WONDERING whether some people have a memory, or are too young to have known, or are just in the clouds but what about:

-this orgy of property speculation whilst not new reached stratospherical heights in the last decade

FOR those unaware a lot of this coincided with:
.record low interest rates
.high population growth fuelled largely by high immigration and visa manipulation
.deregulation of much of the financial system
.removal of planning codes and pulling apart the building compliance system
.sale of public assets and significant privatisation of much of the economy

…the list goes on

SO it was good for some while the gravy train stayed running but it … was largely built up on:
.a mountain of debt
.it was not about housing, shelter and community it was about investment and returns to shareholders

IN less recent times Australian home buyers may recall:
-they were paying about 18% interest rates on their home loan, today most are paying less than 5%, fine but…

-paying off a home loan was an aspiration that was normal; now it is increasingly unobtainable

.Millennial home ownership rates have fallen 26%
-first home owners have represented the smallest percentage of the market than in previous decades
-as the purchase price of homes has increased dramatically the mortgage servicing costs have escalated too, representing in a lot of cases over half of the household net income
-meanwhile homelessness has remained very high (more than 116,000 across Australia … question the figures with many couch surfing)
-wage growth has hardly kept up with inflation for over 5 years
-record profits have been achieved in the banking sector
-the black economy had grown unchallenged in any meaningful way
-AML (anti money laundering) legislation has again failed to be enacted

And now what do we hear:
-the government must not react to the Banking Royal Commission in any way that puts at risk the mortgage brokers … for heaven’s sake
-an over-reaction like tightening the rules might stifle growth, well too bad for those whose lives have been ruined by mal-practices, poor regulatory systems and various watchdogs at lunch
-there seems to be a cohort of people determined to ensure their little slice of the gravy train continues on track to make for them an even bigger pile, to hell with:

.a fair go, it’s not time to step back, no way
.fairness, forget that, it’s only the weak victims of this world that don’t make a truck load
.with the system stacked in favour of the wealthy a sense of entitlement is in essence a belief system
.that regulation and compliance hinders the economy and enterprise




Property investors battered by a ‘perfect storm’ of falling prices and tighter credit


For sale sign outside an apartment building

Property investors account for about 42 per cent of mortgage demand.



In the heady days of the property boom, as big city house prices jumped ahead in leaps and bounds, investors reigned supreme, swatting away first home buyers with their superior purchasing power.

It was a win-win for the investing class. They had willing banks and favourable tax laws working for them, pumping up property prices and capital gains in a virtuous circle.

According to property investor Michael Ilieff, who arrived in Australia as a Bulgarian refugee almost 30 years ago with $8 in his pocket, the tables have well and truly turned.

A combination of hard work, negative gearing and interest-only borrowing helped Mr Ilieff build a life through property, but right now his investment record spanning decades counts for nothing.

Property investor Michael Ilieff stands in front of his white van.

PHOTO Michael Ilieff has built up a property portfolio since emigrating from Bulgaria three decades ago.



He wants Westpac to extend his interest-only loan on a property bought well before the Sydney and Melbourne property boom took off.

Even with prices falling, the property is worth much more than he bought it for, but the bank is treating him like a newcomer.

“Everyone (investors) are suffering from that,” he told The Business.

“Just the fact that they’re asking you how much you’re spending on your Netflix, how much toothpaste do you use.

“They really make it hard to borrow money. It’s ridiculous there’s just a blanket formula and no flexibility.

“I’m not sure how you can run the property market or anything to do with the economy if the banks continue to be this strict.”

Investors are big players in Australia’s property market, representing about 42 per cent of total mortgage demand.


A significant shift in investor sentiment could lead to a serious downturn in the property market with job losses in the labour-intensive construction sector, not to mention the serious knock-on effects to the services such as architects and lawyers, as well as retailers who sell household goods.

Peter Koulizos, chair of Property Investment Professionals of Australia, believes the banks’ tighter lending policies in the wake of the regulator crackdown and royal commission has made it very difficult for investors.

“Even though 2018 was a tough year. I think 2019 will be even tougher,” Mr Koulizos warned.

“So far as borrowing money is concerned this is the worst I’ve seen. It wasn’t this bad during the ’90s recession, and it certainly wasn’t this bad straight after the global financial crisis.”

Investors have also been singled out by banks for bigger interest rate hikes. On average, loans to investors have gone up by 57 basis points more than loans to owner-occupiers.

Investors are now typically paying interest rates more than half a percentage point higher than owner-occupiers.

PHOTO Investors are now typically paying interest rates more than half a percentage point higher than owner-occupiers.



But the biggest risk to investors, according to property research firm CoreLogic, is falling prices. Investors will no longer be able to ride a wave of capital gains.

CoreLogic’s head of research, Tim Lawless, said property prices will continue to fall through 2019 and possibly into 2020. In Sydney they are already down more than 11 per cent.

“It’s a bit of a perfect storm in many ways,” he said.

“Rental yields are beginning to weaken or fall while we’re also seeing unprecedented levels of supply coming onto the market, which could lead to further falls if demand softens.”

