Tuesday, April 18, 2017
Real estate
bubbles, tree changers and cultural “negative gearing”
If
the peak of the US stock-market bubble of the 1920s was the time when hotel
bell-boys everywhere were overheard exchanging stock-market hot-tips, then the
equivalent moment in Australian real estate will be when the word “investment” (in
connection with it) is drained of all nuance.
That is, anyone who has bought
anything at any price – lemon or not – has made, or is on their way to making,
a killing. Oh wait, that’s already happened,
at least in Melbourne and Sydney – and if the party there is over, no one
appears to be getting out in a hurry – yet.
But contra to Andrew P Street, Melbourne and Sydney are just the visible tip of a nation-deep iceberg, on
which several generations of renters are foundering. And on their – our – shoulders rests – disproportionately – a huge
trove of cultural (as opposed to monetary) capital.
Back in money-land, there’s
a name for everyone’s-a-winner “investment” that requires no special skill,
timing or luck: Ponzi scheme. Of course, not quite everyone is a winner – (we) renters are the perceived suckers – and
at the other end, not all “winners” are equal: the earlier one has bought real estate, the
bigger one’s winnings, usually.
It
is a shame, I think, that renters (here, not including me) tend to accept their
individual lots, as one of the mandatory suckers, rather than collectively
assert their market (or voting) power to its fullest potential (that said, for
a certain strata of renters, including me, it is already “game on”; see below). Renters may not be a necessary ingredient for
every flip-for-capital-gain – and the more than trifling number of vacant
investment properties attests to this – but if every, or even many, investment properties were vacant, the
prospects for capital gain would evaporate.
Of course, everyone needs a roof over their heads, so limiting renters’
effective choice in withdrawing from this market.
There
is more than one way to skin a cat here, however – and I believe that a chunk
of we lumpen-renters are one our way to
conspiring to send a powerful market signal, even if this has been done perhaps unconsciously and involves what I’ll call the econo-cultural (as opposed to monetary) sphere. This phrase is not a neologism, but I’m using
it here in specific counterpoint to the phrase “culture industries” et al –
which, if not oxymoronic, fails to account for (and here to invoke the same
parlance) creative consumption – that
is, where and how people like me spend their time dreaming, gleaning and
fossicking.
Living
well outside of the big smoke/s for the main reason of (much) cheaper rent (plus
I didn’t have a job in Melbourne to detain me), I have spent three years in a
box seat to take the national econo-cultural temperature. As I presaged above, there are ripples to
urban real-estate inflation that are felt well outside the commuter belts of
Melbourne and Sydney. Big-city (or even
second-string) property-owners whose careers or life-stage allow it thus cash-in
and sell-up, to go shopping with their hard-currency bonanza in regional
locations where lived was lived in, and so real-estate was traditionally bought and sold for, trusty “pesos”. This domestic “migration”, driven by
real-estate arbitrage, tends to be mono-cultural, and is a potent – and perhaps
under-appreciated – factor in spreading the cheer (or misery, if you’re a
renter) of the urban real-estate boom far and wide. And in turn, a definitely under-appreciated
cultural phenomenon – and not in a good way.
The
net econo-cultural upshot in 2017 is that property prices in all but the direst
of dire country towns are actually quite expensive, thereby preventing, for at
least the last decade, cultural rejuvenation by artist/intellectual types
attracted by the local “peso” economy and social matrix (and moving there with only pesos in
their pockets).
Artist/intellectual
types who rent are thus pretty much stuck in their present real-estate rut,
urban or regional, with no better alternative.
Fitzroy/Darlinghurst garrets are long gone, of course, for committed
bohemians wanting to culturally invest in
their locale, but more recently, so are grungy outer suburbs and even
white-bread country towns.
If
you’ve ever wondered why Australian intellectual life itself has been stuck in
a mediocre rut for at least the past decade, you now have the answer – there is
no “fringe” to escape to any more, and thus no liquidity in the cultural and consumption mix. There
is only urban vapidity and cupidity – a monoculture of greed that trumps, with
spades, the much-vaunted big-city multi-culture, both at home and away. In the cities, hyper-consumption converges
and finds its own level as teenage gangs invade ordinary suburban homes to
steal trophy cars for a ride to nowhere – an even more sliced-and-diced undercutting
of Uber at its own algorithmic game, if you like.
Meanwhile,
in the regions, a different sort of invasion and consumption convergence is
happening. A vanguard of (Anglo-Celtic Australian)
culture-deaf, real-estate arbitrageurs – as opposed to refugees, like me – slowly spread across the nation like a cane-toad
swarm. Though self-fancied and styled
as “tree changers”, they are on a mission to re-invent their new locales and
environments. But rather than resulting
in a heady – and not always comfortable, it must be noted – admixture of
bohemia with old-school country, these newcomers come to conquer, not to
settle.
“Tree
changers” need, and bring, sophisticated weaponry to achieve this, of course –
with their killer advantage, one to which about nine out of every ten old-timer
locals will swoon or reluctantly succumb, being the middlebrow “urban” café. Believe it or not, these are still new enough
in many country towns, and the locals so hitherto unaccustomed to pure consumption
for its own sake, that a newly opened café, complete with brown interior tonings,
in one’s town achieves a social revolution – changing the town’s ~150 year-old social
fabric almost overnight to an all-encompassing, gimlet-eyed (and anti-social)
dollars-and-cents ledger. That is, into
a matrix the “tree changers” can effortlessly and comfortably assimilate – not
least because they spored and sooled it.
There
is some hope here, however – what I like to think of as a form of cultural “negative
gearing”; a collective action by boho renters.
Taking a leaf out of the property investor playbook, we selectively keep
vacant some of our cultural properties,
and so starve the market of stock. This
can work wherever you live. The aim, of course, is to accumulate private
cultural capital in the long-term. As we quietly do this, the hyper-consumption economy will eventually burn itself out – with one
urban home invasion too many, and no country towns left to colonise with middlebrow
cafés. When that day comes, culture,
sweet culture, will be the most valuable roof above all our heads, and floor
beneath your – and not mine – humbled lives.
