Hi all, this clip was taking from the Equity Mates Investing Podcast episode "Expert: Yanis Varoufakis - "You should be screaming from the rooftops, stop doing this!" You can find it here On Spotify: open.spotify.com/episode/4i1ZrrtEiY7kIIPTsIduf2?si=c6e2032a591e4fdd Or Apple: podcasts.apple.com/au/podcast/expert-yanis-varoufakis-you-should-be-screaming-from/id1212097275?i=1000566554055

In the 80 and 90’s u could buy a house working at a supermarket . Now 2 degrees and a masters won’t get you shit in Sydney

200,000 new houses, 1,000,000 new arrivals. How come we have a housing problem?

A major problem is the idea of property as investment. There should be a culture of buy one house as a HOME, and that's it. Its a roof over your head, a place to raise a family. It should be that simple. The system is rotten.

The effects of the downturn are beginning to sink in. People are being impacted by the long-term decline in property prices and the housing market. I recently sold my house in the Sacramento area, and I want to invest my lump-sum profit in the stock market before prices start to rise again. Is now the right moment to buy or not?

God if you think Australia is bad, look here to NZ. We’re a one-trick pony, no industry to speak of and the ONLY game in town is we buy and sell houses to each other. At least in Australia you’ve got other industries…

Decent, affordable housing is not only a basic human necessity, it is fundamental to a functional society. However, the situation we are in right now has been 40 years in the making. Our politicians have intentionally implemented policies to get us to where we are today and we will be so much worse off in the near future than what we are right now. Nor will politicians do anything at all to turn this around. Australia’s biggest problem is that we do not create value. We dig stuff up out of the ground and flog it. The most successful economies invent and make stuff , hold lots of patents and add value. We don’t add value, we just make things more expensive. I feel that our luck is running out and everything will get much harder than what they are even now.

There is no end game, it's just kicking the can down the road.

We're in A Great Depression. Not just a recession, or a Great Recession, but a Great Depression. People who shouldn't be homeless are homeless despite earning decent incomes and many people can't afford to eat properly because of grocery prices-that's how I know we're in a Great Depression

I know how it will end, our working class family will end up living in a camper. We are only one rent rise away from homelessness. I predict that there will be 2 types of people in Australia property owners (rent seekers) and the working poor. Even graduating uni doesn’t guarantee that you will be able to afford a rental.

The government need a forever growing market to keep stamp duty revenue flowing in. They’ve become drunk on it. We all know they’re always solving a problem which then creates 5. It’s their sustainability model.

So in other words if you have an investment house your sweet, it will always hold its value in $ as inflation increases because most politicians have 10 to 20. Homes will never go down cause now boomers are ensuring that they become millionaires through property value and rent income while first home buyers are stuck in an unsavable rental housing market. The level of greed is never astonishing to me anymore

Our politicians are failing us daily, this is a prime example of this failure. Time to take to the streets and demand change or we will get screwed over.

I really have no idea how this has so fee views. Algorithm did you dirty.

Ah stoked, found some smart Aussies who have Yanis on their podcast the first time I discover them. Instant subscribe

My grandma came to Australia melbourne at 16 and moved in with her brother who was living here with his family . When she was 22 she bought a house in Carlton for $2000 A suburb today where a house can fetch 1.5 to 2 million she sold it in the 70s but that’s not relevant I guess . There’s young people today with 100k in the bank and struggle to get a loan (those are the lucky ones some cant save that much ) 30 years ago you could buy a house outright with that much.

yes!! exactly. Houses should be places where people live and investment money should be going into things that build and provide economic value as a whole to the GDP

I live in Perth suburbia, not fancy, not coastal etc. I paid under 600k for a 4x2 four years ago and now everything in the suburb is around a million. This is madness. I don’t need or want my 1970s home to be worth a million, I want my teenagers to be able to get a job and own something themselves one day. But when two uni graduates on full time incomes can’t buy something, you know things are fked up. It took us ages to buy our home too, we’d put in a reasonable offer only to be outbid by some silver top with a clipboard buying their 5th investment property. Covid actually helped us buy something without a ridiculous bidding war.

1419 new arrivals every day and you wonder where are the houses?

Robert Kiyosaki, American businessman and author, described negative gearing as "the government subsidising a loss making business"

It’s so bad here atm. It’s criminal what they’re doing to us.

