Dr.Shifty
Signs of the times up my way.

My local shopping centre five minutes walk from home just lost the medical practice. Five doctors and the owners closed the place and all the doctors have moved to a giant medical centre a few suburbs north. The pharmacy had a connecting door to the waiting room and I imagine will lose a lot of business.

A month ago the Post Office closed. We now go a few suburbs north and parcels can be picked up at either of two post offices but we won't know which one until we get there.

Before that the newsagent / gift shop closed.

Early this year the butcher shop closed.

The BP servo I go to just around the lake closed at Easter and they are building home units on the site.

Our local shops now have IGA, take away, hairdresser, bottle shop, bakery. And lots of empty.

And outside it's cold and rainy.

OK, that's my grumpy rant for the day. 🙄
Cheers, Kim.

From Woodrising (no, nobody else has heard of it either)
Rides a Springfield Dark Horse
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V-Twin
I knew shopping malls in USA have been closing for several years now.  I didn’t realise this was happening in Australia as well.  Sorry to hear Shifty, and of course to all the people who’ve lost their jobs in your area as well.  Australia did really well post GFC but things are definitely slowing down.  The big question on my mind is... will the property bubble burst or deflate steadily as it is doing now?

96F3C9D5-511C-4DC3-BA2B-27C0F0132726.jpeg

Source:  https://www.businessinsider.com.au/american-retail-apocalypse-in-photos-2018-1
Let's be kind to one another.
Melbourne, Victoria
Quote 0 0
CHF10

It's an interesting topic. Australia was mostly un-affected by the GFC than anything else. You don't have much to recover from when you're mostly un-affected. That was thanks in a significant way to the 1996 - 2007 government's economic management in the lead up to it.

What's scary today, is all the economic signs are the same but WORSE than the lead up to the Great Depression, and I mean globally. The next financial "crisis" (will they call it GFC2?) will be way worse globally and far more impacting to Australia. There's only so much debt the world can handle before there has to be some sort of reset. Think of it like the Titanic. The GFC was the hitting of the iceberg. It was an "oh sh!t!" moment. The next one is going to be the sinking, or a "now we're completely F'd" moment.

The property market is going to become completely flooded with property people can no longer afford. It's already happening in the apartment market.

I've started the process of selling my investment properties... I'd rather have my money in my account for the next little while. Even if it ends up only being a small downturn. It's for my own peace of mind.

Live free or die!
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crash
The retail shop as we know it has to diminish as online shopping becomes more prevalent in our society. 

Once upon a time a retailer could afford a shop in multiple locations but now with the increases in rent and the less frequenting of the stores by the regular consumer, they are finding it tough to justify. 

Walking around shopping centres and the CBD in melbourne is a great indicator of this.  Soon there will be little variety available to us if we wanted to go "shopping". 

The only places that will be open are service based industries ( such as the massage and spa places (where you physically have to show up)) and shops that sell perishable goods. As we become more automated there will be less need for people (which is the highest cost to a retailer other than the cost of goods - and is increasing as everyone clambers for the last few dollars before the company goes broke). 

Supermarkets are putting in self serve systems so that they don't have to employ more people - even bunnings do this sadly. Myers and DJ's are cutting their staffing levels to the bone (identifiable by the lack of people on the floor at any time).  These guys are the litmus test for retailing in our locations.  Telstra are laying off staff from their shops (why would they open a shop when they can do it all on line), Toys R Us are closing down and all the staff will be out of work in the not so distant future.

We think that shopping online is saving us a buck and is pretty clever but this is the consequence of that "choice".
Ulysses #30673
IMRG #AU100394
Current: RoadMaster (ebony and ivory)
Highett Victoria Australia
Quote 0 0
V-Twin
CHF10 wrote:
...all the economic signs are the same but WORSE than the lead up to the Great Depression, and I mean globally. The next financial "crisis" (will they call it GFC2?) will be way worse globally and far more impacting to Australia.
I am also concerned about the global economy as well.  I don't want to listen to the doomsayers, but when you hear what the royal commission has uncovered amongst Australian banking sector... I just shake my head in disbelief. 

CHF10 wrote:
The property market is going to become completely flooded with property people can no longer afford. It's already happening in the apartment market.
This is not directed at you, CHF but a general comment for our discussion.

In my humble opinion, small developments of say 30 units or less in established suburbs should have a similar impact to townhouses and free-standing homes - meaning, they will be as good as any real estate investment can be.  However, the majority of the highrise apartments are in huge trouble.  If anyone was thinking about buying an investment apartment property in Docklands, Southbank, CBD (sorry, this is very Melbourne centric post), please watch this video (do ignore his terrible sense of humour, and his sales pitch for his books and workshops.  Skip the video to 1:30 mark - but his summary of apartment market is very sound in my view).