Policy changes from Coalition and Labor hit investors

That is not all. The Coalition Government has made depreciation allowances less generous, meaning many investors are already getting smaller tax deductions.

Investors are also bracing for a possible change in government, with Labor proposing to wind back negative gearing and the capital gains tax discount.


The Opposition plans to halve the capital gains tax discount from 50 per cent to 25, while negative gearing will be ended for established housing and restricted to newly built properties. Although the changes will be grandfathered, meaning that current owners will keep their tax benefits.

The Government is arguing the proposals will trigger a property market collapse, but Labor maintains its policies will stimulate investment in new dwellings and help first home buyers enter the market.

Tim Lawless sees Labor’s changes as another headwind that will further dampen investor demand and may encourage riskier behaviour.

“Most investors target established homes and the risk profile of new housing, particularly apartments, is really quite high now if you’re buying off the plan,” he said.

‘No panic stations yet’

Property group Colliers International sells a lot of apartments off the plan.

“Out of the 10 buyers per apartment that might have been there 12 to 18 months ago, you might be down to five or six now,” Colliers Investment Services director Oliver Totani observed.

“There are still buyers out there. Will it remain difficult over the short term? Absolutely.”

The fear is that the combined impact of falling property prices, softer rents, a lending crackdown and unfavourable tax changes might turn investors into forced sellers or trigger a mass exodus from the market.

“There’s no panic stations yet,” Mr Koulizos said.


“But you will see less property investors at auctions or negotiating property for sale.”

He cannot see a mass sell-off without a significant rise in unemployment or interest rates.

As is usually the case when circumstances change, there are casualties and some investors who bought properties at the top of the market may fall victim to the banks’ tougher approach to lending.

Michael Ilieff suspects some investors have become collateral damage.

“It’s a formula to make you look bad. It’s a formula for you to fail,” he said.

“The bank wants to push you to the end to make you sell out, particularly for someone who might have purchased two years ago and doesn’t have enough equity in the property. The bank probably wants to clear its books.”

It is hard to see investors willingly abandoning the property market just yet because most of them are in for the long haul and the transaction costs are high.

‘In any sort of downturn, you would generally see investors riding it out looking for that long-term capital gain and hopefully trying to improve their yield as they pay down their principal,” Mr Lawless said.

“And are there better places to put your money? At the moment, probably not.”

Michael Ilieff is confident conditions will eventually improve. They always have, but this is not the year to expand.

“My plans have been put on hold. Wait and see.”

But his faith in bricks and mortar is unshakeable.

“The stock market has never really grabbed me. Property is something you can see, touch, manage. Dirt is the best investment,” he said.






TODAY,  building owners are having parts of their buildings excluded from insurance cover.  Non-conforming cladding has been a key driver.  This is a legitimate response by an insurance industry that has no trustworthy line of sight to how buildings are specified, constructed, assured and maintained …

THUS … partially uninsured buildings are technically impaired assets or securities for finance.

-with impact on the saleability and value of these buildings

These are the reasons why a NSW inquiry into the state of the construction industry is needed  …

 What will be done for the owners of defective apartments, both existing and those to be finished before any new legislation comes in?

“It will be very interesting to see what hand the Opal Tower developer may have had in the procurement, superintendence and acceptance of the project.”


OPAL INDEPENDENT REPORT – government‘s safe terms of reference to the rescue

Opal Independent report – government‘s safe terms of reference to the rescue


Academics, consultants and lawyers do not criticise each other. It was reasonable to expect that Professor Hoffman did not look to allocate blame, albeit there are strong pointers in the report. 

Clearly the priority for now is rectification and recertification of the final rectified building. 

The report provides salutary insight into the state of construction in Australia and especially NSW. The experts have done a great job meeting the minister’s terms of reference by describing the particular issues that have presented at the Opal Tower, and commentary on mutually agreed ways to address these. 

They were right to have avoided allocation of blame for now, as this process will most likely be the subject of other proceedings. But, it’s a pity that the report is so engineering design centric, which suggests new layers of checking the checkers might be needed. 

*Construction lawyer Bronwyn Weir, who co-authored the Building Ministers’ Building Confidence report, has cast doubts on the likely impact of the recent actions announced by Minister Kean and the recommendations made in the independent report into the Opal Tower released last week.

Tip of the iceberg

“These things are signals, the Opal Tower is a manifestation of a system in trouble, they are almost the tip of the iceberg of potentially what’s going on in buildings… without prescribed changes including greater registration of practitioners, better design documentation and compliance, more apartment buyers would be left with problem buildings and no way to fix them,” she said.

The ministers say they have mostly embraced the recommendations in the report – the most important being the registration of engineers in NSW, which is widely supported. Regarding the checkers, it’s unclear how the professional indemnity pie would be carved up and who would be taking the responsibility for such interventions. Obviously more detail to follow. 

Also unclear is the effect or intent of creating a database for stakeholders to view prior to purchasing apartments.  Hopefully, not a shift of accountability for buyer beware purposes. Apartments are not purchased in pieces.

