Living Standards Across Australia

[positivetennis]

As a Sydney person living here for almost 50 years I have never noticed as much devlopment and change. Houses are being knocked down, backyards turned into granny flats, houses over 1 million, high rise going up everywhere. Our incomes are higher than the rest of the country, but everything is so expensive. Traffic is a nightmare and people are very competitive with their behaviour and its hard to get ahead unless you earn mega dollars.

My question here is to ask those of you who live in the other cities, how things are going for you. I guess Melbourne is not far behind Sydney, but what about those of you who live in Adelaide and Brisbane. Adelaide in particular has the cheapest housing on the mainland but the highest unemployment even though it was rated highly on the liveability index last year. Any thoughts about this, maybe some of you have lived in more than one city and has some views you could share.

[gav240z]

You seriously do not want to start me on this topic.... .

 

The good news is, immigration is at it's lowest level in 9 years.

 

Which might give infrastructure time to catch up to population growth.

 

With the end of the mining boom, rapid population growth and unaffordable housing in Australia's main cities you can expect our living standards to continue to decline.

 

The good news is the looming property bust will make housing affordable again.

 

You have to ask yourself, why is it that Australia has more land per person than any other continent, yet has the most expensive housing in the world.

[positivetennis]

I'm worried this bust in real estate might not come, instead we might experience more moderate growth. After a break in growth in the December quarter we have just recorded 3.1% growth in the month of May in Sydney and 6.6% for the quarter (Tim Lawless June Core logic.com.au). The only city to experience a decline in may was Perth at -2.7%. Sorry to bring this topic up Gavin, appreciate your response.

 

With Mr Meriton (Harry Trigerboff: currently richest guy in AU) going full steam ahead with mass building construction particularly in Sydney and Melbourne, they must know something in advance. He was interviewed by Ross Greenwood on the money show on 2 GB and was asked if there would be an oversupply of units being built to which he refuted totally. Lots of overseas buyers keen to buy these units sight unseen, particularly that they are brand new and Governments no long interested in supporting regional Australia. (Carbon footprint excuse).

 

Can a city like Adelaide be a future alternative to people who want to live close to the city and not pay a fortune?

[gav240z]

You could be right, a bust may never come. It's a risk either way, buy now and watch it pop or don't buy and watch it continue to grow forever.

 

Harry would talk his own book. But consider this, all the banks are moving to tighten credit, many are not lending to Chinese anymore (they must know or have seen something themselves), all these sight unseen purchases were coming from China.

The Chinese government is cracking down on capital outflow (they limit to $50K per year per person). Chinese browsing of RealEstate.com.au has declined by 25% this year.

 

The growth in May doesn't really concern me, the drop in Interest rates has stoked that. I think the APRA will need to move in to clamp down further on Macro Prudential controls.

 

At best property growth will moderate or plateau and go nowhere in my opinion.

 

I've considered moving to Adelaide for what sounds like the reasons you describe. The big problem is jobs...

[positivetennis]

There is no doubt that Adelaide needs to re-invent itself with some more economic drivers than it currently has going. It's population growth is a lot slower than Sydney and Melbourne. I'm thinking that technology, education and the arts (festivals) might be it in addition to building submarines. Maybe another car maker could take over (Imagine Nissan making Z's in Adelaide). The other risk with investing in Adelaide has always been the opportunity cost of investing in Melbourne and Sydney but the difference of entry now is quite great so the lure of getting into Adelaide at a much lower price could nullify this. I went to Adelaide in January and its a beautiful city, easy to get around, lovely coastline and hills to the East, sunset at 9.30pm in summer and very relaxing and prices have jumped by about 4.0% over the past year so eventually all cities will be pricey including Hobart which has jumped as well. The fear of missing out (FOMO) is there in the back of my mind.  Is there anyone out there on this forum who lives in Adelaide that can shed some light on the future of this city?

[260DET]

Yes, while you are working you have to go where the jobs are, no getting away from that though hopefully improving communications technology will change that a bit. Don't think that the housing boom will bust, it may pause and readjust for a short while but in the long medium term will keep on inflating.

 

We should not forget that our living standards are relatively high though, much of what is considered 'essential' today was not available or considered a luxury not that long ago. So there are false expectations at work here too. Also relevant is the fact that our standard of living is partly supported by allowing foreigners to buy our land in the form of mining or real property, the latter being something that a lot of countries do not allow. Private debt is very high in Australia, some of which no doubt is relevant to funding extravagant lifestyles.

 

On top of all this we have multi levels of government  all of which impose all sorts of costs that eventually have to be paid for and from which we demand all sorts of services and attention, a lot of which we should be able to do without or do ourselves. Basically I think we are living beyond our means as a country.

[dat2kman]

Brisbane does not exist. There is a border gate.

It is kept shut and locked.

