The longer term outlook for Australia property values

I agree that this is occurring, but not for the reason you explain here.

I will say that many Employers do offer more flexibility in some cases because it helps to accommodate some staff members, and it helps the business to cover staff ing issues in some shifts.

But, the real reason Employers are not consciously trying to hide their real intentions about employment status changes by calling it "more flexibility".

Their real intentions are two-fold;
1. Free up the ability to lower staff costs. It's not the wages alone that are the issue; it's the myriad add-ons - Worksafe insurances, payroll taxes, holiday pay, sick pay, long service leave and so on.
2. Improve ability to move on bad staff without fear of long, drawn out, costly and mostly winless unfair dismissal claims.

For example; my business has been going terribly for about 4 years now, and over that time I have had to let go staff. A couple have left anyway for other reasons (moving to different cities), and I haven't replaced them.

I let go two at the end of last Fin year, and went through all the correct steps about fair warning of business slowdown, possible changes to employment situation etc, and even after all the rigmarole and notices and so on; I still copped an unfair dismissal claim. And of course; it came from the staff member least likely to keep their job anyway.

Fortunately, I didn't have to pay anything because my case for having to let go staff was strong and backed up by business tax returns and turnover evidence etc.

But, it was laborious, time consuming, and terribly stressful emotionally...to say I was extremely angry would be a massive understatement.

I sacrificed a lot to keep the staff on as long as possible before having to make the decision; and also cut my wage in half to keep them on as well.

And what was my reward for sacrifice and loyalty?

Had I lost that case, I would have probably been bankrupted...

A few incidents like that will make any employer harden their heart and change their mindset about employing anyone in the future - and how they employ them.

In my opinion, we (employees, Unions and Gubb legislation for such bodies as Fairwork Australia) have finally arrived at the point where we have bitten the hand that feeds us.

 

It's already the case and trending up...

For eg; my BIL is the manager of one farm owned by a large farming corp - in Deniliquin (where I spent most of my teen years).

The farm he runs was 8 farms, and is now one, and all the families who mused to run them are gone. The operation has grown in an automation capacity exponentially, so the staff levels are now about 1/3rd of what they once were.

The town population is steadily dying away, because there are less farming and farming related jobs available, so all the kids migrate to the bigger cities as they reach adulthood...

The flow on into retail etc jobs in the township is noticable now; a few too many vacant shops and buildings, less staff behind the counters etc.

I have no doubt this would be the case in a number of country towns that were once quite strong.

 

CPI +1-2%. Credit and wages growth required. Both on the rev limiter.

 

The longer term outlook?

We'll see good properties, in good and gentrifying areas that were bought for good prices, with good demand, do very well.

 

I don't understand your point, automation and precision agriculture, and not having to rely on labour) and to accommodate offsprings ambitions, has meant farms are wanting to continue expanding and many farms competing for sort after land. Also farmers have a lot of capital tied up in machinery and bring there cost per Hectare down by increasing the area farmed. With banks only willing to lend at about 60% LVR they cant all ways expand by purchasing to get the most effecient scale of production, it is also more tax effective to lease because they can claim the the full cost of the rent as a tax deduction. and don't have to pay rates. I have achieved 8% + average capital growth, can net 5% yield on current value, net 9% yield on value 5 years ago, and 75% on values of 20 years ago when satellite navigation and no-till was first introduced. Also at that time of high interest rates and banks being nasty and reluctant to lend farmers worried that they wouldnt be able to sell their land, I was buying farm land with installment contracts interest free, in 2 years thing changed and prices doubled

 

Micheal Yardney think prices will be steady . http://realestatetalk.com.au/whats-...02b1658131b0f6b690c1e216896ae7793aefd821d167e

 

Thanks Fargo. You clearly are much more knowledgeable on the specifics of ag/farm land itself and it's uses/automation.

Where I am interested is in the knock-on effect of all the changes you've mentioned, in farming and ag production towns, for residential properties in those towns/areas. I guess I'd consider residential houses (I. E. Not acreage but rather modest suburban houses in streets/towns) as quite high risk. Unless a regional centre has more than just the farming component going for it, I wouldn't touch it.

For example, Griffith/Leeton would be high risj for this reason. But other ag-strong regionals may be worth considering due to their more diverse economies (e.g. Goulburn which has the prison and police academy, as well as education, and Ballarat which has the Uni, hospital and fast train to Melbourne).

 

Most people overestimate what can change in one year but way underestimate what can change in 10 years, pace of technological change today makes it an almost impossibility to predict 20 years in advance.
Australia will prosper no matter what as we are the lucky country, there was a very good optimistic article by Bernard Salt in API mag last month about this