House prices
stunet wrote:If there's a crash coming why not sell now, Don?
Why not sell now indeed. Although if you indeed wanted to sell at the top you probably should have thought about selling at the beginning of this year. Markets have already dropped in the last few months.
This is just the start of it IMO.
I've read all of your questions and statements above and just don't have the time to reply in detail to all of them.
But one of you above did hit the nail on the head when you said "as people with expendable income decreases, and the amounts... things like booming Airbnb's will find themselves empty and / or just unviable...". This also applies to investment properties. Also people have a lot of investments, not just houses. they have stocks, super etc. When people see large balances of their assets they perceive themselves to be well off and they spend up big time. When these assets start to tank, they perceive themselves to be losing this well off status so they sell whatever assets they can to not lose too much of their perceived well off status. This is the spiral I'm referring too. There will be a GLOBAL melt down of markets. This will cause panic selling of all asset classes. Housing won't be immune to this.
I'm not sure the Aussie government can step in to stop the blood on the streets, including perceived significant loss in one's house prices, noting people currently believe they are multi-millionaires so 20-30% loss in that is a perceived cliff drop in their wealth., and any government stimulus will be a drop in the ocean compared to the perceived loss of $300-500k on their multiple dwellings.
There is definitely something coming around the corner. Unemployment is one of the first indicators economies are not doing well. Unemployment is rising in Australia. No huge government spending on the cards at least in the foreseeable future.
When people become unemployed they have to sell their assets to maintain some form a lifestyle. As I've said this always starts with non-essential assets/toys. Boats, caravans, 2nd cars, jetskis, all luxury items go at first. Take a look at the 2nd hand market currently for these luxury items. Supply is increasing and prices are dropping. It's starting people, although melt up is well underway at present and still got some way to run (S&P likely another 20%+ to go) before the almighty crash.
Buyers market when that happens, so cash up whilst it lasts people.
Thanks Don, appreciate the comprehensive overview.
Well and truly out of my league.
Don, for a true meltdown to occur the liquidity needs to go down. My house goes up and down in value which has zero impact on my day-to-day spending. Yes, the wealth effect is real but let's be realistic; unemployment needs to be significantly higher for a crash to occur. Where does it need to go in your opinion, 8-9%?
Its only a loss if you "cash in" to realise it. If property tanks in its value why would I sell to cash it in? I'd only sell and realise the net loss if I couldnt pay the bills. Failing that its numbers rising and falling on a piece of paper/stone slab, which has happened since Moses wore sandles..
spookypt wrote:Its only a loss if you "cash in" to realise it. If property tanks in its value why would I sell to cash it in? I'd only sell and realise the net loss if I couldnt pay the bills. Failing that its numbers rising and falling on a piece of paper/stone slab, which has happened since Moses wore sandles..
Fully agree it's only a loss if you sell. For those that can ride the crash out then well done, but there will be a significant number that have to sell to provide cash flow. Don't forget that those that are mortgaged to the hilt, if the market does dump, banks are gonna coming knocking for those mortgages to be stumped up more to reduce the banks exposure to their possible loss. Spirals will take effect when this happens.
Flollo I don't have a particular % on unemployment. I just know it's rising and this will aid in the panic effect when the market crashes.
Your claims don't seem to match the data:
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/lab...
Patrick wrote:Your claims don't seem to match the data:
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/lab...
Im seeing it first hand and in real time. Not looking backwards.
And don’t those numbers show a 17% increase in unemployed people compared to this time last year? Talking about not seasonally adjusted numbers.
https://www.realestate.com.au/news/shocking-3-million-aussies-at-risk-of...
Must be most land and resources per person in the world in Australia, or close to it. How the f did it come to this?
‘The average cost to build a new house in Australia grew 29% in 5 years, from $345,00 (2019-2020) to $444,00
(2023-2024). The average completion time for new houses also rose 50% from almost 7 months in September 2019 to around 10 months in June 2024.’
https://www.abs.gov.au/articles/home-building-through-pandemic
Just bought my first home last week, so obviously the mega crash is just around the corner.
Sorry to everyone in advance.
only-sams wrote:Just bought my first home last week, so obviously the mega crash is just around the corner.
Sorry to everyone in advance.
Congratulations, where’d you buy?
goofyfoot wrote:only-sams wrote:Just bought my first home last week, so obviously the mega crash is just around the corner.
Sorry to everyone in advance.
Congratulations, where’d you buy?
Mount Maunganui, NZ.
My parents are still renters so mostly to help them out with a place to live for the short/medium term. My partner and I still don't know if we want to stay in Aus long term or move back home after some travel in the next 12-18 months.
only-sams wrote:goofyfoot wrote:only-sams wrote:Just bought my first home last week, so obviously the mega crash is just around the corner.
Sorry to everyone in advance.
