Only 30% of people have mortgages, why should the remaining 70% care, many can even put money in savings accounts again after 15 years of them being basically worthless.

He never said interest rates wouldn't rise either, he basically said they don't forecast the conditions that warrant a rise won't happen until then.

Here's a pro-tip if you took on too much debt under the naive belief that 0.1% interest rates were the new norm, sell your overinflated assets and live debt free.

Extremely low rental vacancies are a result of?

State governments, local governments, and property development, basically colluding to not build cheap and affordable high density housing.

australian taxation is already one of the highest in the world. In order for the gov't to build affordable housing (high density or not), it would take even more tax revenue to pull off.

I for one, will not want to pay more taxes.

The free market works for food, so why not have it work for shelter? The key sticking point is zoning issues, and approvals. These decisions are made at the local (council) level, and the existing residents overwhelmingly dislike a high rise going up next to their house/backyard.

The other issue is that a large portion of real estate buyers want land ownership - ala a house. The thought of living in an apartment is at best a stopgap for them.

Therefore, the capital appreciation of an apartment is meager at best. This also causes chronic underinvestment in apartments (esp. quality ones), and exacerbates cheap, low quality shitboxes that people dont like much (and reinforces the idea that they don't want to live in an apartment in the long term).

Where did you pull that from?

Specifically i'm gonna call out income tax in australia :

Income Tax Rate 45%

Ranked in the World #17

> ... This means that Australians are paying a larger share of their wages in taxes compared with other countries.

The single figure of 45% is the highest tax bracket, which only starts at $180,000/year. Australia has a higher minimum wage than most countries, so a large proportion of the population are in minimum wage jobs. People on minimum wage here make ~$40k/year and pay around 14% tax.

Not that any of that really matters if you're talking about government spending, since the overall tax rate is what determines government income, not what any individual person is paying.

If I own an investment property, then I'm going to want a return on that investment.

I want the rent payments to cover the mortgage, and to see capital growth over time.

When you don't get decent returns on your property investment, you'll just move your investment elsewhere.

However with a lack of diverse investment opportunities, housing is a decent play that people understand. So even if returns are low, it's seen as worthwhile, especially over the long term.

This is especially true when you get the much hated "Boomers" and older X-Gens buying properties for their children as it's seen as a better use of money than their kids renting.

I've seen queues of people down the street for open-inspections of average properties, and "Boomers" literally signing offers on the kitchen table at the open of any decent apartment.

If property investors art investing, then builders will stop building and we'll deepen the housing crisis. We've already seen a few major building firms go under in the past 18 months. It's not easy to create a building firm capable of sizeable construction project. It takes years to trade school investment to actually train and qualify people to be able to build houses, and we've under invested in trade schools.

There is a general sentiment on Reddit and elsewhere that if you cant afford the mortgage rises then you shouldn't own an investment property. This just doesnt make any sense, and isn't a useful way to think about it. I get that people are angry with the situation, but it doesn't help change society and housing policy when the younger millennials don't understand all the policy issues or motivations of those that own Rental Properties. :-)

I see regular calls to ban AirBnb as if thats an easy answer... :-/

If you are making 15% appreciation YoY, your mortgage raises are covered and then some by that increase. If you do not have the liquidity to cover those raises, then get out of the market for someone who does. What you are describing is passing all the risk of your investment onto another party to take advantage of the entire profit.

We do, in fact, understand ALL of the policy implications here. It seems like you don’t. The housing market should exist to PRIMARILY provide housing. Any effects such as you being able to cover your margin by passing on your increase to a tenant is a secondary benefit and should be curtailed to meet the primary need of the economy.

Investments should have risks to make economic sense. In Australia, property owners have mostly been buffered from those risks. Economically, the question needs to be asked as to what value investors provide to the market? The current property investor class is for all intents a purposes a vehicle designed to remove money from the pockets of poor people and put it in the pockets of upper middle class people. Most landlords take bonds to fund improvements to their houses after a fingerprint is found on the wall or the concept of “reasonable wear” is not accounted for, they pass on almost all of the costs, and when a person asks for help with a problem they get ignored indefinitely.

