Tuesday, 28 August 2012


Mmm.... just had a thought.

If retired people want reverse mortgages (11% and compounding interest) then why not just sell 25% of their home to an investor and agree to pay some rent. If someone can not sell their home, why not sell 50% of it.

It would suit society if the govt were to buy this equity, so when the pensioner couple die, the house could be converted to public housing as an option.

Flexible financial housing solutions will assist in the deflation.

Later edit: domacom.com.au provides Fractional Property Investing.

What are the exit plans like for the majority holder? Who decides the sell price? Lots of question, however a novel approach

Sunday, 26 August 2012

Unwinding of our Terms of Trade and GDP Growth

Treasury data released in July shows that roughly half of the growth in average income experienced in the 2000s was due to the rise in out terms of trade, and the economy and income growth would therefore experience severe challenges in future when the terms of trade unwind.


Not sure what planet Dick Smith and Ian Lowe are on?


Perhaps if we were actually dealing with the real data and Professor Lowe actually could quote the correct numbers?

He states...
"Adding together the birth rate and migration, the Australian population is now growing by about 400,000 a year or another million every two and a half years...
Each year about 100,000 Australians die and about 250,000 babies are born, so the population would grow by about 150,000 a year or about 400 a day if there were no migration."

We grew by 302,000 actually and 60% on a temporary Visa.
149,700 net natural growth or 296,700 births minus 147,000 deaths. So he is out only by approx 50% in his numbers. Note the deaths were 2.5% higher than the previous year as were births.
Our NOM was 184,000.


What it leads to his the same sort of misguided emotion that surrounds climate change. The difference, demography is quite exact. Look at this bs, Brisbane to grow to 4.4 million from the 2.15 million now by 2031, when it is actually grew by 34,800 last year. Far short of the 118,1421 required yearly to add the 2.25 million over the 19 years.

1. Some city areas in Brisbane are in population decline, as are the other capitals.

2. "The SD of Brisbane experienced the largest growth of all SDs in Queensland, with an increase of 34,800 people (1.7%) in the year to June 2011. Brisbane SD accounted for 45% of Queensland's population at June 2011." Mmmm... 20 years by 34,800 is only 696,000 extra people and in that time frames Qld death rates double.

3. I suppose these suburbs in Brisbane are bucking the Dick Smith Trend. "DECLINING POPULATIONS- In the 12 months to June 2011, just over 10% of the 74 LGAs in Queensland had a small decline in population or remained stable. The two SLAs with the largest declines were Keperra (down 40 people) and Bald Hills (down 30), both located in the Brisbane (C) LGA."

Really as far as the growth in the population in Qld, both natural growth and the NOM could fall and we would still be growing due to the 1/3 demographic momentum, more people living longer.

Ageing Costs and Land Tax

Increasing taxes and reducing spending and entitlements seems to be a common element of most aging nation.The first new tax should be an expansion of the land tax with reverse mortgages provided by Centrelink for pensioners.

After all, surely any new taxes should should increase for the aged as well?

It should not be about raising taxes for the workers or investors?

Singapore Sees Taxes Rising on Social Spending
as Nation Ages
By Shamim Adam on August 26, 2012
Singapore will need to raise taxes in the next two decades as the government boosts social spending to support an aging population, Prime Minister Lee Hsien Loong said as he proposed measures to boost the country’s birth rate.
The prime minister pledged to ensure sufficient affordable housing for citizens, invest in pre-school education and add nursing homes for the elderly. He urged Singaporeans to build a more compassionate society, reject anti-foreigner sentiment and have more babies, saying the nation needs to re-invent itself to progress as the economy faces slower growth after years of rapid expansion....


Friday, 24 August 2012

The passing of the economies

Purple Economy - 1960 to 1970
Gold Economy - 1970 to 2010
Grey Economy - 2011 - 2030
Black Economy - 2031 to 2050
Green Economy - 2051 to 2200

Purple - The boomers enter teenage years and the 60's was, what the 60's was.
Gold - The boomers work and start to amass wealth. The property boom get a slow start.
Grey - The boomers retire and the unprecendented aging off the nation begins. The property bust.
Black - Boomers start to leave the home planet. Oz death rates double. Another property decline.
Green - Possible global population peaks and then its decline. Property grows in line with the CPI.

