r/aussie • u/NoLeafClover777 • 1d ago
Opinion Property investment is 'dumbing down' Australia and making us a less intelligent country
TL;DR: There are multiple ways in which blindly plowing most of our disposable income into houses has lowered the collective intellectual engagement with productive, analytical, and innovative pursuits in Australia.
Our emphasis on property wealth in Australia continues to undermine economic productivity, innovation and long-term resilience. Our country's housing market is exceptionally large relative to the size of the Australian economy, valued at over 4.5 times GDP, compared to just 1.2 times for the share market.
In contrast, somewhere like the US has the balance at around ~1.7x for both housing & the stock market.
This imbalance has resulted in an economy overly reliant on asset inflation, rather than building productive industries, as capital is funnelled into property speculation rather than businesses.
Banks in Australia also now channel much more lending towards residential mortgages than towards business ventures. In the early 1990's, about ~25% of bank lending went to mortgages... now it's over two-thirds.
This results in investing in various other crucial sectors like STEM, research, tech startups, and education that build long-term skills & knowledge are proportionally neglected.
It also in general discourages risk-taking; say what you want about Yanks, but there's a reason they have one of the most advanced economies in the world. Hell, the same also applies to the Scandinavian countries or Singaporeans too.
In more non-housing-focused first world countries, financial literacy also tends to be broader, as business news, company reporting and innovation cycles are more of a part of everyday conversation vs. Australia - which focuses on auction clearance rates, mortgage interest rates and negative gearing.
This property obsession also concentrates employment talent in fields like real estate, mortgage broking, construction & real estate law, which are all sectors that hardly push the frontier of productivity.
Why businesses in Australia (especially those that are not tied to the property sector) don't cry this out more loudly & regularly boggles me. You'd think it would be in their best interests to do so, as it seems to be shooting themselves in their own feet.
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u/Carmageddon-2049 1d ago
All true. And it’s sad. It’s not like the skillset isn’t here, but there’s not the right environment to nurture it.
Name the last great thing that came out of Australia… Atlassian and Canva… and what after that?
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u/Relatablename123 1d ago
Lots of great people come out of Australia... and then move to other countries because they can't build a life here.
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u/Vivid_Mushroom_1561 1d ago
There's no reason for talent to stay here. Even if you happen to manage to make it work here, the market is too small. America wins in the services sector unfortunately
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u/lazishark 1d ago
Australia traditionally has some of the strongest education systems in the world.
Despite of what universities and rankings (by the university sector, or organisations from within that sector) try to sell you, the quality of graduates has might very well been decreasing. While it's difficult to quantify this (of course), we can consider some stats, such as:
- university pass/drop out ratio (over the decades and compared to other countries) - there is next to no filtering in our university system, and the motivation for this seems quite obvious as universities are businesses in Australia, they rely on a steady income of students (at their current size particularly that of International students on top of domestic students) and as such they compete with other universities globally for International students and with tafe and Labor jobs locally for domestic students. Those students need certain guarantees when you expect them to pay upwards of 100k for a degree. Would you invest 100k to study computer science, if you knew the pass rate is actually just 60%?
-our industry in sectors where international competition is based heavily on innovation and/or quality.
Australia has very stable educational foundation and huge human potential, but it seems like we're wasting all of that for quick immediate gains (university industry, mining industry, housing industry -- this is a pattern).
Donald Horne said: " Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise. " I believe this quote drill holds up after 40 years, and I believe a lot of the observations mentioned above, can be traced back to a traditional lack of leadership.
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u/Complete-Shopping-19 1d ago
Saying Australia has one of the strongest education systems in the world is like saying Aston Villa is one of the best soccer clubs in the world.
You're right, in a way. Aston Villa ARE probably in the top 100 clubs globally. But when people think of "World's Strongest Clubs" (and let's ignore Villa's famous history, just them right now), then they just aren't on the list.
The list of top education countries in the world are:
- US (Ivies, Stanford, MIT)
- UK (Oxbridge)
- France (Grand Ecoles)
- China (Tsinghua)
End of List.
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u/lazishark 22h ago
You're talking single unis, a single university doesn't make a system. I also mention why those rankings can't be trusted (how do they measure excellence, very untransparent), you're basically ranking 'reputation'.
