This generation of young people in the crypto space, if you have some money, please don't buy a house.
The reason I haven't been active in posting these days is mainly because I returned to Australia to handle some matters—selling a house.
In the simplified Chinese community, this matter is not worth mentioning; after all, some sell their houses to gamble on dog coins, while others have just enough breakfast money to buy a house.
Why sell? It's amusing; your host has been cut. But the key point is, how was I cut? I hope young money can learn from this.
Why did I buy back then?
Ten years ago, I graduated, got my Australian identity, and thought I should stay, so I took a bit of income from three years of running a guesthouse in college + a small bank loan to buy a second-hand apartment.
In Australia, apartments refer to condominiums with permanent ownership. At that time, North India, due to its 'going out strategy', saw a lot of hot money from Kshatriyas flooding into the Australian real estate market. However, due to legal restrictions, foreigners could only buy off-the-plan properties, and only Australian citizens and green card holders could buy second-hand ones.
In similar locations, second-hand properties are over 20% cheaper than new ones. At that time, I thought this location and layout were suitable for both renting and selling, and the rent could basically cover the bank loan entirely. I specifically chose a building without an elevator, no pool, and a low density to minimize property fees.
The final transaction price is still quite reasonable and was at the lowest exchange rate in nearly ten years.
The big pit emerges.
Friends who have listened to my Twitter Space may know what I was doing in Australia after graduation. Back then, buying property in Australia could be done with cash directly, with no KYC. Due to work requirements + family background, I consider myself half a real estate expert, and even later did some development. However, as a buyer, I still faced setbacks.
Starting from the second year after buying a house, the property fees began to rise. Initially, the increases were small and went unnoticed, but in the third year, the property management suddenly demanded each household pay 40,000-50,000 AUD for a 'renovation fund'. Since most owners are elderly and do not reside there, the management took the opportunity to force the budget through.
At that time, I raised doubts and kept arguing with the property management for over a year, eventually escalating to court. During that time, I was in Southeast Asia and could only entrust a lawyer to act on my behalf, which took almost another year.
Good news: I didn't lose the lawsuit.
Bad news: The property management company was dissolved and bought by former employees.
It's like starting all over again. I truly lack the energy to continue; I can only settle.
The last straw.
Starting in 2020, the Australian government added a property holding tax for non-citizens on top of the existing additional stamp duty and purchase application fees for foreign buyers.
Worse still, this time the tax is also applied to green card holders who are not tax residents, and it gradually increases each year, starting from 1% in 2020 to 5% by 2025.
This is robbery; whoever holds it is a fool and must cut their losses.
Over the past decade, the growth of Australia's apartment market has been very limited; mine is about 20%. The off-the-plan property still basically remains underwater. If I account for all transactions, renovations, and that previous 'renovation', I should have a small loss.
A bloody lesson, to be reflected upon.
In middle age, one ultimately pays for the understanding formed in youth.
From a trading logic perspective, real estate is a typical low liquidity asset; its price does not reflect liquidity, similar to inscriptions. As long as there are no lower transactions in the market, the price can still be maintained, but it's impossible to convert to cash.
The total transaction volume of the local real estate market offers limited assistance to your property's liquidity because real estate is akin to NFTs, with liquidity further subdivided by location, school districts, regulations, etc., and is not a standard bulk product like BTC.
From the perspective of real estate as an investment, it is a typical dividend stock, with huge sunk costs and high transaction costs. Loan interest is akin to the electricity bills for mining machines; holding it to collect rent.
However, real estate investment is worse than mining machines: the rules of Bitcoin are fixed, while real estate returns entirely depend on government actions.
When the government wants to fill the deficit, it often targets property owners. To please voters, they restrict owners, favor tenants, and weaken the sanctity of property rights (the foundation of capitalism). Since they cannot offend affluent voters too much, the 'fattest' target is, of course, foreign investors—this slaughterhouse can be opened at any time.
Australia's foreign buyer tax, North India's ever-changing restrictions on purchases and sales, property tax—it's all the same.
Don't buy property in chaotic times.
Stability and prosperity are the lifeblood of asset types like real estate that heavily rely on government. However, whether in North India or in the U.S. and Australia, the government is deteriorating, sinking, and heading down the path of chaos with high consistency.
Andrew Tate once said something I deeply resonate with: don't buy real estate, buying a house is like letting the government squeeze your testicles. As long as you have a weakness, any large government authoritarian regime will unhesitatingly exploit it.
Young people in the crypto space, don't be like the old leeks who earn a bit of money and then go buy a house. The saying that crypto is a hedge and safe-haven asset in the real world is definitely not empty words once you have a sufficient amount.
