Australia housing bubble

[zilo]

Originally Posted by MercuryT

I'll miss her though.....

Midway Point a beautiful spot in greater Hobart.

You are lucky...you got out just before it hits the fan.

Nice views but with the bogan factor.

[marty351]

Black tyre marks are not a good selling/buying point.

[Bossxr8]

Originally Posted by Yellow_Festiva

Come September when the loan deferrals expire there will be a bunch of home owners under severe mortgage stress if the economy doesn't return to near normal.

They are suggesting extending the deferral program.

For how long? The banks are in a bind - they may be left holding housing stock that's worth less than the loan against it.

That's a fair point. With the loan deferral program running things aren't changing yet. But i'm not completely convinced they will anyway.

Local land sales dropped right off when the first lock downs started, but once talk of restrictions being eased surfaced, sales went straight back to where they were previously. And auction prices have not dropped at all. Still places selling for well over the reserve price.

Outside of the overpriced capital cities I think it's hardly even going to drop.

[Polyal]

Originally Posted by Bossxr8

That's a fair point. With the loan deferral program running things aren't changing yet. But i'm not completely convinced they will anyway.

Local land sales dropped right off when the first lock downs started, but once talk of restrictions being eased surfaced, sales went straight back to where they were previously. And auction prices have not dropped at all. Still places selling for well over the reserve price.

Outside of the overpriced capital cities I think it's hardly even going to drop.

We all talk about generations being cotton woolled, yet we continue to do it to our economy so the ivory empire doesnt fall....

Investment is meant to have a risk component.

[b0son]

This is a useful site, shows the changed in advertised prices and what price the property eventually sold for: https://propertyweb.azurewebsites.net/

A quick perusal of postcodes in my area paints a very different picture than the property spruikers and sales data (of which up to 80% is being withheld and not submitted) they present would have us believe. People are rapidly readjusting asking prices, frequently after only 2-3 weeks. That suggests a market starting to panic, having little faith the status quo will be maintained.

I've seen flat out lies from agents - they run an ad showing a price they 'achieved' that was $50k higher than what the property actually sold for. You simply cant trust anything being put out by anyone that derives any income from sales. They are lying, both by omission and outright porkies.

[Bossxr8]

Originally Posted by b0son

This is a useful site, shows the changed in advertised prices and what price the property eventually sold for: https://propertyweb.azurewebsites.net/

A quick perusal of postcodes in my area paints a very different picture than the property spruikers and sales data (of which up to 80% is being withheld and not submitted) they present would have us believe. People are rapidly readjusting asking prices, frequently after only 2-3 weeks. That suggests a market starting to panic, having little faith the status quo will be maintained.

I've seen flat out lies from agents - they run an ad showing a price they 'achieved' that was $50k higher than what the property actually sold for. You simply cant trust anything being put out by anyone that derives any income from sales. They are lying, both by omission and outright porkies.

How can you tell if a real estate agent is lying?

When they open their mouth.

[FTE217]

Originally Posted by Yellow_Festiva

Come September when the loan deferrals expire there will be a bunch of home owners under severe mortgage stress if the economy doesn't return to near normal.

They are suggesting extending the deferral program.

For how long? The banks are in a bind - they may be left holding housing stock that's worth less than the loan against it.

Mind you the way I see it - the banks are not actually losing any money, any unpaid money will just be paid later on down the track at most probably a much higher interest rate.

I've deferred my repayments and am rushing through some minor fixes in the hope I can list my place for sale mid to late July.

Sell before the slump, buy at the end of the year when things may be a little cheaper.

See what happens I guess.

Its all and good thinking planning ahead BUT highlighted above from your post is the $64M ???, deferral program or not extended whilst our Immigration is shot to pieces (that selfishly I'm glad its at a complete holt) and all other covid economy declines/disasters carrying on as IF the economy will be anywhere near back to normal end of 2020 I expect.
Decline is occuring right now from what we see......
Sell July/Aug no matter you'll be selling for less, buying (less) similar later on.
Usual turn of events same circumstance buying during when prices are high.