This issue is decades old. It all began when state governments limited green-field developments starting us on this unsustainable trajectory to soaring land prices. The federal government now has super-charged the issue with this ridiculous notion that we have to "catch up" immigration where it would have been had the pandemic not occurred, all because the business sector is crying to for "cheaper" labour. Its not going to end well for those that aren't in the market or cant get into the market and now there is no "fast fix". It essentially took decades to get here and its going to take at least another decade to even come close to being resolved. As for those people saying that house prices are unsustainable and will crash, yeah nah, that's not going to happen, ever. Simply too much pent up demand of people wanting to live essentially in the same two places (Sydney and Melbourne). The closet thing to a crash that we may see (and really, that we need to see) is that house prices stagnate for several years to bring relative affordability down and the only way that will occur is if the feds drastically cut net immigration.

End game is to keep people from owning property unless they’re corporate or wealthy.

Man that was so well put and succinct. I’m sick of having the same conversations with people who think housing is the only answer.

I’m disgusted by the cost of purchase vs relative value of the house on any given property within 10km of any major city in Australia. $2mil to buy a crap post war that would sell for maybe $50k if I had it removed from the minimum size block.

Same situation as NZ but not as bad (there are still some pockets of affordable housing in Australia, not a single realistically priced house in NZ). It's just addiction - a middle class addicted to lifestyles funded by other people's debt and a political class addicted to their votes. Coming down will be hard, very hard.

"Caressing the ears of the middle ground with policies that are catastrophic for the middle ground in the long term" - A very based man Seriously this dude has hit the nail on the head with absolutely everything he said.

Lack of supply increases demand and therefore price. And people always want to make more money. Since nobody's doing anything about it in either the public or private sector, I'm starting to feel like not building extra houses in lieu of making more money on the existing ones (for a lucky few) is kind of orchestrated & intentional.

I am fucking sick of people trying to make excuses for the unbridled greed that has been the boomer grift on a necessity. Housing is a fucking necessity not a commodity.

A nationwide addiction to the Ponzi scheme that is the housing market . An unbelievably wealthy country that should be rolling out quality government housing like the Dutch do to level the playing field for all .

Essential workers cant even live close to their work.

If not for constant government intervention in the marketplace, market forces should correct imbalances. Watch carefully and you will see that pretty-well any government initiative anywhere will worsen any problem. This is entirely deliberate.

Whoah here is a crossover I wasn't expecting!! Equity Mates and Yanis! Will wonders never cease?!

Fantastic point that I'd never really thought about... "Investments should be going into the things that produce future value. Houses do not produce future value. They can produce economic rent, which comes at the expense of the dynamism of the market economy." All of that cheap credit after the GFC and COVID has been pumped into house prices in this country instead of being channelled into productive enterprise or new business. Banks love the idea that they have a large chunk of the country buried under debt that'll keep them paying it back over decades, rather than having that credit being used to fund business growth, which is intrinsically more risky. The only people that'll benefit from that are bank executives and bank shareholders. The rest of the population and the economy lose out. It's a fkn mess. And any political party that even talks about changing negative gearing or the capital gains discount know that - despite the fact that these distortive taxes need to go - it's political poison to touch them. We'll be fked for a long time yet, especially with the aging population, many of whom have a vested interest in maintaining the status quo... but still count as an ever increasing proportion of the vote.

Why doesn't the govt ever talk about the ridiculously ever increasing tax they get from EVERY house sale/purchase.

Adam Smith when he coined a Free-Market, meant a "Market Free from Rent". It's Landlords and Investors who lie to you by saying it's a Market Free from 'Government'. But it's actually government that is the very institution that can make a market Free from Rent. Problem in Australia is a government that can make decisions for the people doesn't exist, just parties looking for handouts from businessmen.

Everyone knows that prices are way over inflated, but when a large majority of the wealth is held by older people, who occupy a larger percentage of our population - who are close to, or own their own home, then of course any practical policies to reduce prices during elections will never succeed.

Well said!

We are obsessed with house prices, we talk about it all the time. I keep trying to explain to my friends that the number doesn't matter, because you can't afford to buy the house next door, you're immediately priced out of your neighbourhood, having to relocate to suburbs further out or interstate. That's why so many Melbournians go to Queensland.