*Today, building owners are having parts of their buildings excluded from insurance cover.  Non-conforming cladding has been a key driver. This is a legitimate response by an insurance industry that has no trustworthy line of sight to how buildings are specified, constructed, assured and maintained. Unknown risk is generally uninsurable – how would an insurer price or mitigate unknown risk? 

*The flip side of this is that partially uninsured buildings are technically impaired assets or securities for finance. This will have an impact on the saleability and value of these buildings. It’s likely the impact of structural issues at the Opal Tower may impact their value.

**These are the reasons why a NSW inquiry into the state of the construction industry is needed. 

*They underpin the reasoning for systemic change, more regulator accountability and single cover 10-year warranty insurance for all residential buildings over three storeys starting from July 2020.

There are reportedly thousands of impaired apartments and more in the making. A reporter at the press conference asked what would be done for the owners of defective apartments, both existing and those to be finished before any new legislation comes in. 

The ministers had to concede that this would be contingent on the government being re-elected. When pressed if they were keen to continue in their current portfolios there were no clear indications of interest other than to claim pride in what has been achieved to date along with the “biggest regulatory reform package for the construction industry” ever announced in Australia.

In the report supporting the announcement there was at least acknowledgement that the responses needed went far beyond engineering.

Minister Kean has noted that the Opal Tower experience is not just an Australian problem. He pointed to the 2018 Dame Judith Hackitt review of UK building laws (“Hackitt Review”), commissioned by the UK government, which found widespread non-compliance in the UK construction industry and “ignorance” and “indifference” towards building roles and responsibilities respectively. This is an international issue. 

Dame Judith Hackitt said:

“Contractual arrangements for multi-storey projects differ, but commonly developers engage a builder to undertake a design-and-construct project. This means the builder is responsible both for the development of the design and the construction of the building. While the developer might initially engage architects and engineers to prepare early designs to obtain planning approvals, these consultants then become subcontractorsOnce contracted, the builder will work to find efficiencies and cost savings in the development of the design and construction of the building.”

This situation is not unique to residential buildings. It applies to school buildings, sports facilities and commercial buildings equally. 

*The point Dame Judith Hackitt has not made is the shared culpability of clients who go about procuring buildings with practices that are sure to return them less than optimal outcomes. 

**The Fifth Estate provided a case study on this very subject. It will be very interesting to see what hand the Opal Tower developer may have had in the procurement, superintendence and acceptance of the project.**

For now, it seems that both the developer and the engineers are content to point to the builder. WSP Australia and New Zealand chief executive Guy Templeton has reportedly said, “I cannot say more clearly that WSP did not underdesign the hob-panel assembly… what has been built was not WSP’s design at the points of failure.” He was silent on WSP inspections.

*In the same article in The AFR, the reporter opined the following conclusion: “One thing is clear, however; the report has absolved the developer Ecove from responsibility. Ecove takes a view that construction was at fault.” 

This position is seemingly adopted by Ecove chief executive officer Bassam Aflak who has reportedly said, “as the investigation team have stated in their report, this was a rare case of structural defect, but has nevertheless provided relevant, important and unique insights.”

The situation is clearly becoming toxic between the developer, designer and builder as each would now be under advice from their lawyers and insurers. Stuck to one side of this are the Opal Tower residents who will be left to battle out their rights beyond the immediate fix in the courts. 

*NSW is now in election mode and the government simply wants the Opal Tower out of the news.

The AFR identified that the independent report did not seem to make it clear if non-compliance to the design, the actual design – or both – were at fault. Clarification from the NSW Department of Planning reportedly yielded the following response: “How you interpreted the report is your prerogative” with the representative refusing to offer any further explanation. Heads down here.

The Opal Tower story has much more to give in shedding light on the NSW construction industry

Critical documents that will eventually see the light of day will help. The Fifth Estate has been on the front foot calling for the Opal Tower to be used as a lens to view the local industry. Articles dealing with the poor state of construction procurement and practice have also been published. 

The strongest call has been for a 10-year warranty to be required for all residential projects over 3 storeys, started after July 2020. 

*The issues are involved are so systemic, that a roots and branches enquiry into the NSW industry is essential. These go way beyond the engineering report into the Opal Tower. Here are some of the documents that will help shed light on who signed up for what, and who may not have delivered the goods:

  • The developer’s tender documents including the designs, approvals and the design and construction contract, showing all of the legal amendments to the standard form;
  • The design and construct builder’s tender documents to the engineers, the proposed scope of design, inspection and certification services, the contract used, showing all amendments;
  • The design and construct builder’s relevant contracts with suppliers and sub-contractors for the parts of the Opal Tower project identified in the engineering report;
  • The design and construct builder’s progress claims for the months that the defects identified by the independent engineers report, were performed and paid for;
  • The superintendent’s progress payment certification for the same elements;
  • The design and construct builder’s claim for practical completion
  • The curriculum vitaes for the following:
    • The design and construction builder’s design manager
    • The developer’s superintendent
    • The design and construct builder’s site manager
    • The design and construct builder’s quality assurance manager
    • The design and construct builder’s on-site safety and risk manager


Insights from the above documents will help shed some light on the state of the construction industry in NSW. The Opal Tower project is just one of many that will help demonstrate to the industry’s governance authorities the tip of the iceberg referred to by Bronwyn Weir.