[BA-XT]

We just bought our first house - right before Covid started

Assuming this hadn't happened we both think that we realistically had about 1-2 years to get in the market around Melbourne. We live in Wyndhamvale. We saved $50k when renting and paid $475k with using $43,000 deposit.

New houses can be had for under $500k but land size is a postage stamp. I'm talking 4 bedrooms turnkey but less than 300m of land.

Our house has doubled in price since 2010 which is scary. Still needs probably $15-$20,000 repairs outside but structural sound. We are just greatful to be out of the rental market.

Also our mortgage is only $100 a week more than our rent which is nice.

[b0son]

Originally Posted by BA-XT

Also our mortgage is only $100 a week more than our rent which is nice.

After 10 years you'd think your rent would be $100 more than your mortgage. Especially given how low interest rates are.

[Yellow_Festiva]

Originally Posted by b0son

After 10 years you'd think your rent would be $100 more than your mortgage. Especially given how low interest rates are.

I would give it 5 years, if that.

Sent from my LG-M700 using Tapatalk

[BA-XT]

Originally Posted by Yellow_Festiva

I would give it 5 years, if that.

Sent from my LG-M700 using Tapatalk

I know. They are low that's why we bought within our means. We did think about the possibility of interest rate hikes, but you can't go through life thinking what if. Worse case scenario? Interest rates go up and we lose a bit or break even.... imagine if the rates went up by 3%? So many people would have to simply walk away from their loans.

[zilo]

Originally Posted by BA-XT

.... imagine if the rates went up by 3%? So many people would have to simply walk away from their loans.

ROFL......3%? And that would be disastrous?

our last mortgage payment was on a loan at 17.5% !!!

[BA-XT]

Originally Posted by zilo

ROFL......3%? And that would be disastrous?

our last mortgage payment was on a loan at 17.5% !!!

I know what you mean. Then house prices started to explode. I haven't done the comparisons with wages ect but I'd imagine most mortgages were around $70,000 back then? 3% now would be disastrous for people in the mortgage belt.

[b0son]

Originally Posted by zilo

ROFL......3%? And that would be disastrous?

our last mortgage payment was on a loan at 17.5% !!!

on what size loan?

[BA-XT]

Originally Posted by b0son

on what size loan?

That was sort of what I meant. This house and land was a huge $53k all up in 1988-89.... keeping in mind I live in western side of Melbourne. Say the average wage was $300-$400 a week.

So I just used the Bank of Melbourne mortgage calculator. It's 99% accurate surprisingly. Was only $2 out on our actual repayments!

Anyway....

$65,000 loan over 30 years with a 17.5% interest rate is $238 weekly.

So it seems houses were much cheaper, with high interest rate. The complete opposite of things now. And that house would probably be worth $900k plus now probably.

[zilo]

Originally Posted by b0son

17.5%...on what size loan?

Loan was 50k house purchase price 4 years earlier was 82k...average earnings were 28k a year.

I clearly remember it was 20th April 1992, same day I gave up smoking...LOL

[zilo]

Originally Posted by BA-XT

I know what you mean. Then house prices started to explode. I haven't done the comparisons with wages ect but I'd imagine most mortgages were around $70,000 back then? .

Nah...top taxrate was 60%...not many could afford a 70k loan then.

Every dollar you earned over $675 a week you only saw 40c....

Mortgage repayments were in after tax dollars....ouch!

[FTE217]

Be great stamp duty was reviewed
https://www.brokernews.com.au/news/b...rm-271661.aspx

Originally Posted by zilo

Mortgage repayments were in after tax dollars....ouch!

my dad's house was about $25'000 and 3KM from the brisbane CBD.
I'm told that back then, any additional $$ you repaid over the minimum repayment went straight to the loan so the faster you paid it off, the less you paid in interest.