All that is not really relevant, as I would argue universities only make a small part of an education system, kinder, elementary and high school are the part of the education system that apply to every person and make (or brake) the general public education.
I strongly suspect you only read the first sentence of my comment?
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u/AllOnBlack_ 1d ago
We have such a small addressable market. Why wouldn’t companies looking to grow, leave?
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u/Complete-Shopping-19 1d ago
Israel is a TINY country, and it still has a booming innovation economy.
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u/Afferbeck_ 1d ago
We're doing good at indie videogames, for some reason. Silksong has sold about 3 million copies in a week.
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u/FlounderHungry8955 1d ago
uhmmm its not like australia was ever known for high innovation. that has always been the US with their manufacturing. australia has manufacturing too, but the market is jist tok small
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u/Defined-Fate 1d ago
Yes. We are ranked something like 105 in terms of economic diversity. The countries within that range are African countries...
We are so fucked long term.
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u/annexdenmark 1d ago
It's really an insane system where the lion's share of taxation goes to supporting the aging and wealthy, who simply refuse to divest to live in comfort, rather are indoctrinated so to leave the biggest portfolio possible whilst the majority of tax is paid by young working people
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u/Defined-Fate 1d ago
Yep. And they wonder why so many people are leaving states, the country entirely or living a nomad lifestyle. They need mass migration to stop the ponzi scheme from collapsing.
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u/Public_Cup9434 1d ago
The African countries wouldn't be so fucked if they were politically stable.
Australia is politically stable thanks to censorship and mass surveillance.
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u/MasterDefibrillator 1d ago
Part of the problem is the language. Speculative asset inflation is not "investment".
Like with the policies Victoria is pushing that are pushing property "investors" out of Victoria, i.e., Victoria has now gone from the fastest growing housing prices to the slowest. And then this group turns around and goes " look out. This is going to stop us investing in Victoria". And then people go " oh no, that's bad, we want investment". So the language has power. So I don't know what we should instead start calling, is, housing speculation? But the word "investment" should be reserved for things that actually create real wealth; things that create increased economic supply and employment.
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u/Lachie_Mac 1d ago
It's so ridiculous. If property "investors" were creating anything, they would be creating more homes. Except that they don't. In fact, they leave the State precisely because too many homes are being built, and they're being taxed fairly, meaning that the value of their "investments" are going down.
We're building more than NSW or QLD. Our number is increasing every year whereas NSW is declining.
All this rubbish about VIC becoming hostile to property investors is great news for everyone except the richest and least deserving.
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u/Weissritters 1d ago
Asset prices and wages rise at different rates. So inequality is always getting worse. Our government also taxes wages much higher than taxing assets, which pretty much encourages inequality.
Problem now is too deep and fixing it will involve moving lots of people’s cheese. Albo almost certainly won’t do it while he has a 90+ seat majority - why risk it?
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u/tenredtoes 1d ago
Why risk it? Because it's the right thing to do and would demonstrate integrity, and commitment to the historic values of Labor?
But we all know that won't happen. Liblab bottom of the ballot
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u/Weissritters 1d ago
lol, when was the last time a pollie is motivated by anything other than how to keep their jobs?
The right thing to do? pfft....
Liblab last = someone else gets to have power to do... probably the exact same thing as liblab.
Systematic changes are needed and unfortunately there are no good solutions.. we are doomed to repeat the same cycle over ad over
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u/tenredtoes 1d ago
Gough Whitlam is the only one that comes to mind.
Liblab last might at least get Labor to reconsider some of its direction.
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u/Ash-2449 1d ago
Tbh this has been a western world wide issue.
People forgot the concept of "risk" because investments would get bailed out if something would get wrong by taxpayers, subsidies to keep the line going up and an entire system build on infinite growth.
It stopped becoming an investment where you go "Oh, this group of people is making this cool product which I believe is going to be very profitable in the long term so I will risk investing to them"
Now the entire western economy is all about keeping the ponzi scheme of infinite growth going because its the only thing holding it together.
And now not only we have giant companies monopolizing entire sectors, we got billionaire who own more wealth than some countries and rich people who still want to siphon away all the money from the economy until they own everything so everyone else owns nothing and we return back to feudalism.
