Sydney house prices rising $1,000 per day

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myscreenname said..

The good news is if you are dead, it doesn't really matter. The rest of them will figure it out.

I hope they put ten $100 notes in my left hand when I die, It might help, IDK

They won't be putting $1000 bucks in cash in your left hand, they will be hanging onto the bitcoin to see if it doubles again. or... they could be trying to sell the bitcoin to add to the $998 to get the cash for your bribe in the afterlife.

Ho hum here we go again. Some of you have a preliminary understanding of what's going on but most have no f ing clue. History just repeats. Get your head around economic rent and it's capitalisation into the price due to government granted licenses - the mother of all licenses is land and until that changes, history will not change. Also the role banks play (creating and detecting credit)

Or just keep dribbling absolute nonsense like a drunken deluded bar flies to each other (as per normal when this topic comes up). Read this



www.booktopia.com.au/the-secret-life-of-real-estate-and-banking-phillip-j-anderson/book/9780856832635.html?source=pla&gclid=Cj0KCQjwjPaCBhDkARIsAISZN7RjOVaF-ZhdumLiJXEpY2mdfvRGBZPqEJMppZDfxi77abW2RAhUKjoaAq5hEALw_wcB


then you will finally know... and the truth is scarier than fiction.


Solution is simple enough. No one should ever own land. It should be leased (where you then have the right to make this land as productive as you want for productive gain, your wealth creation and indeed a far between use of credit) and the rent taken each year will not only reduce any price gains on the land but also create a dividend that could be shared among all its citizens.


but the Easter bunny is coming soon
and you won't have foggiest clue what I'm talking about until you actually understand the game. The game that has fashioned our very civilisation as we know it.
as I said, read above. It's a great context to study history as well.

or don't and keep saying the rubbish I've read here. (Well not all, some of you are on the right track).


ps if you think I'm full of crap google or find the things I have already said regarding the concerns about dropping house prices in the Sydney house price thread on here a while back. And trust me I'm not gloating. Because I also know what's coming next and it's not good. Then again this time may be different to all the other time since the early 1800s.

Inflation is a symptom of a healthy economy, it's primary cause by the velocity of money, the more times money changes hands for goods and services the more in demand goods and services become and therefore laws of supply and demands come into play, secondly long term inflation is good if it's based on wage growth, the more a wage increases the easier it is to pay down past debts . A house bought 20 years ago for 350k loan on 45k income is payable down faster when as wage inflation growth.

I think biggest issue is migration that's caused a double whammy over the past 10 to 15 years, it's suppressed wage growth but proped up the housing and realestate markets. I'm starting to lean towards governments borrowing more to create the right amount of inflation through simulating the economies by infrastructure spending , once the economy starts kicking along the two methods to slow it down is to increase tax and decrease stimulation, I realise Japan has tried this approach but culturally it's like comparing apples to oranges. Lastly all that government debt is easy to remove off the books, they just go to the reserve and print ( this is sort of done already when a bank starts a new loan they create an asset on their books with part of it backed up by a percentage of deposit/ earnings , it's their capital requirements ) when the money has been spent already, creating it to pay it off isn't inflationary, added to the fact interest rates can then go up as well deposits/ bond yields improve .

The two instances of hyperinflation , the first well known is the German after ww1 , crippling repatriations and economy ruined meant they had little to produce to trade with so printing to pay repatriations was worthless to the receiver of the currency, Zimbabwe was same issue nationalisation of assets and then the poor management of those assets meant a country that had to buy in products with little value to export out. Meant outside the Zimbabwe economy their currency had little value. Over time they continued to make larger domination notes and the locals would only accept to trade in usd or other currencies.

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eppo said..
Solution is simple enough. No one should ever own land. It should be leased (where you then have the right to make this land as productive as you want for productive gain, your wealth creation and indeed a far between use of credit) and the rent taken each year will not only reduce any price gains on the land but also create a dividend that could be shared among all its citizens.

Hmm. It's sounds as though you're agreeing with me in concept, but just doing so in your typically incredibly consdescending fashion. You're also ignoring the more difficult issue of how to transition to the solution, which you describe as "simple enough", while making no effort to explain. Or maybe you're the only one who could ever understand?

In practice there is little difference between leasing land from the state, and owning land but being required to pay land tax commensurate with its utility. Under ownership you get the security of knowing you can use the land in perpetuity, but society as a whole gets fair recompense for affording you that privilege.

If you're a young person under the current system, it's like joining a game of Monopoly two hours in, to find that the other players have already got a hotel on Mayfair, and the only thing left to buy is Old Kent Road.

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Harrow said..
Capital gains tax on investment property would be a good help too.

The CGT discount after one year is meant to compensate you for the affects of inflation over time, but instead it seems to be a windfall generator after only a single year.

You would think that in this day and age of computers that you could easily apply a level of inflation each year and calculate something more realistic and lead to less flipping of houses.

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Harrow said..
Capital gains tax on investment property would be a good help too.

You pay for the property, you pay interest on the mortgage, you pay to maintain and upgrade the property, you pay tax on all that.... Then when you sell the government holds their hand out again.

I don't get it.

I do get the land value tax ...

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AUS1111 said..
Under ownership you get the security of knowing you can use the land in perpetuity,

Nah!! That is not the way it works. It is called "real" estate. Real in Spanish is Royal and they can take it off you whenever they like.

Do we have any definite answers? Do I sell up and move to the bush? Is Sydney going to keep going up or is it all going to fall in a heap in 4 weeks?