The Grey Economy

How to cope with grey Australia
Oliver Marc Hartwich & Jessica Brown
Published 5:30 PM, 24 Aug 2012

Australia's population debate misses global ageing reality.
In Australia, we talk about population growth as if it is something to be feared. But across much of the developed world, population ageing is a far more worrying trend.
Populations are getting older and smaller across Europe and northeast Asia.
Japan is now the oldest society in the world. Its population is projected to shrink by a quarter by 2050....

1. As Oz ages, like many others, it will likely become more NIMBY, conservative and resist immigration.
2. Over the next 25 years our deaths rates double and our natural growth may drop to zero or even negative and there is no chance immigration will double or treble to compensate.
3. 40% of voters are above the age of 50 and this percentage grows significantly in the future.
4. Note our demographic momentum, more people living longer, is 1/3 of our growth in real population numbers. So natural growth, NOM and momentum.

Monday, 20 August 2012

How fast will the population decline.

Seems the No speaker does not get it really. Australia population will peak and then decline.


The Yes speaker outline our demographic momnentum and the No speaker says he is wrong. What the?
The yes speaker also does not say that the populatrion should continue to get bigger indefinately, rather he says we will peak and then decline. He is correct.

Sunday, 5 August 2012

a thinker, with the actual data...

Andrew Smith - http://www.aiec.hu/
All text below is taken from http://theconversation.edu.au/new-migration-council-to-fight-for-a-bigger-australia-7895

"What is high population growth? It is relative, e.g very high post WWII, and now falling as we speak (and as many understand includes near 40% temporary residents, i.e. international students, guardians, dependents and long term tourists who produce export income for the Australian economy)

False statements are not challenged e.g. the evergreen "rampant runaway population growth" when in fact it has stalled, and significant proportion are temporary residents anyway. But don't tell that to the real estate industry as we brace for a sustained stagnation of property prices, at best.....

Presently there is both a shortage of aged care personnel (and many other industries e.g. hospitality, IT, engineering, particular trades etc.) and with significant bubble of baby boomers who will reach an age where they will require aged care, who shall provide it (let alone replace them in the workforce)? For now many baby boomers are in the situation of both caring to various degrees for children and parents in lieu of other support., and this will become worse

Pensions after baby boomers retirement should not be such an issue as retirees from then on will have been in 2030 superannuation system, so that is not a "Ponzi" issue (unless of course they cannot work due to caring for ageing parents).

Declining population is already becoming an issue in Europe especially Central Eastern and Southern Europe, Russia, Germany, Japan plus our own regional towns and cities, and internationally high growth populations will largely stabilise by 2050 (e.g. Iran has lower birth rate than Australia). Further, it is not the quantitative population figure, high or low, that is the issue but the qualitative when a significant proportion are elderly versus young.

Australia also needs to think of not just how to adapt our profligate lifestyles dependent on oil, lack of transport systems, regional development and our badly planned suburbs, but how to fit into our region (you know Asia?). Should we have a defence force not reliant upon the US, be able to produce and add value to products and services needed in future versus e.g. suggestion of Dr. Bob Birrell that we should just focus upon mining?

My issue with such "debates" is that there seems to be a lot of "wolves dressed in sheep's clothing" organising themselves using proxy arguments to stop or reduce diversity in a society the envy of the world, and would seem to prefer a sepia tinted mostly white Australia of the 1950s. I have news for you, it's too late, Australia is already one of the most culturally and ethnically diverse countries in the world, and it is not going to change, except probably get better and browner"

Unfortunately there are many, not all, who use anti population, anti immigration, care for the environment arguments and random factoids to mask their own prejudices.

"The population lobby’s ‘we’re all doomed’ diatribes against modern capitalism and the environment are a gold mine of sociological perversity but they may also attract a protest vote at the next federal election....."


Does the Stable Population Party explain clearly and publicly what is the definition of population, and that immigration is not the major component of population but is one of many variables?

Good visible example are international students who are included in net overseas migration figures and population, yet not only are the majority temporary entrants (i.e. suggestion of applying for residency will mean their student visa application will be rejected under the Genuine Temporary Entrant test), nor buying houses but actually subsidising places for Australian students?

Then again, if one didn't cite immigration as a major component of population (and supposed runaway growth) it may suggest that we are not being overcome by foreign hordes destroying the environment.....ironically Australia can manage that by itself.

Apply the Brakes http://www.publiceye.org/magazine/v26n1/apply_the_brakes.html

As the definition of Net Overseas Migration has been ignored I shall post official definition here:

"Net overseas migration (NOM) is the net gain or loss of population through immigration to Australia and emigration from Australia...