Let's be kind to one another.
Melbourne, Victoria
Quote 1 0
V-Twin
crash wrote:
Once upon a time a retailer could afford a shop in multiple locations but now with the increases in rent and the less frequenting of the stores by the regular consumer, they are finding it tough to justify. 
Ducati Melbourne dealer, a few doors from Indian Melbourne dealer moved somewhere else will cheaper rent.

crash wrote:
Supermarkets are putting in self serve systems so that they don't have to employ more people
I believe Amazon was trialling a checkout system that's doesn't require any work.  You just grab what you want in the supermarket and put them in your bag and walk out and the scanners can detect what you took and just charge them to your credit card.

crash wrote:
We think that shopping online is saving us a buck and is pretty clever but this is the consequence of that "choice".
About 10 years ago, I was checking out a pair of Ray Bans at Myer.  The price tag was $280.  I purchased the same pair from a retailer in New York City, shipped to me for $80 (saved $200).  If Aussie retailers were selling them for $100 or even $120, I would have bought them here.  I believe the online shopping took off because Australians were sick of paying the Aussie Tax.  I believe Aussie retailers have been ripping us off for too long.  So, I believe that online shopping phenomena were self-inflicted.  However, it has flow-on effects.

Retail shops close, and they become vacant.  Landlords will have to lower the rent (or typically offer longer rent-free since the value of the property is tied to the rent) and eventually sell the empty shop.  Meaning, the value of retail properties will take a hit.  All the shop assistants and store managers are out of work, and there will be fewer people buying lunches.  Now the cafes and restaurants take the hit.  Less money circulating in the market will impact everyone.  Less people will be able to buy motorcycles too... especially the pricey ones.
Let's be kind to one another.
Melbourne, Victoria
Quote 1 0
BigTone
CHF10 wrote:
That was thanks in a significant way to the 1996 - 2007 government's economic management in the lead up to it.

interesting...I know quite a few people that might disagree with that CHF10. Anyhow, opinions...
Cheers,
Tony
St. Kilda  Victoria
IMRG: 20380071
Current Ride: 2020 Dark Horse Challenger 
Previous Ride: 2015 Roadmaster
Quote 0 0
crash
Agreed, the economy - like the environment - is pretty fragile.  What we are seeing is the "butterfly" effect. 
Ulysses #30673
IMRG #AU100394
Current: RoadMaster (ebony and ivory)
Highett Victoria Australia
Quote 0 0
CHF10

IBM ad from almost 20 years ago! (hence poor quality)

 

Live free or die!
Quote 0 0
V-Twin
Sydney and Melbourne’s property market (high ends) are taking the beating.  When will that spread to the masses?  I think we have a bumpy ride ahead.

—————

Sydney housing downturn to eclipse 1989 recession

Sydney’s housing downturn is 0.1 percentage point away from being the worst on record.

CoreLogic figures released on Monday showed Sydney house prices fell 1.4 per cent in November, double the national average, bringing the annual decline to 8.1 per cent.

Sydney’s housing market is now down 9.5 per cent from its peak in July last year. CoreLogic believes the total peak-to-trough decline will be 15 per cent.

  • $1.5 million owners feeling ‘most pain’
  • House prices ‘could fall 30 per cent’
  • Aussie John warns of ‘nuclear bomb’

That means the downturn is on track to eclipse the previous record set during the last recession between 1989 and 1991 when prices fell 9.6 per cent, the worst since CoreLogic began collecting figures in 1980.

“The downwards pressure on national dwelling values is largely confined to Sydney and Melbourne which together, comprise approximately 55 per cent of the value of Australia’s housing asset class,” said CoreLogic head of research Tim Lawless.

Melbourne prices fell 1 per cent over the month and are now down 5.8 per cent from their peak in November last year. Nationally, dwelling values are down 4.2 per cent from their peak in October last year, back to levels last seen in December 2016.

Perth was the only other capital to see price falls at 0.7 per cent, while all other cities eked out minor gains over the month. Brisbane was up 0.1 per cent, Adelaide 0.1 per cent, Hobart 0.7 per cent, Darwin 0.7 per cent and Canberra 0.6 per cent.

The median value in each city at the end of November was:
  • Sydney $821,438
  • Melbourne $656,163
  • Brisbane $493,041
  • Adelaide $433,464
  • Perth $448,336
  • Hobart $451,039
  • Darwin $426,141
  • Canberra $596,141
  • National $535,481

The top end of the market is being hit the hardest.

In Sydney, the most expensive quarter has lost 9.3 per cent over the past year, compared with 5.7 per cent in the bottom quarter.

In Melbourne, the top quarter has fallen 9.9 per cent while the bottom quarter has risen 1.7 per cent.

Auction clearance rates are hovering in the low 40 per cent range and threaten to dip into the 30s. SQM Research managing director Louis Christopher noted three previous times that has happened.

“That was in October/November 2008 during the GFC, May 2004 after the NSW vendor stamp duty was introduced and July 1989 when the cash rate hit 17 per cent,” he told Property Observer.

Mr Lawless said tighter investor finance conditions were fuelling declines in Sydney and Melbourne. RBA data showed the annual pace of credit growth slowed to 5.1 per cent in October, the slowest rate since 2013.

Meanwhile, owner-occupier credit growth is rising at the slowest annual rate since November 2015, possibly due to out-of-cycle interest rate rises by the major banks between September and October.

“Potentially investor sentiment is being weighed down by the potential changes to taxation policies related to housing should there be a change of government,” Mr Lawless said.

