Australia Still the Richest Country on Earth

[mithrandir (Andrew)]

Originally Posted by casstony

High house prices result from easy money and are currently more indicative of the wealth of banks than the wealth of individuals.

High prices reflect people wanting to live in specific locations.

You want harbour views? Pay for them.
You want to be close to good public transport (eg rail)? Pay for it. Prices around our old house have about doubled in a year as investors move in to buy up land where they can build blocks of flats in walking distance to North-West Rail's "Showground" station.

[AndrewJ]

Where i am, a lot of the higher prices are now being paid by foreign investors. In many cases, they dont want to live in the house or rent it out, as it is merely purchased as a means of getting an address that gives them access to a "good school".
Locals cant compete against people cashed up like that.

Irrespective of anything else, comparing the increase in median house price against median income as a percentage shows something is wrong.

Andrew

[Renato1 (Renato)]

Originally Posted by AndrewJ

Gday Renato
I agree partly, and a lot of that is due to our high ( relative ) dollar, and the fact that the cost and time of international transport has dropped dramatically.
Also, ( as mentioned by a friends young daughter ), a holiday cant be repossesed later, whereas trying to buy something real that you cannot afford can :-)
I also agree we are "currently" really well off relative to a lot in the world, but part of me also says thats because we have squandered the legacy of our parents generation to get there, and are starting to steal from the future to stay there.
Sorta like having a party with the credit card.
Somewhere underneath it all, we will need to make "real" money to pay for it, and the current trends for that in this country arent looking as good as they should be.

Andrew

Hi Andrew,
You aren't wrong, there is certainly cause for concern about the future unless we live within our means now. Borrowing for infrastructure is fine, as future generations get to use it too. But borrowing for consumption now, so that they have to pay it back later, isn't fine.

Certainly, all that very high median wealth that Italy has isn't doing it much good. In my 11 week trip to Italy last year, catching up with relatives and friends in a rich part of the country, several themes kept coming out of the mouths of most of the people I spoke to - the crisis, and how their kids couldn't get jobs - and just about everyone knew of someone who had recently migrated to Australia to find work.
Regards,
Renato

[Renato1 (Renato)]

Originally Posted by casstony

High house prices result from easy money and are currently more indicative of the wealth of banks than the wealth of individuals.

But even if so, the banks are owned by individuals and indirectly by their investment, superannuation and annuity funds.

The average superannuation account makes most adult Australians have more wealth than most of the rest of the world.
Cheers,
Renato

[gaa_ian (Ian)]

When you have worked or lived in a developing country, you realise just how "Lucky" we are .... Now if the house prices fall dramatically ...Opps we may not be #1 !
Either way, we have it pretty good.

[Renato1 (Renato)]

Originally Posted by gaa_ian

When you have worked or lived in a developing country, you realise just how "Lucky" we are .... Now if the house prices fall dramatically ...Opps we may not be #1 !
Either way, we have it pretty good.

Hi Ian,
House prices would have to fall quite a bit or our dollar fall quite a bit for Belgium to knock us off the top perch.

But then again, when in Belgium last year, house prices out in the middle of nowhere seemed pretty high to me compared to Australian prices.
Cheers,
Renato

[gaa_ian (Ian)]

Originally Posted by Renato1

Hi Ian,
House prices would have to fall quite a bit or our dollar fall quite a bit for Belgium to knock us off the top perch.

But then again, when in Belgium last year, house prices out in the middle of nowhere seemed pretty high to me compared to Australian prices.
Cheers,
Renato

I think you are right Renato, you don't have to get too far out of the city to find very affordable properties in Australia. We all seem to love our coastal cities though (me too !) and we pay the price for that. Go 1 hour inland and land prices are often 1/10 of the coastal prices.

[xelasnave]

Originally Posted by brian nordstrom

Yes land might be cheap but we get robbed blind to develop it to a stage where the councils allow you to even consider to build a house.
Brian.

That is why we don't have slums.

[Nikolas (Nik)]

Originally Posted by xelasnave

That is why we don't have slums.

We have a few slums in Melbourne, in particular East Heidelberg. There is one area called "little chicago."
What you consider slums is not third world standards but it is slummy none the less.

