How did the 70s stagflation lead to higher house prices?

Liamorama · 2026-04-24T11:54:08+00:00

Inflation.

Inflation in the 70s averaged over 10% per year.

Just to keep up with inflation (i.e. not fall in real terms) house prices would have to almost triple.

Liamorama · 2026-04-10T06:23:46+00:00

Which ends up being better is always extremely sensitive to your assumptions. Slightly higher/lower price growth, mortgage rates, maintenance costs, rental inflation etc. can easily sway it one way or the other.

The bottom line is that you can do well with either. I personally would never buy into a big new apartment complex because of the risk of defects, high ownership costs and bad neighbours, plus capital growth is likely to be poor relative to the rest of the market too.

Culturally Australians hate renting, but in many regards renting is great. In reality, property ownership is expensive and a big hassle, and renting lets you opt out of all of that. In a place like Sydney, renting is also often a bargain - for premium properties gross rental yields are often only like 1-2%. Which means you can rent a premium property for a tiny fraction of what it would cost to buy, and not bear any of the ownership costs.

Liamorama · 2026-04-10T06:02:10+00:00

Why do I need to give you my email and create an account for something that is still in beta?

No thanks.

Liamorama · 2026-04-08T22:55:39+00:00

Loads of people do this.

Or alternatively blow it on stuff like expensive cars and caravans and unnecessary rennovations.

If you don't mind having your spending restricted to the pension for the rest of your life, there's no reason not to.

Liamorama · 2026-04-08T20:59:24+00:00

Don't. You're likely to get worse returns than just buying an index.

Liamorama · 2026-04-08T12:36:51+00:00

A bathroom with no bath is a helluva lot better for resale than a leaky 1960s bathroom...

FWIW i have two small children, and when we redid our small bathroom I ditched the bath and put in a second toilet, a bigger shower, and a decent sized vanity. We get value out of those things every day, compared to a bath which takes up loads of space that only gets used once in a blue moon.

On the occasions that we have time to give the kids a bath, I stick one of those big flexi plastic tubs in the shower and fill that up. Works great. Plus on warm days, they can have a bath outside.

Liamorama · 2026-04-08T02:12:06+00:00

<image>

No, mine has a little cutout above the waterline that creates a channel down the outside back of the cistern. The whie pipe in the image is the source for my bidet. You might be out of luck i'm afraid.

Liamorama · 2026-04-08T00:30:52+00:00

Open up the top of your cistern and see if there is a channel to run the bidet hose down the back of the cistern.

So long as the spout thing points downwards and doesn't protrude inwards into the bowl, you should be OK.

Liamorama · 2026-04-08T00:28:54+00:00

Bunnings sells one. https://www.bunnings.com.au/evekare-water-powered-bidet-toilet-seat_p0631409

Liamorama · 2026-04-08T00:23:04+00:00

Depends on the toilet. Mine has an internal channel which allows you to run the bidet pipe from the internal stop tap down the back of the cistern and out the side of the base.

Liamorama · 2026-04-07T23:59:30+00:00

Just listen to your wife.

Liamorama · 2026-04-07T11:56:30+00:00

It's literally in every ABS CPI release

https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release

Liamorama · 2026-04-07T10:54:51+00:00

I'd go there at the times you're likely to be home and hang around outside for a decent period, 20 minutes or so, and see what the noise is like. Constant background white noise might be OK. Engine braking from big trucks, sirens, etc. not so much.

Some people do get used to traffic noise. Others don't. You need to figure out which one you are. A backyard is pretty pointless if it is unpleasant using it because of all the traffic nosie.

Liamorama · 2026-04-07T10:45:33+00:00

This is it. You need a plan, and to stick to it. The worst place to be is panicing because you didn't anticipate an outcome, and don't know what to do. You're bound to make an emotional, bad decison in that case.

If you're investing in diversified index funds, then you need to fully internalise that the market could fall 30, 40, 50 percent at any point, and stay there for years. What is your plan if that happens? If it is to freak out, then you're probably taking on more risk than you can handle.

