Compound growth in house prices over ?

[EFFalcon]

Originally Posted by Road_Warrior

I don't, I wouldnt live near the CBD if you paid me

Which is why we're looking at places 20klm out but with easy access to a railway line.

in some major cities, people would consider 20km close to the CBD lol.

[BHDOGS]

The man who lived his life while he could before death took him

[GhiaEB]

The brother who bought the $13mil winning lotto ticket

[PridenJoy]

House prices will always go up. Maybe not to the extent we have seen over the past decade but 5% pa growth (1 or 2% after CPI) adds up after 10-15 years.

[ebxr8240]

Plus your FAR better off controlling your own money than investing in shares etc.. How often do they go broke and find they have $10m mansion somewhere!!!We lost enough in Hanover finance thank you...

[Angeldust]

Originally Posted by PridenJoy

House prices will always go up. Maybe not to the extent we have seen over the past decade but 5% pa growth (1 or 2% after CPI) adds up after 10-15 years.

not sure there will be many that can afford them at that rate.

[PridenJoy]

Originally Posted by Angeldust

not sure there will be many that can afford them at that rate.

Well, they'll just have to work hard and give up some luxuries to get into the market, nothing different there from 30-40 years ago, owning your own house has never been 'cheap'. I do not believe 5 % growth per annum is beyond anyone's reach.

[BHDOGS]

unfortunatly its beyond alot of peoples reach and if you take away someones ability to own there own home or have anything to aspire to the generation will decend into no hopers who are already on the rise in this country the greatest trick the rich ever pulled was tricking people into think they could be just like them with enough hard work while deliberately pushing them back down the ladder

[Kryton]

Originally Posted by PridenJoy

Well, they'll just have to work hard and give up some luxuries to get into the market, nothing different there from 30-40 years ago, owning your own house has never been 'cheap'. I do not believe 5 % growth per annum is beyond anyone's reach.

What a load of crap.
Back then the avergae house was 4.3 times the average wage, now its 9.6 times the average wage.

[Dr Jekkyl]

Originally Posted by PridenJoy

Well, they'll just have to work hard and give up some luxuries to get into the market, nothing different there from 30-40 years ago, owning your own house has never been 'cheap'. I do not believe 5 % growth per annum is beyond anyone's reach.

You are right. Owning your own home has never been cheap.

It has however been cheaper, say at 3x the average income as late as the mid 90s. This is in contrast to the 6-7x required now. 5% annual growth is just going to push ownership further out of peoples reaches.

Suggesting that all that is required is harder work is a cop-out.

[PridenJoy]

Originally Posted by davway

What a load of crap.
Back then the avergae house was 4.3 times the average wage, now its 9.6 times the average wage.

That is true if you want to live in Carlton/Richmond etc. Plenty of affordable houses in Melbourne at least, problem is people on average wage do not want to live in average areas so they whinge and complain that Toorak is too expensive for them.

[MAD]

No, people on average wages complain that the CUB's have overpriced the average areas by only wanting the biggest and fanciest things possible without considering their actual location.

[PridenJoy]

Originally Posted by MAD

No, people on average wages complain that the CUB's have overpriced the average areas by only wanting the biggest and fanciest things possible without considering their actual location.

CUB's?

Edit: For those who claim housing is not affordable...some of those suburbs are above average and some are less than 15 kms to the CBD...

http://www.realestate.com.au/propert...hine-110466925
http://www.realestate.com.au/propert...hine-110522037
http://www.realestate.com.au/propert...park-110794191
http://www.realestate.com.au/propert...ibee-110811695
http://www.realestate.com.au/propert...akes-110880483

That was after a 5 minute search...plenty of others...

[Stugots]

CUB = Cashed Up Bogan

I'd go further to say it's overseas investors and non citizens who've been given increasingly free access to the residential property market (buying) which they should never be entitled to.

[mostly_broncos]

I was reading an article online today about the housing market in Australia and it reminded me of this thread.


http://www.zerohedge.com/news/ultima...housing-bubble

The numbers on this chart look worse (maybe its just unfolding differently)than those from the US housing bubble .

Here is a chart of our housing prices In the greater Boston area of the US where i live . The chart goes back to 1987 and you can see 2 bubbles bursting in that time

http://www.jparsons.net/housingbubble/boston.html

Judging by the charts on my first link your prices are going up faster than ours that would make me very nervous if I was contemplating buying at these prices .

You might have a few years to go yet but things are souring over in china it looks like lately with talk of a hard landing in their economy .

[zilo]

Originally Posted by Keepleft

GFC was nothing, patience please......