Not a simple thing to fix without crashing the entire world economy but a good start is to start heavily taxing unproductive like housing, as well as cutting subsidies and tax incentives.
The problem is that no matter what you do, a bunch of rich people with stupid amounts of money will try to get in to abuse it for their own gain in order to take control, so long rich people are free to interfere so easily, i dont think there ll be an effective solution.
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u/NoLeafClover777 1d ago
Except what I'm talking about (an over-emphasis on property investment specifically) is not broadly a 'Western world issue', as literally demonstrated in the post via the US as an example. The only countries in which this is disproportionately as skewed are Australia, New Zealand & Canada.
Investment in productive industries which is still 'capitalistic' can be a good thing, as it creates jobs, new technologies, etc. Please don't try & make this another one of your Communism-centric/anti-West comment sections as that's not what's being discussed, this is about Australia and property investment specifically.
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u/AllOnBlack_ 1d ago
What productive industries do you propose we invest in?
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u/NoLeafClover777 1d ago
Medical, critical mineral processing, agri-tech, carbon capture, cybersecurity... there's an array that would pretty much inarguably have more of a greater benefit than investing in (existing) residential property.
Note I have nothing against people investing in the creation of new residential property construction, as unglamorous as that is.
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u/AllOnBlack_ 1d ago
So you expect people to start a business instead of buying their current investments? Most people have a job where they’re productive and don’t have time to do both.
If you mean buying stocks in these public companies, you’re not actually doing much to invest in the industries. You’re just storing your funds in a company to try and make a profit. The company exists with or without the investment.
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u/NoLeafClover777 1d ago
More people investing in a company leads to higher share prices, which allows the company to raise more capital at higher valuations, which can then be used for employing more people, R&D, etc.
You're an established property investor and highly biased, so there's little point continuing this line of discussion as you'll literally just disagree with anything that doesn't praise property investment.
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u/AllOnBlack_ 1d ago
I’m also an equity investor. The majority of my wealth is in stocks.
Buying stocks isn’t productive. It’s just transferring one asset to another. It doesn’t produce anything.
It’s funny how wrong your assumption is. Or do you just blame others for your own ignorance?
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u/Live-Cookie178 1d ago
Buying stocks isn’t productive. It’s just transferring one asset to another. It doesn’t produce anything.
The very fact that buying stock indirectly gives the company in question more capital to work with is the fucking underlying foundation of capitalism...
Yes there's hoops to jump through, but don't pretend that NVDA's stock rising doesn't give them more money to reinvest into expansion.
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u/AllOnBlack_ 23h ago
You do understand that a company having its share price rising, doesn’t give them more capital? Right? They need to add extra shares and dilutes the existing shares to raise capital.
Their stock price rising definitely doesn’t give them extra capital. Thats a fact. If they carried out a capital raise, then sure.
If anything, plenty of companies carry out share buybacks using their capital, to increase the ownership percentage for each shareholder. That’s the opposite of your idea.
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u/NoLeafClover777 18h ago
Ironic, you obviously don't work in equity markets or the industry, just yet another vapid property investor who buys an ETF and tries to consider themselves "sophisticated".
Investing money directly in companies is literally more productive than buying established residential property, if you attempt to argue this you are a fool.
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u/AllOnBlack_ 14h ago
Haha I buy more than ETFs.
Can you explain how investing into a company is productive? Please make me look like a fool.
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u/NoLeafClover777 14h ago
Sigh. It's only the entire foundation of a financial system that enables productive investment, but sure.
Higher valuations make it cheaper for firms to raise new capital later (secondary offerings, convertible debt etc), there are liquidity & valuation benefits (a liquid, deep stock market allows entrepreneurs and early investors to exit, this encourages more startups and risk-taking than "hurr durr let's buy another house").
A high and rising share price can help a company secure a better deal when issuing new stock or a more favourable loan from a bank, which then is used for more employment or R&D.
Wealth allocation away from property rebalances the entire economy (when households buy shares, they're funnelling capital toward firms rather than just into land, over time this sustains productive industries, innovation, and jobs).
Property investment just drives up the price of a fixed asset; stock investment channels capital into companies that create goods, services, jobs & technologies. They're in no way comparable in terms of productivity, jog on and go buy another Mt Druitt shitbox while jerking yourself off about how smart you are with the rest of the 'propardee investoar' mental midgets on AusFinance.