*A further 20 case study projects will be needed to provide defensible evidence of the problems and what will be needed to turn this around.*

Those projects should be drawn from across NSW, involve differing project types, scale and complexity. They should include a mix of public and private projects.

It is these challenges that will await the next building minister in NSW. It was understandable that Minister Kean was coy about putting his hand up for the same portfolio if the government was re-elected next month. The same answer could be expected for the next industry nightwatchman at the Commonwealth level. The construction industry seems to carry blemishes that no aspiring minister would want on their record. It is time for the construction industry to demand better. 

It’s time for both sides of politics to announce their intent to hold an enquiry into the state of construction in NSW if elected. Otherwise, these issues will still be there to bite in four years’ time.

In the interim, you have to feel for the Opal Tower residents and thousands like them.

David Chandler is a construction industry practitioner and an adjunct professor at Western Sydney University.



More Articles on this Topic

© Copyright The Fifth Estate Pty Ltd 2019 

Is Snowy Hydro’s expansion another infrastructure white elephant?

Is Snowy Hydro’s expansion another infrastructure white elephant?


By Leith van Onselen


The Morrison Government yesterday approved a $1.4 billion investment into Snowy Hydro 2.0 –  a pet project of former Prime Minister Malcolm Turnbull:

Early works on the pumped hydro-electricity project will start within a week after Prime Minister Scott Morrison confirmed almost $1.4 billion in equity into making the project a reality…

The total cost of the project is expected to be between $3.8 billion and $4.5 billion according to a feasibility study. Taxpayers will chip in $1.38 billion, with Snowy Hydro to fund the rest through its own internal cashflow and debt financing.

It’s expected the first electricity generated from the scheme will be available by October or November 2024…

Pumped hydro works by using cheap electricity — usually at night — to pump water back up a hill and into the dam, where it is stored until energy demands start to peak during the day.

More power storage is a good idea. But whether this project is a good way to achieve it remains debateable. The ABCproduced an excellent analysis of the pros and cons back in March 2017, which is well worth a read.

The cost of this project is currently estimated between $3.8 billion and $4.5 billion, but will likely grow. Additionally, by the time the project comes on-stream, battery power is likely to be very cheap:


The question is: can Snowy 2.0 deliver cheaper energy than the private sector doing the various forms of storage that are looming as highly competitive? Highly doubtful.

Moreover, for a government that insists it wants to see technological neutrality, the new Snowy project is a giant bet on the opposite.

Another key issue here is due process. The Snowy 2.0 project started in a moment of crisis as the gas cartel and inclement weather triggered blackout in SA. After that, the Turnbull Government ran a bizarre Enron-style campaign of fear and intimidation that blamed renewables when the problem was always (and still is) the gas price. And we know where Turnbull got the idea:

The Snowy Hydro expansion was a brain fart of Malcolm Turnbull – announced for political reasons without first conducting an assessment nor consulting with his state stakeholders.

And now it’s arrived, for better or worse.


Summed up by the Unconventional Economist …  Negative gearing does little to boost the actual housing supply and lower rents, but rather raises prices and crowds-out First Home Buyers …

With investor demand having already crashed it’s a good time to implement the ALP Policy … it will prevent a future investor bubble, moderate the cycle, and boost the First Home Buyer share over the longer-term …

TO find out more including more articles from LVO view CAAN WEBSITE for the Category of Negative Gearing …


Experts lash Coalition’s negative gearing rent lies



By Leith van Onselen

Last week, in the ultimate sign of desperation, the Morrison Government convened a housing roundtable with a veritable who’s who of property industry lobbyists. Excluded entirely from these deliberations were representatives from renters associations, social housing providers, housing academics, and affordable housing advocates.

As was later discovered, the event was hosted by the Property Council and aimed squarely at attacking Labor’s negative gearing and capital gains tax (CGT) policy.


Photo:  Treasurer Josh Frydenberg, Prime Minister Scott Morrison, and Property Council chief executive Ken Morrison. Photo: TND/AAP


One of the key ‘findings’ from this roundtable was that Labor’s policy would magically push-up rents – a claim that has since been smashed by housing ‘experts’ denied access to the roundtable. From The New Daily:

Grattan Institute budget policy director Danielle Wood… said that the Treasurer’s “scare campaign on rents makes even less sense”.

“If there are fewer investors there are less properties for rent, but those properties don’t disappear – home buyers move in, and so there are also fewer renters,” she said.

Tenants’ Union of NSW senior policy officer Leo Patterson Ross said that renters, would-be home buyers, researchers, and those at the coalface of affordable housing and homelessness know that “this housing tax warning and these problems are not real concerns” but rather “just industry trying to protect their business model”.

There is “no credible evidence” to support the government’s claims that rents would rise, Mr Patterson Ross said…

“If they think reforming negative gearing and the CGT discount would increase rents, then why are they not supporting it? They are treating Australians with contempt.”

