Australia as a wage earner.

My father, her son will tell you its criminal that someone can live on a property worth many millions, then still stick their hand out to the taxpayer. I know nothing of inheritance and any taxation from it, so I have no idea how much the taxpayer will get back on her passing. I can tell you 2/3 of her three off-spring are welfare dependent, so I'm assuming the taxpayer will get very little.

Maybe we have to just grin and bare it for the pre-war'ers as that was the culture they grew up in and retired in. However should we accept it going forward? For example Gen X (my gen), probably not. So what if the house you bought in 1990 in middle of no where only cost $10,000 then, its now worth $10M, no OAP!
  RTT_Rules Dr Beeching

Location: Dubai UAE
Meanwhile in Europe - the end of the Internal Combustion engine powering cars is in sight (although IC/Electric Hybrids will probably be around a bit longer):

https://www.caradvice.com.au/692900/european-parliament-emissions-vote/
End of large scale petrol and diesel manufacturing is somewhere in the mid 2030's, small volume will continue for 10-30 years beyond for remote applications.

However, the EU is being very quick to want to kill of the internal combustion, but has yet to fully address a world of 90% cars being EV, ie energy source, waste disposal etc.
True that.  Still lots of questions about battery recycling, cobalt mining etc etc.

An interesting recent report by CSIRO: https://www.csiro.au/en/Research/EF/Areas/Energy-storage/Battery-recycling

The key will be efficient and cheap recycling as economies of scale improve.  And decent regulation to make sure it happens.

I tend to think that the higher costs of EVs will drive many people to public transport and other forms of mobility in the future.  And that's not a bad thing IMO.

Regardless, they'll still be plenty of demand for fuel oils in the aviation and shipping sectors for decades to come...
The average Joe and Closed Eyed Greenie doesn't give a crap about the mining, out of site and out of mind.

EV prices will drop down to that of ICE prices before ICE cars disappear. Also note those targets by EU are so low that if they can make a petrol engine that efficient, the Env argument for supporting EV's starts to become very clouded.
I think the EU manufacturers will really struggle to meet those targets with the new WLTP standard, and not the old one which was easily 'tricked'.
Carnot
As a guide, I have found that fuel efficiency tends to improve at around 10-15% per decade. For example, my 2011 Aurion has an engine design that was 3 years old when I bought it and was supposed to be around 9.9L/100km (I actually get better).

However, the V6 Camry today, uses less than 8L/100km, might be lower, not sure but when I looked up 6mth ago it was a WTF moment. The fuel tanks are also smaller.

I noticed same in 737's, look at the various generations.

So by 2040, I could see them pulling out another 20-25% of the current fuel consumption. Question will be if they continue to invest. If the directive is EV, they will cut back on investment in ICE.
  don_dunstan Minister for Railways

Location: Adelaide proud
The national housing market is starting to stink rather badly - my own home town once apparently immune now also starting to produce some really bad "investments" - Property Observer:

A New Port third level water view apartment has been sold for $331,000 by mortgagees.

The South Australian home was listed by Samantha Hirniak and Tom Walsh from Walsh Real Estate Semaphore.

Located in the Spinnaker South apartment, the 317/1-2 Tarni Court apartment offers two good sized bedrooms, open plan lounge/dining, and kitchen with dishwasher alcove.

The complex comes with the indoor heated swimming pool, gym and sauna.

Centrally located and close to all amenities, it is just five minutes stroll to Semaphore Village and a short drive to West Lakes shopping.

Here's the truly shocking part:

The apartment was last traded at $599,900 in 2009.
  RTT_Rules Dr Beeching

Location: Dubai UAE
The national housing market is starting to stink rather badly - my own home town once apparently immune now also starting to produce some really bad "investments" - Property Observer:

A New Port third level water view apartment has been sold for $331,000 by mortgagees.

The South Australian home was listed by Samantha Hirniak and Tom Walsh from Walsh Real Estate Semaphore.

Located in the Spinnaker South apartment, the 317/1-2 Tarni Court apartment offers two good sized bedrooms, open plan lounge/dining, and kitchen with dishwasher alcove.

The complex comes with the indoor heated swimming pool, gym and sauna.

Centrally located and close to all amenities, it is just five minutes stroll to Semaphore Village and a short drive to West Lakes shopping.

Here's the truly shocking part:

The apartment was last traded at $599,900 in 2009.
don_dunstan
This can only be a good thing.

Only issue if your house value drops below your mortgage for the newer buyers, but provided you have a job, this is not an issue. Banks don't like evicting house owners as its messy, especially if after foreclosure and selling the property they are still out of pocket.

As for the investors, its about time some realised Australian property prices don't always go up and I think the industry will be better for it if a few people and banks get burned. Back in the early 90's house prices receded so much it took 7 years for Sydney to recover (if I recall correctly), other state capitals less.
  Groundrelay Chief Commissioner

Location: Surrounded by Trolls!
Looks like those small/medium business tax cuts are going through although I fail to see how someone making $500k PROFIT will do much with an extra $12.5k.