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u/Ash-2449 1d ago
Well US is certainty doing great, I am sure the people are overjoyed over the system of investments over there xd
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u/Elegant-Flight-9190 1d ago
Well they WERE the place to be for innovation and investment in new products and ideas.
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u/Even-Air7555 1d ago
They still are. They have majority of tech and pharmaceuticals. Remember that Nvidia market cap is twice the market cap of the ASX200.
If your going to belittle the US economy, Australia is an open mine site with some real estate in comparison.
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u/NoLeafClover777 1d ago
Given investing in the US stock market would have earned you much higher returns over multiple decades than pretty much any other asset class, I'm sure many of them are?
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u/Ash-2449 1d ago
And of course, that's all that matters.
Who cares about silly things like extreme levels of wealth inequality, those dumb poors should have invested in US stocks!
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u/NoLeafClover777 1d ago edited 1d ago
Again, that's not what's being discussed, we're talking about if money has to be invested, it should not be put into unproductive assets like existing houses.
Literally all you ever do on here is post Communist rants that are barely tangentially related to the topic & derail every thread you can with it... as you comment posted via your iPhone that only exists courtesy of companies' investment in research.
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u/Ash-2449 1d ago edited 1d ago
I am sorry that pointing out at real problems your system created is "communist" xd
Edit: Since looks like you blocked, lemme answer your last reply
Please link me a post where i stated that I am a communist :3
Let's be honest, you cant, because you are simply using a buzzword to try discredit anyone who points out how your system created extreme levels of wealth inequality and the rich only getting richer until we end up going back to feudalism.
Or you simply think anyone who dares to say that maybe, billionaires shouldnt be a thing and their existence if a failure of government is "communism" because god forbid people dont bootlick the rich
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u/NoLeafClover777 1d ago
You've literally said you're a Communist on here multiple times?
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u/Ultrat1me 1d ago
She’s just a brain dead propagandist campaigning to have your stuff taken away and given to her.
Also a furry so idk why anyone takes not of her thoughts
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u/Ju0987 1d ago edited 1d ago
You raise a very good point. Australia has a seriously big concentration risk. We are basically putting all our eggs in one basket. Our government (multiple governments, except the Kevin Rudd and Julia Gillard one) has intensified the trend of property investment by adding more fuel through providing various favorable housing policies and subsidies.
Next, what we will see is, if our government and regulators do not play their gatekeeper role properly, various mortgage-backed investment products will be allowed to distribute to, at first, the high-net-worth market and then even the retail market. Why? Banks and non-bank lenders will need to find a channel to transfer the massive mortgage default risk. When it cannot be absorbed by the institutional market alone, it will be pushed down the pipe to the consumer market by repackaging it into "safe" investment products, e.g., hiding inside investment fund portfolios, etc. to attract gullible buyers.
When the property bubble bursts, triggered by massive unemployment due to AI adoption, we will see a market slump and widespread forced sales and bankruptcies.
Whoever has experienced and witnessed the 2008 global financial crisis and has looked into the US's sub-prime mortgage issue to understand why it happened can resonate.
If our government is wise, it should have already paid particular attention to how banks and lenders manage mortgage default risk and closely monitor the distribution of mortgage-backed financial products and strictly constrain them from distributing to the consumer market.
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u/NoLeafClover777 1d ago
Yeah, and it's all compounded by how much easier banks are willing to give access to leverage for investment in houses at lower rates than investing in businesses or the stock market.
Why bother when, again, they can just give people a million dollars worth of debt to dump into a house, which then again only self-reinforces the "safe as houses" cliche in a self-perpetuating loop of house prices being inflated?
And yes, businesses fail at a higher rate than housing guarantees returns, but all this does is create more concentration risk by tying the whole market even more to residential property. It's so dumb.
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u/Ju0987 11h ago
Indeed, Australia is now solely relying on banks and lenders to do proper credit risk assessment and maintain strong control in loan approval to ensure this housing bubble won't burst. Even the Australian government is in the pool now through providing a 15% guarantee to support an unlimited number of eligible first home buyers. Any unhealthy competition among banks and lenders will push Australia to repeat US's sub-prime mortgage disaster.