UNSW City Futures research fellow Chris Martin also rubbished the Treasurer’s claims… “Investors do not currently pass the benefit of negative gearing onto tenants; they leverage that benefit into greater purchasing power for themselves, and hence into higher prices,” he said.

By reducing investor demand for housing as a financial product, the reforms should also help bolster flagging home ownership rates, by assisting renters in making the leap to buying, Dr Martin said.

“The proposals should result in more renters becoming home owners, because they will be less likely to be outbid for properties by ‘investors’ than they currently are,” he said.

Good stuff. As we all know, the entire point of Labor’s policy is to stop property investors from crowding-out first home buyers, in the process lifting home ownership rates:

As shown above, when investor demand falls, first home buyer demand rises. This is a good thing.

Moreover, the overwhelming majority of so-called property investment – 90% – goes into established homes:

*Therefore, negative gearing does little to boost actual housing supply and lower rents, but rather raises prices and crowds-out first home buyers.

Now is actually a good time to implement Labor’s policy. Since investor demand has already crashed, there’s far less risk of investor flight and widespread market disruption than if investor demand was running at the wild levels of two years ago.

What Labor’s policy will do, however, is prevent a future investor bubble, moderate the cycle, and boost the first home buyer share over the longer-term.





There are more properties on the market now than at any time since 2012 — and no-one’s buying

THIS is what is happening …
-some stock, probably a lot of it is on the market but the owners will not sell unless they get what they want (as detailed)

SOME are now in, or close to negative equity so the owners and/or banks are nervous about:

.being able to service debt on a property that is losing value

There are more properties on the market now than at any time since 2012 — and no-one’s buying


A for sale sign out the front of an apartment building.

According to CoreLogic, there are more properties listed nationally than at anytime since 2012.


New data shows that there are more properties on the market now than at any time since 2012.


But the tightening of credit rules and pessimism about the future mean buyers are scarce and sellers are being forced to be patient or offer heavy discounts — and sometimes both.

According to CoreLogic research, there are 115,000 houses currently listed across the country, 15 per cent higher than this time last year.

“Properties are being added to the marketplace at a time when conditions are weak,” Tim Lawless of Corelogic told 7.30.

“There’s not as many buyers around which simply means the rate of absorption is quite low.

“While new listings are tracking really low, particularly compared to a year ago, the total number of homes being advertised for sale is actually really high.

“It’s the highest level we’ve seen since 2012, which was the last time the housing market was in a downturn.”

‘Buyers back in the driver’s seat’

Corelogic's Tim Lawless. Interviewed by 7.30, February 2019

PHOTO Corelogic’s Tim Lawless says there is plenty of housing stock for buyers to choose from.



There has been a dramatic increase in how long it is taking to sell properties over the past year.

More than 83 per cent of all properties in Sydney have been on the market for more than 60 days, an increase of almost 10 per cent on last year.

In Melbourne that figure is 80 per cent of all properties — a jump of more than 20 per cent.

Capital city property listings in the 28 days to 10 February 2019.Properties are also taking longer to sell in Canberra, Brisbane and Adelaide.


“Buyers are absolutely back in the driver’s seat,” Mr Lawless said.

“They have plenty of stock to choose from and they can negotiate quite hard on the purchase price.”

Sales are down 15 per cent across Australia, but that figure increase to more than 20 per cent in the big markets of Sydney and Melbourne..

“One of the primary factors is access to credit is now much harder, particularly for investors,” Mr Lawless said.

But owner-occupiers also suffered.

“Over the second half of 2018 it was also very, very noticeable that owner-occupied credit flows started to slow very sharply,” he said.

‘We want to sell — we don’t want to give it away’

Pat and Shirley Tucker have reduced the price of their house to try and sell it

PHOTO Pat and Shirley Tucker have turned down a number of offers that they thought were too low.



Pat and Shirley Tucker have put their four-bedroom home in Melbourne’s eastern suburbs on the market.

They want to sell so they can downsize for their retirement.

Despite the prestigious location, they are struggling to find a buyer and have had to lower their expectations.

“We’ve had to temper our prices,” Ms Tucker told 7.30.

“We’ve got real estate agents coming in here giving us strange numbers and we knew they were unrealistic.”

Last year they received several offers but none that they considered good enough.

“We got some real, genuine interest,” Mr Tucker said.

“We actually had three firm offers.

“We’re realistic. We know the market’s cooled off a bit [but] the offers were just a little bit low.

“We genuinely want to sell the place but we don’t want to give it away.”

Their real estate agent David Fileccia said the Tuckers’ home would have sold quickly for a premium in previous years.

“There’s a lot of negativity. So buyers will buy into that, and sentiment and confidence is everything in real estate,” he said.

Mr Fileccia believes going to auction is no longer as appealing as it once was.

“I think the challenge with selling a home is just the method of sale,” he said.

“A lot of people still employ the auction technique, and post the royal commission I think the challenge has been obtaining finance prior to auction.

“We’ve sort of changed that strategy and we’re doing a lot of expressions of interest now and we’ll work with terms that we didn’t necessarily use in 2016 and ’17.”