Congratulations, where’d you buy?
Mount Maunganui, NZ.
My parents are still renters so mostly to help them out with a place to live for the short/medium term. My partner and I still don't know if we want to stay in Aus long term or move back home after some travel in the next 12-18 months.
Congratulations, mate.
I thought for sure you'd buy in Melbs following your passionate defence of the blighted city.
stunet wrote:only-sams wrote:goofyfoot wrote:only-sams wrote:Just bought my first home last week, so obviously the mega crash is just around the corner.
Sorry to everyone in advance.
Congratulations, where’d you buy?
Mount Maunganui, NZ.
My parents are still renters so mostly to help them out with a place to live for the short/medium term. My partner and I still don't know if we want to stay in Aus long term or move back home after some travel in the next 12-18 months.
Congratulations, mate.
I thought for sure you'd buy in Melbs following your passionate defence of the blighted city.
Unfortunately that is a fairly one sided opinion in my relationship and I'm counting down the days before I get whisked away to crowded European beach breaks.
Partner got no love for Melbs?
Congrats on the house purchase!
Thank you! They certainly don't teach you in school how to buy a house - felt like every step of the way we were missing something or not doing the right thing.
Low humidity + generally high pollen levels causes havoc with my partners skin, the last 2 years after living in the humid paradise of Brisbane (her words) have been tough.
Plus she just finished her PhD and never wants to look at the Uni of Melbourne ever again.
This article is about planned rezoning in Melbourne. But the below statement from a developer caught my attention. Really? $14k per sqm for a viable apartment building project? That must be bullshit!?
'What that means now is for a normal apartment in Melbourne, a developer needs to be selling that for around $14,000 a square metre for the end product to be viable'
https://www.msn.com/en-au/news/australia/leading-planner-warns-planned-z...
flollo wrote:This article is about planned rezoning in Melbourne. But the below statement from a developer caught my attention. Really? $14k per sqm for a viable apartment building project? That must be bullshit!?
'What that means now is for a normal apartment in Melbourne, a developer needs to be selling that for around $14,000 a square metre for the end product to be viable'
https://www.msn.com/en-au/news/australia/leading-planner-warns-planned-z...
Sounds about right to me. Worked on a heap of medium-large apartment towers over the last 5 years and they are heinously expensive to build. Builders profit margins are sometimes only 2-3%.
I mean the 2 bed apartment we rent in Brunswick just sold for ~$10000/sqm. Its a 2010 build shit box with all sorts of things wrong with it.
Why are they so expensive? Other developed countries can build them for far less than this. What are the cost drivers?
^^ overpaid over-entitled tradies would be a good start
Missus and I were looking to do an internal reno of existing weatherboard cottage (~95sqm) and small extension (~45sqm). Single storey. Flat block. No access challenges. Nothing extravagant. Nothing gnarly from a design perspective.
Quotes came back at between $800-950K.
Estimated time 9 months start to finish.
Over $6K a sqm. Insane. Just not worth it.
Actually cheaper, and quicker, to knock down and rebuild. Updating existing house to meet new code was the killer.
flollo wrote:Why are they so expensive? Other developed countries can build them for far less than this. What are the cost drivers?
I reached out to a sparkie to get a quote for test and tag 4 safety switches as part of our town house complex. Remember this is just to "test and tag" and doesn't allow for any new work or repairs if the switches are faulty......................$320!!!!! WTF. Would take like 1 min per switch!!! Maybe 2 min per switch if you include the "tagging".
velocityjohnno wrote:https://www.realestate.com.au/news/shocking-3-million-aussies-at-risk-of...
Must be most land and resources per person in the world in Australia, or close to it. How the f did it come to this?
Incredible isn't it.
This has been foreseeable for decades and even with parts of the U.S. looking third world, still we push ahead with that model.
The price of getting a tradie to do anything makes grocerys seem cheap.
I think the price of tradies has skyrocketed just because of demand over the last decade or two the demand has been crazy there is just so much work, tradies can pick and choose what they want and jobs they dont want put crazy prices on or pick who they work for.
Covid made thing's even worse as you had to factor in possible material cost increases.
My advice to anyone getting anything done by a tradie, get a minimum of three quotes, you will be shocked at how much prices can vary.
Although a price too cheap should be viewed with caution, better paying a reasonable price for a job well done, than saving money and getting a rushed or cut corners B grade job.
Well done only-sams! Given what's happened with NZ interest rates you might be closer to the lows than ringing the bell on the top. Enjoy your travels.
And a lovely part of the world to boot- congrats on your purchase O-S.
No matter where you hang your hat, it can't be understated imo the satisfaction in having a place to call your own.
Thank you gents!
Yeah well done OS. Good on you helping out the parents as well.
