They've resorted to door-to-door selling now? I think the floor's really about to come out from under the property market. It's falling already, but from that it sounds like it's barely holding together.

That was two years ago. The same company rang my parents to invest in New zealand not too long ago saying it's the next big thing. Pity with older baby boomers who have never invested before, they think housing is allways the best investment, no idea about mining stocks or any other investments, real estate is the only the thing the tards can understand and digest. If you invest in mining stocks, for example i have some money in a gold mining company, they have 1.5 million ouces in the ground, ATM they have 60 million shares which are trading at just under $.4 each. Their cost is to mine an ounce is $256US. Basicly your buying an ounce of gold for $36 in the ground. Next year when they go into production you will be getting a good return, explained that to my parents, but said the stockmarket is risky, I bought those shares 6 months ago at .2, I didn't have much money in it, but it's good to double your money no matter how much you invest.

I'm suprised people in the US havn't been bothered by people knocking either to sell their property or buy their property. It's been happening for awhile in Australia, but not lately which is weird. My parents said they used to get a call from the real estate agents once aweek asking if they wanted to sell their home (and asking if anyone else they know who might be interested in selling).

I live in the outer north east suburbs of Melbourne and we're selling up by the end on January. The suburb I live in is close to public transport and has a good local market community but I believe the coming recession will break many of the young first home owners and property value will plummet. So I'm selling and renting for a few years to reap the capital growth before it's too late. I'll invest the equity in hedging funds and hopefully make enough profit to buy another home outright in a few years. If the SHTF in the short term at least we'll be ready to move in short notice. If everything goes cruisy for the next few years (unlikely) then hopfully my investments at least match the real estate growth.. If I can do this then I'm fully hedged.

double post deleted

Smart move, property is going bye bye, atleast for the next few years, investors are dumping their property money into the stockmarket, leaving property behind, but I think alot are not smart enough yet to invest in mining companies, they are still investing also in the banking sector and other related type investments, but I do believe over the next few years the companies who extract valuable resources out of the ground vs financial and retail insitutions will come out the winners and the latter will be the losers. Oil, Energy, Copper, Gold, etc etc except for aluminium (most of it gets recycled, the price hasn't moved much since the bottom of 2001) will rise greatly as production has moved steadly down over many years which has been driving the prices up, still early days yet, I think the mining sector will be the best sector to invest in atleast for the next 5 years, pitty my parents have decided to invest in totally the wrong sector and they could pay greatly, but I have explained it to them, too bad for them if they don't want to listen.

No, that's true. Now that I re-read the article it does appear that he must of lumped all the other costs into that figure.

Actually I just did the math and with Insurance, Plates, Gas, Servicing (which I do myself) it comes out to about 67.00 per week for a 80 km (roundtrip) commute in a 98 Neon (paid for).

Either these people are commuting huge distances or they must be driving brand new cars. Maybe they should buy a crappy used car and cut their costs in half. A car payment is a huge waste of money

I dont know where Jaws gets his idea that this is all some socialist government's fault.

I hear his argument that higher density housing gives greater returns to the developer and so thats what they build. Well, round here, thats just wrong, and I guess the same is true in Australia. People will pay more for a nice house with some land, and given that undeveloped land is relatively cheap, the developers follow the money. Result is urban sprawl.

With no other influences applied, people have the choice between expensive cramped in-city properties, or commuting maybe as far as 50km each way daily for a better lifestyle, and all distances inbetween.

If you are so adamant in your assertion that sprawl is the favored living condition because it is inherently 'better' and more 'profitable', then why are government incentives (mortgage interest deduction, federally backed mortgages, etc.) necessary (indeed, endemic) to promote what you deem an inherently better lifestyle? My guess is that sprawl is popular because the government is willing to subsidize it more than any other living arrangement.

Yes, the people like it, the landowners selling out like it, the developers like it.



What? You have government incentives?? How bizarre. We dont have any government meddling in mortgages. Why on earth would your government do this?

However, if (and I'm not doubting your assertion) your government do favour sprawl with financial incentives, its easy to see why you would find my statement unexpected, and indeed explain where much of the negativity expressed in this thread towards (coining the term) sprawlers originates.