..... Overseas travellers are included in the population if they are in Australia for 12 months or more, during a 16 month period. (as are international students, temp workers and dependents).......

.... Net overseas migration can fluctuate considerably from year to year, but has been decreasing in recent years.....

......Currently NOM contributes about 54 per cent of Australia's population growth." http://www.immi.gov.au/media/fact-sheets/15population.htm

Of NOM, international students alone contribute 39%, according to the ABS, this is while international student commencements (i.e. new starters, not existing students re enrolling onshore) have been dropping in recent years..... more directly 20,000 jobs have been lost in universities, TAFEs, private colleges and related sectors.

This is the news the "Ponzi" property sector and media are not entirely open about..... population growth has been stagnating......

UK govt. is being advised to remove temp entrants from their NOM and population data to lessen the alarmist headlines the BNP etc. are encouraging e.g. "runaway population growth".

Meanwhile, a little more commentary about our "population" and "demography" experts.... http://immigrationptyltd.wordpress.com/tag/dr-robert-birrell/

"Population stabilization has been taboo for progressive greens since the late 1970s. But anti-immigrationists like FAIR founder John Tanton, a former Sierra Club activist, cut their teeth on the overpopulation anxiety that permeated the environmental movement earlier in that decade. Subsequently, they used the Malthusian lingo of resource scarcity, carrying capacity (the maximum population an environment can sustain indefinitely) and overshoot (when a population exceeds its carrying capacity) to launder the image of the white nationalists with whom they became allies. When climate change became a public issue, it gave fresh impetus to what population specialist Betsy Hartmann has called the “greening of hate.”

The Multicultural Council has an important role to play in Australia if we are to continue being held up as one of the best examples of a mature and diverse democracy internationally. This should also include informing the public and heading off (especially US style e.g. FAIR) misinformation campaigns attempting to co opt decent Australians into opposing "multiculturalism" through conflation of perceived negative issues and misinformation about population growth, immigration and environment, then without any irony claiming "racism" by "multiculturalism"..... (worst case scenario is the likes of Anders Breivik in Norway).


*Multiculturalism is not some dark satanic cult, it is a fact everywhere in the world, and is not against "Anglo Celtic" culture (nor Aboriginal), but diversity that can be both celebrated and used to enhance Australia socially and economically.

*Population has been declining in Australia from a "spike" in population growth brought about mostly by success of Australia's international education policy, i.e. full fee paying students and dependents, who subsidise places for Australian students, are included in Net Overseas Migration statistics, which is declining.....

However, organised groups, media and politicians from all parties have branded population growth as "runaway population growth" to create alarm, now with restrictions on immigration, international students etc.. Australia shall be facing related problems; education sector shedding jobs, skills shortages in specific occupations, ageing workforce, negative racist image for Australia, but on the plus side the real estate industry can no longer cite population growth as a driver of property prices.......

*Internationally populations are stabilising through much lower birth rates, and in some cases declining already......

*Immigration is not solely (if at all partially) responsible for environmental degradation and "carrying capacity", we Australians can manage that all by ourselves through our dependence upon fossil fuels, cars, large suburban houses, lack of urban planning and will from politicians (and Australians), while majority of "immigrants" have much more modest carbon footprints plus ability to compromise.

Links of Interest:

It's Not Easy Being Green

John Tanton FAIR Anti Immigration Laws - The Immigration Hardliner Family Tree

New York Times The Anti-Immigration Crusader

Immigration The Republicans are Getting It. When it comes to immigration, Republican candidates remain stuck betweena nativist rock and a demographic hard place. This week, a few sensible voices like Condoleezza Rice, George P. Bush, and Jason Riley of the Wall Street Journal editorial board are warning of the dangers of anti-immigrant politicking and pointing the Party toward amore inclusive approach to immigration reform. Meanwhile, candidates like Mitt Romney, Jeff Flake, and Wil Cardon remain stuck in the old way of thinking about the politics of immigration.



• If the Commonwealth Bank of Australia still in public ownership, the Treasure's surplus would have been assisted by a dividend of almost exactly $5,000 million - in just one year, nearly as much as Cheating flogged it for.

• $100 billion to fill the Libs backhole.

• Australia has approximately 1 public servant for every 12 citizen. Canada about the same. The UK is 1 in 11 and the US is 1 in 13, though if you exclude Defence Force personal this changes dramatically for the US where it becomes 1 in 18. This is across all tiers of government.