Tell all your southern mates we are strange in Qld.

We talk slow, sit on front porches, drink beer we cant spell, and play really good rugby league.

Nothing to see, move on,,,,,,,,,,,,,

[260DET]

There is nothing great about Brisbane, glad I moved away.

[PB260Z]

Hi,

 

Yes we have a very low population density, but so much of our land is not easy to live on.

 

Another thing is the expectations people have. One of the young guys at work is always complaining that he will never be to afford property...... He has just taken his girlfriend to New York to propose marriage and will be returning via the Greek Islands.

People just seem to want everything at once these days. When I got married and purchased a house, I had 2 jobs and had done so for 5+ years. We had had not been on European holidays and had minimal furniture.

 

My wife and I went without things for years and only recently have started to indulge. She still has not travelled further than NZ.

 

Yep I'm an old fart & on my soap box

 

PB

[positivetennis]

Yes, many (or some)  of the younger generation do spend on lifestyle things. Overseas trips, mobile phone bills and they like to progress quickly to the top when it comes to purchasing property and not afraid of large debt's and credit. Many of the younger generation work in professions that are highly paid. Sydney in particular has some individuals who earn between 500k and 1million a year and this city is their playground along with overseas wealthy people who have lots of money and have changed the value of things.

Some of  the older generation used to save up and buy when they had the money. Unfortunately the rate of change has made this approach difficult to execute

I don't know how a school teacher for example would be able to afford the median price of over 1 million in Sydney, unless they are prepared to live on the outskirts which many do with the hope that they will pay the house down and trade up. The only problem with this strategy now is that the inner and middle rings of Sydney increase in value at a much higher rate than the outer ring so that is it for them. Sydney is a global city now and Melbourne is not far behind in terms of real estate but still cheaper.

Brisbane is benefitting from the lower dollar and tourism is the main driver, its been tipped to have its best year yet for growth, but time will tell.

[gav240z]

So the question is, do we want Melbourne and Sydney to be cities for the rich only? A big part of the problem is the tax structure of this country. It encourages leverage into property. Instead of encouraging investment in productive enterprise, small and start up businesses.

 

Then you have the ticket clippers, rent seekers who use politicians to gain an economic advantage over others. Think of all the toll roads, outrageous airport parking fee's, compliance costs (imported vehicles) are just some examples of ticket clipping or rent seeking which really serves no economic benefit to others.

 

We have a lack of serious competition in many fields in this country, banking (the big 4 control the majority of the market), supermarkets  (Coles and Woolworths) etc.. A lack of serious competition means they can play by their own rules and in many cases act like a cartel. There is a lot of examples of this behavior.

 

It's what inflates the cost of living here in many ways. The current model of flogging a house to the next person for more than you paid for it can only work for so long. At some point it will be productive enterprise that's needed in order to continue our quality of life. But we are doing everything we can to kill manufacturing in this country and the start up environment for tech companies is pretty hostile. They cannot get funding. Which is why any ambitious young entrepreneur in the tech field ends up in San Francisco, or Austin Texas. I think Cape Town South Africa was great for those working in tech sectors (online marketing etc..) at least when I spent a few months there that's what I could see.

 

The problem with a services economy like ours, is that we cannot export cafe's, manicures, massages, personal trainers outside of the country. In order to flourish we must export things that people want or need. Right now Australia's economy is dependent on houses, baristas's, personal trainers, massage parlors etc.. Walk down any main street and that's what you'll see.

 

We haven't had a recession for 25 odd years now, in some ways we need 1, it will make us re-evaluate the current system and perhaps as Donald Trump says "Make Australia great again".

[positivetennis]

Unfortunately with our 3 year government terms, means that governments are less visionary in planning for the future and more interested in getting re-elected or elected from opposition into government. We have had 5 prime ministers in 6 years where they are more worried about news polls and the daily media cycle than governing for Australians. Countries like China have 100 year plans.

Globalism and internationalist philosophies have been forced on Australians and we are basically been given our orders. You can tell that this started in the 1980's when we allowed our dollar to be manipulated by multi-nationals and tariffs lowered in an attempt to create  a 'so called' competitive environment. How could have Australian manufacturing survived when China pays its workers nothing. Currently we are selling off our farms and each day we do this our GDP shrinks.

With the services industry now being a focal point of Sydney and Melbourne points to an increase in immigration and then building infrastructure and construction sector industry which in turns fuels the demand for real estate and since manufacturing and mining are declining, everyone is thinking Sydney, Melbourne and then Brisbane. Sydney's population growth is ahead of schedule increasing by 1 million in just 5 years.

[Brabham]

I can not help but read the original post and the others and agree that our living standards are declining rapidly. As someone who grew up in Sydney (now Slumney) I wake up each day with an unending sense of loss and mourn what has become of Sydney and Australia, and dislike what it is now and is further heading towards.

