Australia housing bubble

[FTE217]

Originally Posted by b0son

It's easy to say this when you're from a generation that has been able to utilise the massive equity growth of the last 20 years. Houses have gone from 2-3x income to 5-6x income. It's free money. You can buy rental after rental without even putting down a deposit, to a point. Just wait for values to go up.

How does a first home buyer compete against that? And honestly, why should they? Is living in the burbs of Sydney worth $1million? Not even close.

b0son, with all due respect - its not fair to pigeon hole earlier gen having it easier......
I couldn't afford to buy in the area I grew up in wayway back then and forget other areas I would have liked and banks weren't just opening the doors to first home buyers as some may think.
We fought tooth and nail scratch a deposit and then pray visiting banks getting an approval.
Prices were going up and up, it always does we were stressing and once in the first 5yrs was living pay packet to pay packet no extra money for take out or forget going to restaurant.
To some living in Sydney its worth the million (and where you grew up) for in time the equity builds up best compared to anywhere else in the country.
Like has been mentioned, you buy in the cheaper outer burbs OR even a mate back then couldn't afford zack in Sydney, he decided to buy in the central coast wife preggo on 1 wage, hasn't looked back but he gave up for yonks being close to family and friends.

You've all heard this before anyway, the cycle keeps repeating itself and yep its damn hard.

Thanks PG2.

[b0son]

Originally Posted by FTE217

b0son, with all due respect - its not fair to pigeon hole earlier gen having it easier......

Objectively though, they did (on average). Prices relative to income were far lower, wages were rising, interest rates were falling. You took on a 25 year mortgage knowing it could be paid off in 10. None of that's true anymore.

We fought tooth and nail scratch a deposit and then pray visiting banks getting an approval.

How do you even scrape together a meaningful deposit now? Prices go up faster than you can save. Granted, its way easier for a FHB to get a loan these days, but thats a bit like arguing giving credit cards to kids is a good thing. Even if you tightened lending to them, the investor would buy it and rent to the FHB instead. And they can do so because it's little risk, and little/no outlay. And at the end, they get away with favourable taxation so where's the benefit to society?

Prices were going up and up, it always does we were stressing and once in the first 5yrs was living pay packet to pay packet no extra money for take out or forget going to restaurant.

Not like over the last 20 years. Prices relative to income were relatively stable until John Howard changed CGT, which prompted the pile-on in the property investment market.

High house prices are a false economy. The price growth doesnt create any extra jobs (we'll always build as many homes as there are people wanting to live in them), and the wealth effect is an illusion - you're using debt to fund consumer spending, and thats never good for an economy long term. Howard IMO will go down as the worst PM we've possibly ever had in terms of the way he screwed an entire generation.

[PG2]

A little story for those who are interested...

About 25 years ago (our 25th wedding anniversary was 2 days ago) we bought a house about 45 minutes out of town.

My Dad's reaction, "Why are you buying all of the way out there?"

My Mum's reply to Dad, "That is exactly word for word what YOUR Father said to us 20 years ago when we bought 30 minutes out of town."

[b0son]

Originally Posted by Itsme

If people stop doing investment properties who is going to supply the rental properties? which will dramatically effect a lot of people.

If people can afford a home, who will need a rental property? Maybe have a look at the rate of home ownership over the years, its been falling steadily as affordability has been decreasing.

Plenty of affordable housing for first home buyers, they should be buying in areas where it is affordable not looking at areas where prices are out of their reach or wanting to have everything straight away.

Really? Where? Even in Tahmoor (100km drive from Sydney) a 3br is $700k and up.

[.:4:.]

So before i bought my place 9 years ago my dad gave me some interesting facts on the market over the years. He was in the mortgage industry so was up on this kind of stuff. So i dont remember his exact average figures, but it was along the lines of in the late 70s, early 80s house prices were about 5 times an average persons income. In 2012 my place was 10 times my income. So due to population growth the market had grown faster then wage growth due to the extra demand for housing. So my old mans push for me to buy over rent was simple. The amount borrowed doesnt change and you pay it down creating equity, rents do typically go up over time making it more difficult to save for a deposit and also the property market is always changing.

[slowsnake]

Originally Posted by Itsme

If people stop doing investment properties who is going to supply the rental properties? which will dramatically effect a lot of people.
Plenty of affordable housing for first home buyers, they should be buying in areas where it is affordable not looking at areas where prices are out of their reach or wanting to have everything straight away.

I knew somebody would mention this eventually, and the answer is simple, if you get into the rental property business, and that's a very "light and easy" way of saying that you want easy money on your investment!
And I had this argument with my nephew, he owns 3 properties and lives in one, he bought a 3 bedroom town house at Scarborough were he lives, he works very hard as a heavy mechanical fitter, up at Telfer at present I think!