Historical comparisons are hard to make given that privatisation has resulted in a number of public enterprises being handed over to the private sector when these workers would have been included in the public service numbers. In terms of cost Federal public servants cost around $17B a year or between 4-5% of the federal budget. State/Local governments clearly vary as the cost to their budget is the cost of delivering the services.

Middle class welfare has expanded dramatically over the last 12 years. Read this excellent summary.
http://www.morganwealth.com.au/after-the-party-how-australia-spent-its-mining-boom-windfall/ Note the waste under Howard and how we could have had a larger sovereign wealth fund if it wasn't for popularism.

So Public service numbers aren't that high and as a percentage of GDP total tax take is around 30% in Australia, 28% in the US, 33% in Canada. I don't think we are over taxed. People today work longer hours, people today require both parents to work, Oh to have someone stay at home with the kids is now unaffordable.

• I think the ancient Greeks and Romans would probably consider us to be slaves. The idea of 'having to work' to pay off debt would be abhorrent to them.

• The economic modelling firm Macroeconomics estimates that over the decade 2005 to 2015 the Government will have received $259 billion in windfall revenues from the commodity price boom, however the budget forecasts predict we will end that decade worse than we started, with nearly $130 billion in extra debt. This despite being managed by the world's greatest treasurer for most of this time, and having an economy that we are told is the envy of the rest of the world.

Both sides of politics are simply spending our children's prosperity in trying to buy our votes - and we don't complain.

We have a profligate government, and an opposition that have spent the last few years telling us that our major problems are a peaceful invasion of boat people, a carbon tax that will wipe towns off the map, HSU mismanagement and the exploits of Peter Slipper.

Imagine if we had saved that $259 billion: we could pay cash for the NBN ($36b), Melb-Syd-Brisband fast train (est $90b), GFC (say $100b) and there would still be $33b left over, and no debt increase!

We have had a fundamental failure in leadership, and a fundamental failure of the population to hold them to account.

• From rear-view to looking forward... a video

Saturday, 4 August 2012

taxed without representation

Times have changed and it is probably time to allow a voluntary vote by those who are taxed without representation, 16 year olds up. 40% of all voters are now over 50 and if we do not take the youth from exclusion to inclusion, we are doomed.

It is probably also time to question if any of the 131,000 people above the age of 90 currently, who can not tell the difference between a book and an Apple, should have the right to vote.

the grey economy


Australia's population, like that of most developed countries, is ageing as a result of sustained low fertility and increasing life expectancy. This is resulting in proportionally fewer children (under 15 years of age) in the population. The median age (the age at which half the population is older and half is younger) of the Australian population has increased by 4.8 years over the last two decades, from 32.1 years at 30 June 1990 to 36.9 years at 30 June 2010. Between 30 June 2009 and 2010 the median age remained relatively steady at 36.8 years. Over the next several decades, population ageing is projected to have significant implications for Australia, including for health, labour force participation, housing and demand for skilled labour (Australia to 2050: Future Challenges, January 2010 (Intergenerational Report 2010), Attorney-General's Department).

TABLE 9. Estimated Resident Population By Single Year of Age, Australia

131,000 people in June 2101 above the age of 90.


There were 3.01 million people aged 65 years and over in Australia at June 2010, an increase of 370,600 people or 14.0% since June 2005. The proportion of people in this age group increased in each state and territory over this period, leading to an overall rise from 12.9% of the total population to 13.5%.

In 2010, Tasmania joined South Australia in having the highest proportion (15.6%) of people aged 65 years and over. The Northern Territory continued to have the lowest proportion (5.5%).

In the five years to June 2010, the largest increases in people aged 65 years and over occurred in New South Wales (110,300), Victoria (88,300) and Queensland (87,900). Rapid growth of 43.4% occurred in this age group in the Northern Territory over this period, however this added only 3,800 people, the smallest increase of any state or territory.

The SDs with the highest proportion of people aged 65 years and over at June 2010 were Yorke and Lower North in South Australia (21.4%), Mid-North Coast in New South Wales (20.4%) and Wimmera in Victoria (20.1%). The SDs with the lowest proportion of people in this age group were Pilbara in Western Australia (2.7%), Northern Territory - Bal (4.7%) and Kimberley in Western Australia (4.9%). 

Friday, 3 August 2012

emigration peaking

88,000 left permanently last year. Note we are now at the highest percentage of those departing to coming permanently, ever! I wish the Dept would update this sheet…probably to scared to…lol as it may show a 69%…ouch
“For Australian-born people, the decision to leave permanently is usually based on economic reasons, particularly employment”… yer, they leave to go to 9.6% unemployment?

