Maybe it's because I grew up in Europe, but "Don't buy it if you can't afford it" has served me well. The majority of people I know just use credit cards for the perks but never miss a full payment.
There is still time for a pop once governments decide things are normal again after covid.
While thats true on its face, in practice trying to make that bet is a fools errand at this point. People have been telling me that for a decade plus, now. It still hasn't happened, and the Australian economy (and household wealth) is inextricable intertwined with real estate -- I can't see any government deciding to let it "pop", personally.
They won't let it pop, but that doesn't mean it won't. Of course, timing it is the big bet, not predicting if it will happen.
Australian property prices are cyclic with an upward trend. There are (substantial) cyclic decreases in prices, especially in Sydney[1].
But people who talk about "popping" property prices seem to believe there will be a massive (50%+?) fall in prices.
But there are fundamental reasons why this is unlikely. The 2008 GFC causes a 16% decrease in prices in Australia[2], and it's hard to imagine something being worse. Prices recovered 10% the next year, because Australia avoided a recession and there is fundamental demand for living areas in out major cities.
The GFC caused a 18% decreases in prices in the US[3]. Given that Australian mortgage rules are different (there is no ability to walk way from a mortgage in Australia, unlike the US) it's unlikely a bubble in Australia will "pop" worse than that.
But 10% decreases occur relatively often. For some reason these are ignored, but the truth is these are the "pops" that take the froth out of the market.
[1] https://cdn.propertyupdate.com.au/wp-content/uploads/2021/03...
[2] https://www.theguardian.com/money/2009/jan/06/house-prices-f...
[3] https://money.cnn.com/2008/12/30/real_estate/October_Case_Sh...
There's also reason to believe that the Australian property market has decoupled from the rest of the economy, and that's because tax breaks like negative gearing incentivize buying properties even when it makes no financial sense otherwise. This could change overnight with the stroke of a pen, but it would take an awfully bold politician to do it.
The difficult thing is... when does it stop? The above could have been said 10 years ago, just replace the 3 with a 2. Should it have stopped then? Now? In 10 more years?
It's not fake money. It's likely not even "beyond means". The debts can likely be paid back. But it seems quite unlikely the level of spending can continue to grow.
However Australia has such a large amount of land, and such a small population that forecasted worldwide population drop won't affect Australia so much. It's such a desirable place to live that immigration at the current rates will be sustainable regardless of the rest of the world's population growth rate. Whether or not our cities can keep up with the growth and maintain their high levels of livability is another question.
I'd also question your statement about population drop on the next 15-20 years. All forecasts I have seen are that the world's population will continue to grow until the end of the century. If the world's population were set to start shrinking in such a short timeframe, I'd think it would be a huge talking point in any discussion about sustainability and global warming.
I am always amazed at news reports from Japan about how the sky is falling because their population is shrinking. For some reason no one ever says "on the plus side, Japan is one of the most densely populated places on the planet, a slow decrease in population will help improve quality of life measures and sustainability".
https://www.finder.com.au/australias-personal-debt-reported-...
I'm including 'Investment debt' cause who are we kidding? It's all investment properties.
Real estate prices in Sydney and Melbourne are in the million(s), but incomes are ~100+k AUD. Some people earn 200k+ as a principal engineer, but that's pretty much it.
In America you have much more cities where you can find a decent job and different lifestyle. If New York is too expensive, you can move to Raleigh, NC. I don't think that exists in Australia.
There is also a very low degree of innovation in Australia, it's all related to real estate and mining.
Personally I just feel like it's not worth building a life here unless you get a large inheritance, but for an immigrant, America is a much better place to build a future.
Melbourne is pretty decent for high end tech jobs, but not as good as Sydney.
Certainly real estate is extremely expensive and broken, but it's not like New Zealand where the real estate is almost as expensive but the pay is much lower. I had to leave for this reason - New Zealand's housing crisis is much worse in real terms.
How close? let's say AUD 300k (I'm honestly curious, does Optiver/Atlassian/Google even pay that much here?) which is a mind-blowing salary in Australia, tops all kinds of taxes, it converts to USD 220K give or take, adjusted for higher taxes and cost of living, down to about 200k.
So a top earner 0.1% in Sydney makes as much as a strong 3 yoe engineer in America.