And I had a little chat to this 33 yr old young man, be 44 yrs old now, and I asked why he decided to settledown, simple query, and he has a mint Red Maloo ute plus Kwaka 1400cc which is mint and he rides it once a year, but he bought 2 more properties a 1 bedroom at Wembly, main St, opposite pub, and a 2 bedroom at Glendalough.

When I asked what made him finally settle, he said dad put the deposit on the Scarborough town house while he was away working, now I love my brother but don't get me wrong, but he never got into the rental business, because like me and 3 brothers and sister we were very poor growing up,watching dad work 5 jobs to put a roof over our heads and feed and clothe us, we'll that was hard on him and hard for me to see, council house in the same estate that Paul McCartney and George Harrison were born in Liverpool.

So my thoughts on multi property House owners, not Commercial owners, that's OK, it's business, but as I said to my nephew 12 yrs ago that he dident seem the type to invest in poor people's misery, I expected him to keep his bluestone share portfolio up to date, that's a good return on ya dollars.
He said dad told me not to waste all ya money on cars, women and booze, and get this he then said " you don't want to end up with nothing like your Uncle Billy "

Real nice that, he's not invited to my funeral, no one is, but I explained to my nephew about our poor upbringing compared to his easy run, I told him that while people are buying and selling the same property over and over it puts the little earner out of the picture, but, I added if he bought a block of land, built a new home and rented that then that's an entirely different proposition, instead of buying and selling the same property, that he create a portfolio of properties he has built himself, and the tenants pay a fair rent to cover mortgage and rates only, no more than that, he has 3 more properties now and all new, not this buy sell cut throat market that we have now.

[b0son]

Originally Posted by slowsnake

I added if he bought a block of land, built a new home and rented that then that's an entirely different proposition, instead of buying and selling the same property

Agree 100%. The CGT discount should only apply to investments that are economically productive, eg. those that create jobs. That means new dwelling construction, or share IPOs.

Trading existing assets doesnt help the economy, so shouldnt qualify for a CGT discount. If I buy existing shares, the company doesnt benefit, it gets no revenue with which to grow its operation. If I buy an existing property, no builder was required. Nobody did any work for that transaction.

[Yellow_Festiva]

Originally Posted by b0son

If people can afford a home, who will need a rental property? Maybe have a look at the rate of home ownership over the years, its been falling steadily as affordability has been decreasing.







Really? Where? Even in Tahmoor (100km drive from Sydney) a 3br is $700k and up.

Campbelltown area still has houses $550k and under.

Out west around Penrith and Lethridge Park around $650k.

3br houses with land.

Tahmoor considered outside of Sydney but the above locations are not.

There are still affordable options to be had. Just need to be prepared to travel and perhaps buy something that needs cosmetic work.

Sent from my SM-G973F using Tapatalk

[b0son]

Originally Posted by Mont5.0

Supply and demand is what the housing industry is about.

Absolutely, and there's a huge oversupply of money which will always drive prices up.

If you required investors to front a 10-20% deposit in cash, the property investment market would disappear overnight. Using equity wildly distorts the market because it allows those without the funds to engage in transactions as if they did. So the people that are driving price growth, drive their own equity, which allows them to invest more and further drive growth. It's a little like a Ponzi scheme.

[b0son]

Originally Posted by Yellow_Festiva

Campbelltown area still has houses $550k and under.

It has 1. It's 2br. It could best be described as a freestanding unit because it has absolutely no yard. From there we rapidly enter $600k and up in terms of asking prices. When you look at what they're actually selling for, we're in the $700k's. Agents are wildly underquoting at the moment, and houses are going either at the upper end of the price guide or well outside it.

There are still affordable options to be had. Just need to be prepared to travel and perhaps buy something that needs cosmetic work.

There arent many however. We have a lot more than a couple dozen or so first home buyers all over Sydney.

I get where you're coming from. We all had to start somewhere, but that somewhere is getting not just further and further away from where we work, but it's also getting smaller and smaller. By the time people have a deposit, they already have a family, they need a 3-4br. I dont want my daughter to wait til she's in her mid-30s before she starts thinking of having kids. So I'm buying an investment that she can one day live in rent free so she can save money to buy her own place. What other option is there?

Ironic isnt it? We want house prices to grow so much that inevitably we'll end up having to help our kids fund theirs.....