Thursday, 2 August 2012

the agequake ahead

Australia in now leaving a unique period of demographics changes that signified the economic benefits of a high ratio of working-age to dependent population during our demographic transition. We now head towards an ageing population. During the cusp stage we are in now, there are both low birth rates and low death rates. Birth rates have dropped to well below replacement levels since the mid 1970's and that would normally lead to a shrinking population, had we not have our high net immigration.

As the large group born during our baby boom, 1946 to 1965 ages, it creates an economic burden on the shrinking working population by increased health, pensions and aged care. Our death rates are remaining consistently low and longevity is ageing our population as the average age climbs beyond the current 36.7

This 'gift' effect is not automatic and was earned by the presence of suitable economic policies, including high immigration, that allowed a relatively large workforce to be productively employed, evident in our current participation rates.

Now, the first wave of baby boomers are about to retire on mass. 1.2 million people will be added to the over 65's by 2015.

Low unemployment percentages will remain throughout the 'grey economy' starting this year and remain low, if not approach 0% as the full effects of the baby boomers, all retiring over the next 16 years, is felt.

Job ads will rise or stagnate as business will find it increasing harder to get staff. This trend will also continue well into this decade approaching.

Perhaps we should call the next 16 years the 'retiring economy' then after that the 'grey economy' 2026 to 2035

Then, as we have the boomers starting to die on mass, 2035 to 2045, the 'black economy', followed by the 'green economy' as the average age might actually drop. 2045 to 4000.

So what might we need?

As everyone is selfish by nature, we must ensure we actually know why we need our bubble to deflate slowly. A sudden pop would not be good for the nation, whereas the slow deflation down to the levels of actual affordability, is the option I see most likely to happen. This can be assisted by anti-speculation on residential laws and taxation changes.
We need to change over the near future,
  • Land tax to replace Stamp Duties (for the pensioners, this could accrue and be paid on the sale of the property)
  • Capital Gains on the PPOR if sold under 10 years (exemptions for health, work babies or any real legit reason to move)
  • NG only on new builds
  • Death Tax on estates over $2 million (25% on the amount over $2 million)
  • GST to 20% and the tax free wage threshold to $50k (increase welfare accordingly)
  • That we endeavor to have half the Parliament under the average age of the day and for all tax payers to have the right of representation, by voting rights. 16 to 18 years old, as voluntary voting.
  • To encourage our Australian born residents, and in particular our skilled youth, to return to Australia permanently after 7 years away, and have whatever HECS debt they personally have, cancelled on return to Permanent Resident status.
  • To encourage permanent placements into regional Australia, doctors who bring their family (wife and at least 2 children) and reside in a regional area, are given a free house for accommodation. After 5 continual years in that community, the house ownership is transferred to them at no cost.
  • A national scheme setup to encourage the youth, to take an recent sole immigrant, and provide a period of assimilation into the Australian culture and structures. The sponsoring Australian resident youth would receive a $150 per room allowance for this ‘inclusion’ in our future, for a maximum of 26 weeks. Conditions apply and read the small print etc....
I note that while I wrote these suggestions some 18 months ago, that alyssum seekers are being lodged domestically.  

    Family Assist Part S

    Family Assist Part S (carrots and sticks), would allow a sole pensioner be able to sell up their PPOR and the proceeds remain asset test free for the pension test, if they live with another 'family' and put a majority of their investments into Govt Bonds or an approved govt savings account. They could also park the capital into a mortgage offset account in their name with the interest going to the couple/family mortgage. The rent the 'family' receives would be tax free and the 'family' would as get a $5k govt grant, to help house the pensioner.

    At the same time a Land Tax needs to be introduced to create the 'stick'.

    The 'family' could be young FHB and need not have a direct family relationship with the pensioner.
    It will be a bad refelection on our society if we allow 28% of our homes to end up as lone occupants. Now at approx 24%.  Ageing in place will be a social disaster. Isolation and loneliness is a state we should find unacceptable for an advanced society.


    From the ABS link on the above thread, Figure 7.48 shocks me.....

    We certainly have the spare bedrooms for Family Assist Part S

    Housing utilisation
    All households (000's)
    • More bedrooms needed 218.5
    • No extra bedrooms needed 1491.0
    • 1 bedroom spare 2857.1
    • 2 or more bedrooms spare 3359.5
    All households 7926.2

    March 18, 2013 - Update : Was on the ABC Radio today (Sunshine Coast) and the idea was received well.

