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.