Below is an extract from a property newsletter that I pay for. In the past 18 months or so there has been much discussion about the Australian property market crashing, a couple of private contacts on this site have talked about it and made enquiries to me about it. Obviously we have had a correction but it has been nothing like a crash and our markets have started the next phase which is one of the reasons I am putting this blog out there. 

Take note of it if you like and everyone will no doubt have their own social perspective of the evils and such of property and who can and can't afford it. My personal advice is too look to anything with a land base (house and land) and low level town houses and units (two story's max). Sydney people would be well aware of the dangers that have emerged in high rise.

Here is the extraction!

‘In the current environment, Australia appears as a safe harbor — both comfortably close and far from home.’
These words come from the CEO of Juwai.com — a Chinese website that lists overseas property.
He was commentating on the surge in interest in luxury Australian real estate from wealthy investors in Hong Kong.

Hong Kong tops the list for world’s most expensive real estate. The average price of a small apartment is over US$1.2 million.
And by the way, Hong Kong has now officially surpassed New York City as the place with the highest concentration of super wealthy people.
Juwai.com — the largest property portal for Chinese investors — recently reported that enquiries from Hong Kongers wanting to purchase Australian houses has increased 50-fold over the last three months.
Most of these enquiries focus on Sydney and Melbourne.

Why? think of the current protests.

It’s by far the most significant and widely publicised protest we’ve seen in the region since the pro-democratic demonstrations in Tiananmen Square over 30 years ago.

Of course, as you know by now history repeats, or rhymes, in set time frames.
In financial markets, it’s easier to observe this because we can chart both time and price.

Take a major event in the market and count forward, 30, 60, 90, or 120 degrees — in a period of days, weeks, or years — and markets are likely to turn or pause on (or close to) those counts.

We can do the same with historical events.

The Tiananmen Square protests in 1989 lasted nearly eight weeks.
Today, we’re several months into the current Chinese/Hong Kong unrest and it shows no sign of stopping.
The consequence's are predictable. More Asian money will flow into Australian property.
Cross boarder investment is always a major feature of the real estate cycle.

In 1990, the banking crisis in Tokyo led to a flood of investment from Japanese buyers into Thailand, Malaysia, and Indonesian real estate markets.
Money also fled to the ‘safety’ of US real estate when Thailand and its neighbours experienced their banking crisis in 1997 — especially to cities such as New York and LA.
Sometimes policymakers do this this quite deliberately.

In 2008, former Aussie PM Kevin Rudd removed restrictions on foreign purchasers to stop our property market crashing. Real estate values boomed by 25%.
30 years ago, after the Tiananmen Square massacre, Bob Hawke opened the gates and allowed 40,000 Chinese students to stay in Australia.

Will current PM Scott Morrison be facing a similar situation?
There are currently over 100,000 Australian’s living in Hong Kong. They own about 600 of the nation’s firms.
Most of the expatriates are Chinese Australians (or Hong Kong Australians).

Hong Kong has no private land ownership.
It was set up on the right premise. Britain acquired the territory from China on a lease. Residents paid 5% of the property value per annum to reside there.
The costs of administration were taken from the rent. That meant that taxes on productivity were low — and as such the economy thrived. The people of Hong Kong had more to spend in their pockets.
Of course, the system has broken down over the years. Less of the rent is collected — and property speculation is rife.

Hong Kong are the most levered nation in the world, with the most expensive real estate in the world.

Our property looks cheap in comparison. Furthermore, it’s on a freehold title.

Australia has restrictions on overseas buyers purchasing established homes — and there are a range of higher taxes for those that do choose to invest.
However, demand is increasing, and non-bank lenders are out in force offering alternative streams of finance.

Here’s the forecast: This potential wave of money could inflate our property markets and carry us into an almighty real estate boom into 2026. You’re well placed to take advantage of it.

 

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  • This reply was deleted.
    • Thanks for your thoughts Tad.....notwithstanding those you need to get over climate change.

      A wise person once said to me you cannot control the uncontrollable....if for one minute if you think human kind can do anything about climate....you are "batty".

      Is climate change real ....YES

      Can mankind change it....NO

      What can we do? Question is you are asking the wrong people....try asking the polluters and the people that count in the countries with environments that cause same.

      The economic reality is that Property markets and wealth creation are just a passtime for many human beings, they will never have the chance to do anything about property markets. In the interim the ones that are interested in their material well being I offered this article.

      We have a situation today where apparently thousands of school student's and other's  are going to protest about totally impractical happenings....they obviously have no understanding of the practicalities and we are going to teach our children (reference is where they get this shit from ..presumably their teachers) how to ignore economic reality and whistle "dixie" why the earth melts. Its a shame these same kids didn't do a one day course on economic management and their teachers likewise....the financial ignorance in this country is appalling.

      Maybe this is the answer to the worlds population crisis, half the planet drowns.....if you can't feed them or supply them with energy (power) do the kids understand they won't be able to power their game machines, my god! lets see how they go in the fields sowing rice by hand and harvesting instead of playing the latest version of "Donkey Kong" or whatever.

      Tad you are a worry wart, you asked me for investment advice for your kids who were venturing into property, I bet they are not overly concerned because they are doing something practical.