You would make similar money in the stock market but you are taking advantage of broken system that enriches people already in the system. Mortgages give access to houses because they are necessary. People now take mortgages and use them as a margin loan to fund speculation and investments.

The policy answer is to stop allowing investors to access all of the benefits that have not been designed for them. Fixing the John Howard era middle class welfare rorts would begin to fix the problems.

As you stated the right thing to do is to look at interest rates and not overexpose oneself to the effects of inevitable rate changes.

How most people think about it: I can afford the monthly payment and it's cheaper than my rent. Let's do this.

Fortunately banking laws in Australia prevent banks from granting loans to people that they can just barely afford. However despite this most people still don't have any savings or disposable income (When compared to similar "rich" economies, Australia has one of the lowest rates of personal savings in the world.)

The result is that a lot of people will have to cut back and find their lifestyle significantly changed in order to keep their homes.

Because the remaining 70% rent, with many wanting to own a property someday.

Higher mortgages mean higher rent.

Australia has very little social housing.

Renting for families is an unpleasant experience. You can be forced to move with little warning, and finding a new rental in your area can be very difficult and sole destroying. So many would love to own if they could, if only for the stability it brings.

We have many problems!

I just made an assumption :)

But lower mortgages also mean higher rent. I've never seen rent go down.

Literally everything means higher rent. Go figure.

Census dwelling data does not give an accurate picture of the number of Australians with mortgages. For example on my census our household reported that we rent the dwelling that we were in, because we do. We reported nothing about the mortgage we have on an apartment in the city that we moved out of 1 year earlier. According to that data point your using my household would be seemingly unaffected after interest rate rises outside of potential rent stress.

All that being said, it sounds just like any other western country, or in fact any country in the world apart from very, very few. Welcome to 21st century, you have mostly FED to thank for this, everything else just snowballed in its bad decisions.

We've had wage stagnation for ~15 years. I've long wondered what it is about our job market that keeps wages down whilst company profits continue to grow. Perhaps an unspoken collusion around wages, or maybe lack of salary growth in government jobs that in turn pushes the private sector.

Lack of competition and choices is another issue, as is Australia's dispersion of cities. It's not straight forward for someone in Adelaide to take a job in Sydney that pays more. Workforce mobility certainly pays a part.

When I lived in the UK, I took it for granted that you could commute to another major economic City for work, especially in the South.

Because of wage stagnation, I see a major debt crises looming with BNPL and its old friend the credit card.

It's a house of cards. Taking on more BNPL debt that is serviced with credit-cards is going to become a huge problem for Australians.

I see a lot of people in my community that appear to be doing OK, but with mortgages that gone up over $1000 a month.

People have little savings and live month to month, spending everything they have.

Changing lifestyle and spending patterns doesnt come easily to people, and I see it as the slow boiling frog problem. They'll maintain their current lifestyles because they dont realise the spending and credit problem they have.

Where is the extra money coming from to service their mortgages?

Well, it's credit cards and BNPL. Which will slowly grow until they are in trouble. Maxed out limits on multiple BNPL schemes backed by multiple maxed out credit cards is going to create crippling debt levels.

It may take 18 months to manifest, but I'm sure it will.

I already know that many people in my community carry credit card debt month-to-month and I cant see how this is going to improve.

It's not just those with Mortgages that are in trouble. Renters will be in serious trouble too as all those investment property mortgages have gone up too. Which means huge increases in weekly rents are starting to appear. The Australian subreddits are filled with irate renters.

Just getting my thoughts down, and anything could happen I guess! :-)

why isn't it straight forward? There's nothing stopping someone from interviewing (let's say, remotely) and accept a job in sydney while in adelaide, and then move when they secured the offer.

There's some moving costs - but i would imagine it's going to be in the order of about 1-2 months of rent at most. Of course, if you have kids, with school and such, then you'd have a harder time.

Want to improve the lives of ordinary Australians? Reduce immigration levels.

Employees can import foreign labour which has the effect of putting downward pressure on wages. Hence why wage inflation has stalled since COVID restrictions have been eased.

And in terms of rental market, it has been widely reported.