“A negative gearing rollback looking to exclude established dwellings could diminish demand across the resale market with less investment demand for properties with low rental yields.”

He added the halving of capital gains tax concessions would “likely provide further disincentive to investment, on top of weak prospects for capital gains, premiums on investment mortgage rates, low rental yields and fewer depreciation benefits”.

Mr Lawless said this downturn was different to previous cycles. “Typically the catalyst for a turn in the housing market is a result of changes in interest rates or economic conditions,” he said.

“This time around however, the market has been most affect by credit policies and availability of finance, despite very low mortgage rates and relatively strong economic conditions.”

While headwinds from tighter credit conditions “will continue for the foreseeable future”, strong GDP growth, low unemployment, strong population and wages growth “should help to support housing demand and offset a more material decline in dwelling values”.

It comes as a survey of experts and economists by comparison website Finder found the majority support ANZ’s prediction of 15-20 per cent falls in Sydney and Melbourne.

“ANZ’s suggested 15 per cent drop would see $145,500 and $118,500 wiped off the average house price in Sydney and Melbourne respectively,” said Finder insights manager Graham Cooke.

“A 20 per cent drop would see nearly $200,000 disappear from the equity of Sydney homeowners,” Cooke said. “If we do see these types of price drops in the market, recent home buyers who laid down a 20 per cent deposit could see themselves in negative equity by the end of the year.
””

Source:  https://www.news.com.au/finance/economy/australian-economy/sydney-housing-downturn-to-eclipse-1989-recession/news-story/b2c328d3c1da8db297ea806b82b15f5e
Let's be kind to one another.
Melbourne, Victoria
Quote 0 0
CHF10
Considering a Bill Shorten Labor government is almost a (very sad) certainty, and with it comes a lot of very scary, nonsensical economic policy, there is a lot more pain ahead for the property market.
Live free or die!
Quote 1 0
Croc
Not sure about properties but I notice that CHF10's profile picture has disappeared!  What's That a sign of??
I'm Not Completely Useless . .
I Can Be Used As A Bad Example!

Kwinana W.A.

Ulysses   #48275
IMRG      #100932
Quote 1 0
BigTone
CHF10 wrote:
Considering a Bill Shorten Labor government is almost a (very sad) certainty, and with it comes a lot of very scary, nonsensical economic policy, there is a lot more pain ahead for the property market.

Might as well blame Labor...😁😁
Cheers,
Tony
St. Kilda  Victoria
IMRG: 20380071
Current Ride: 2020 Dark Horse Challenger 
Previous Ride: 2015 Roadmaster
Quote 0 0
BigTone
Croc wrote:
Not sure about properties but I notice that CHF10's profile picture has disappeared!  What's That a sign of??

That would be Labor's fault as well..lol
Cheers,
Tony
St. Kilda  Victoria
IMRG: 20380071
Current Ride: 2020 Dark Horse Challenger 
Previous Ride: 2015 Roadmaster
Quote 0 0
Dr.Shifty
CHF10's profile picture was part of a multi-faceted lease in my local shopping centre. When the butcher closed up, then the Post Office, then the newsagent, then the medical centre, it was only a matter of time before the smaller concerns were taken with the flood. 🙂
Cheers, Kim.

From Woodrising (no, nobody else has heard of it either)
Rides a Springfield Dark Horse
Quote 0 0
crash
Croc wrote:
Not sure about properties but I notice that CHF10's profile picture has disappeared!  What's That a sign of??


Not everyone can be evaluated on physical appearances.
Ulysses #30673
IMRG #AU100394
Current: RoadMaster (ebony and ivory)
Highett Victoria Australia
Quote 0 0
Croc
Thank the Gods for that Crash!  I'd be in deep doodoo if that was the case.  Been rather badly remodelled over the years and they weren't exactly plastic surgeons! hahahaha  (still, looking like Brad Pitt was getting annoying, having to avoid crowds etc ðŸ˜‚ 😉
I'm Not Completely Useless . .
I Can Be Used As A Bad Example!

Kwinana W.A.

Ulysses   #48275
IMRG      #100932
Quote 0 0
crash
Aha, I can see the resemblance - I think I saw Brad in a shirt that looked similar (almost - well maybe)
Ulysses #30673
IMRG #AU100394
Current: RoadMaster (ebony and ivory)
Highett Victoria Australia
Quote 0 0
Croc
Yeah, but Brad is over rated.  I also kept getting references to Ragnar Lothbrok, but I had the haircut years before that actor copied it!  ðŸ˜‰ 
Hm, is this starting to get away from the suburbs??  Anyone like sheepskins???Image0-1.jpg 
I'm Not Completely Useless . .
I Can Be Used As A Bad Example!

Kwinana W.A.

Ulysses   #48275
IMRG      #100932
Quote 0 0
crash
Now that's a low blow picking on a guy's sheepskin when his back is turned.

Were you aware that you can purchase lambskin condoms!! True - google it.
Ulysses #30673
IMRG #AU100394
Current: RoadMaster (ebony and ivory)
Highett Victoria Australia
Quote 1 0