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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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Replies

                    • Poppa. Okay, if you're so smart and TAD, Magpie and me are dumb "neathandals":

                      How much do you think it will cost to convert us off all fossil fuels to go clean to nuclear and hydro as you suggested? Impact of this?

                      Considering Australia emits 1% of worldwide CO2 what effect do you really think all of that will have in the big picture?

                      I'm sure you're constantly up to date as to what is happening to the glaciers in, and fly to, Greenland and Antarctica like Englander does, regularly...so you know how quickly they are melting.

                      Eventually, how valuable will any of your coastal properties be underwater in 30, 50 to 500 years? 

                      The good news is, in the case scientists such as Englander are 100% wrong, not all your properties will end up underwater. But, frozen.

                       

                    • HOE did I hit a sore spot?

                      Now stop and think what i said, you have not mentioned clean coal HOE, you have not mentioned how many clean coal power plants are being built all over the world.....put it into context and Australia is not the cause or the cure and I see no rational reason for the government to do more than they currently do.They should be building more clean coal power plants, looking at ways of introducing Nuclear (we have Hydro) drop subsidies on renewables because they have no storage capacity, spending more money on storage facilities and technology.

                      Why is this a good idea because Coal is our major export along with iron ore and we have "oodles" of uranium and rare earth minerals, not to mention lithium which a necessity for storage capacity. I have left off gas by the way, which is also very clean. do you realise we produce the cleanest coal in the world.

                      Now by saving what is initially a power problem with supply and cost we may be in a position to change to more and more of whatever you want.

                      Electric Cars for example are going to need to run on electricity, funny that?

                      My being up to date on glaciers etc is totally irrelevant to the points being made. You have fatally floored your argument and missed the whole point of my discussion......why is this so, how can normal intelligent people be so stupid? 

                      This is the greatest myth in human history!

                      Its interesting that people like Parra Tragic, Sir Col and myself can see this so plainly.....why is this so. As I said to Super in one of the first comments I made, I may only be half as smart as him, but this is so obvious.

                      Come back with an economic argument that makes sense of what you would do HOE.....how would you pay it and run the rest of the philosophical and economic agenda's of this subject.

                      PS The savings on power with the introduction of clean coal power would may help to drought proof the drought problems and green Australia and gobble up some of that distardly carbon.....which interestingly enough is the basis of our whole existence.

                    • What would you do maggie......I keep asking the question.

                      Australian cannot do anything, hire a boat and go to China, I am sure some greenie will pay for it.....will it be a steam boat, because it will require coal, will it be a motor driven oil boat, or a uranium driven tanker......hang on how can you make that trip to China without adding to the polution....oh of course, catch a plane .....they fly using magnetism!

                      Hmmm now its time for the brains to come in.....I suppose they could swim, but we breathe out carbon dioxide and there is the power required from the support boats.....and of course when they get to China, they will want to use their Ipads or Donkey Kong (modern version).

                      Silly me they could sail, now that's cost effective!

                • Just a minor point: teachers are paid very well in Australia. 

                  • Yeh! I don't think we need to broaden the subject Bob, everyone is well paid in Australia, including the unemployed....its just who you want to compare us with.

                    This problem has probably occurred a thousand plus times in the history of the planet, we want to blame ourselves for causing it, maybe so, but what is the answer that is practical and achievable......Mt St Helens is a volcano, what is the carbon footprint on it every time it erupts and whose to say we might have more active volcanoes.

                    Evolution is not very kind when it comes to extinction events, a very few of us left might end up in caves.......well if we have to start again, it has to be somewhere.

                    Maybe everyone should go revisit the movie "Waterworld" for an eye opener to the future.

              • Just as pedohiles are attracted to scout halls and altars, so are the lefties to schools and campus’.

                Its just a natural employment choice for them and it’s an unwritten rule - school teacher = raging leftie.

    • I am not disagreeing with you in principle Kram, I just let that article out there.....it will have consequences just the same and if you follow my argument about economic holocausts, then we could even be on the same track. This is much too large a subject to carry in this type of forum and the complications and variables are different for everybody.

      Its bloody hard for a lot of people out there just ask the 640 odd workers that were going to be getting jobs at a new mine that was overturned by a judicial member because the coal would be exported to Korea and cause pollution somewhere!

      Thats the type of economic consequences that will be coming from the left wing green based advocates that are influencing our children to protest, when they would not  have a clue until their Donkey Kong and PSP goes flat!

      • I think you're right mate - I think if we sat down and talked economics over a few we would be in general agreeance at least in principle - way too big an issue for a forum though!

        lol Donkey Kong? What the hell? I was playing that at high school back in the early 80's on a device that looked like the thing below. Next thing you'll be telling me that the kids these days need to hop off their pogo sticks, put down their Secret Seven books and get back to class!! :)

        3577238632?profile=RESIZE_710x

        • They have updated it bit I think Kram .....it just that I am sure they run on batteries and not windmills and all the renewables that we have in the system cannot be stored......I know you would realise that but that is trying to explain to our "Green Relatives"................. maybe its a good idea and to show that I am not the complete moron my wife works volunteer for Rural Aid and I have plenty of empathy for those poor bastards and what they are going through.......If I wrote a blog on the Bradfield Scheme of watering the middle of Australia and filling the Darling would I get your support?

          • Yeah seriously Pops, Donkey Kong is ancient history now. Super Mario and Sonic the Hedgehog are all the rage these days.

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