Anyone who has been to the US or Europe recently knows exactly what you refer to.

[kaniSS]

As long as we have an under supply of housing it will never be over.

[MAD]

Originally Posted by kaniSS

As long as we have an under supply of housing it will never be over.

I hope that was tongue in cheek, because the national census showed a swing of about 600k homes from a speculated ~230k under supply to an actual ~340k over supply.

[mr smith]

Originally Posted by kaniSS

As long as we have an under supply of housing it will never be over.

One of the biggest lies of the last decade!

Just look at who sold this lie, TV and print media, the HIA and the banks.
Now...who got real rich off the housing boom?

[ebxr8240]

Originally Posted by mr smith

One of the biggest lies of the last decade!

Just look at who sold this lie, TV and print media, the HIA and the banks.
Now...who got real rich off the housing boom?

Learn from it.. The future is pretty much what the past has been..
Try and do something.. Esp something that appreciates ..

[Hell Cat]

Originally Posted by GhiaEB

The brother who bought the $13mil winning lotto ticket

Are you saying your brother won $13mil in the lotto?


If so, get your brother to hook a brother (me) up!!

[ILLaViTaR]

Originally Posted by PridenJoy

That is true if you want to live in Carlton/Richmond etc. Plenty of affordable houses in Melbourne at least, problem is people on average wage do not want to live in average areas so they whinge and complain that Toorak is too expensive for them.

No, our house in Berwick more than doubled and it's the basically the same everywhere. Even bloody koo wee rup and the likes went up.

[mr smith]

Over the last ten years, yes houses doubled as every man and his dog got on the negative gear band wagon. But as Asia dominates the economy with cheap labour, we will see a change of fundimentals. House prices will NOT double in the next ten years. House prices are falling.
To anyone doubting this I'm happy to sell you my house for an over inflated price if your keen to prove me wrong and put your money up?

[mostly_broncos]

I was in the building trade all through the bubble here in the US and it was pretty obvious by 2004 that something was wrong . We kept working and making good money but we started to wonder why a man and his wife and their 2 cats needed 5 bedrooms 2 baths a 3 car garages. Mom and dad are out of the house working 50 hour weeks to pay the mortgage they don't have time to fill all those bedrooms with kids.

2 streets over from me are rows of massive cookie cutter houses with for sale signs out front. They are all ugly houses and they all look the same. Here in New England houses had a certain style that I remember growing up , these houses don't fit in. They are too large on the lots , the trees are all cut off so they jut up awkwardly out of nothing . They all have over complicated roof lines that will be costly to maintain 20 years out , bland neutral colors there is no charm or comfort to them.

They are all the same house every job was a flip or a rotate , in one development we might have 3 different plans with a few mods. Flip a garage to left or right , add a screen porch left or right , farmers porch or no farmers porch , entryway left or right


The worst trend as a home buyer was the phased or 2 stage rollout. A parcel of land would be divided into 60 or 100 lots or whatever and they would build up every other or every third lot and people would be so excited . Big wooded areas between them and the neighbors far away it all seemed so cozy and secluded.
3 years down the road phase 2 kicks in and they clear cut the wooded lots and literally plop an exact twin of your house on either side of you. All those lovely shaded lots suddenly turn to desert. You could say the people should have seen it coming but first time buyers had no clue how that worked. If you wanted to get out at that point how could you sell when the layout of the place had no appeal compared to when you moved in? If the guy across the street decides to sell how do you distinguish your house from his besides price? If you price yours at 400 he just goes 390 then what do you go 380? Thats how the prices come back down.

You know what else is funny? You always have a property tax bill to pay based on the value and as prices climb you keep getting reappraised upwards but when prices fall your taxes never seem to go down. You pay taxes on 400,000 and you couldn't get 280,000 on the open market

[zilo]

Plenty of talk about the mining boom slowing down In Australia now.

Dunno what affect that will have to housing..

[Ben73]

Originally Posted by Jim Goose

Exactly.... a LOT of Australians (without causing a stir), especially those in the mining boom, who make a $100,000 a year, seem to be all whinging they cant afford to live... "really" I say in reply??

I wonder why?

3 or 4 cars, a jetski, a boat, two trail bikes, 5bedroom home in the most expensive part of town, a plasma in every room..... hmmmm

Eventually that person will own that 5 bedroom house in the nice part of town and it will be worth heaps.
Better then buying a tiny house in the **** part of town and drinking the rest of their money away.

[DANNO178]

Originally Posted by Resurrection

Dave289 was right.

Must have been like trying to tell everybody that the world was round for the first time.