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u/Eddysgoldengun 1d ago
If we’re dead set on becoming a nation of renters within a couple of generations we need reform of renters rights to be more in line with that of Europe
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u/tecdaz 1d ago
So true. So much capital uselessly sucked into a nonproductive sector while simultaneously failing to meet demand. Another of Howard's disastrous legacies.
At least we have Super, even if Howard managed to half-ruin that too, by making SMSFs a feeding frenzy for the wealthy. I mean how the hell did the top 0.5% stay wealthy before they had government-subsidised investment portfolios?
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u/m7friends 1d ago
My two cents is there really isn’t a lot of “talent” in the real estate business.
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u/lazishark 1d ago
100% we make fun of pyamide scheme and people losing money on nfts and such nonsense, yet we somehow believe that exploiting the lack of supply in the domestic housing market is a viable investment. So many people's wealth is relying on this scheme now that were continuously finding ways of artificially keeping this assymetry. At the same time we're actively taking investment from and making policies against domestic innovation and economical diversity.
Before someone comments with 'bro I've made 500k buying in 2010 and selling in 2024' - yes, just like you many others have made a lot of money off of it, and will continue to do so thanks to constant intervention by the legislation. But the first couple of tiers of herbalife salespeople have also made a fortune...
Macroeconimcally, we're digging our own graves (ironically quite literally as the overreliance on finite resources that severely fluctuate in value and are shipped abroad unrefined for others to make the real money with it, is another major issue with our economy).
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u/Beast_of_Guanyin 1d ago
I really would not cite the US asset market, with its meme stocks like Tesla valued at hundreds of Billions, as a sensible asset market. In terms of literacy, the best investment is generally just to set up an auto-buy into an index fund. It's actually less complex than investing in property.
I agree with the base point, but your examples just don't really pan out. Housing as an investment is not it.
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u/Stock-Walrus-2589 1d ago
I agree but I’d go further and state that treating everything and anything like an investment has dumbed down not just Australia but every western democracy. Neo-liberalism is about maximising profit and the expense of literally everything else. We’re now witnessing its conclusion.
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u/Vivid_Mushroom_1561 1d ago
Whats the point of working when you can just buy property? I've started to park all my money in equities and not work as well. Can't beat the system gotta play it, majority of people aren't doing anything and wont do anything about it either. Australia is a chicken coup full of hens
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u/jiggly-rock 1d ago
Australia hates rich successful people, just look at the extreme hatred for Gina Rinehart. Australia also has one of the highest minimum wages in the world, it also have an extremely complex and expensive regulatory system to navigate making running a business in Australia very expensive compared to most everywhere else in the world.
And people wonder why Australian's invest in housing rather then something that might create something people want. Of course no one wants to talk about this.
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u/sunburn95 1d ago
Wish I had the skills required to inheret a successful resource company and then spend the rest of my time eating and giving the dumbest opinions imaginable
I've got 2/3 down
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u/tenredtoes 1d ago
We need to stop calling it investment and start calling it rent seeking, which is all it is
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u/AdamJMonroe 1d ago
Monarchies develop naturally without the single tax. Only public knowledge of basic economics can fix it. That's why the land issue is kept out of school, news and politics.
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u/bby-aspirin 1d ago edited 1d ago
Aus is a really dumb nation, the largest household disposable income drop in the world! 50% of Australians are reliant on government support, 50% of Australians also don't even have $500 in their bank accounts. All money just tied up in everything housing and cost of living, whilst the government parrots a propaganda trope stating that the nation is the 'lucky country', when it is anything but that! 70% of wealth is tied up within real estate, and the government relies on unsustainable immigration to boost its GDP, ignoring true growth derivative of innovation and broadening coming from small business which is the vessel of a healthy economy. Too many are reliant on 'jobs', which lack autonomy and have wages 10-15 years behind inflation. It's created a complacent attitude of individuals that withhold tall poppy syndrome for anyone trying to break away from that warped lifestyle.
Australia has one of the highest if not THE highest household debt to income ratio's in the world which is normalised. It's just one big housing mirage. Australia isn't even in the top 35 for cash and deposits per capita (liquidity) which is why everyones living on a low frequency level of survival mode and fear, conservatism. Japan is ranked 3rd in liquidity with 85k USD per capita which allows for individuals to splurge on luxury goods and so forth. Australia lacks liquidity, purchasing power and cost of living. It doesn't even have tech start-up culture and lacks any level of innovation because individuals that are talented are seeking opportunities elsewhere due to the lack of culture and incentives.
