Comments on: Australian house prices in 2010

By: Mervyn Jacobi

Mervyn Jacobi — Fri, 02 Jul 2010 22:04:49 +0000

I suggest that anybody wanting to invest in the house market should first look at the history of where inflation and bad economy come from. Look in the internet at scources of the history, remembering that Australia, the UK and the US also had recessions in the 1930’s and 2006 on, although the US is more in the throughts of a depression, their economy is going backwards. While people are buying homes as an investment, the prices they are getting are probably only keeping up with inflation or little more, and when sane parliamentarians come into action???? the bubble will burst, but those people who have bought homes to live in will be better off and be able to keep thei homes, unlike now. History has shown that because of much human greed, the top tax has to be 66.6%, the lower top taxes since 1970, have proved that. Get on your internet, and check “tax history of Australia” unfortunately it won’t tell you much before 1960 bu go to “Tax history of the US” which will take you from the 1930’s recession to the 2007’s depression, then look at “Taxes around the world” and you will see why there is a “Global economy, it is caused because the treasurers or whoever is handling the taxes is responsible.

By: Mervyn Jacobi

Mervyn Jacobi — Fri, 02 Jul 2010 04:06:52 +0000

I am 80 years old, back about 35 years ago the government gave housing grants and the real estate or developers increased the prices of the homes by an amount equal to the grant, and the same is happening now. Of interest to you could be that the prices of new homes about the same as new homes costing around $500,000 today, cost only about $20,000 back in 1970, not from normal inflation though. The obscene increase in the cost of homes, food and all other goods and services has been caused by the governments over the last 40 years, reducing the top tax from 66.6%, allow ing those people unfettered by other means ie Arbitration court decisions, have increased their salaries or other income, causing the hugh costs in the goods or services that their company delivers. Wages, low salaries and small business can not keep up with these obscene prices, so you have a recession and if it goes as in the US, you have a depression – The economy goes backwards.

By: Mervyn Jacobi

Mervyn Jacobi — Wed, 30 Jun 2010 07:00:24 +0000

AS long as we have governments ie political parties who put lawyers or others who don’t have any idea on the effects of low top taxes ie 47% tax has brought us into recession mode, 35% has brought the US into a depression. Our best tax for wage earners and small business, and the economy was back in the 1950-70, where our economy was tops and everyone had a good existence. The treasurers since 1970 have been playing god with stupidity, and have ended up now just teetering on the edge of the precipice of the recession. When they bring back the 66.6% tax like we had back then, you will notice the hugh benefits.

By: Greg Atkinson

Greg Atkinson — Mon, 22 Feb 2010 03:09:30 +0000

Christina well they are raising the retirement age so I guess it means they don’t want people to retire at all! Amazing how Rudd and Co don’t see the irony in making changes to super whilst leaving the politician’s overly generous pension scheme untouched.

By: Christina

Christina — Wed, 17 Feb 2010 20:27:57 +0000

Beats me Greg. I don’t understand many things this government does. They say they are worried about the aging population problem but they cut the voluntary super contribution cap by half and propose higher tax on super contributions. How does that help people save more for their retirement?

By: Greg Atkinson

Greg Atkinson — Wed, 17 Feb 2010 11:56:19 +0000

Hi Christina, that is a good point about the relaxed foreign investment rules. I wonder how the Government figured that would help local home buyers?

By: Christina

Christina — Wed, 17 Feb 2010 11:03:22 +0000

Hi Greg Agree that government action helped pushed up prices. Relaxing the property ownership rules for foreign investors in Mar 09 probably did more than FHOG as locals have to contend with cashed up foreign investors who can borrow at low interest rates overseas. According to this article, 40% of sales were to Chinese investors in some suburbs. I live in one of the south-eastern suburbs of Melbourne and I see exactly what they mentioned in the article happening around me. Lower loan volumes locally also support the view that a lot of the property purchases are by foreigners. Three interest rate rises has not dampened the appetite for higher end property but has caused mortgage stress to first home buyers. If the Chinese government continue their tightening, it won't just be our mining companies who will get impacted.

By: Greg Atkinson

Greg Atkinson — Wed, 17 Feb 2010 07:59:24 +0000

I was not really worried about house prices in Australia until late last year/early this year. I don’t think Keen is right as such, more of it is a case that the Government was wrong to prop the market up via the first home owners grant while the RBA was cutting rates at the same time.

I am not a housing market will crash sort of guy, but I do get the feeling it is getting a little too hot for comfort at the moment.

By: Christina

Christina — Tue, 09 Feb 2010 06:52:15 +0000

Peak oil? I don’t think I know enough about oil to comment.

I agree with you that we will see some things in the next few years that perhaps we have all not seen in our life time so far. I have been reading this book This Time is Different which gives us a really comprehensive analysis of financial crises. The authors show us what happened in over 250 historical crises in 66 countries.
An unsustainable rise in asset prices and credit precede banking crises. Banking crises tend to be followed by sovereign debt crises and it could take up to 10 years to get back to pre-crisis level. I think the financial crisis that started in Oct 2007 is still playing out and it will be quite a few years more before we see the end of it.

By: Witold

Witold — Tue, 09 Feb 2010 00:31:18 +0000

How about peak oil? Some experts are predicting by the end of the year OPEC will have 50% market share in oil exports around the world. What will the future of the world’s economy going to look like in the recent years ahead, let alone the long-term. I believe Australian house prices at the moment are unsustainable along with the level of the world’s GDP.