‘I guess everyone is worried’

Haig Abraham standing next to a 'for sale' sign outside a house he is trying to sell.

PHOTO After six months on the market, Haig Abraham still has not found a buyer for his house.



Haig Abraham also knows the frustration of selling in a falling market.

The house in Sydney’s western suburbs has been on the market for six months and Mr Abraham has lowered the price significantly, but is still trying to find a buyer.

“It’s a nice two-bedroom, small two-bedroom home [with a] comfortable private backyard,” he said.

“We’ve actually recently bought a property elsewhere. And we need to offload this one to just take a bit of the pressure off.

“We have had some serious offers since then but unfortunately they fell through.

“But there are still people trickling in, having a look, having some interest but as of now, no, no 100 per cent offers have been submitted.”

Mr Abraham thinks tighter lend rules are playing into that.

“There are a lot of a lot of good people that can service loans that can’t get loans,” he said.

He is still upbeat about finding a buyer soon, but does not want to get trapped if the market continues to fall.

“I guess everyone’s worried, especially people who are selling,” he said.

“We don’t want to be caught up in that where, you’re going to have the house for sale for another year or six months and then lose more.”

Not at the bottom yet


But, unfortunately, that is exactly what Mr Lawless said the data was indicating.

“I don’t think we’re at the bottom of the market just yet,” he said.

“We’re not seeing any evidence that the market’s about to turn around, we’re not seeing any evidence that credit is about to loosen either.

“All the credit flows data that’s publicly available through the RBA or through the ABS statistics is showing a fairly dramatic and consistent decline.”



Queensland property outlook subdued but southern buyers still looking, experts say

Apartment building bust picks up speed, with ‘further falls’ predicted

Housing correction and consumption slowdown are key economic risks, RBA warns






1, the real median house price was 2 X in 2016 than 1981 …

2, mortgage repayments as a percentage of disposable income were also 43% higher in 2016

3, home ownership rates have fallen 26%

4, real weekly rents have more than doubled, making saving a home deposit more difficult

5, the percentage of income spent on recreation has actually fallen 18%



Richard Glover grew up without experiencing the delights of avocado on toast.

Photo:  SMH

The myth of the “smashed avocado” generation


By  in Australian EconomyAustralian Property


By Leith van Onselen


Back in 2016, Bernard Salt attacked the Millennial generation, claiming they’d rather spend their money on $20 smashed avocado breakfasts than making the sacrifice their parents and grandparents made to forgo consumption in order to accumulate a deposit.


Bernard Salt knows a thing or two about money. Picture: Peter Ristevski



The ABC has published an interesting chart series comparing age cohorts in 2016 to the same cohorts in 1981. The charts pertaining to the Millennial 31-40 cohort is particularly interesting and comprehensively debunks Salt’s profligate Millennial claim.

First, real median house prices were more than twice as high in 2016 as they were in 1981:

Second, mortgage repayments as a percentage of disposable income were also 43% higher:

Third, home ownership rates have fallen 26%:


Fourth, real weekly rents have more than doubled, making saving a home deposit more difficult:

And finally, the percentage of income spent on recreation has actually fallen 18%:

In other words, Bernard Salt couldn’t be any more wrong about Millennials.






Is Australia headed for financial crisis?

Is Australia headed for financial crisis?

Nugget’s News has released a special presentation, entitled Australia – A Coming Financial Crisis, which explains “the systemic changes that have taken place in recent years that have now put Australia’s banks, property market & economy at risk of a financial crisis or economic collapse”.

The presentation covers a wide gamut of data and includes testimony from Fund Manager Roger Montgomery, as well as Digital Finance Analytics’ Martin North. It also covers many of the themes discussed on MacroBusiness over the past eight years.

Well worth watching.







More evidence Visa Manipulation suppresses wages

The Union Movement is actively engaging to Change the Rules … but what “we” need to do in Australia is to “change the Government” and “change the Senate” …

The ALP recognises that with 1.6 million Visa Workers that has become an absolute problem!


O’CONNOR: On permanent migration, Hamish, we have tended to have a bipartisan position. …

What has become an absolute problem has been the explosion, the misuse, and abuse, of issuing of temporary work visas. There are 1.6 million visas in Australia at this point. In fact, the current Government has increased that by 200,000. So what you have now Hamish, for example you have temporary visas being issued as student visas, where the applicant is not primarily studying. You have work holiday visas being issued for those who are not on holiday – they are undertaking work here, primarily.

The visas themselves have been abused, and one of the reasons why we have one of the highest levels of youth unemployment, high underemployment, is because there has been an abuse of temporary work visas. That should be stopped.



Photo:  The Guardian

More evidence immigration suppresses wages



By Leith van Onselen


As revealed in the above BBC News video and the below article from The Guardian, UK companies are experiencing a labour ‘supply shock’ from lower immigration, which has forced them to lift wages:

Growing skills shortages in the UK jobs market are starting to drive up wages, according to a survey, as more companies across the country report difficulties finding staff…

The research compiled by the Chartered Institute of Personnel and Development and the recruitment group Adecco showed that basic pay expectations had increased to the highest level since it began tracking wage agreements in 2012.