Westpac has forecast that Australian rents will continue to hyper inflate until mid-2024 because of soaring international migration.

Westpac Business and St George senior economist Pat Bustamante warned the current rental inflation was likely to be longer and more severe than the prior cycles because demand via immigration was vastly outpacing supply.

“Given the current supply and demand dynamics, and the lag in supply, the peak would likely take longer than people expect”, Bustamante told The AFR.

“The return of migrants and international students… [is] putting a further strain on the rental market”. [1]

People don't dare say reduce immigration because then you get called racist.

[1] https://www.macrobusiness.com.au/2023/02/westpac-migration-s...

> Employees can import foreign labour which has the effect of putting downward pressure on wages.

You didn’t cite any sources here, and according to [1] this is wrong.

In response to your comments about the rental market, I noticed you picked a source that is overwhelmingly anti-immigration. (I counted 4 more articles either linked or ‘recommended’ that described in varying terms how immigration is the cause of all of Australia’s problems)

I don’t say that as a means to ignore the argument, rather I think we’re all better when we can recognise biases - internal and external.

According to [2], the rental crisis has been caused by many factors predominantly related to the pandemic rather than immigration.

> People don't dare say reduce immigration because then you get called racist.

I don’t think an argument should be dismissed on that basis, either! But surely you accept that some who advocate for reducing immigration do so simply because they are racist.

Some may avoid the suggestion because they recognise that immigration is longstanding policy and perhaps a defining feature of our country.

Some may see that other countries who are less welcoming of migrants are indeed having the same wage/inflation/property problems.

So it is possible that some do not reject your argument because they think you are racist but because the argument is not convincing.

[1] https://insidestory.org.au/does-immigration-mean-lower-wages...

[2] https://www.ahuri.edu.au/research/brief/why-does-australia-h...

You want a developer, then if all or nearly all developers are employed you need to offer higher wages to them to defect to your company. If however you can import an immigrant and pay them the same or lower wage (which is better than they get in their home country), then suddenly you don't need to offer a higher wage to local developers.

The fact that I need to explain, and prove, this to supposedly intelligent people is frankly mind boggling.

Your reasoning is acknowledged in those links, and then they explain that this narrative sounds good but the data proves it wrong.

Some things really are mind boggling :)

Now that immigration is open employers will offer less salary compared to the market but a fresh of the plane immigrant will still end taking that job because his/hers first priority is getting a job and they dont fully know what the market rate is.

Source? I’m not aware wages on average increased during the pandemic.

To the rest of your comment, it seems to be incorrect: https://insidestory.org.au/does-immigration-mean-lower-wages...

Did you switch jobs during Covid? Talk to your friends and colleagues who switched jobs and then get back to me.

Before you link any random website, you have to figure out what is their agenda. There is lot of propaganda. These so called studies claim that immigration does not hurt wages, then you have to look into who is sponsoring these studies. Lot of times its some industry lobby group who wants to lobby for more immigration to suppress wages funds these studies to get the conclusion they want.

If you trust such studies you should also trust that cigarettes are good for you because cigarette companies paid scientists in the past to conduct studies to show doctors recommend cigarettes.

Don't fall for such propaganda again or try running a business where you have to hire employees.

They increased their salary!

Did you know that lots of other people didn't change jobs during the pandemic? In fact, some people even lost their jobs! And lots of others kept the same job at the same salary (while inflation increased).

From 14 March to 3 October 2020, for example, the ABS reported that wages were down -3.3% (and would be much lower if you excluded JobKeeper payments)[1].

We're on a tech website, so if you had scoped your comment to "tech workers salaries rose on average", I would probably agree. Do remember that the world doesn't consist entirely of tech workers.

> There is lot of propaganda.

This is certainly true. But given you didn't provide any of your own sources to back up anything you're saying, some might think you're using accusations of "propaganda" as a simple means to disagree with something you don't like.

[1] https://www.aph.gov.au/About_Parliament/Parliamentary_Depart...

> But given you didn't provide any of your own sources to back up anything you're saying,

https://www.rba.gov.au/publications/bulletin/2022/jun/job-mo...