I'd take that sort of arrangement with that sort of house-price-to-income ratio with the 17% interest any day of the week. I'm not sure why some people keep calling the younger generations lazy when they just had the luck of buying in better economic circumstances.

[guzzis3]

FWIW:

I live in a "village" of about 50 heritage homes on the outskirts of Brisbane. In the last maybe 9 months about 5 of 6 houses have sold here including 3 very recently. Ours is a relatively cheap area but I cannot believe they are getting so many sales so easily. Some sold off market and the agents are pestering us for listings.

Those of you running numbers you should consider repayments as a % of income. When I was young houses cost about 3.5 times the average wage, but interest was maybe 9%. When it went to 17% house values retracted significantly. Now it's 2% prices are stupid.

Stamp duty was one of the taxes that were SUPPOSED to go with the GST. Instead as usual they kept them and payroll tax and just added another tax on us. The GST had a flawed implementation so we got stuck with almost as narrow a base as sales tax but our fearless leaders managed to turn every small business into a tax collector and teh extra administrative burden was the final straw for a lot of them. Screwed again...now we are supposed to be grateful and excited they might do what they should have done 20 years ago ?

[zilo]

Originally Posted by leesa

......... I'm not sure why some people keep calling the younger generations lazy when they just had the luck of buying in better economic circumstances.

Prolly cause we never had spas...theatre rooms..landscaping done on day one...double garage..workplaces with gyms and childcare at work...smashed avocado...smart phones on breathtakingly expensive handset plans...and an expectation that a degree entitled one to a job...

Hell ,we had 100 sq metre houses with one lounge room and one bathroom...and had sheets on the windows till we could afford curtains...air conditioning?...nope....two cars? nahhhhh

Originally Posted by leesa

I'm told that back then, any additional $$ you repaid over the minimum repayment went straight to the loan so the faster you paid it off, the less you paid in interest.

.

You can do that now...unless you have a "silly" loan..

[78xcgxl]

Waiting patiently. Can't wait to buy my first home at a realistic price point.

[blueoval]

Originally Posted by zilo

Prolly cause we never had spas...theatre rooms..landscaping done on day one...double garage..workplaces with gyms and childcare at work...smashed avocado...smart phones on breathtakingly expensive handset plans...and an expectation that a degree entitled one to a job...

Hell ,we had 100 sq metre houses with one lounge room and one bathroom...and had sheets on the windows till we could afford curtains...air conditioning?...nope....two cars? nahhhhh

I bought my first home in 2007 in a pretty poor area. It was a poxy little 3bd flat, 1 bathroom, single carport off a main road on community title that was pretty average to look at, but it was solid. I still had to drive 45mins to work everyday and back.

I left it far too long to buy a house and really at the time, it was at the height of the boom before the GFC hit. We mortgaged ourselves to what we could afford and still be comfortable. Upgraded and replaced bits and pieces here and there but it was ours for about 5yrs. Sold it and made about 50k out of it which wasnt bad for doing very little other than new floor vinyl and some cheap plants. We used that profit to build the house we currently live in.

My point is, my expectations were realistic. We just had a vcr and the old box tv and we lived within our means at the time. I cannot say for a fact all people feel entitled to get everything, but I know a lot expect a lot for the price they pay in todays money.

Here in SA, you can get your foot in the door with house and land for under $300k if you are prepared to live in the outskirts of Adelaide and prepared to drive up to an hour in to work or longer if you take public transport. The house is new, but the house size and what you get for that price is probably not good enough for some. You may have to do your own perimeter paving, landscaping, floor coverings and be happy with the base range from the builders specs in terms of selections, but these extras could be done over time when your funds allow for it. It all boils down to being realistic and what you are prepared to accept.

[BA-XT]

Originally Posted by zilo

Prolly cause we never had spas...theatre rooms..landscaping done on day one...double garage..workplaces with gyms and childcare at work...smashed avocado...smart phones on breathtakingly expensive handset plans...and an expectation that a degree entitled one to a job...