Everybody overlooks that housing has allowed decades of underfunding in social services and health. Most Australians aren’t getting properly rich from property. The family home funds retirement, allows people to pay late in life medical bills, and pays for late life age care. These are expensive services that have been able to be underfunded because people have been able to use property equity. Very few people are leaving a legacy inheritance after all that. Most people aren’t landlords. Their house is the single investment that they have after living paycheck to paycheck. The ‘windfall’ gain in value will be consumed by increasingly expensive services. A decrease in house prices is only half of the story. There will need to be a rebalancing, or many more people are going to face late in life hardship. My father is a welder near retirement, and a number of his mates have been able to add years to their life by downsizing to be able to access timely cancer treatments etc.

We need a million homes... We could aim for population growth of around 900,000 to 1,000,000 over the next 3 years. That by the way, is a BIG cut in immigration from the current levels. Even though without context, seems like a huge number on its own.

The idea for the 'expansion of supply' has nothing to do with houses as assets. It is about extracting all your money from every possible reserve to restrict money supplies. They'll then change the rules down the track to catch you out in order to make you further dependent upon the Government and future policy. Debt is slavery to the whims of politician and their policy.

It’s because of bad policy and everyone trading homes like investment assets

Boys, massive props on getting such high profile guests. Epic stuff.

Restrictive land policy is what drives unaffordability in concert with interest rates. Land is horded by developers who drip feed it into the market. Like the inflation target used by the RBA to set the cash rate, land supply should likewise be monitored and adjusted for the increase in population. The argument against this, of course, is that it will result in urban sprawl, and that would be the case if we continue to choose to live in only a handful of our biggest cities. Australia has more arable land per capita than any other country. It beats the second ranked country by a mile. We can spread out. How many new cities have been created in this country in the past 50 years? Bugger all. Invest in new regions. Now is the best time to do it.

Agreed

He’s right so much capital is circulating around housing - something we can’t export, eat, or enjoy to any great extent it’s just fulfilling a basic necessity yet it demands so much resources.

There is no “end game”. Politicians end game is 3 to 4 years away maximum or until the next election and whatever will win votes.

I predict a housing crash due to people buying homes over asking price, lacking equity if prices decline further. Foreclosure becomes likely if they can't afford the house, and selling won't yield profits. With anticipated layoffs and rising living costs, many individuals may face this situation.

Now 7 star energy rating minimum in Victoria for new homes. Fun times;)

Love this. Saying it straight.

A) For the last 5 decades or so most voters have been negligently voting for big dumb parties who have policies that drive, and a record of delivering, lower living standards for most voters. B) The big dumb parties bring in extra people via immigration faster than they build infrastructure and faster than they allow extra housing to be built (via zoning and infrastructure). C) The result is a housing shortage which results in higher rents and higher purchase prices for housing than would otherwise be. D) The inexorably rising rents and sale prices lead to complex secondary effects such as land-banking, negative gearing, hoarding vacant houses, developers trickle-releasing land, over-borrowing, over-capitalisation, over-renovation, Politicians owning many investment properties, people wanting to use superannuation to buy a house, etc. Here is the solution: A) Voters must vote smarter. Put the big dumb parties (Labor,Liberal,Nationals,Greens) last below the line in whatever order you can stomach. B) Better people in government will then limit immigration to a level that is below the capacity to provide high-quality housing and infrastructure. C) Over time this will reduce the housing shortage and we will see LOWER rents and lower house prices D) Secondary problems will go away. In case you missed it: The complex nonsense is a symptom of the high prices and high rents The high prices and high rents are a symptom of the housing shortage The housing shortage is a symptom of the immigration/infrastructure/zoning mismatch The immigration/infrastructure/zoning mismatch is a symptom of the big dumb political parties in charge The big dumb political parties in charge are a symptom of negligent voting by most voters. David 02May2024

'Houses should not be an investment, they should be places where we live' it's tragic that we've collectively forgotten something so simple.

Honestly so nice to hear some common sense. You've got a new podcast subscriber.

Wow!! from CANADA!!!

This is what happens when you turn houses and land into speculative assets. Imagine what would happen to Australia if we prevented anyone owning a home that was not theirs? Ie, kill off all investment properties for residential properties. Commercial properties are different.

My parents bought a house for $35,000 in 2003/2004 Same house sold for $399,000 in 2020 and I can only assume it's more like $550-600k today. Australia needs to build more modestly sized houses (we don't NEED a five bedroom starter home as a single/ couple), we need to allocate development towards large towns instead of continuously trying to build and re-build near one of the few major cities, we need to cut inflation any way we can (it's essentially theft of wealth by the political class) and we need to dramatically reduce the immigration intake and perhaps even write it into law that there's an immigration cap tied directly to the existing population of the country. 700,000 immigrants under labour has exacerbated the housing crisis by creating significantly more demand than there is supply, thus creating scarcity. We also need more homeless shelters, nothing fancy, just a capsule bedroom to sleep in, some donated furniture, computers and bicycles, along with a communal kitchen and bathroom. Safe and warm and able to help people get back on their feet.