[IDT]

[QUOTE=Yellow_Festiva]
I can't remember the exact statistic... 4-6 decades ago the average house cost 3.? times the average wage.

Now the average house costs 8-9 times the average wage.

QUOTE]
People whinging about these statistics cracks me up laughing. 4-6 decades, or even 2 decades, ago a bank wouldn't give you a loan for more than 3 or 4 times your annual income. That has now changed so they will give you a loan for 8 times (or even more) than your annual income. Its because we have easier access to money that house prices are up. Because more of us are in the market. Its the low interest rate that is the cause. Ultimately its your ability to repay the loan over your life (30years) Higher interest rates lessen your ability. If the banks started charging the interest they did in the 80s the multiple of annual income would go down by default. High interest rates = less players in the market, less players = more risk to banks so they take less risk by reducing the amount they will lend

If you want house prices to go down, you have to have less buyers, the only way to have that is by having high interest rates. What in this country pushes up interest rates better than anything? High unemployment!

Everyone wants a manison in the city or by the beach, my olds bought a fibro house in Mt Druitt, we moved up market to Campelltown in the early eighties (yes compared to Mt Druitt it was upmarket at the time). They now live in Cairns retired and are kickin back in thier eighties. When they hear people complain how hard it is to get into the market for young people they laugh. They worked thier ***** off and bought thier first house in thier forties.

It has never been easier. you may not get the suburb you want or the 4 x 2 with pool but its not so hard as most make out.

[DANNO178]

[QUOTE=IDT]

Originally Posted by Yellow_Festiva

I can't remember the exact statistic... 4-6 decades ago the average house cost 3.? times the average wage.

Now the average house costs 8-9 times the average wage.

QUOTE]
People whinging about these statistics cracks me up laughing. 4-6 decades, or even 2 decades, ago a bank wouldn't give you a loan for more than 3 or 4 times your annual income. That has now changed so they will give you a loan for 8 times (or even more) than your annual income. Its because we have easier access to money that house prices are up. Because more of us are in the market. Its the low interest rate that is the cause. Ultimately its your ability to repay the loan over your life (30years) Higher interest rates lessen your ability. If the banks started charging the interest they did in the 80s the multiple of annual income would go down by default. High interest rates = less players in the market, less players = more risk to banks so they take less risk by reducing the amount they will lend

If you want house prices to go down, you have to have less buyers, the only way to have that is by having high interest rates. What in this country pushes up interest rates better than anything? High unemployment!

Everyone wants a manison in the city or by the beach, my olds bought a fibro house in Mt Druitt, we moved up market to Campelltown in the early eighties (yes compared to Mt Druitt it was upmarket at the time). They now live in Cairns retired and are kickin back in thier eighties. When they hear people complain how hard it is to get into the market for young people they laugh. They worked thier ***** off and bought thier first house in thier forties.

It has never been easier. you may not get the suburb you want or the 4 x 2 with pool but its not so hard as most make out.

The lending standards of today would have caused the old bankers to fall off their chair in laughter. Old days , 20% deposit , this was needed for several reasons , 20% deposit of actual savings shows that the borrower can save and is disciplined in his living standards and not living behond his means. It shows he is of good character and a much safer candidate for the bank . It also gives the bank as well as the owner a buffer and shows that they wont run at the first sign of trouble . You would be less inclined to walk away or go bankrupt if you had actually put in 20% from your hard earned savings. Today or not long back you need no deposit at all , and as if this was not bad enough some would let get away without having the stamp duty or legals fees. I can still hear the old bankers laughing from their grave.

Question is how and why did we go from very safe and stable lending practices to very unsafe and unstable lending practices. In the old days you actually needed a real job that could actually be proved , you also needed to have been working there for a number of years , not like now whete you can work for a few weeks or months then get a loan , and in some cases have no job and get a low doc loan and state whatever you want as income, no questions asked, yes this was happening.

The other thing is when your loan is ten gimes your wage, people have no money left over to spend on or grow the economy , cause its all going in interest payments. This spare money could be used to invest in your future as wlll as grow the economy though actual spending of real money. To have all your eggs in one basket is not a clever way to position yourself .An economy is grown through hard work , savings and investing in growing buisinesses. I still cant understand how we lost the plot and decided that borrowing more money was the way to go when growth and savings and investing is actually hows things are done and work.