Hell ,we had 100 sq metre houses with one lounge room and one bathroom...and had sheets on the windows till we could afford curtains...air conditioning?...nope....two cars? nahhhhh




You can do that now...unless you have a "silly" loan..

This.

I've had arguments on the domain page on Facebook about this.... whilst I get this is stereotypical of gen y, some young couples seem to want to buy near the city in suburbs like Elwood, Burwood ect. I say to them move back out further to get into the market, as my mortgage is cheaper than renting in the inner city. But they don't want to live "in the sticks" so they just keep complaining about the prices

[Yellow_Festiva]

Originally Posted by BA-XT

This.

I've had arguments on the domain page on Facebook about this.... whilst I get this is stereotypical of gen y, some young couples seem to want to buy near the city in suburbs like Elwood, Burwood ect. I say to them move back out further to get into the market, as my mortgage is cheaper than renting in the inner city. But they don't want to live "in the sticks" so they just keep complaining about the prices

Same people can be found on dating sites - semi attractive low 40's single women who want to meet a guy:

* That lives within 5km of the CBD
* That has these specific degree(s) / qualification(s) / certificate(s)
* That makes $xxx,xxx income based on their employment expectations
* That must have this body type, hair type, eye colour etc
* That must be this minimum height
* That must have a car
* Than must be of a certain religion and ethnicity
* That must be totally single, not separated, divorced, no kids
* That must be older than me and also want kid(s)

But... it's certainly not their fault they are single - they just haven't met the 'right' guy yet

[MITCHAY]

Originally Posted by FTE217

Be great stamp duty was reviewed
https://www.brokernews.com.au/news/b...rm-271661.aspx

They are trying to phase out stamp duty in favour of rates here in the ACT as it would in theory remove a significant barrier for new home buyers and potential downsizers.

It also provides a much more solid revenue base both good things.

But beware, rates here have been climbing but stamp duty reducing no so much. Heaps of people are ****ed about the double dip here. It is more likely to be long term reform.

And stamp duty in a market such as Sydney is a huge money spinner.

[Franco Cozzo]

Originally Posted by blueoval

I bought my first home in 2007 in a pretty poor area. It was a poxy little 3bd flat, 1 bathroom, single carport off a main road on community title that was pretty average to look at, but it was solid. I still had to drive 45mins to work everyday and back.

I left it far too long to buy a house and really at the time, it was at the height of the boom before the GFC hit. We mortgaged ourselves to what we could afford and still be comfortable. Upgraded and replaced bits and pieces here and there but it was ours for about 5yrs. Sold it and made about 50k out of it which wasnt bad for doing very little other than new floor vinyl and some cheap plants. We used that profit to build the house we currently live in.

My point is, my expectations were realistic. We just had a vcr and the old box tv and we lived within our means at the time. I cannot say for a fact all people feel entitled to get everything, but I know a lot expect a lot for the price they pay in todays money.

Here in SA, you can get your foot in the door with house and land for under $300k if you are prepared to live in the outskirts of Adelaide and prepared to drive up to an hour in to work or longer if you take public transport. The house is new, but the house size and what you get for that price is probably not good enough for some. You may have to do your own perimeter paving, landscaping, floor coverings and be happy with the base range from the builders specs in terms of selections, but these extras could be done over time when your funds allow for it. It all boils down to being realistic and what you are prepared to accept.

Something I notice in Adelaide is that houses tend to have things like pergolas, its not real common out here in Boganistan on the rural outskirts of Melbourne.

In Adelaide every house and its kennel seems to have the pergola/covered outdoor area and even on houses priced around the $300K mark.

I don't want a huge mortgage, I don't want something flash I pretty much just want to own something.

One of the reasons I'm considering the move when I buy my first property is its $450K-$500K plus here in Boganistan which has poor infrastructure and you're still 45 mins out of the Northern suburbs of Melbourne.