From a Kiwi perspective, given the original note was about Australia, I'm with the school of though that says these folks have done nothing wrong, they certainly aren't handout money-grabbers.

That article is hard to follow..

"The average cost of running a small car has risen to $147.54 a week "

Thats all the hard info we're given. Thats $590 bucks a month.
What kind of car? What was the per week costs last year? The year before that?

If these are people driving 5 series BMW's, you wont get much sympathy from me. If this cost rose from an aervage of $100 a week, you wont get much sympathy from me. If these people have undue debt (Credit cards etc) you wont get much sympathy from me.

As it stands, I'll withhold my judgement for the meantime as theres no real meaningful information in the article, other then the cost per week has "risen to $147.54".

Specop

In Victoria the RACV calculates the overall cost of running a car. Journos usually use this figure to include in their articles.

http://motoring.racv.com.au/racvm/which ... iption.cfm

IMHO no one actually spends this money on a week to week basis as it includes such things as depreciation of the vehicle, servicing and repairs.

oil4u,

Being in Aus, I can say it seems about half the population is in a two car family with a V8 of some kind or a SUV (they are generally smaller than US ones and called 4WD's here) and a smaller runabout. Dad generally drives the bigger car until there is a family and then they swap. Or at least that's what I have seen.

Good link, and it confirms what I thought. Based on the following, it seems those numbers arent*entirey* accurate from a "what does it cost to operate the vehicle" perspective. Really, a 10% increase in fuel prices should be easily absorbed by any family, and I cant see insurance going up, nor would maintenancesuddenly take all that big of a hike. It seems the greatest cost to operate factor is depreciation, which is something ofa smokey figure as its not a tangible cost one pays on a weekly or monthly basis.
Now I could be wrong, but if Aussi's are running such atight budget a 10% FUEL increase shuts them out of the housingmarket...Well, their grinding the budget down to the very last red cent and thats always a dangerous play regardless of current economic conditions.

"Many motorists will point the finger at increased fuel prices, as this is the most obvious out of pocket cost. The RACV vehicle operating costs however, identify the real expense of motoring by including all the costs associated with owning and operating a vehicle, not just the obvious ones. Petrol pricing has increased by around 10 percent since last year, but the higher cost of depreciation is a much bigger factor. New car sales have increased with the cut to import tariffs reducing the prices of some vehicles, while other manufacturers have made their vehicles more attractive by adding extra equipment rather than reducing prices. As a result, higher new car sales have led to a glut of used cars on the market. It's simply a matter of supply and demand driving the value of used cars down. Depreciation, which is often considered the "hidden" cost of motoring has increased significantly."

The U.S. started the middle-class home craze in the 1940s & 50s with the creation of secondary mortgage lenders through the powers of the Federal Housing Administration, which basically brought the concept of 30-year loans and low (5-6%) interest rates to the market, e.g. via government 'market interference'. Prior to this development, 10-year, high-interest mortgages were the norm, effectively 'shutting' millions out of the home market. Then the government started the federal mortgage interest tax deduction as another induction to home ownership, with no like deduction for renters. To make sure that the automobile would reign supreme, cities started arbitrarily mandating onsite parking requirements and segregated zoning laws, severely limiting the economic function of land development to strip malls and office parks. Add to this the advent of the federal interstate system, built with a mandated hypothecated tax (more market interference) and you have have all the necessary ingredients of government market intrusion to promote the single-family home lifestyle over all others.

Why did the U.S. government do this? Basically, a large homeowning middle class possesses the ability to greatly grow a consumer market and, thus, the 'economy'. Of course, this end is limited by cheap resource availability, as members of this site can well attest. The fact that the power of a massive federal government helped make it 'affordable for all' probably affected the free market in countries like yours, making housing artificially affordable through the implied security of the U.S.-backed mortgage market.

To put this into perspective, imagine if the government decreed wine as the 'supreme' drink over all others and made it artificially affordable for all. Now, I love wine as much as the next person, but is it a proper function of government to provide me with access to cheap, plentiful wine? Hopefully, you can now see the link of the gov't-backed real estate market with socialism.