 

As Gav has alluded to, my contention is that living standards are declining as a result of excessive population growth, driven by very high levels of immigration. You can not increase the population of a country of around 23 million by an extra 1 million people every 5 years and not expect living standards to fall. In short, any perceived benefits of a "big Australia" are far outweighed by the costs that overpopulation imposes, even though it may push up the level of economic growth as measured by GDP. What is not factored in to GDP growth are the costs of this high population growth. These costs include all of the things mentioned above, such as higher house prices, smaller lot sizes, higher density living, urban sprawl, high costs of congestion (time costs), loss of open space, loss of heritage, environmental and cultural assets. This is why Sydney and Australia are becoming a worse place to live for all those who are currently here. In the 1960's, Australia had a population of around 10 million. It now has a population of around 23 million. I stress that it is making all those currently here worse off, regardless of their background.

 

One of the key factors why both major parties support high population growth probably comes back to our political system allowing political donations. Obviously, big business has an interest in high population growth because it means there are more consumers to sell products too, increasing profits. Property developers also clearly benefit from this system as population growth means more profit. So long as political donations are allowed, no Australian should have any faith in the ability of the political system to make decisions that are in the best interests of Australians, as they are beholden to their donors. The Libs being in the grip of big business, Labor being hopelessly controlled by the unions. No rational person would donate money to a political party without favourable decisions in return. This is essentially legalised bribery, and is not democracy, but is a plutocracy or neo-feudalism controlled by special interests. There needs to be public funding of election campaigns, so that parties are not owned by their donors. Every bad political decision can usually be traced back to a special interest.

 

This is why they have been hesitant to touch negative gearing and CGT concessions, as it would make the wealthy beneficiaries of this worse off. Both negative gearing and CGT concessions should be scrapped, as it creates a favourable tax incentive to invest in property. However, if they are scrapped the changes should be grandfathered so that those who invested under the tax regime at the time are not unfairly disadvantaged. This would have some moderating effect on house prices. High house prices may not be a good thing, as all of people's income is devoted to housing and can not be spent on other goods or invested, I'd argue it may be bad for the economy. Similarly, I think that children need a backyard to play in, or we will see a lot of health and social problems down the track from families growing up in apartments or with no open space.

 

In the upcoming election, I would therefore encourage people to vote for a minor party that supports lower population growth. We should also put pressure on the politicians to end the practice of political donations. If people vote for a minor party, it sends a message to the major parties that voters are dissatisfied with their performance, they will then have to take notice. What is really needed is probably a new political party that makes decisions in the best interests of the people. If people saw that it made decisions on principle and was not owned by donors or special interests, I think a lot of voters would get behind it and abandon the other two.

 

In my view, ownership of housing/land should also be restricted to Australian citizens to improve affordability and protect sovereignty.

This gets difficult when companies/trusts are involved, but we could establish laws around it.

 

The policy implications in order of importance are therefore:

 

1)Remove political donations and establish public funding of election campaigns, so that parties are not beholden to their donors.

2)Reduce population growth by substantially lowering the level of immigration, as it is making all current residents worse off. Over the long term Australia should return to a population of around 10 million to be sustainable.

3)Scrap negative gearing and CGT concessions, grandfathering the changes.

4)Restrict ownership of at least residential property to Australian citizens.

 

I would encourage everyone to vote for a minor party in the upcoming election, to send a clear message to the big two. You can then preference one of the big two who you dislike the least. Sadly, I have little faith that things will improve.

[EJ101]

Sydney is expensive, congested and badly planned. Roads and rail are 20 years behind where they should be. Developments are approved and built prior to major infrastructure such as roads, rail, schools etc being put in place and then they play catchup but never catchup and reliance on your car is your only option as public transport will take you twice as long. Some good friends of mine packed up and moved to Orange and they vow never to come back to Sydney. (Maybe after their first winter there they might change their mind). Unfortunately for all of us the days of a government with long term vision and doing what is needed for the greater good is gone. I'm keen to hear what people from other parts of the country have to say. I've always liked Melbourne!

[Brabham]

Longer terms may also help partially, 3 years is too short to have any long term vision, even shorter when they are backstabbing each other!

[blu260z]

I have lived in Adelaide for the last 23 yrs and agree with most, Adelaide needs a restructure. Adelaide is a great little city we have great beaches, nice suburbs, excellent wine and great history. Unfortunately I doubt any automotive industry will move in to replace Holdens as the cost of manufacturing compared to places like Japan, korea and America just couldnt be matched.

The submarines are great for SA but is still not the saving grace it needs. We have an excellent wine industry in both Barossa Valley and McLaren Vale and it employes alot of people but its deffinatly not booming.

The government considered using SA as a nuclear waste dump and although not great it could generate alot of money for SA which could be used to expand infrastructure.