Almost three quarters of the 1,254 employers surveyed said they were finding it tough to fill vacancies in the first quarter of 2019, with manufacturing companies having the greatest difficulty.

Despite growing concerns about the potential fallout for the British economy from no-deal Brexit, unemployment has hit the lowest rate since the mid 1970s, while record numbers of people are in work. Figures from the Office for National Statistics show that pay growth across the country has risen to the highest level in a decade, as companies raise pay to attract workers.

The latest official data show that the number of unemployed people per job vacancy has dropped to 1.6, down from 5.8 in 2011.

Growing numbers of companies have expressed concern about the post-Brexit immigration system curtailing the number of migrant workers available to hire. Net migration from the rest of EU to the UK has slumped to a six-year low, exacerbating the difficulties facing companies looking to hire staff.

Two-thirds of private sector firms in the CIPD/Adecco survey had increased their starting salaries in response to recruitment challenges, up from 56% in the final three months of last year.

Unemployment (4.0%) running at the lowest level since the mid-1970s.

Wage growth the strongest in a decade. What’s not to like?

Of course, an empirical study by the Bank of England found that immigration into the UK had pulled average wages down. So obviously slowing immigration would help to boost wages.

The economics is the same in Australia.

Various Productivity Commission modelling has shown that immigration lowers the wages of incumbent workers (see here). These results were confirmed recently by modelling from Victoria University (see here), as well as modelling for NSW.

Even the RBA recently admitted that “that the flow of new workers into the labour force [primarily from mass immigration] could continue to be stronger than usual, so that unemployment declines more slowly than we expect and wage pressures could take longer to emerge.

The economics is simple: continually increasing labour supply via immigration, and enabling employers to recruit workers from a global pool and to forgo training, necessarily reduces workers’ bargaining power and ergo wages growth.

Again I ask: why isn’t Australia’s union movement and the Left up in arms at Australia’s mass immigration ‘Big Australia’ policy, which is not only eroding workers’ conditions and pay, but also pushing-up their cost of living and lowering their amenity?

Why are they playing into the hands of the ‘growth lobby’, which are capturing the gains that come from bigger markets and paying lower wages, while ordinary residents wear the costs?







Majority of Aussies want fewer international students



Majority of Aussies want fewer international students

By Leith van Onselen

After a near doubling of international student arrivals over the past five years:

A new national survey from the University of New South Wales has found that the majority of Australians (54%) believe international student numbers should be limited. From The AFR:

The results show 54 per cent thought foreign student numbers should be limited. Strongest support was in the 18 to 34-year-old age group with nearly 62 per cent of people saying they thought international student numbers should be limited…

Is anybody surprised by these findings? The growth in international students across Australia’s universities has been extreme:

This has resulted in degraded standards from universities catering towards students with poor English skills, as revealed by three recent Australian reports (here, here and here).

Dr Cameron Murray – an economics lecturer at the University of Queensland – did a great job dissected the issue via Twitter:

A thread on my experience:

1. 90% of students in my economics masters classes are international.
2. Half of them struggle with basic English
3. When I ask in tutorials why they are doing the degree, half tell me that they “need more points for their residency visa” (1/n)
4. They tell me they choose economics because they can do the maths but don’t need to understand anything or write anything.
5. I always set written essays or reports. Students tell me that they know other students are using paid ‘essay writing’ services to pass my class (2/n)
6. If half the class can’t understand English it brings down standards. It must—unless I fail half the class.
7. Think about the incentives—a casual lecturer who costs $25,000 fails 50 students paying $250,000. Change lecturer next year or reduce intake to keep standards? (3/n)
8. It is frustrating when top international students from foreign governments/central banks come to your class, then sit next to rich Chinese (almost always Chinese) who can’t understand a word and are there to buy a visa (4/n)
9. The evidence shows the effect on standards is real.
None of this is a secret. That research is from 2011. Here’s an article from 2014:
10. Unfortunately, this reality conflicts with the widely believed myth that our immigration program brings in “high skilled” workers.
11. 350,000 international students paying $25,000+ per year to study is $9billion being pumped through our top dozen universities. (6/n)
12. Halving the number of international students would keep all the good students, boost standards for all, and remove the visa scams.
13. But this would remove $4.5billion per year of revenue to the universities. (7/n)
14. In sum, universities are being degraded so they can be used as a back-door immigration program, and no one at the senior levels of universities or major political parties want to change it.
15. It is nearly career suicide for younger academics to say anything about it (8/8)

I forgot to add that almost every student I failed or called out for plagiarism got second and third chances until they passed. After the first chance it is taken out of my hands to higher ups at the faculty…

There is nothing new in this thread.  did a big investigation a few years ago. Nothing changed AFAIK. People are just used to the new reality.

More here:  and here:

*As suggested by Dr Cameron Murray, the primary motivation for many international students to study in Australia is to gain backdoor permanent residency and/or work rights.