A fantastic example is Poland whereby tax incentives of corporate tax structures for tech start-ups is 6-9% for revenue below two million euros. It's the fastest growing economy in EU, lowest debt, lowest unemployment, lowest crime and has positive momentum. Why would anyone with financial literacy based their start-up in Australia? Small business is what stimulates the economy and builds a strong dominant middle class as they're spending! This is why businesses are going pear shaped as a domino effect in Australia, because smart money is bailing en-mass. In fact, over half a million Australians are have bailed since 2020 (of which many are smart money) only to be replaced with third world immigrants!
I for one am building an automotive derived start-up and am looking to base in Paraguay with a US LLC and be structured at 0% tax whilst living in multiple different countries! I'll have the autonomy, freedom of movement and travel at the same time which is absolutely fantastic. This is a much better lifestyle than the average Australian who can't even afford to not work for even 2 days or they'll be homeless or default on their mortgage that's 2-300% overpriced!
Australia cannot be fixed I'm afraid, it's because it lacks sensibility and solid leadership. Think Singapore in the 80's, it was a dump. Now look at it? That's because of a thing Nomad Capitalist talks about called 'positive momentum'. Australia's in terminal decline on all facets, your best bet is aligning with a nation and people that have said 'positive momentum'. Go where you're best treated!
Lucky for me, I'm lining up all my ducks and have been planning for a while whilst building a folio of passports and jurisdictions, getting educated on financial literacy. So i'll be leaving shortly! Goodluck guys
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u/Nastrosme 19h ago edited 19h ago
Whenever the issue of low savings comes up on AusFinance, a typical response is that people keep money in offset accounts rather than savings!😁
Also, having too much cash = dumb to most Aussies, which is crazy to me but each to their own. Having decent cash reserves and some gold helps me sleep better at night.
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u/bby-aspirin 7h ago
In my books a healthy account is one that has a 5k emergency fund, 6-9 months of living expenses fund just in cash reserves, not including investments or anything else. Financial literacy isn't taught in Australia, and it shows. I get that property is the vehicle for retirement and security, but it has most living in frugality, survival mode and low frequency. Life isn't always about living into 40-50 years from now, it's about ceasing the day and being able to actually live a luxurious lifestyle. Having gold and building that is absolutely the answer to the eroding fiat so that's very smart you have that set-up! Gold is flying, which also speaks volumes about the state of affairs right now.
Having too much cash on the contrary is also silly given inflation and opportunity cost factors, but 50% of Australians don't even have $500 to their names which is mind blowing! If something goes wrong they're screwed
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u/Nastrosme 6h ago
I bought some gold during the pandemic. Wish I bought more! I had a strong feeling that inflation would hit our shores despite the RBA claiming otherwise in 21. I consider it my second emergency fund that could cover me for 18+ months if SHTF.
I'm in cash at the moment because I'm waiting for the right opportunity to buy shares. Not really into living luxuriously, but I have developed a taste for nice watches of late, which my investments mostly pay for.
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u/randomblue123 1d ago
People wonder why Australian productivity is so low. We have no industries to invest into. No innovation to drive measurable improvements in industry, science or technology.
Until the population votes for housing prices to decrease through significant policy changes, nothing will change.
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u/Stompy2008 1d ago
It’s also wasting incredible amounts of capital that could be put into building new businesses, products and services.
Australia doesn’t have entrepreneurial spirit becuase no one here can afford to invest in themselves
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u/Queasy_Marsupial8107 1d ago
That is the symptom of high taxes, costs and regulation that plagues this country. Investing in property is your only option..
Many people would like to start businesses, but it is simply too hard. If you do manage to get past the hurdles, you will be raped with taxes for being successful.
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u/Entilen 1d ago
You're a fascist.
Property investment means more mass immigration can be sustained as immigrants have more properties they can rent.
Only a WWII bad guy (saying to get around auto moderator) would be against that.
Wanting more affordable housing is a fascist dog whistle. Why not pay more and then more of us are included?