[Yellow_Festiva]

[QUOTE=DANNO178]

Originally Posted by IDT

The lending standards of today would have caused the old bankers to fall off their chair in laughter. Old days , 20% deposit , this was needed for several reasons , 20% deposit of actual savings shows that the borrower can save and is disciplined in his living standards and not living behond his means. It shows he is of good character and a much safer candidate for the bank . It also gives the bank as well as the owner a buffer and shows that they wont run at the first sign of trouble . You would be less inclined to walk away or go bankrupt if you had actually put in 20% from your hard earned savings. Today or not long back you need no deposit at all , and as if this was not bad enough some would let get away without having the stamp duty or legals fees. I can still hear the old bankers laughing from their grave.

Question is how and why did we go from very safe and stable lending practices to very unsafe and unstable lending practices. In the old days you actually needed a real job that could actually be proved , you also needed to have been working there for a number of years , not like now whete you can work for a few weeks or months then get a loan , and in some cases have no job and get a low doc loan and state whatever you want as income, no questions asked, yes this was happening.

The other thing is when your loan is ten gimes your wage, people have no money left over to spend on or grow the economy , cause its all going in interest payments. This spare money could be used to invest in your future as wlll as grow the economy though actual spending of real money. To have all your eggs in one basket is not a clever way to position yourself .An economy is grown through hard work , savings and investing in growing buisinesses. I still cant understand how we lost the plot and decided that borrowing more money was the way to go when growth and savings and investing is actually hows things are done and work.

Times certainly have changed, even in my short time here, and I'm 33.

Some things have changed for the better, some for the worse.

I got my first place with the help of my parents in 99. Without them, I wouldn't have got my foot into the market.

Fast forward 2 years to 2002. Working 3 jobs, paying cash for Uni, and knocked down my 30 year loan to 5 years. Found a 1br unit in Sydney for 71k and thought I would go for it.

Didn't get approved for a 50k loan caus I 'wasn't working full time'... don't worry that I had just finished 5 years of Uni, paying my way through, drove a new car, worked 7 days and had the support of good parents.... It seems I was a gamble to lend on....

"Come back when you have been working 3 years full time as a teacher"....

Yup, no worries......

This peeved me off to no end. The amount of times I had full blown arguments with bank managers was a joke. But hey, thats was the way the system worked.

I did get that unit, only by totally refinancing my house and buying it with cash... Thats right, I also needed to pay .75% higher interest as I was more of a 'risk'.... So I couldn't borrow on it, but I could pay cash if I used the equity of my first place... and lets face it, most of that bloody equity was my extra repayments... amounted to squat.

I think bankers / mortgage people need to be exprienced in thir profession as well... some had NO BLOODY CLUE about finance....

"Excuse me mr Yellow Festiva... I see you have a bank balance of $17".

YF "Yeah.... thats because I'm getting paid tomorrow. I guess it's also because the $2500 I transfered into my loan last week works better for me there then in my savings account"...

Some still were scratching their heads on that one. I needed to transfer out my re-draw to show 'savings' only to put it back in the following day...

Credit cards are the best. The same bank was happy to always increase my limit, after all, I was an outstanding customer! Come loan time, that would bite me in the but.

"No worries Mr Yellow Festiva. What we can do is reduce your credit limit to 2k, apply for the loan, then jack it right back up to 45k".. same bank..

Lost count of the times I had to do that. Didn't matter that I had not paid a cent of interest in the whole time I had my card...

Ohhh the FULL TIME JOB line........ the bloody crock line of the year!

Tell me this my friends. What job is 100% secure??? NONE!

In life 2 things are CERTAIN. Death and Taxes. What difference does it make if I work 'Full time', or if I work 3 temp jobs @ 60hrs a week??? If the money comes in you pay your loan....

Who has ever got a call from the bank? "Excuse me Mr. XYZ, we are just confirming that you are maintaining your FULL TIME job so that we know you are able to maintain your repayments"

So why be so @nal about working FULL TIME on application. It means SQUAT. Work is not what it was 20-30 years ago. You don't stay in the same industry for decades then retire. I wonder what the average work stint is these days? 2-3 years?? 5 MAX????

So how does that work on a 30 year loan??? Oh diddums...

Banks must keep who your employer is on the application right?? With all these large 'established' companies going bust, did they then scan all loans, cross reference people who worked for those companies then call them to cancel their loans??? Of course not. Anyone can quit their full time job at any time, and the banks would never know.

You know what's funny now.... I went to the bank to get approval to buy a house. I wanted to borrow no more than 750k. I got a call from my broker to say I'm approved for 1.2 Million.....

I aslo submitted the paperwork on the brokers dining room table at his house at 7pm on a Sunday... First time I went to the bank to beg for 50k I wore my Sundays best in the hope it made me 'look better'...

Go bloody figure...