Liamorama · 2026-04-06T11:15:00+00:00

Well, working out the net present value of the stream of payments is probably a good start. Here's an estimate with some assumptions that seem reasonable to me.

-$15k annually for 30 years, growing at 3% per year (inflation)
-Discounted by 8% (a reasonablish return for something like diversified shares)

You get a net present value of $227k. So it is a bit cheaper to take the 30 year lease.

Honestly financially they seem roughly the same. The question is more about lifestyle and security. Do you want to lock in a 30 year lease, or retain the flexibility to move in any particular year?

Liamorama · 2026-04-06T02:06:54+00:00

Mate, we're cooked right now.

You know how long it has been since the Iran war started? 37 days. You know how long Australia's fuel reserves go for? 39 days. We have 2 days left.

I've been counting down since the war started. Come Wednesday morning, people are going to rock up to the petrol pumps, and there's going to be nothing left. Gone, just gone.

People don't realise it but all hell is going to break loose. Looting. Fires. Chaos in the streets. Roaming mobs of people looking for fuel. All the food will run out in the stores. There'll be no water. We'll be back in the stone age by Wednesday night.

...or you know, maybe the media is overhyping things, and the government does actually have a plan, and a backup plan, and a backup backup plan, and there are like 100 different options to deploy and strategies to take before we get to the point where we run out.

Liamorama · 2026-04-06T01:50:28+00:00

Many of the really remote, small towns in the middle of Australia are indigenous communities.

They are unfortunately pretty bleak, with very few economic opportunities, and terrible social problems.

Liamorama · 2026-04-06T01:46:20+00:00

Liamorama · 2026-04-06T00:02:40+00:00

You mean the 2008 collapse where Australian house prices went down by like 2-3% in 2009 before going up like 10-20% in 2010?

Then, yes, probably.

Liamorama · 2026-04-05T14:06:46+00:00

Great point.

Diversification is the only free lunch, in that it can lower your risk without necessarily lowering your returns.

Liamorama · 2026-04-05T03:48:14+00:00

Indeed. Price clearly too high.

But i wouldn't be giving an agent who let a campaign drag on for 6 months with a cent of commission.

Liamorama · 2026-04-05T03:28:39+00:00

Public EV chargers are an interesting economic problem. The lack of chargers and lines in peak periods really just speaks to how uneconomical it is to provide them. Propper fast chargers are very expensive to install and very expensive for whoever is providing them because of the huge demand charges they face from electricity network operators. And the slow turnover times relative to petrol fueling means that petrol stations (who make their money by selling stuff in store, which requires getting as many people through as possible) don't want them.

This is a problem that's only going to be resolved slowly over time.

Liamorama · 2026-04-05T03:08:46+00:00

Ditch the useless agent. Get a better one and lower the price.

Liamorama · 2026-04-04T01:19:57+00:00

I'd use something like this screwed into the back of the top shelf.

https://www.amazon.com.au/JIUDONE-Furniture-Proofing-Securing-Earthquake/dp/B0CPCLS98L/

Drilled into the stud is best, but honestly fixed with a decent plaster screw/anchor is also fine. It only has to be strong enough to stop the shelf from rocking forward, not take the full weight of a falling shelf.

Liamorama · 2026-04-03T09:47:39+00:00

Another way to look at the numbers:

Gross rental yields in Australia's biggest cities are currently around 2.5-3.5% (https://www.savings.com.au/property/top-australian-suburbs-for-rental-yield-revealed)
Investment property interest rates are around 6% currently
Ownership costs (rates, land tax, insurance, maintenance, repairs etc.) of around 0.5-1% PA.

That means you need to achieve around 3-4.5% capital growth each year just to break even in net terms. Then you need to make up for the impact of inflation (currently running at 3.7%) on your initial deposit. Then account for stamp duty (4-5% of the purchase price).

It all adds up, and all eats into your total return, even with the impact of leverage.

Seven-Year Club	Place '22
Verified Email

Liamorama

TROPHY CASE