[Yellow_Festiva]

Originally Posted by b0son

It has 1. It's 2br. It could best be described as a freestanding unit because it has absolutely no yard. From there we rapidly enter $600k and up in terms of asking prices. When you look at what they're actually selling for, we're in the $700k's. Agents are wildly underquoting at the moment, and houses are going either at the upper end of the price guide or well outside it.

There arent many however. We have a lot more than a couple dozen or so first home buyers all over Sydney.

I get where you're coming from. We all had to start somewhere, but that somewhere is getting not just further and further away from where we work, but it's also getting smaller and smaller. By the time people have a deposit, they already have a family, they need a 3-4br. I dont want my daughter to wait til she's in her mid-30s before she starts thinking of having kids. So I'm buying an investment that she can one day live in rent free so she can save money to buy her own place. What other option is there?

Ironic isnt it? We want house prices to grow so much that inevitably we'll end up having to help our kids fund theirs.....

House and land:

https://www.domain.com.au/230-rivers...560-2017373743

https://www.domain.com.au/60-merino-...560-2017373742

Plus a couple of Villa's:

https://www.domain.com.au/3-16-alder...566-2017230209

https://www.domain.com.au/7-20-stewa...560-2017375822

True, not many left but still a few around. I'm going to watch the above 4 to see what they go for.

I've been watching the lower end of the market and have saved a bunch of houses that have recently sold for around $650k

https://www.domain.com.au/50-sandaka...770-2017312661

https://www.domain.com.au/46-helena-...770-2017314140

https://www.domain.com.au/16-cumbern...770-2017312447

If you are happy with a Townhouse or Villa there are a handful of really nice places for well under $700k a bit more closer to town as well.

I've got my eye on one place that needs some work. After building my house in Sydney and watching tradies do sub standard work and cutting every corner possible while demanding top dollar I've always wanted to get a place of my own at the bottom end of the market and do a full renovation top to bottom inside and out myself to see what the outcome is.

See how I go. May even put it in the 'non car projects' section.

Future kids facing an uphill battle that's for sure. It will be up to parents to set them up, but that's nothing really new isn't it?

But I fully understand that not all kids have parents that are in that position.

[ford71V8]

Originally Posted by Yellow_Festiva

Future kids facing an uphill battle that's for sure. It will be up to parents to set them up, but that's nothing really new isn't it?

But I fully understand that not all kids have parents that are in that position.

Some people have parents in that position and then some, but still don't get any assistance. Some of those people, don't want it.

[.:4:.]

Originally Posted by ford71V8

Some people have parents in that position and then some, but still don't get any assistance. Some of those people, don't want it.

So theres 2 trains of thought towards that statement. Im the youngest of 3 kids. My older brother lives in a nice 3 bed 3 bog 2 carhold townhouse in a nice area. My parents bought my sister a unit when she was 19 in a good area. She sold it years later for to fund her current place with her partner. Me, i got shafted. So at the time i was the only married child and the only one with a kid. Was i dirty about having to buy a place on my own? No. My then wife was super salty about having to do that, but her opinion didnt matter, her family was poor so no handouts from them. So it was take any opportunity for overtime and use the energy that could be used for complaining to make the extra on the weekly paycheck.

[Itsme]

Originally Posted by slowsnake

I knew somebody would mention this eventually, and the answer is simple, if you get into the rental property business, and that's a very "light and easy" way of saying that you want easy money on your investment!
And I had this argument with my nephew, he owns 3 properties and lives in one, he bought a 3 bedroom town house at Scarborough were he lives, he works very hard as a heavy mechanical fitter, up at Telfer at present I think!

And I had a little chat to this 33 yr old young man, be 44 yrs old now, and I asked why he decided to settledown, simple query, and he has a mint Red Maloo ute plus Kwaka 1400cc which is mint and he rides it once a year, but he bought 2 more properties a 1 bedroom at Wembly, main St, opposite pub, and a 2 bedroom at Glendalough.

When I asked what made him finally settle, he said dad put the deposit on the Scarborough town house while he was away working, now I love my brother but don't get me wrong, but he never got into the rental business, because like me and 3 brothers and sister we were very poor growing up,watching dad work 5 jobs to put a roof over our heads and feed and clothe us, we'll that was hard on him and hard for me to see, council house in the same estate that Paul McCartney and George Harrison were born in Liverpool.

