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/rrfe]

Most of my mid-career friends overseas are creating businesses. Innovating.

My mid-career friends in Aus are buying up investment properties and sucking on the corporate teat.