 

Our unemployment rate is high because the government hands out $200+ a week to them and if that covers their cost of living and housing trust they dont work. Dont get me wrong people on legitimate pensions and unexpected redundancy and unemployment need centrelink, but I am referring to the people dodging the system.

Dont dare me to continue on this topic!!!!!

 

Our cost of living is not to bad in Adelaide but our beer is overpriced but thats only because nobody dares to drink WestEnd (vomit). And if you can deal with a burst water main every 30 min you will love it. All though I love quiet little Adelaide I would like to see a bright future for younger generations and if this means turning little Adelaide into big Adelaide then thats fine with me. Hopefully these submarines spark something and really kick Adelaide into gear ☺

Edited June 5, 2016 by blu260z

[260DET]

It's refreshing to read the posts here, obviously the problem is not a lack of intellect and talent in this country but a lack of constructive outlets for those qualities. As for Sydney, the die appears to be cast, too many people wanting to live/invest there so the result is inevitable unless govco changes the rules. And that is not going to happen while those with influence are making money from the situation.

 

On the subject of govco wastefulness, just the other day a woman was taken by a croc up north. It was her own fault, her family had the grace to comment that she had intruded into the croc's territory. But what does Qld govco do? We are going to spend $3 MILLION on a survey of the croc population. Just a typical throw money at a perceived problem kneejerk reaction 

[gav240z]

A good article discussing the same thing really..

 

https://capitalistexploits.at/2016/06/trouble-brewing-australia/

[gav240z]

This Brexit stuff is interesting... despite being told by every Economist, every world banking organisation and countless politicians that an exit would be bad for Britain, the majority look to be in favour of leaving the EU.

 

I can't help but think that a lot of the challenges the UK are facing are similar to what Australia is facing. It will be interesting to see if this has any impact on our own election in a couple of weeks.

 

Neither major political party (Liberal / Labor) wants to talk about the elephant in the room.

 

Worth listening to this interview on 2UE. Which all sounds reasonable to me.

http://www.2ue.com.au/news/sustainable-australia-partys-william-bourke-talks-to-john--garry-20160621-gpo0cv.html

 

I still haven't made up my mind on who I'll vote for this coming election but I am starting to lean more toward the Sustainable Australia party or at least giving them a preference vote.

[260DET]

Watched a JJJ talkfest show on Ch 22 about how tough it's supposed to be for young people. Lots of comment about uni HECS debt but not one mention of doing a trade instead. Revealed a typical lack of balance from the ABC, plus hipster JJJ influence although youngies are entitled to bitch about housing affordability which is a direct result of  Govco policy.

[gav240z]

Well the audience for JJJ tends to be young hipsters. So that's probably half the reason.

 

I'm all for doing a trade, shame my IT job pays so much better.

[260DET]

So you're a hipster Gavin lol actually except for the rapcrap I like most JJJ music and one thing's for sure, moi is no hipster. 

[andyk_79]

Ha ha come on Gav we know you ride a fixie to go get a kombucha whilst wearing an obscure hat ironically

[Brabham]

I agree with you Gav, I will most likely give my first preference to sustainable Australia or similar and then preference labor as they are prepared to make some changes to negative gearing, and are not handing out tax cuts to businesses when the budget is nowhere near balanced. None of the major parties possess the gumption to make the tough choices to reduce the deficit and have resorted to lies and scare mongering.

 

I think the issues faced in the UK are similar to here, and while the UK will face pain in the short term I am certain it will be better off in the long term when it regains sovereignty.

As Kennedy said GDP captures everything but that which is important, and higher population with higher GDP is actually lowering living standards as the good folk in the UK have realized.

The problem with GDP is it does not capture the negative externalities of population growth ie, higher house prices, smaller lot sizes, congestion, lower quality of life. In fact, it may measure the sales of more cars and fuel as a positive, yet the value of time lost in commuting and traffic is not captured. I would argue these costs far outweigh a few percentage points of GDP, and are significant if you assign a value to this time lost.

One of people's key motivation is also intergenerational equity, and it is clear to me that the next generation will have a lower standard of living due to unaffordable housing, denser living, congestion etc. I can't see any leaders here at the moment with the fortitude to tackle these problems. I think other countries will leave the EU too as they are being conned.

Edited June 24, 2016 by Brabham

[Brabham]

PS an intake of 70,000 people a year is still far too high, we should be aiming at negative population growth in order to see the benefits flow through to people in the major cities. Japan's population is declining and while their growth is stagnant, I suspect living standards in real terms have improved as people have been able to afford to move back into Tokyo rather than commute. Imagine how much better off you would feel if you could now afford a 40 Sq meter apartment in Tokyo rather than 20 square meters. Japan is smart, negative interest rates are a bad idea though.