So my thoughts on multi property House owners, not Commercial owners, that's OK, it's business, but as I said to my nephew 12 yrs ago that he dident seem the type to invest in poor people's misery, I expected him to keep his bluestone share portfolio up to date, that's a good return on ya dollars.
He said dad told me not to waste all ya money on cars, women and booze, and get this he then said " you don't want to end up with nothing like your Uncle Billy "

Real nice that, he's not invited to my funeral, no one is, but I explained to my nephew about our poor upbringing compared to his easy run, I told him that while people are buying and selling the same property over and over it puts the little earner out of the picture, but, I added if he bought a block of land, built a new home and rented that then that's an entirely different proposition, instead of buying and selling the same property, that he create a portfolio of properties he has built himself, and the tenants pay a fair rent to cover mortgage and rates only, no more than that, he has 3 more properties now and all new, not this buy sell cut throat market that we have now.

You are not the only one who was grown up in a poor persons enviroment as I certainly did with many siblings, I lived on hand me downs and went without a lot of things in life but I believe in capitalism where you get off your *** and make a go working hard and striving for what you want in life.
Hate to say champ but investment in housing is one of them and I do not begrudge anyone. I'm all for anyone making a better life for themselves.

Originally Posted by Itsme

I believe in capitalism where you get off your *** and make a go working hard and striving for what you want in life.

Hoarding a limited resource isn't exactly working hard though. You're just holding on to an asset until it goes up in price and then using the equity to buy another, and another, and another... and another... without really even having to put in a day's work. That's not working hard.

It's made even worse by the deliberate effort to limit supply so as to increase demand, further sparking more price rises. How is that working hard? People are sitting on their asses. There are approx 300'000 homes left empty around Australia, partly owned by foreign investors parking their cash here and partly by people wanting to just hold on to it and re-sell it in the future without the additional wear and tear. Is that your version of capitalism and working hard?

Originally Posted by Itsme

Hate to say champ but investment in housing is one of them and I do not begrudge anyone. I'm all for anyone making a better life for themselves.

Is it that black and white though? Housing is a basic necessity of life, as is water. What if that becomes the next limited resource that turns into an investment with private people hoarding it and charging others for access? How about hiking up the costs of insulin (and other drugs) 700% so a portion of people can no longer afford it? Where is the line when it comes to making a better life for yourself at the expense of someone else?

[Ross 1]

Originally Posted by leesa

Hoarding a limited resource isn't exactly working hard though. You're just holding on to an asset until it goes up in price and then using the equity to buy another, and another, and another... and another... without really even having to put in a day's work. That's not working hard.

The people I know with multiple properties work extremely hard, as did I when we had houses in Brissie. Unless you inherit it or win lotto the money doesn't appear from nowhere. These people that have houses are playing by the same rules for everyone else, they are normally the ones that were prepared to take a risk to start the ball rolling. I worked multiple crap jobs to afford our first one and kept working hard to add to that.

[Yellow_Festiva]

Originally Posted by leesa

Hoarding a limited resource isn't exactly working hard though. You're just holding on to an asset until it goes up in price and then using the equity to buy another, and another, and another... and another... without really even having to put in a day's work. That's not working hard.

Wow... just wow.

Leesa, I owned many investment properties in my time and still have some now. I can tell you that I did any and all maintenance on them when needed.

Sure, I could have sat back and let all my property gains pay for them but then that's putting my money into the pockets of others.

Rather than look for excuses why don't you ask the advice of people 'in the know'?

There is always ways to achieve what you want if you have enough perseverance.

Believe me I know. I've done 'the impossible' several times over...

Sent from my SM-G973F using Tapatalk

[Citroënbender]

Just to throw a bit of hindsight into the mix, GC mentioned Annandale.

https://www.realestate.com.au/proper...nmore-nsw-2048

In 1991, as a youngish bloke, I mentioned to my parents, that I’d like to buy this place. As in, hint, would they like to help me. No way, too hard, it’s a bad area, too dear, you’ll never succeed they told me - I was fool enough to listen. From memory it was advertised quite a lot higher to start with and came well down.

It took me nearly another decade to realise they were perpetually inward-looking, negative thinkers; risk averse to the point where it cost them a lot of money. It’s why now I’ll keep hounding people like Franco here, to not delay, to make use of opportunity.

[Ross 1]

Originally Posted by leesa

These things are a direct result of the state of the housing industry. Does their suffering not stir any empathy in you at all?

Not really, it's based on her desire to stay in Noosa, a notoriously expensive tourist trap. A quick google search shows over 2800 properties in her price range in Brisbane alone, it might not be what she wants but it is her reality.
https://www.realestate.com.au/rent/b...rce=refinement

[Yellow_Festiva]

Let's get on track.

Read an article today that auction clearance rates are dropping because vendor expectations are too high.

And I tend to agree. After seeing over a dozen properties and putting in offers above asking prices that were rejected I'm not entertaining the agents any more.

Had 3 call me today begging me to attend auctions tomorrow to 'possibly grab a bargain' and simply said no longer interested and all the best.

