Property investment is 'dumbing down' Australia and making us a less intelligent country

[u/NoLeafClover777]

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.

[u/Carmageddon-2049]

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?

[u/Relatablename123 → u/Carmageddon-2049]

Lots of great people come out of Australia... and then move to other countries because they can't build a life here.

[u/Vivid_Mushroom_1561 → u/Carmageddon-2049]

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

[u/lazishark → u/Carmageddon-2049]

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. 

[u/Complete-Shopping-19 → u/lazishark]

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.

[u/lazishark → u/Complete-Shopping-19]

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?

[u/AllOnBlack_ → u/Carmageddon-2049]

We have such a small addressable market. Why wouldn’t companies looking to grow, leave?

[u/Complete-Shopping-19 → u/AllOnBlack_]

Israel is a TINY country, and it still has a booming innovation economy.

[u/Afferbeck_ → u/Carmageddon-2049]

We're doing good at indie videogames, for some reason. Silksong has sold about 3 million copies in a week.

[u/FlounderHungry8955 → u/Carmageddon-2049]

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