Australia Housing Market Bubble
As a follow up request to an article I wrote last week:
https://steemit.com/australia/@contemplate/australia-s-secondary-bubble-private-education-costs
I was asked about my views on the Australian Housing bubble. There are many articles out there on the bubble and by people more qualified than me. I will share my views with the hope of generating discussion.
My view is that we all need a place to live and that housing or real estate should not be viewed as an investment, however I am sure that many have profited from real estate and would surely disagree. If there is a correction, I view the best approach is for most owners who have been invested for many years to ride it out and for current potential buyers to research and do their own homework before buying.
I have 2 daughters who at current prices will not be able to afford real estate, this is a problem. As people die, move into aged care homes, scale down, move back to rural areas, there will be a increase of sellers in the years ahead but who will be the buyers? Immigration may help but balance is needed.
There is a stigma associated with renting, as though there is a class system of those who own and rent. Europe does not have this view. Perhaps this stigma needs to change.
In Australia, real estate has done very well in recent years, so why not get in? There is a fear of missing out and many feel that there are not many opportunities to invest in other areas such as the ASX etc. Perhaps there needs to be more of a focus on innovation and fostering valuable, Australian made and led companies.
We need sound monetary policies, low interest rates are deterring savers from saving and encouraging some to invest in real estate who cannot afford it and will be challenged if there is an increase of interest rates.
Regardless, if there is a correction, we will all be affected and we will need to support each other.
Thank you for your post, highly appreciated.
I am looking to form an automation and equipment company in Perth. I have the possibility to buy a good running small little tool manufacturing company (can quickly expand the product range with automation), it has been running 20 years and has sustainable income with excellent goodwill (e.g. GE etc.), however the banks here have no clue and I cannot submit to their terms. For instance, they will finance the purchase (AUD K600,--) if I leave a cash (idiots!!!) security of 600K on one of their accounts.
When I ask if I can leave the security in the form of Berkshire Hathaway stock, they say no. Stupid idiots! Every Australian bank is currently paying higher dividends than their earnings, Ponzi-Scheme! I am looking for serious investors, can issue shares via Ethereum technology if wished. Single investor not desired, must be atleast 2 parties. But, so much to the issue of innovation and technology. Nobody really wants to invest in it. And, Australia needs to go into that direction ASAP, in Europe most raw materials are already being recycled. Australia cannot think it can continously survive without high-tech processing depth related to the raw materials it has.
Wow, I can only imagine your frustration. I moved here 3 years ago and was quite shocked when I learned that Australia was not a leader in solar energy technologies. China's commodity bonanza has been both a positive and a negative to the Australia economy, it is unfortunate that more of that boom money was not invested into other areas of the economy. Canada has experienced a similar scenario with the oil boom of the early 2010 but there has been recent interest in investing in IT, technology and quantum computing.
I wish you the best of luck mate, take care.
I have been reading about the beginning of the collapse of the housing bubble in Canada, and I know there is a huge housing bubble here in the US, eclipsed only by the Student Loan debt bubble and auto market bubble.
Seeing your first hand analysis of the Australian housing market bubble confirms my suspicions that this is definitely global, and going to be ugly when it bursts.
Very good points, I have been following the Canadian and US bubbles as well. The trends for all of these bubbles is quite alarming and I find it disheartening. Saying that, I do believe that there is hope as long as people stick together if things get ugly, appreciate each others differences, share views and ultimately make informed decisions and actions.
meep