I'm looking forward to more properties being returned to listing with a price range and open to offers.

Rates seem to be on the up as well. I'm wondering what it will be like early next year when people realise they can now spend their deposits on a holiday.

Another article stated possible leveling out of prices mid 2023.

Once rates kick up a few percentage points things will start to get interesting.

Sent from my SM-G973F using Tapatalk

Originally Posted by Ross 1

Not really, it's based on her desire to stay in Noosa, a notoriously expensive tourist trap. A quick google search shows over 2800 properties in her price range in Brisbane alone, it might not be what she wants but it is her reality.
https://www.realestate.com.au/rent/b...rce=refinement

I think she's trying to keep her kids in the same school. Tourist trap aside, having to upend kids' lives because the area is now too expensive for them, that's still incredibly sad.

[Citroënbender]

The other week, I was contacted again by someone who’d previously expressed interest in my rural place. I’ll note here, that IMO anyone who uses the expression “forever home” is probably looking to turn a profit sooner than later on their house…

Anyway, I’m not going to sell. I offered to properly fence off a quarter - arguably the best portion - and (formally, by contract) rent it to them at peppercorn rate for “6-9 months”. The idea being they could use it as a staging point to informally camp, store larger personal possessions (eg drop a container or caravan) while they networked to find a place or some land to build in the area. I didn’t offer a full twelve months (but would have considered extending if all going well) in case that encouraged complacency or false hope. Nope, they wanted it all and they wanted it now.

[Ross 1]

Originally Posted by leesa

I think she's trying to keep her kids in the same school. Tourist trap aside, having to upend kids' lives because the area is now too expensive for them, that's still incredibly sad.

I agree it's not ideal but if the choice is to move the kids to another school or sleep in a car, I know what I would choose for my kids. Kids are pretty resilient and can probably adapt to change better than adults.

[Giant Cranium]

I’m Craig and I’m sorry for owning 2 houses in Sydney. Please forgive me for trying to set myself up for the future

I’m also sorry that my tenant who earns 180k a year doesn’t want to own a house and only wants to rent. I’ll kick him out to teach him a life lesson

I’m very sorry that I’m 34 and have gone without things and worked hard to buy the houses.

I’m most sorry that I own 2 cars and the newest is 15 this year

[290GTP]

Originally Posted by Giant Cranium

I’m Craig and I’m sorry for owning 2 houses in Sydney. Please forgive me for trying to set myself up for the future

I’m also sorry that my tenant who earns 180k a year doesn’t want to own a house and only wants to rent. I’ll kick him out to teach him a life lesson

I’m very sorry that I’m 34 and have gone without things and worked hard to buy the houses.

I’m most sorry that I own 2 cars and the newest is 15 this year

Leesa, this is Craig.

Craig tells it like it is in the real world.

Be more like Craig.

[FairmontGS]

Originally Posted by Giant Cranium

I’m Craig and I’m sorry for owning 2 houses in Sydney. Please forgive me for trying to set myself up for the future

I’m also sorry that my tenant who earns 180k a year doesn’t want to own a house and only wants to rent. I’ll kick him out to teach him a life lesson

I’m very sorry that I’m 34 and have gone without things and worked hard to buy the houses.

I’m most sorry that I own 2 cars and the newest is 15 this year

1961 The Macallan 40 Year Old Cask Strength Single Malt Scotch Whisky spat back on the floor bro - too funny

[b0son]

Originally Posted by Giant Cranium

I’m Craig and I’m sorry for owning 2 houses in Sydney. Please forgive me for trying to set myself up for the future

Dont be. I dont begrudge anyone taking advantage of the rules of the day. The problem doesnt lie with individuals, it lies with a government that is so obsessed with kicking the can down the road that they're willing for more and more wealth to be concentrated into the hands of fewer and fewer people. That's never been good in any society.

[Giant Cranium]

Originally Posted by FairmontGS

1961 The Macallan 40 Year Old Cask Strength Single Malt Scotch Whisky spat back on the floor bro - too funny

I’m sorry. I can’t replace it. Too busy paying the mortgage

[redxm]

Originally Posted by FairmontGS

1961 The Macallan 40 Year Old Cask Strength Single Malt Scotch Whisky spat back on the floor bro - too funny

Did the glass have a coaster under it?

Just asking for a friend.

[Itsme]

Originally Posted by leesa

Deleted quote

Well unfortunately that is part of life with some people being disadvantaged but telling other people how to earn their way of financial gain is quite frankly none of your business.

BTW I have empathy for people who try to succeed in life but not for those who think life owes them a living.