A RECORD number of everyday Australians have joined the millionaires club with a new crowd of entrepreneurs emerging from the global financial crisis.
There are now more millionaires in Australia than before the crisis, with many newcomers taking the plunge on a business idea mid-GFC and striking gold.
While Europe and the US still struggle, Australia’s economy has evolved into a rolled-gold millionaires factory, churning out 15 new millionaires a day during the past two years.
Business idea! Ha. No, the main increase is because of ridiculous inflation in house prices:
Capital city property prices rose upwards of 20 per cent in the 12 months to April 2009, elevating many Australians to millionaire status on their bricks and mortar alone.
Yup, if you’ve a quarter acre block anywhere near a capital city, you’re probably a millionnaire automatically now, or will be soon.
At this rate, a shack in a swamp will probably cost a million by the end of the decade.
That’s not a good thing, though. Because when house prices alone make people technically rich (not that most of these people can take advantage of this unearned new money, since they’re living in it), the corollary of that is that only the rich can now buy a house.
The sad thing about this story, with such devastating consequences for future generations, is that stupid governments will probably trumpet it as some kind of success. Rather than the damning indictment it really is.
Doesn’t make a lot of sense. People can’t buy the fuckin things.
Well, those who already have a house can buy them as investment properties using the equity in their already inflated existing property, and borrowing from a bank. Then, to pay for it, they can jack up the rent for the poor suckers they priced out of the market.
It’d be wonderful if a significant number of people with large equity stakes in the property market were drawing on them to invest in starting businesses, but I’d want to see some actual data before believing that Australia has seen any kind of upsurge in entrepreneurialism.
the report shows an exceptionally high rate of investment in property. 41% of all assets (in 2008). god knows what the 2010 figure is. the average in other countries is 22%.
the definition of “high net worth individuals” excludes primary residences. so about half of the wealth in australia is in investment properties.
yeh, thats sustainable.
Of course, no politician (except perhaps from the Greens) is going to admit that there’s a clear link between the influx of investors and the inflation that’s keeping homebuyers out.
but why dont the major parties speak up? demand for investment mortgages increased 308% in 8 years. the banks are lending money like theyre going out of business. its all very curious
Because the only real steps (raising CGT, restricting negative gearing, increasing renter rights) would get them slaughtered in the electorate by selfish baby boomer swinging voters. Much easier to do nothing but throw money at first home buyers to buy their votes because they don’t realise it’s making the problem worse.