Presumably they have to pay taxes and have a high cost of living as well :)
I don’t know how accurate it is but the 2020 SO developer survey puts the median salary for an engineering manager in the US at $152k and an SRE at $140K.
In my experience that’s maybe slightly higher than going rates in Melbourne and probably about the same as Sydney.
On the other hand, AUD300k is a C-level salary here in Australia and way past the start of top tax bracket (AUD180k)
SO numbers are way off comparing to levels'. They're heavily skewed toward the low end. Think about it, who even bothers reporting salary there? I don't even find SO useful in general, these days when I look up an issue I usually end up on github, not SO.
The point is, in AU, making 300k is a really big deal (high rank in FAANG), while it's far from a big deal in the US.
Out of interest I had a look at roles advertised on indeed.com in Atlanta and SF for SREs and data scientists. Estimated ranges seemed to match SO survey results reasonably well.
Maybe both just have bad data.
I don’t doubt that there’s some great tech salaries on offer in the US but I do suspect the massive salaries reported here aren’t necessarily representative. Nor of course is 250k/year in Australia.
Look at property prices in Vancouver and Toronto, New York and San Francisco or London. You're going to find them just as unaffordable relative to the median salary. The difference is that for you personally - a worker in tech, the US will likely pay you a better salary relative to the median than you receive in Australia.
Not FAANG either.
250k for non-contracting is indeed impressive. I'm guessing a trading firm, in that case, they are outliers, curious if they have presence in Brissie though.
We're in Brisbane.
Thought I'd interview because I was getting sick of the old job. Wasn't intending to start actively looking.
External recruiter approached me on LinkedIn, had an interview with her, another 3 interviews with the company. No leet code nonsense. Did do a personality and IQ test though. And a problem solving excercise which involved troubleshooting Python and SQL. The final interview followed by a group chat with the whole engineering team.
Honestly the whole interview process was really enjoyable. I'm stoked to be here.
That said, I've worked for small companies in the past. Two in fact. And they both hold the rungs for second worst and actual worst companies I've worked for. With this new company though they also hold the top! But it's early days. So far so well.
This was all in March/April too. Quite recent.
The bonus break down is:
10% of my salary paid quarterly if I hit my targets and I get around 0.9% profit sharing.
My position title is just SRE. Same rank as the other engineers.
CEO > VP of Engineering > All the SWE/SREs sit here
Targets change quarter to quarter and are what ever I and my Manager/VP decide.
Typically the targets are technically focused. E.g. product needs in the next 12 months require specific SLO/SLI's being met, in addition to some future customers who we're looking to onboard require us to be compliant in certain security standards. Those are my goals for this quarter.
Think of house prices as reflecting the "price of living in Australia".
1. As long as your LVR isn’t too high your interest payments on a home loan will probably come in well below what renting an equivalent house would cost. Further rent will generally rise over time with inflation, whereas your interest will decrease to zero over time as you pay down the loan.
2. If you’ve got a home loan with a 100% offset account (very, very common in Australia) then a credit card makes financial sense. I purchase everything on credit and pay the full balance each month. I pay no interest, earn points and this maximises the amount of money in my offset account at any one time.
3. Depending on your usage and tax situation a noveated lease (car lease) can make good financial sense.
The thing worth pointing out that explains how both this, and the person you are replying to are correct is that in Australia we haven't had an unemployment crises since the 1990s.
If you have never seen unemployment, and can't imagine not having a job then arranging your affairs for tax efficiency makes perfect sense, even if it means you are carrying more debt.
according to https://www.marketwatch.com/story/the-buy-now-pay-later-wave...
"In Sweden, home to BNPL provider Klarna, installments accounted for 23% of e-commerce transactions last year."
The German word for debt is schuld(Schulden), which has the same meaning as guilt and is associated with something bad.
For some examples of Germany's issues it's worth looking at the weak state of retail banking (Deutsche Bank / Commerzbank proposed merger), and the financial scandals.
I'm inclined to believe another commenter who suggested that millennials and younger don't really like credit cards, and this is a different way to get a similar thing – better cash flow.
I think that is the case as well in the US. Credit card interest rates are atrociously high. Which makes it difficult for people who get caught in the CC debt-loop to get out.