My reading is that it says more people changed jobs than usual, and noted that changing jobs often leads to higher wages (in case I wasn't clear before - I agree!)

It makes no comment about immigration or a significant increase in wages during the pandemic (whether or not related to immigration), which I understand is your argument.

Wage growth in fact dropped significantly in the first year of the pandemic[1], before rising to its highest level in 10 years just recently - coincidentally(?) a year after we opened back up and our migrant arrivals increased significantly[2].

[1] https://www.abs.gov.au/statistics/economy/price-indexes-and-...

[2] https://www.abs.gov.au/statistics/people/population/overseas...

Profits again outstrip wages amid accusations 'corporate Australia is driving inflation'

https://www.abc.net.au/news/2023-02-27/wages-rise-but-profit...

(I have no position, just throwing grist to the mill)

You raise a really good rate with the lack of workforce mobility. From outside Australia it is probably really hard to understand how immobile our workforce is considering how large the country is. The governments at both a federal and state level seem to be very keen on ensuring the professional working class who could be remote stay immobile putting greater pressure on cost of livings in centralised cities.

Thirty percent!

Understandably he's looking to move and buy because fuck being beholden to that kind of bullshit ever.

They've aired several ads like this using children to convince people that NAB is "more than money".

On supermarket profits. I've noticed price-jacking has reached a new level. Seemingly in collaboration with the brands to deceive customers. For example, "50% off dishwasher tablets"... sounds good. But then you see the "normal" price they expect you to believe: $48 for a pack of 32 dishwasher tablets. That's AUD $1.50 per tablet / USD $2.23 per tablet. There's no chance dishwasher tablets cost anywhere near that much to make.

The next cheapest is more than three times the price and doesn't do anything the Coles branded product doesn't.

No Aldi here in Tas, but I'd have to break the tables to approach price competitive.

I have no idea how much dishwasher tablets ought to cost, but you've applied the exchange rate in reverse. $1.50 AUD is currently about $1 USD.

AUD $48 for a pack of 32 tablets is about USD $32. When I look on Walmart US site, they are selling the same brand and similar product (Finish Powerball Quantum) in a 50 pack for USD $15 which is about AUD $22. I don't expect Australia to be the same equivalent price, but the price difference here is crazy.

We’ll see what Australians think when they can’t live off HELOCs and retire based on purely owning some 70’s bungalow anymore.

So the higher the prices, the higher their revenue would be. And the inflation caused by that would also in their favor as it virtually diminishes their liabilities. There is no better way of making quick money in short term for the governments, but it will for sure backfire at some point. Those politicians know that, but they cannot care less as long as it doesn't burst in their term.

It's easy to post record profits when dollars are worth 60 cents.

How much have their margins gone up?

Margins go up and down all the time.

'Mr Kierath said it was important to note the companies' profits fell in the last six months of 2021, so these results were rebounding off an unusually low base.'

Ergo, they look good because they were depressed in the prior reporting season. Ergo, it's just corporations bashing, because people are mad inflation is going up.

If you look at Woolworth's profits over time, it would look to be going back to normal levels[1] after a dip due to COVID.

[1] https://www.statista.com/statistics/1116200/australia-net-pr...

If you are an investor, you will want a return on your capital. Would you invest in a business, where the return is lower than what you can get in a bond? If your profits fall too far, unless you can convince investors that its temporary, they are likely to withdraw their funds, and then your business will end.

Prices are also less sticky than wages which means they rise and fall in response to supply and demand, whereas wages are more sticky.

He never said that. Actual primary source -- https://archive.md/uE4g3:

> ... This is the basis for our assessment that the cash rate is very likely to remain at its current level until at least 2024.

That statement is preceded by quite a long analysis, and discussion. His assessment was wrong obviously. He deserves flak for not being wise enough to not make such a strong assertion. But ... he never said unequivocally "no increases until 2024". It's quite frustrating seeing the media bludgeon those words into his mouth.

Also, like all central banks, he was trying to jawbone to get the results he wants without having to induce the pain of the action required. Even this week, there was talk of 3 more interest rate rises. He is hoping this will cut spending, reduce demand, and drive down inflation so that the interest rate rises aren't required.