Coast loses its golden hue

Gold Coast real estate is looking very shaky:

Weather: Sydney 19°C – 23°C . Shower or two.

Developer Jon Fish’s Tuscan-style six-bedrrom house with 55m water frontage at 5 Lancelot Close, Sovereign Islands, Gold Coast, which sold for $7 million. MORE PHOTOS Source: Supplied

THE Gold Coast is losing some of its swagger, with housing prices falling by up to 30 per cent. And there may be worse to come for the region.

The signs are there: declining immigration, increasing unemployment, dire affordability, rising interest rates, an absence of buyers and a lift in the number of mortgagee sales.

Few high-profile developers remain, wiped out by poor decisions, debt and the global financial crisis.

The place has also changed. It’s seen huge growth – 580,000 people now live there – and the housing market has become more complex.

There’s everything from overpriced beachfront luxury – one-bedroom apartments from $795,000 – to battleaxe blocks in suburbs that look like any other urban sprawl.

There’s been a focus on spectacular losses: the Q1 penthouse was sold recently for less than $5 million after being bought for $7.8m in 2002.

But the real long-term story may well be the incremental pain suffered by ordinary homeowners as cracks begin to emerge in the mortgage belt.

Adding to the bleak picture is a housing stock overhang that real estate mogul John McGrath – who has expanded his Sydney-based agency business to the Gold Coast – says will take more than two years to clear “if nothing was listed from now on”.

And that’s not going to happen. Indeed, the trickle has become a flood in some areas. Until the past few weeks the amount of property available (and traded) on the Gold Coast has been at multi-year lows but that is changing.

It’s a pattern being repeated across Queensland, where many regional lifestyle property markets are in disarray: Cairns, Port Douglas, Whitsundays, Noosa and Hervey Bay, to name a few. For the week to November 21, there were 74,193 advertised property listings in Queensland, up 26 per cent from the same period last year, according to residential researcher RP Data.

“That’s really hurting the market,” says RP Data’s senior research analyst Cameron Kusher.

To put it another way, Queensland has tens of thousands more property listings than any other state in the country. In Australia’s most populous states, NSW and Victoria, for example, there were 64,362 and 45,976 listings respectively.

In years past some of these southerners may well have been selling up to move to the Gold Coast but that is not happening as much any more, and high prices are a reason.

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Bill Kerr: thoughts on the nuclear debate

Bill Kerr: thoughts on the nuclear debate:

The majority of the audience was anti nuclear (2/3rds or 3/4) but thanks to the work done by Barry Brook on his blog, Brave New Climate, there was a significant pro nuclear presence Mark Diesendorf was energetically aggressive in his attack on nuclear power as an “idealistic fantasy”. He argued that renewables could completely replace fossil fuels by 2030 and presented a slide showing the growth of various renewables illustrating how this could be done. I felt this slide was dodgy but didn’t know enough to refute it. Mark also made a big issue of his expertise and criticised Barry for pronouncing outside his field of primary expertise. Aspects of this slide were challenged by Barry Brook. How could geothermal grow so quickly when on another slide Mark had shown geothermal at the R&D stage in Australia and that new technologies took 40 years or so to reach large scale commercial stage. Mark had used this to argue that IFR (Integral Fast Reactors) was pie in the sky, so Barry’s counter was quite effective.

 

monster column (China: The World’s Next Great Consumer Society)

monster column (China: The World’s Next Great Consumer Society):

Both the world’s largest economy and its latest challenger need to remake themselves. As Guo bluntly told me, “You are facing transformation, too.” The United States needs to shift away from debt-financed consumption with little long-term benefit and toward investments that can create good-paying jobs, like education, infrastructure, energy and scientific research. China needs to invest less and consume more — to keep growing rapidly and, in the process, to stimulate economic growth around the world

(via Instapaper)

monster column (China: The World’s Next Great Consumer Society)

monster column (China: The World’s Next Great Consumer Society):

China’s education system also holds back innovation. Party leaders, from Feng to the highest levels in Beijing, worry that schools have not yet figured out how to create entrepreneurs who can build great businesses. “The traditional education produces a problem,” Feng said, “in which people can do well in exams but don’t have very innovative skills.” To address the problem, Wuqi has added more art and music to the curriculum, on top of the usual math, Chinese and English. The high school with the Amherst and N.Y.U. photos on the wall has created clubs for handicrafts, physics, chemistry and singing. Feng admits he does not yet know how well the efforts are working.

(via Instapaper)

monster column (China: The World’s Next Great Consumer Society)

monster column (China: The World’s Next Great Consumer Society):

The next step is to educate people not just for factory work but for the white-collar work that would be a growing part of a consumer economy. Much of that work requires a full high-school education, if not college too. Today 55 percent of China’s adult population has graduated from high school (compared with less than 10 percent in India). But only about 5 percent of Chinese adults have a college degree of some kind.