*In fact, the lobby group representing international students in Australia – the Council for International Students in Australia (CISA) – point blank admitted that they come to Australia for permanent residency, not because of the quality of education on offer:

The Council for International Students in Australia said foreign potential students were attracted to Australia by the possibility of migrating here.

But Mr Dutton’s strong views on border policy and his statement that Australia should reduce its intake of migrants “where we believe it is in our national interest” would tip the balance for some would-be students…

The national president of CISA, Bijay Sapkota, said… “For people coming from low socio-economic backgrounds there has to be a value proposition. If they go home they will not get value. So there has to be a possibility of immigration.”

We already know that the majority of Australians want the immigration intake to be lowered, as revealed by the majority of recent opinion polls:

  • Australian Population Research Institute: 54% want lower immigration;
  • Newspoll: 56% want lower immigration;
  • Essential: 54% believe Australia’s population is growing too fast and 64% believe immigration is too high;
  • Lowy: 54% of people think the total number of migrants coming to Australia each year is too high;
  • Newspoll: 74% of voters support the Turnbull government’s cut of more than 10% to the annual permanent migrant intake to 163,000 last financial year;
  • CIS: 65% in the highest income decile and 77% in the lowest believe that immigration should be cut or paused until critical infrastructure has caught up;
  • ANU: Only three out of 10 Australians believe the nation needs more people.


Therefore, it’s not surprising that the majority also want international student numbers curbed, given Australia’s education system has effectively become an integral part of the immigration industry and the federal government’s ‘Big Australia’ policy.

Of course, Australia’s rent-seeking universities love the current arrangement because they get to ‘clip the ticket’ and maximise fees and profits from the flood of international students arriving in the hope of transitioning to permanent residency, and have lowered standards to entice ever greater numbers.

Vice-chancellors’ pay has exploded to an average of $1 million on the back of the student flood, while ordinary university students are stuck paying off expensive and increasingly worthless degrees, taxpayers are stuck writing-off unpayable debts, and the broader population is suffering under the never-ending population squeeze.

Policymakers must restore integrity to the university system, beginning with removing the link between international students studying at university and gaining work visas and permanent residency. Australia’s universities must no longer be used as a backdoor pathway for immigration, and must be forced to compete on quality and value alone.



Sydney’s toll roads: most expensive and extensive in world


By Leith van Onselen


While residents of Sydney and Melbourne are suffering from crush-loaded roads, trains, schools, and hospitals, as well as hideously expensive housing, toll road companies like Transurban are making out like bandits.

In fact, according to ABC News, Sydney’s toll road network is the most expensive and extensive in the world:

…transport experts have given the city the dubious honour of having the most extensive — and expensive — urban toll road network in the world.

Sydney has nine toll roads that include a total of 15 toll points, and will soon have even more when motorways under construction are completed.

Currently, motorists are charged when driving on the:

  • M2
  • new M4 WestConnex
  • M5
  • M7
  • M4
  • Eastern Distributor
  • Cross-City Tunnel
  • Lane Cove Tunnel
  • Sydney Harbour Bridge
  • Sydney Harbour Tunnel

There will be at least six additional tolls between now and 2023 upon completion of the:

  • M4 tunnels
  • M5 (from Beverly Hills to St Peters)
  • M5 East (Beverly Hills to General Holmes Drive)
  • M4-M5 link
  • NorthConnex

“In terms of the kilometres of tolls in the urban area, Sydney has the most in the world,” said Chinh Ho, senior lecturer with the Institute of Transport Logistics Studies at the University of Sydney.

“We have an expensive network of toll roads…

Fees range for cars from $1.67 on the Military Road e-ramp to $7.45 on the Hills M2 Motorway at North Ryde.

The WestConnex has a wide range of fees from $4.93 on the new widened M4 to $7.89 on the new M4 between Parramatta (Church Street) and Haberfield (Parramatta Road and City West Link).

Total toll charges on the WestConnex will be capped at $9.30…

Earlier this month, The Australian’s John Durie hailed Transurban’s CEO, Scott Charlton, for extracting “monopoly rent” from users:

When Scott Charlton started at Transurban six years ago the company had seven roads. It now has 17, with another nine projects under development…

In toll road terms this, combined with low interest rates for the foreseeable future, is about as close to heaven as you can get, and Transurban has average concessions on its roads totalling 30 years – up from 25 when Charlton started.

By contrast, Transurban’s international peer ACS has average concessions on its roads of 20 years, while French giant Vinci has 17 years…

Another way of describing toll road concessions is monopoly rent, because it’s the length of time an operator gets to collect on earnings before interest tax, depreciation and amortisation margins of 80 per cent plus.

And while motorists are being gouged, Scott Charlton is enjoying massive remuneration of $7 million.

This is Australia’s population ponzi economy in action. It’s a model of growth where corporate Australia privatises the gains from mass immigration and socialises the costs on everyone else.

And it’s only going to get worse as our two biggest states double in size to around 10 million people by 2066, as projected by the ABS:

These are the hidden costs of a ‘Big Australia’: in effect giant private taxes, which fatten the ‘growth lobby’s’ wallets at everyone else’s expense.