    September 21, 2013

    ''Mary'', who owns the house, is in her late 80s and has lived there alone since the death of her husband several years ago. In popular parlance, she is the archetypal little old lady rattling around in the old family home. In the language of public policy and economics, Mary is an ''over-consumer'' of housing and her choice of dwelling is ''inefficient''. Put another way, she is helping to reduce supply and inflate prices.
    The number of older Australians who live alone in large homes is startling. An analysis of 2011 census data reveals that of homeowners aged 70 and over who live alone, 62 per cent have a house with three or more bedrooms. That adds up to 238,078 houses with at least three bedrooms occupied by just one person. Among houses owned by older couples (with at least one partner aged over 70), 82 per cent - or 332,752 houses - have at least three bedrooms.


    Good plan, although they may still end up living alone, which to me is still a social issue.

    the nightmare of housing prices

    ‎I simply pose the question, why rising house prices would be good for an advanced society?
    Below are a few posts I have done either in Facebook, or as comments in forums.

    1. Housing is a right, not a privilege.
    2. Residential property should never have become a speculative asset.
    3. Personal wealth should not be acquired by residential property speculation and in particular, 'house flippers' who used the PPOR as a tax shelter from property profits.
    4. All wages should grow across an advanced society at the same rate for all levels.
    5. Public housing is an investment in our nation, not a cost, as it is an investment into people.
    6. Rent increases should not be more than CPI, by law.
    7. Doom and gloom is rising house prices, not falling house prices.
    8. Having a social conscience, means caring about the cost of housing for the following generations.
    9. House prices do not always go up. There is no housing shortage in Australia and some ABS stats are BS.
    10. We need to guide the youth to go from exclusion to inclusion and the aged from success to significance.

    Immigration and population growth does not correlate to house price growth.
    Associate Professor Steve Keen has worked on this. It is a myth.

    Easy credit and demographics blew the bubble up and by an large demographics and tighter credit will deflate the bubble.

    Our natural growth may drop to zero or even negative around 2035, due to our death rates doubling as the boomers leave the home planet. I think it is very likely that our population will peak around 2040 at approx 29 million and then may even start to decline. So, for the kids under 10, good news, houses will be very affordable again in their lifetime. We have spent the last 20 years with 'rear view mirror' policy making. Trying to fix the problems of the past. Once a population peaks and then starts to decline, policy is formed by looking out the 'front window'. That day is coming and while people can rent at fraction the cost of a mortgage for the same property, sit tight, rent, save, invest and wait some more....
    These people may end up having a 100% deposit!

    Unaffordability has been talked about for some time.
    What is lacking is political balls to tackle the problems.
    "House prices in Australia have risen faster than average household incomes since 1970. In 2007-2008, 49.3% of low income households with a mortgage in NSW were found to be in mortgage stress (nationally 46.6%). Sydney is considered to have the most heated market for private housing amongst
    Australian capital cities. From September 2008 to September 2010, median prices for non-strata dwellings in Sydney increased by 22.8% and by 14.9% across NSW.
    According to Shelter NSW, in September 2010, 1% of home purchase stock was found to be affordable for very low income households, 6% for low income households, and 25% for moderate income households.
    While the overall trend in house prices in NSW is upward, there is some variation amongst local housing markets in terms of the extent of the increase.
    For key workers (notably, police, teachers, nurses, fire fighters and ambulance officers) looking to buy a house, 84% of Sydney LGA's in 2010 were unaffordable. In regional NSW, 75% of LGAs were affordable, with house prices less than 5 times the salaries of key workers."

    Why prices will drop and according to my demographic studies,  until around 2018.

    http://www.coagreformcouncil.gov.au/reports/housing.cfm now... sad stuff indeed.
    Ignore the shortage myth as the Census 2011 data, and the missing 300,000 people blew that myth apart.

    Average people are priced out of average homes.

    Latest Australian Bureau of Statistics figures show 3 in every 10 households suffer mortgage stress."

    Read this three times!!!!

    1. 6% of mortgages are now underwater. That is the loan is more than the house is worth. Many of these people in negative equity, will sit tight, continue to pay the mortgage (if they keep a job) and 'hope' that prices rise in the future - Denial.

    2. Buying a 'home' is an emotional decision, not a financial one and thus the bubble blew up. If you wanted to make money from RE, you would rent and then buy multiple IP's achieving the biggest gain over time.