Jonny Howard supressed wages and let the A$ fall while selling off our gold reserves 😢

A land tax on investment properties and vacant properties will help drive down house prices. It will make builders hurry up with their builds. It will disencourage land banking. It will incentivise investors to sell their investment properties. It will incentivise investors that have vacant property and vacant lots to either rent them out or sell them. At least then, they will be used.

He never mentioned immigration so I don't take anything else he has to say seriously. The housing crisis could be solved in six months if they were just willing to completely halt, or at least drastically curtail the number of immigrants pouring into this country for the next several years.

Houses are where we live. It is a basic need!! It is shelter!!

Ditto New Zealand.

Negative gearing should be immediately stopped. If every person was only allowed the one home that each & all need, there is no shortage - is only the shift in sociatal values with greed now a common accepted norm sees investor rights as equal or higher than everyone's right to a comfortable, affordable perm. home. Bravery & sanity in policy is lacking in both major political parties (would expect no less from the greedy but Labor's response is dissapointing too) & the Greens are the only party with helpful Housing policies that benefit the average working class & others who need fair & reasonable support.

my question is, what should i do now that i know im sorta screwed? because i want a home and im willing to work to get one but it seems like im just meeting my time, money and energy robbed from me willingly.

Really good points made. Could a political movement in Australia gain a footing just on the back of the building public housing supply?

Immediate moratorium on immigration intake for 5 years, outlaw foreign ownership of residential housing if unoccupied, promote building of blocks of low cost flats or apartments to fill immediate needs, and this wholly artificial "crises" will evaporate in short order!

Australia demolishes 22000 houses a year and how many are replaced with 1 house often due to zoning restrictions. Not much supply there.

Young Australian's who don't own a home, nor have a chance of buying one, may become politically radicalized...

The Superannuation funds are investing in the sector and driving prices up - in Ireland here we are same, my sister is in germany with 20 years and the same there

If we get rid of negative gearing - country collapses. If we get rid of immigration - traffic decreases, house price decreases, pollution and carbon output decreases, crime decreases, social trust increases etc.

The frenzied dinner party chats about property 😂 amen sir!

One house is worth one house. Prices constantly rising only prevent people from being able to buy their first home. This little piece of logic constantly escapes both politicians and those who vote for them.

One type of madness is running a race where there is no finish line. Right now, that race is the Australian property sector.

I recall years ago Bob Carr saying publically the Sydney basin is full house,any more people will be at the detriment of those that live there already. Maybe there is,or could be economic life west of the great dividing range

And the other issue is the quality of builders work is down right disgusting. Sloppy slap-up homes with sub par materials and no quality control. Wouldn't touch a modern home that's built in the last 10 years with a 100 foot pole.

He is right, spot on. Straylians have been obsessed with Propardee since the boomers came of age-funny thing it's them who've profited the most by a serious margin as they've influenced Policy for decades to do nothing but push up house prices. Australians are also getting dumber and far less productive, particularly in the last 15 -20 years with our young being pushed into trades and boganism. Ingenuity, development and entrepreneurship are not rewarded, buying houses is.....where is the end game? Straight back to the penal colony days and the middle ages with the majority of the population becoming slaves and undoing the good work of the industrial revolution. Apathy, greed, corruption and allowing idiocy to rule has created this complete disaster, why Millions of people are not marching on Canberra each week is beyond me.

Same in NZ, maybe worse. Decades of governments guaranteeing house prices will increase over time. Anyone who even suggested house devaluing policy were universally mocked into shutting up.

Orchestrated idiocy is correct description

Increase supply by taking investors out of the market

The fundamental problem is over regulation of land use. A good example is the demolition control law in Brisbane. Many billions of dollars of inner city land are tied up with this egregious law. Owners of old tin and timber houses are not allowed to demolish them.. instead of being razed, these old slums are raised and built under at great expense. It is a theft of property owners rights and adds to housing costs and impairs the orderly redevelopment of the inner city suburbs. Entire city areas need to be rezoned for at least medium density development with 40% site coverage and 3 above ground storeys. Some of the inner city suburbs should be rezoned to MP1. The NIMBYs are those afflicted with the Heritage Delusion oppose sensible rezoning of land.