[Nikolas (Nik)]

Originally Posted by gaa_ian

I think you are right Renato, you don't have to get too far out of the city to find very affordable properties in Australia. We all seem to love our coastal cities though (me too !) and we pay the price for that. Go 1 hour inland and land prices are often 1/10 of the coastal prices.

And we pay through our teeth for essential services (sometimes with our lives due to slow ambulance responses) as a result.

[xelasnave]

Originally Posted by Nikolas

And we pay through our teeth for essential services (sometimes with our lives due to slow ambulance responses) as a result.

Around here they call the Wespac helicopter and it's free.
Mind you we run various functions to raise money for them

[Nikolas (Nik)]

One helicopter aint the issue. you are looking at it rather simplistically

[el_draco (Rom)]

Without reading it, sounds like the same self justification tripe. If you take a gander at most of the mugs you see on the street, they aren't dancing with joy, in fact you're flat out seeing a smirk in most places. Those that are, probably doped on anti-depressants or high on something else. Wealthy? in terms of the all mighty $, maybe, but it's a worthless measure. Bugger GDP; that measures greed. Try a "happiness index" and you'll find we are quite impoverished.

[jenchris (Jennifer)]

You live in the wrong place.
I walk around my area and see a lot of happiness.

I just spent 6 months in uk.
They are less able to find the spark than aussies.

[Irish stargazer (John)]

I hate to be the prophet of doom, but I saw a similar situation back in 2006/2007 based on over inflated house prices and easy money here in Ireland. An economy not based on output/export is never stable long term. Hopefully it won't crash like it did here and leave many in negative equity and out of work. House prices where we lived in Sydney were getting really silly though. Its one of the reasons we decided to return home.

Mind you, since I came back here in June this year, things have really improved in Ireland. Lots of optimism and unemployment falling. New car sales are way up (always a sign of improving economy). Also had a great Summer.
Dublin house prices have gone nuts again though (will they ever learn)

[Nikolas (Nik)]

How many natural resources does Ireland have?
I tell you now if China's economy ever goes south we are stuffed!

[jenchris (Jennifer)]

Our export trade to China seems to mainly be real estate. .

[JB80 (Jarrod)]

Originally Posted by Irish stargazer

I hate to be the prophet of doom, but I saw a similar situation back in 2006/2007 based on over inflated house prices and easy money here in Ireland. An economy not based on output/export is never stable long term. Hopefully it won't crash like it did here and leave many in negative equity and out of work. House prices where we lived in Sydney were getting really silly though. Its one of the reasons we decided to return home.

Mind you, since I came back here in June this year, things have really improved in Ireland. Lots of optimism and unemployment falling. New car sales are way up (always a sign of improving economy). Also had a great Summer.
Dublin house prices have gone nuts again though (will they ever learn)

There are worrying similarities and problems which may even surpass what went on in 2007.
Who knows what will happen if anything?
I don't think Oz will fall anywhere near like what Ireland and Spain have done but don't be surprised if it did.

[Irish stargazer (John)]

Originally Posted by Nikolas

How many natural resources does Ireland have?
I tell you now if China's economy ever goes south we are stuffed!

The peak of the "Celtic Tiger" back in 2002 was fuelled by very strong exports. Its was only when the growth started to stabilise back to realistic but sustainable levels that the housing boom took over and well....the rest is history. It was the banks that killed the country back in 2008.

Ireland has a very big and world renowned agricultural export business. It is also a major global hub in the medical device and pharmaceutical industries as well as in IT combined with a highly educated workforce. We are also self sufficient in natural gas. That's is what is driving growth back again.
You are correct about China's economy-lets hope that doesn't happen.

Visit Ireland. (we need the money !!)

[Irish stargazer (John)]

Originally Posted by JB80

There are worrying similarities and problems which may even surpass what went on in 2007.
Who knows what will happen if anything?
I don't think Oz will fall anywhere near like what Ireland and Spain have done but don't be surprised if it did.

I really hope it doesn't happen in Oz like it did in Europe but the similarities are there. The banks were better regulated than in Europe but you don't really know what has happened behind closed doors.
You have escalating housing prices combined with low interest rates and banks that are willing to lend ridiculous amount so money. Its like pouring petrol on a fire.
A good indicator is the amount of personal debt per capita.