This generation of young people in the crypto world, if you have some money, don't buy a house.
The reason I haven't been active on Twitter these days is mainly because I'm back in Australia to handle some matters—selling a house.
In the simplified Chinese community, this isn't worth mentioning, after all, some people sell their houses to gamble on meme coins, while others can just afford a house with their breakfast money.
Why sell? It's a well-known story; your host has been cut. But the key point is, how I got cut, and I hope young money can learn from it.
Why did I buy back then?
Ten years ago, after graduating and obtaining Australian residency, I thought I should stay and needed to have a house. So, I took some income from running a guesthouse for three years in college plus a small bank loan to buy a second-hand apartment.
In Australia, an apartment refers to a permanent ownership apartment building. At that time, due to the "going out strategy," a lot of hot money from North India flooded into the Australian real estate market. However, due to legal restrictions, overseas buyers could only buy off-the-plan properties; only Australian citizens and green card holders could buy second-hand ones.
In similar locations, second-hand properties were more than 20% cheaper than new ones. I thought this location and layout would be good for renting and selling, and the rent could basically cover the bank loan. I specifically chose a building without an elevator, pool, and with a low density to minimize property costs.
The final transaction price was reasonable, and it was at the lowest exchange rate in nearly ten years.
The big pit emerges.
Friends who have listened to my Twitter Space might know what I did in Australia after graduation. Back then, buying a house in Australia could be done with cash directly, without KYC. Due to work needs and family background, I considered myself a semi-real estate expert, and I even did some development later. However, as a buyer, I still faced setbacks.
Starting from the second year after buying the house, the property fees began to rise. At first, the increase wasn't much, and I didn't pay attention, but in the third year, the property management suddenly required each household to pay 40,000 to 50,000 AUD for a "renovation fund." Since most owners were elderly and not living there, the property management took the opportunity to force through the budget.
I raised questions at that time and spent over a year arguing with the property management, eventually taking it to court. At that time, I was in Southeast Asia and could only entrust a lawyer to represent me, which took nearly a year.
Good news: I didn't lose the lawsuit.
Bad news: The property management company was dissolved and the license was bought by former employees.
It was like starting over. I really didn't have the energy to continue, so I had to settle.
The final straw.
Starting in 2020, the Australian government added a property holding tax for non-citizens on top of the existing extra stamp duty and application fees for overseas buyers.
Worse still, this time, green card holders who are not tax residents were also included, and it gradually increased each year, from 1% in 2020 to 5% by 2025.
This is robbery; whoever holds it is a fool, and must cut losses.
Over the past decade, the increase in the Australian apartment market has been very limited, about 20% for my unit. The off-the-plan properties from back then are still basically underwater. If I account for all the transactions, renovations, and that previous "renovation," I should also be at a small loss.
A bloody lesson, to be learned from.
In middle age, I ultimately paid for the understanding I had in my 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 cannot be converted into cash.
The total transaction volume of the local real estate market offers limited help to the liquidity of your property because real estate is akin to NFTs, with liquidity further segmented by location, school districts, regulations, etc., and is not a standardized 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 like the electricity bill for mining machines, holding it to earn rent.
But real estate investment is worse than mining machines: Bitcoin rules are fixed, while real estate returns completely depend on government actions.
When the government wants to fill a deficit, they often target 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 property-owning voters too much, the "fattest" target is, of course, overseas investors—this slaughterhouse can be opened at any time.
The Australian overseas buyer tax, North India's ever-changing purchase restrictions, sales restrictions, and property taxes are all part of the same problem.
In chaotic times, don't buy property.
Stability and prosperity are the lifeblood of asset types like real estate, which are highly dependent on government. However, whether in North India, the U.S., or Australia, the government is all in a race to the bottom, heading towards chaos.
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 soft spot, any big government regime will not hesitate to exploit it.
Young people in the crypto world, don't be like the old leeks who earn a little money and then go buy a house. The statement that crypto is a hedge and safe-haven asset in the real world is definitely not an empty phrase once you have enough weight.
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