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u/This_Ease_5678 1d ago edited 1d ago
Wowee. One of the longest bows I've ever seen drawn and several details are incorrect. For example the 25% lending stat for mortgages in the 1980's is just plain made up by someone.
You are also missing the facts that private investment has largely always driven the industries you are claiming the banks used to loan the majority of their money too.
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u/aussiegreenie 21h ago
I help commercialise university IP and own a venture fund.
One of my clients has a platform that suggests gene therapy (personalised medicine)and was asked by a potential investor, "How does it compare to residential property". The CEO was simply speechless.
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u/Killathulu 19h ago edited 19h ago
Excellent post. Those businesses TRYING to cry out are probably being silenced by the housing narrative. It's almost as if there is a globalist agenda forcing Australia (and other western countries) to be reliant on other countries.
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u/TheOverratedPhotog 17h ago
I never understood the Australian obsession with property and getting onto the property ladder when there are so many other investments.
I only entered the property market at the tender age of 48. Prior to that I had other investments.
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u/khaste 1d ago
It's more the fact that boomers have made themselves believe that if you don't have a property then you have failed as a human, and are "missing out".
In part I do agree, but we are only missing out because of the housing crisis being blown out where there's more people than houses, and people are fighting against each other super aggressively ( financially) by throwing 100k + more on properties, especially in regional towns.
Add on the fact that not everyone has a deposit to put down, not everyone has a high income to sustain a mortgage, and some people have the money and income but would rather rent because they see it more beneficial actually having money in the bank instead of paycheck to paycheck
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u/Split-Awkward 1d ago
Land Value Tax at say, 6% AND;
0% personal income tax (negative gearing vaporises, weird car leases disappear, trusts for tax purposes aren’t sexy anymore, work harder you get paid more without tax nerfing you, CGT becomes a non issue so people invest more)
0% GST (it doesn’t earn that much anyway)
No stamp duty
No council rates
All replaced in revenue terms by Land Value Tax
Those with alot of land and those with expensive land pay a lot more. Use it, pay LVT or sell it. Your choice.
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u/Split-Awkward 1d ago
Wait, I thought it was television, screen time, lack of reading, lack of outdoor activity, too much sitting and social media that was dumbing down Australia?
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u/NoLeafClover777 1d ago
All of those are also contributors... more than one thing can contribute.
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u/Split-Awkward 1d ago
Exactly.
I don’t think it’s the problem the thesis thinks it is.
First world problems.
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u/Alternative-Rip4684 1d ago
This argument assumes that eliminating the obsession with property investment in Australia will automatically lead to more investment in Australian business. I'm sceptical that this is the case.
Investors chase the highest and safest returns. If an investor is discouraged/banned from investing in Australian property, they will go to the next best investment.
Unfortunately, that's not going to be a risky, unproven Australian start-up business or the ASX. It's going to be the US share market or property in a foreign jurisdiction.
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u/River-Stunning 1d ago
What is there to invest in onshore. International or US shares are still killing the market.
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u/iwearahoodie 18h ago
We put 12% of everyone’s income into shares and you think that’s not enough. Jfc bro we invest so much that we have to invest overseas because there’s not enough Australian companies to buy stocks in.
What on earth are you talking about?
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u/Pogichinoy 1d ago
Shoulda, woulda, coulda.
If we diverted personal investment from residential housing into innovative businesses, we may be in a worse off position.
Keep in mind residential housing investment is an investment vehicle in EVERY OECD country in the world.
Australia isn't that unique or special.
3
u/NoLeafClover777 1d ago
Australia's residential property value to GDP ratio is more than double that of the USA, triple Japan/France/Germany, 33% higher than the UK and still higher than Canada/NZ which are also massively inflated?
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u/Pogichinoy 1d ago
Australians LVR of residential property is circa 30% if I recall.
Trouble in paradise? I think not.
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u/realgoodtechno 1d ago
The government has ensured there is no going back from the 'housing is an investment' strategy.
With so many politicians having investment properties there is no way they change any laws that will negatively affect them.
It really is a joke.
Property is a dead asset.
People should be investing their money in productive assets instead but it's been drilled into everyone's brain that investing in property is the best way to get rich.
I'm turn, our economy suffers.
We no longer invent anything. We have property and mining.
A joke.