The uneven quality of China’s colleges presents one problem. A recent book coined the term “ant tribe” to describe the many struggling recent graduates, particularly of second- and third-tier colleges. Over the long term, the bigger problem is that education beyond junior high school is financially out of reach to many families. In most parts of China, tuition starts when children are about 14. In a recent poll, Chinese families cited education as the main reason that they save money.

(via Instapaper)

monster column (China: The World’s Next Great Consumer Society)

monster column (China: The World’s Next Great Consumer Society):

None of this means China is on the verge of running out of steam. It probably has at least 5 or 10 years of rapid growth ahead, even if it simply doubles down on its current growth strategy, because it can still take more industrial market share from other countries. In a way, though, the country’s short-term strengths in manufacturing and exporting may be another reason to wonder what the future holds. Those strengths will make it harder for China to summon the urgency to remake itself.

The debate over economic policy in China feels different from other political debates. People who will not mention the words “Tibet,” “Falun Gong” or “1989” in polite conversation talk openly and critically about the state of the economy. The criticism serves party leaders’ purposes in some ways, because it tends to underscore that China remains a poor country, unable — in their telling — to reduce pollution or raise the value of the renminbi without causing economic misery for its citizens. The closest thing to a loyalty test in the public discussion of the economy is the renminbi. Chinese economists often harshly criticize the United States for putting pressure on China to appreciate its currency, even if they eventually get around to mentioning that they, too, think it should rise.

(via Instapaper)

monster column (China: The World’s Next Great Consumer Society)

monster column (China: The World’s Next Great Consumer Society):

But once you start to notice the signs of unsustainability, you start seeing them everywhere. Some highways are strangely empty. So are some buildings. When I tagged along with a group of American businessmen on a tour of what we thought was a new energy-efficient office building in Hangzhou, a coastal city a couple of hours south of Shanghai, we soon realized that it was — hard as such a thing may be to imagine — a sample office building. It had been built to show potential investors what their business might look like if it moved to Hangzhou.

This unsustainability is especially pronounced in the current real estate mania. Housing prices have been soaring, despite government efforts to cool the market. Relative to rents, housing prices in Beijing, Shanghai and Hangzhou are higher than they were in most any American city at the peak of our housing bubble. In Beijing or Shanghai, four or five different real estate agencies might open on a single block. Other agents simply set up shop on the sidewalk, with a table and brochures. At traffic lights in Beijing, young men walk among the idling cars and hand out brochures for newly built apartments.

(via Instapaper)

monster column (China: The World’s Next Great Consumer Society)

monster column (China: The World’s Next Great Consumer Society):

China now spends about 50 percent of its gross domestic product on a broad category economists call investment — roads, bridges, trains, ports, technology, factories and office buildings. That is the highest share in recorded history. During their great booms in the 1960s and ’70s, Japan and South Korea never topped 40 percent. China itself was spending 35 percent only a decade ago.

(via Instapaper)

monster column (China: The World’s Next Great

monster column (China: The World’s Next Great:

This model is part of something that has been called the Beijing Consensus, and it is understandably appealing to other poor countries. Yet in many respects it is not new. Politics aside, China’s story is the classic one of economic development: investments in physical capital and education make a society more productive and are combined with a huge shift of people from farms to factories. England, Germany, the United States, Japan and South Korea have all followed the model over the last 250 years. The economist Gregory Clark, author of “A Farewell to Alms,” calls it the only story of economic development.

And this same story explains why China’s continued rise is no more inevitable than its recent rise. From far away, China may look like an unstoppable colossus. From the inside, it looks more vulnerable. Indeed, Chinese economists, business executives and Communist Party officials are debating, sometimes passionately, just how vulnerable it is. “In the short and medium term, there should be no problem,” says Yu Yongding, a prominent economist. Among other things, the government has built up enough savings to spend its way out of most problems over the next several years. “But there are fundamental contradictions in the Chinese economy. We can waste our strengths in one or two decades. If we exhaust these strengths, then we’ll be in a big trouble.”

(via Instapaper)

Cellulosic Ethanol Reality Begins to Set In

Cellulosic Ethanol Reality Begins to Set In:

Back to the EIA report, they were quite frank in their assessment of Range Fuels. If you recall, I was the first to point fingers at the vast disconnect between Range Fuels’ early, hyped up promises and the constantly diminishing expectations of what they would actually deliver:

Broken Promises from Range Fuels

I contrasted the more than $320 million that they have taken in and the promises of a 100 million gallon cellulosic ethanol plant (which they had said would cost $150 million) with this year’s admission that they would only have 4 million gallons of methanol capacity. But you wait, they insisted. They were going to get that plant up on methanol, and then switch over to ethanol and all would be right in the world. But they just needed more money.

Oh, I had my critics. Defenders of Range — including Range themselves — began to come out and insist that I didn’t know what I was talking about. Well, the EIA had something to say about that:

Range Fuels Inc., which was excluded from the EPA’s proposal, is expected by the EIA to provide 1 million gallons of methanol next year. The plant’s Soperton, Ga., capacity is 4 million gallons, however, “we assumed a 25 percent utilization rate due to its repeated inability to meet stated production goals,” Newell wrote.

(via Instapaper)