The problem is decreasing house prices means negative equity. That is why they don’t want house prices to come down.

The end game is when all housing is nationalised. I read a newspaper report about the Evatt Foundation’s latest meeting over 20 years ago where they were “predicting” this would be required by around 2030 to solve the looming housing crisis..

The Australian population is a well behaved flock of sheep who produce premium fleece. The flock is getting larger. Politicians are just faces for the people who reap the wealth, and who use the power it affords them to manipulate conditions on the farm. The biggest foreign investors in Australia are Americans and the UK, so whatever powerful people or groups are behind the scenes pulling the strings there have considerable control of Australia as well. It is hard to believe they are Anglo-Saxon or Anglo-Celtic people, because how could it ever be possible that from a position of such dominance this cultural grouping has fallen so far. Unless the wealthiest among them sold out on them.

Just let people build their own homes and get council and government the fuck out of the way... we have shit tonnes of land and the ability to live off grid...

Producing more houses would make current house values to stop going up (at least as rapidly as it has been). There are not enough building companies to keep up with demand, and the current companies don't want to expand because the owners would lose money by taking on more employees and projects. Not to mention the owners often always have their own properties as investments. The last thing they care about is the housing demand if they are going to lose out on helping out. Maybe this is not the whole problem, but I believe it is part of understanding how to find a solution

Try to explain this concept to Australian owing a mortgage that they house is not an investment, they will lose their minds 😂

He's describing Australia but this 100% applies to Canada and the problems here.

I have if from unconfirmed sources that the best Government Australia ever had, the present one - is actively working on this ! They just need to finish a few other matters first which would need small but very time-consuming tweaking.... They will keep us posted !

The lower class people are really suffering because of high rents. It's starting to create an underclass. More people living on the streets. Creates a bad atmosphere that ruins the financial gains that the higher classes make.

I was going through sold properties in Brisbane (Hawthorne), on average they have lost 56% against gold since the year 2000. That’s an astronomical ‘real’ decline, everyone is pricing them nominally against mouse click money. That’s in an environment of great demographics, low inflation, falling rates and a competitive jobs market - how will they perform with all of that currently reversed?

The house builders won't "expand supply" because that would lower the prices and their margins. But councils aren't bound by a profit motive. Council house building is the only way to make housing affordable. And there's nothing to stop that happening but the politicians.

This is why we can't build 1 million homes.. 1. Stamp duty 2. Land tax 3. NSW government new infrastructure contributions tax $25k per new lot 4. CGT 5.GST 6. Council contributions 7. Cost of construction 8. New NCC , double glazing , solar panels adding cost to already inflated cost of building 9. Council delays with DA's 10 .interest rates and holding costs With all these costs , why would any builder / Developer be encouraged or interested in construction... The government will put the NSW construction industry into a coma

The narrative what wealth is needs to change. A debt you take decades to pay off is not making you rich it's making you poor. You can't spend your house. Affordibily = wealth. Japan had a property boom in the 1980s that they are still recovering from and look at the breath and depth of industry they have. And they still have the largest govt debt in the world by far.

This is all true.

Its Criminal what they have done with housing!

Investment properties are the cancer of our society in Australia. Imagine if we were allowed to commodify and monopolise the air we breath, then imagine "investment atmosphere". House prices are not an accident, they are a result of decades of intentional market manipulation through foreign investment and by massive hedge funds etc etc

It's frustrating that we're still having this discussion. Price dynamics boil down to the balance of supply and demand, any elementary student can tell you this. The crux of the matter lies in the insufficient supply and still dangling carrots to drum up further demand. However, when key players like the real estate industry, banks, developers, and even the government profit from escalating prices, there's little incentive to intervene. Add to that the unethical behaviour of some politicians amassing multiple properties for personal gain, and it's no mystery why housing costs continue to soar. It's a blatant display of greed, reminiscent of the controversies surrounding supermarket prices and the relentless surge in fuel costs. Greed has spiralled out of control, and it's the root cause of the issue. Time is running out on a peaceful resolution, but those in position to intervene are too blind to see it

We should talk about migration numbers etc but beware the cookers in the comment section claiming there's an invasion (and defending negative gearing, very curious)

What goes up

Fix zoning and tax land amd it would fix housing everything. But it will never happem