      Wake up Australia the concept of Australia doing anything about climate change other than sending the country broke is the greatest myth in History!

      PS Please don't put up any charts or pictures, the science is not in question, its the cure that's fcuked. Good house keeping is all and our only responsibility....that good house keeping means practical harvesting of our resources and using same.

      I would be far more comfortable seeing the energy and wastage of renewables applied to infrastructure to help us harvest water and make our country drought proof. Does not matter what causes the drought, they (droughts) have been happening for millions of years.....we are not going to change climate!

       

      • This reply was deleted.
        • Stop reading Tad, people are always worried about something, it is only meaningful if you can do something about it. 

          Actually a win for tomorrow will be great but it pales into insignificance over the fact we have school teachers scare mongering our children over this shit!

          PS Honestly what action do you think can be taken within our country to help the situation of a 2 or a 20% increase ......in the meantime we need to economically stabilise ourselves to survive with what we do have.

          • the fact we have school teachers scare mongering our children over this shit!

             

            Totally agree Poppa.

            It'll all be fine though, we'll just fix it with another tax.

            C52nBFhWQAEpN-c.jpg

            • Luckily we don't need bear control ME

              3440439212?profile=RESIZE_710x

          • This reply was deleted.
            • Child activism .....Hmmm I think of young brainwashed children in Nazi Germany being indocrinated into "hating" the Jews.....there is an opprtunity for you to explain to these kids Tad that they have been indocrinated by the left wing imperial army of the greens and the teaching community......disruption has its place.....its not with these children being bainwashed!

              • This reply was deleted.
                • Yes it is, it has a detremental effect on the economy and the next line of non thinking robotic children.....lets give them all a gun and make them productive!

              • Equating children campaigning on saving the planet with the Holocaust is disgusting Poppa.

                Climate change is not up for debate, it is not a belief system, it is not some figment of someone's imagination. It is real, it is happening and it is already impacting us. Don't believe me? Talk to the fire fighters battling bushfires in September, talk to the farmers out west who are battling drought, talk to the inhabitants of countries in the northern hemisphere such as Iceland where a 700 year old glacier was just declared dead, or in Alaska where its sea ice is at perilously low levels, or the Great Barrier Reef where huge chunks are dead and dying due to rising sea temperatures.

                You may think these children are brainwashed, but they're doing something to fix the mess yours and previous generations created. They have to live in this world when you're long gone. 

                If you think man kind can't do anything about it, then you aren't listening. We are at the point where we have to do something or else yes, we won't be able to do anything. But we can do something, if we act right now. Australia may be a small player, but rectifying this situation is something that requires all nations, it's not something you can just palm off "to the big polluters". 

                You mention the economy, but what's the point of having an economy if the world is tearing at the seams? You going to save the GBR by throwing money at it? Are you going to eat money when the crops fail? As someone part of the younger generation I am sick to death of hearing older generations shrug their shoulders at climate change and carry on like it's no big deal, that the world will keep spinning. Guess what, you'll be dead when climate change hits its tipping point. I won't and my son won't and we'll be the ones having to deal with it. So either get in line, or shut up and keep your ill-considered, lack of scientific beliefs to yourself. 

                • I love your passion and committment Supe. Keep at it - the cultural swing is going to take a good 20 years but it's doable and it will happen - as long as punters keep the faith and maintain the fight. It's a pity our goverments are too weak to make the important calls - but that will change. Good on you mate :) 

                  • Globally right leaning governments have chosen short term political gain over longer term science based constructive actions.

                    The sad fact is that  Australia  has known of the dangers and consequences of climate change for at least 20 years.

                    Liberal governments have spent the last two terms undoing the measures created by the previous labor government. 

                    The liberal government prior to that spent 3 terms denying climate change.  

                    In terms of environmental protections and climate, past Liberal governments have badly  let down future generations.

                    Now you have the Nationals asking for the fasttracking of numerous dams by ignoring environmental protections. Talk about short term thinking!

                • You really fcuked up then Super, you showed your colours and no brains, none of the arguments you have stand up and let me tell you unequivocally that you and your children will be in a holocaust before climate changes this planet. It will be a financial holocaust that you could never understand.

                  Its wondeful you have a new son super, but guess what he isn't the first, I have sons and grandchildren and am at least as half as smart as you and I am not worried about climate change, I am concerned about left wing extremists that are down the back of the garden playing in fairyland, like you have just explained yourself as doing.

                  You are not wise Super you are just another young upstart who wouldn't know shit from clay.

                  Buy yourself a link into the history chanel and you will discover that children all over the world have been indoctrinated into various and extreme belief sysytems, Nazi children being no exception.  

                  What I am seing here and the decisions being made by the judicial system tell me we are in a lot more trouble than you could imagine.

                  Do you really think for one minute you own the wisdom of the world when you have exposure to zilch life lessons. Get some experience and understand the economic consequences of your Green party and the imbeciles within it.

                  So either get in line, or shut up and keep your ill-considered, lack of scientific beliefs to yourself.

                  Thats more arrogant than you can believe and I am supposed to be the arrogant prick.

                  Finally "Equating children campaigning on saving the planet"  is whose fantasy and who is leading them to understand the economic consequences of their childish antics!

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