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Gboots said..
Re new land tax proposal for NSW

propertyupdate.com.au/plan-to-abolish-nsw-stamp-duty-could-create-more-problems-than-it-solves/amp/

Yes happened in every cycle at this time. The stamp duty saving will just capitalise back into the price. Infact whatever gov policy (and there have been many over the past 300 years) this will always be priced back into the land. Unless this rent is taken away via some means, then the fundamental law of economic rent and getting as much you can will Perpetuate. Until the lending (credit creation) reaches a point the productive (real) economy cannot afford. Then the cyclic destruction of land and the entire economy.
and the needle returns to the start of the song...


above. I wouldn't sell yet, the party has just got started. You think prices are expensive... (as everyone does at this point in the cycle) but this is just the starting act.

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eppo said..
Yeh Cisco that hand is pointing at about the right spot Maybe slightly more north but only just. Nice. And above. That's why the next cyclic clean out will be so devastating. All reserve currencies have their used by date and the US dollar is starting to stink. It's well passed it's used by date and it's success has been fueled by the fiat model this time. Nothing wrong with that model. Credit drives prosperity.

but when that credit is used to chase economic rent on speculative land, instead of productive practises, then the house of cards has to come tumbling down. Why? Because governments grant and protect private property rights. It's ironic that America was essentially founded as the greatest land grab in history and indeed birthed what we now know as the stock market.

They have created, printed and borrowed from so far into the future, when it dies (and it will), it will seem as there is no future at all. like a wounded old lion it will fight to the bitter end only making things far worse. When America falls, the world falls. That's just how it will be. Until the wreckage is cleared.

this clean out will be akin to the Great Depression I'm afraid and will make 2007 - 2011 look like a walk in the park. As sure as the sun rises tomorrow.

.....and this is when a major "war" comes into play . To rebalance the books .

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Kamikuza said..
You pay for the property, you pay interest on the mortgage, you pay to maintain and upgrade the property, you pay tax on all that.... Then when you sell the government holds their hand out again.

I don't get it.

I do get the land value tax ...

Sure, you pay all that, but it becomes a deductible or is subtracted from your capital base when you sell. No different to any other business or employment expense.

But more than that, I'm generally against residential property investment on principle, since it favours the rich. And I say this as someone who's employment and financial status places me in an ideal position to be a property investor.

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Mr Milk said..

Harrow said..

FormulaNova said..
The CGT discount after one year is meant to compensate you for the affects of inflation over time, but instead it seems to be a windfall generator after only a single year.

You would think that in this day and age of computers that you could easily apply a level of inflation each year and calculate something more realistic and lead to less flipping of houses.

If you want to do it for land, then you need to do it for ALL investments. Shares, bank interest, everything. Not that I'm against that.

I'm fairly sure that's what the situation was until the mid 80s. Keating changed things from working out inflation. I don't remember the reasoning behind it. It was Costello who put on the 50% discount on CGT that resulted in the house price inflation ever since 2000

From en.wikipedia.org/wiki/Capital_gains_tax_in_Australia#:~:text=From%2020%20September%201999%2C%20the,continued%20to%20be%20CGT%2Dfree.

"From 20 September 1999, the Howard Government discontinued indexation of the cost base and (subject to a transitional arrangement) introduced a 50% discount on the capital gain for individual taxpayers. Assets acquired before 21 September 1985 continued to be CGT-free. For assets acquired between 20 September 1985 and 20 September 1999, the taxpayer had an option of using indexation (up to the CPI as at 30 September 1999) or using the 50% discount method."

Keating Indexed it against CPI, and then Howard just applied a broad 50% after 1 year. I think Keating's approach made sense as it is taking into account the effect of inflation, but Howard's change is just a bonus for any investors.

I don't like this setup because the intent is to funnel money into investment in housing to increase the supply, but the implementation of the 50% discount after only 1 year seems to drive investors to buy existing stock and wait for a windfall profit. Not really improving the supply of housing as much as it should and driving up the cost of existing stock as a negative.


I am getting a bit more skeptical as I get older, which is probably a normal thing, but it makes me wonder if the people that implement these schemes are doing for the good of the community/society or getting distracted and doing it for the good of people that help them campaign.

I watched 'Exposed:The Ghost train fire' on iview last night, and surprised me a bit about how it seems that NSW was corrupt at a high level, at least back in the 80s. Scary in fact. Organised crime, and politicians that should be looking after us, looking after themselves.

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Harrow said..

FormulaNova said..
I watched 'Exposed:The Ghost train fire' on iview last night, and surprised me a bit about how it seems that NSW was corrupt at a high level, at least back in the 80s. Scary in fact. Organised crime, and politicians that should be looking after us, looking after themselves.

I felt like crying for the families of the victims when I saw that show. What a disgusting bunch of individuals. I can't comprehend that behaviour.

Yeah, I was similarly shocked. Some guy wants realestate and ends up killing people to try and get it. It also showed the level of corruption in place that makes someone think they can get away with it.

If your kids died in an accident its one thing. They happen, however unfortunate. But to find out its most likely a criminal attempting to get something and then find that he has been helped along by corrupt police and politicians... heartbreaking.

I hope this level of corruption is a thing of the past, but humans being human means that it will probably happen again.

The families who can afford to travel are saving, but theres an overly large percentage of Aussies struggling day to day who havent been solvent enough to holiday for years, if ever.