The Libs have now established 'Forward Estimates' as the new economic benchmark when it comes to fiscal decisions.
  don_dunstan Minister for Railways

Location: Adelaide proud
This can only be a good thing.
RTT_Rules
No, it's an unmitigated disaster in the making, you of all people should be acutely aware of the possible consequences having most of your money in a Big Four bank.

If this keeps up then there will not be an orderly transition or winding-down of the real-estate boom - it'll be chaos and there's no doubt in my mind that the Commonwealth (read: taxpayers) will have to bail out the banking system and pick up the bill for this twenty year bubble.
  RTT_Rules Dr Beeching

Location: Dubai UAE
This can only be a good thing.
No, it's an unmitigated disaster in the making, you of all people should be acutely aware of the possible consequences having most of your money in a Big Four bank.

If this keeps up then there will not be an orderly transition or winding-down of the real-estate boom - it'll be chaos and there's no doubt in my mind that the Commonwealth (read: taxpayers) will have to bail out the banking system and pick up the bill for this twenty year bubble.
don_dunstan
No its not, you and most of us have repeatedly stated the unsustainable rise in house prices is killing affordability, family budgets and longterm savings. A drop of 5% this year and likely next year is a correction well needed to bring some common sense back into the market. Certainly no worse than Perth over last 3 years.

Not the first time Sydney has gone up and not the first time Sydney has gone down. We all survived.





The Australian banks won't collapse, expert on Ross Greenwood show explained the average level of finance and mortgage is not as high as many believe due to the very large number of legacy loans in the system which are not at risk.

Of note, Dubai has also gone through its own real estate down correction, 25-30% over last 2-3 years, on the back of a similar rise over the previous 3-4 years. No bank bailouts here! Its been good for all as too much money spent in rent, people leaving, families separated. Yes some home owners but mostly investors over heating the market have got burnt, but life goes on.
  don_dunstan Minister for Railways

Location: Adelaide proud
I think what you're not getting is the scale and consistency of the slump. This isn't just a localised slump, it's pretty much nation-wide and its also falling consistently across the board. If it keeps up there will be many people underwater with no equity; it's all very well and good to say that house prices had to fall but the problem is that there's no way back from there without huge amounts of pain.

Read this Guardian article explaining why there's no way that we could possibly have a 'soft' landing because the whole system is predicated on eternal growth. That's why the last twelve months of falling national house prices ($35 billion in the last quarter) is such a disaster for the financial system - they simply are not geared to cope with a sustained fall in the value of the national housing pool. And it's showing absolutely no signs of slowing down - the only regions not affected by the falls so far are Hobart, Hunter Valley and Adelaide - nearly every other part of Australia is experiencing a fall in asset prices.

This will not be pretty and you certainly can't compare it to what happened in the GFC or in 2003; it's not the same thing.
  RTT_Rules Dr Beeching

Location: Dubai UAE
I think what you're not getting is the scale and consistency of the slump. This isn't just a localised slump, it's pretty much nation-wide and its also falling consistently across the board. If it keeps up there will be many people underwater with no equity; it's all very well and good to say that house prices had to fall but the problem is that there's no way back from there without huge amounts of pain.

Read this Guardian article explaining why there's no way that we could possibly have a 'soft' landing because the whole system is predicated on eternal growth. That's why the last twelve months of falling national house prices ($35 billion in the last quarter) is such a disaster for the financial system - they simply are not geared to cope with a sustained fall in the value of the national housing pool. And it's showing absolutely no signs of slowing down - the only regions not affected by the falls so far are Hobart, Hunter Valley and Adelaide - nearly every other part of Australia is experiencing a fall in asset prices.

This will not be pretty and you certainly can't compare it to what happened in the GFC or in 2003; it's not the same thing.
don_dunstan
Actually I do and its nothing we haven't been through before. in the early 90's there was a nation wide slump.

However this time a few differences
- Perth started it correction 2-3 years ago and mostly done
- Brisbane never really had a significant rise to start with, so less likely to slump
- Darwin, well, its small market
- Adelaide suffered over flow prices rises from East Coast, so a slump back to where it belongs will be welcomed by locals
- Hobart was late to join and has people living in cars, a slump will only improve the situation
- Canberra, what ever
- Syd and Mel, prices went off the planet, a slump is desperately needed.

Regardless 5%pa drop for 1-3 years won't cause alot of pain and affects mostly investors. Investors who buy at peaks are not investors are they, they're dreamers! Owner occupiers are only at risk if they borrowed +80-90% and loose the ability to repay. Overall their numbers are very small (according to same radio show) with such high debt ratio and in general these buyers left the market previously due to prices going to high. With prices dropping, home occupiers will and have started to reenter the market.


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