In the late 1800s, Melbourne was heralded as ‘Marvelous Melbourne’. It was experiencing the biggest boom Australia had ever seen.
Immigrants discovered large nuggets of gold in areas such as Castlemaine and Bendigo.
They poured their wealth into the real estate market.
By 1889, the value of land in parts of central Melbourne was as high as that in London. The most successful developed an intricate web of land banks, mortgage companies, and building societies.
It was all set up on a web of complex cross-ownership and financial arrangements. As long as confidence was held, the boom in land values kept growing. It was all fuelled by speculation in land and shares in the companies that backed it.
‘Thousands of acres of suburban land were subdivided and resold many times, each time at a higher price…anyone, it seemed, could make a fortune in this incredible economy’. ‘[Everyone] grasped at the chance of quick wealth and invested their savings. Many borrowed widely to invest more than their assets were worth, and later formed a pitiful kite-tail to the catalogue of insolvencies.’
– Michael Cannon, The Land Boomers
The downturn that followed (at the end of the 18-year cycle in the 1890s) was the deepest and longest Australia ever weathered.
It was worse than the downturn during the 1930s Great Depression — worse than the downturn in the early 1990s, worse than anything we’ve seen since.
Today, it’s not gold mining that is going to drive the land cycle. Rather, the mining of cryptocurrencies — and the blockchain technology that supports it.
We’re witnessing the start of the effects of the ‘war on cash’ right now.
The principal aim of the ‘war on cash’ is to shift transactions to solely digital — leaving an electronic data trail for law enforcement and tax authorities. And that’s a scary proposition.
It is a pathway to enable easy tracking of citizens from cradle to grave. The ultimate form of control in our increasingly technocratic society. A plan in the making for decades.
It will complete a cycle of indoctrination over the information you consume, with punishments for those that step outside of the dictated boundaries.
If you still think this is a little far-fetched — ‘couldn’t possibly happen in a great democracy like Australia’ — take a look at a blog written by the International Monetary Fund (IMF) in December 2020.
IMF researchers are calling for internet search history to be tied to citizens’ credit scores. They argue that using ‘the history of online searches and purchases,’ can solve the problem of ‘certain kinds of people not having enough hard data (income, employment time, assets and debts) available’ to buy products.
It’s a ‘great monetary reset’ — but it will not stop the cycle.
Truth be told, the economy and society itself cannot go forward as long as you have a financial oligarchy that rules this system.
Those that control the money, control the people.
You cannot have both a financial oligarchy and democracy.
Against the outcries of public opposition, the banks will always be bailed out in a crisis.
Policies will always be employed to assist landowners, and never the labourers.
While this system exists, the cycle will repeat as it has done for centuries.
New monetary technology will only feed the cycle.
Take crypto.
Whichever way you look at it, it’s now seen as a digitally scarce store of value — a new form of gold. And it’s also going to sink directly into land prices.
Bitcoin [BTC] fever started to hit the real estate market a few years ago. In the UK, property developer Go Homes began selling new properties in bitcoin in 2017.
The first was sold to a bitcoin miner for £350,000 in Colchester.
Solicitor Adrian Toulson, who handled the transaction, explained:
‘The Land Registry agreed in principle that the price could be recorded in bitcoin, but the buyer may well choose to use pounds, simply because calculating any capital gains tax may prove very complicated.’
In the US, bitcoin is viewed as a way foreign investors can dodge currency controls at home and US economic sanctions. ‘Bitcoin accepted’ is a message commonly seen in the description of homes for sale in the Miami area.
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Source: pymnts.com/cryptocurrency |
The world’s first crypto house auction in Australia took place in front of 200 people on the east coast in April 2019.
Since then, ‘Propy’, a real estate platform that enables the buying and selling of properties using fiat money and cryptocurrency, has closed on sales in crypto across both Sydney and Melbourne.
The platform has over 3,500 users from Australia and partners with several property developers, thus enabling crowdfunding for sites.
Natalie Karayaneva, co-founder of Propy stated:
‘My vision for Propy is to bring self-driving real estate transactions to the world, with all of the logistics seamlessly executed on the back end.
‘Our platform offers a terminal to observe transactions in real-time, making the process transparent for real estate executives, title companies, homebuilders, buyers, and REITs.’
The influence of blockchain goes further than this, however.
Take Power Ledger. It is an Australian blockchain pioneer changing the way energy is made and used.
Their technology allows households to disconnect from power companies.
Using solar-powered energy generation, property owners can trade electricity with others via an online marketplace. It’s done with the help of battery storage.
Houses with similar solar systems installed form a ‘virtual power plant’ that allows low-power users to trade surplus power with high-power users.
It’s taken off in a big way in Perth.
Power Ledger and Perth-based real estate developer OP Properties constructed one of Australia’s first carbon-neutral apartment developments.
The five-story apartment block is called Montreal Commons. It is designed with 39 apartments, a café, and ‘developer-funded’ rooftop solar panels with local battery storage.
As well as cheaper electricity, Power Ledger’s carbon-neutral apartment block has a host of marketing incentives attached. 50% reduction in the strata levy (the building maintenance fees).
That means that buyers will have more in their back pocket to bid up the unit prices. Effectively feeding the incentives back into the developer’s pocket.
Owners can trade their excess electricity through Power Ledger’s blockchain-based energy platform. And if needed, they can also buy it back. And as power becomes cheaper? You’ve guessed it — land prices absorb the gains.
Few people in the mainstream understand any of this.
They’re still waiting for Australia’s property crash to occur sometime this year.
You don’t have to like how this feudal system works. But you do need to be on the right side if you want to benefit.
That’s what we teach you to do over at Cycles, Trends & Forecasts. Knowledge of the cycle will gift you the greatest gains the market has to offer.
Best wishes,
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Catherine Cashmore,
Editor, Land Cycle Investor
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