$300K buys you something in that Salisbury/Elizabeth area or Mt Barker if you go south - sure they're a bit low socioeconomic but so is Boganistan, at least Adelaide everyone's within 30 minutes of the city regardless of where they live and I imagine even in peak hour if you're living on one end and working in the other its not going to be like Melbourne where it often takes 2 hours plus go from CBD to Dandenong which is only 35km AND paying tolls for the privileged.

Originally Posted by Yellow_Festiva

Same people can be found on dating sites - semi attractive low 40's single women who want to meet a guy:

* That lives within 5km of the CBD
* That has these specific degree(s) / qualification(s) / certificate(s)
* That makes $xxx,xxx income based on their employment expectations
* That must have this body type, hair type, eye colour etc
* That must be this minimum height
* That must have a car
* Than must be of a certain religion and ethnicity
* That must be totally single, not separated, divorced, no kids
* That must be older than me and also want kid(s)

But... it's certainly not their fault they are single - they just haven't met the 'right' guy yet

Sounds like you come across my cousin on a dating app

I remember her telling me a guy ticked all the boxes and he was nice, met the ethnicity requirements but 'he was a driver and only on $60K/year' so he landed on the **** list.

She has the full list of check boxes.

The best one was signing up for Salsa classes then complaining that all the guys are gay.

[blueoval]

Originally Posted by Franco Cozzo

Something I notice in Adelaide is that houses tend to have things like pergolas, its not real common out here in Boganistan on the rural outskirts of Melbourne.

In Adelaide every house and its kennel seems to have the pergola/covered outdoor area and even on houses priced around the $300K mark.

I don't want a huge mortgage, I don't want something flash I pretty much just want to own something.

One of the reasons I'm considering the move when I buy my first property is its $450K-$500K plus here in Boganistan which has poor infrastructure and you're still 45 mins out of the Northern suburbs of Melbourne.

$300K buys you something in that Salisbury/Elizabeth area or Mt Barker if you go south - sure they're a bit low socioeconomic but so is Boganistan, at least Adelaide everyone's within 30 minutes of the city regardless of where they live and I imagine even in peak hour if you're living on one end and working in the other its not going to be like Melbourne where it often takes 2 hours plus go from CBD to Dandenong which is only 35km AND paying tolls for the privileged.

If yo can get something in Mt Barker for 300k, grab it. It has more appeal than Salisbury/Elizabeth.

That said, come further south and head to Port Noarlunga, Seaford area where there are some of the best beaches close by and you could possibly net a good deal in the new estates there.

I live 3mins from Noarlunga and on a hill so I can see Port Noarlunga from my house as well as Seaford and Old Noarlunga. Not in a great area. But the views more than make up for it. 35-40mins from the city center via the southern expressway.

As for Pergola's. Its the SA way to get a verandah fitted cheap. A lot of the low socioeconomic places have them and its suits the need well for little outlay. If you can afford a verandah/patio/alfresco under main roof then you are already ahead. But yes, pergolas are the norm here and only those in higher income brackets tend to find them ugly and prefer the UMR appearance. But they are an affordable option.

[GasoLane]

Originally Posted by blueoval

If yo can get something in Mt Barker for 300k, grab it. It has more appeal than Salisbury/Elizabeth.

That said, come further south and head to Port Noarlunga, Seaford area where there are some of the best beaches close by and you could possibly net a good deal in the new estates there.

I live 3mins from Noarlunga and on a hill so I can see Port Noarlunga from my house as well as Seaford and Old Noarlunga. Not in a great area. But the views more than make up for it. 35-40mins from the city center via the southern expressway.

Just don't tell Franco about Maslins Beach or he'll be over next weekend!

[blueoval]

Originally Posted by GasoLane

Just don't tell Franco about Maslins Beach or he'll be over next weekend!

That depends which 'end' you venture down. The most south end of Maslins is where you need to keep your eyes pointed towards your feet. Don't ask me how I know this.