GuySmiley wrote:^^ overpaid over-entitled tradies would be a good start
My Workcover premium went from
$9000 a year last year to $13,500 this year.
That’s minor compared to companies who employ 10 plus people.
Those costs have to be added to the hourly rate.
I agree with you, tradies are paid too much compared to some industries who deserve a lot more (hello nursing, carers) but far out it costs a lot to run a business properly, and legally, these days.
Edit. I’ve never had a workcover claim either, that was just the increase the government decided on.
Edit x 2. I’m on a roll here - forgot to mention builders warranty insurance went up 65% last year to this year. I’m registered with the VBA so every job I do I need to take out warranty insurance.
Similar but different - we work on the rail and MTM introduced a new compulsory course this year just because they could. It's a farce.
$407+GST per person for a 1 day tick and flick. For our small surveying outfit in Melbourne that's $1600 + lost charge out for a day x4.
Sounds like we're drowning in bureaucracy and never ending cost increases. There is no hope if the cost of a new apartment is $14k+ per sqm.
indo-dreaming wrote:I think the price of tradies has skyrocketed just because of demand over the last decade or two the demand has been crazy there is just so much work, tradies can pick and choose what they want and jobs they dont want put crazy prices on or pick who they work for.
Covid made thing's even worse as you had to factor in possible material cost increases.
My advice to anyone getting anything done by a tradie, get a minimum of three quotes, you will be shocked at how much prices can vary.
Although a price too cheap should be viewed with caution, better paying a reasonable price for a job well done, than saving money and getting a rushed or cut corners B grade job.
Most tradies I contact don’t even give me a quote. Must be great to be in a position where you can pick and choose your work.
That will all come to a crashing halt in the not too distant future.
Please correct me if I'm wrong but didn't Howard privatised the vocational training sector and significantly reduced TAFE sector funding? Both actions would have significantly reduced the numbers of apprentices coming through. Of course Howard was also the PM that pretty much halted Federal funding of public infrastructure which you could perhaps reasonably argue we're still dealing with today.
donweather wrote:indo-dreaming wrote:I think the price of tradies has skyrocketed just because of demand over the last decade or two the demand has been crazy there is just so much work, tradies can pick and choose what they want and jobs they dont want put crazy prices on or pick who they work for.
Covid made thing's even worse as you had to factor in possible material cost increases.
My advice to anyone getting anything done by a tradie, get a minimum of three quotes, you will be shocked at how much prices can vary.
Although a price too cheap should be viewed with caution, better paying a reasonable price for a job well done, than saving money and getting a rushed or cut corners B grade job.
Most tradies I contact don’t even give me a quote. Must be great to be in a position where you can pick and choose your work.
That will all come to a crashing halt in the not too distant future.
“ Must be great to be in a position where you can pick and choose your work. ”
It is a good feeling Don, it’s only taken over 10 years of doing shithouse jobs and just saying yes to everything that comes along and under quoting and making mistakes and no money and working for the wrong type of client to get to that position.
If anyone is envious of being in that position stop whining about it and get off your arse and do something about it.
“ That will all come to a crashing halt in the not too distant future.”
^ this over generalised doom theory is getting farkn old
… maybe try define ‘all’ , ‘crashing halt’ and ‘not too distant future’ ;)
etarip wrote:Missus and I were looking to do an internal reno of existing weatherboard cottage (~95sqm) and small extension (~45sqm). Single storey. Flat block. No access challenges. Nothing extravagant. Nothing gnarly from a design perspective.
Quotes came back at between $800-950K.
Holy dooley etarip that is ridiculous! Do you mind telling me what state you are in? We have recently done a similar renovation, gutted our single story brick veneer, added an additional dwelling (4th bedroom) removed 3 internal walls with beams in the roof, moved and replaced entire kitchen, 2 new bathrooms, new timber flooring throughout and put a small pool in for 500k, which I thought was crazy! We lived in the garage for 4 months because we couldn't afford to rent somewhere whilst work went on, took about 7 months to complete.
Estimated time 9 months start to finish.Over $6K a sqm. Insane. Just not worth it.
Actually cheaper, and quicker, to knock down and rebuild. Updating existing house to meet new code was the killer.
flollo wrote:Sounds like we're drowning in bureaucracy and never ending cost increases. There is no hope if the cost of a new apartment is $14k+ per sqm.
sure does sound that way...
some staggering numbers in here
https://www.google.com/amp/s/www.news.com.au/finance/economy/australian-...
fwiw, I agree with the need to cut reliance on private consultants
however, the system was already so over bloated with people achieving nothing, it seems we're now an obese dog, too debilitated to even bother chasing it's tail...
time for a triage?
time for a chainsaw?
The reason why tradies are reluctant to quote is because you can spend a lot of time doing one that will often end up being a waste of time, and money. Especially smaller jobs.
And it is often difficult to predict how long a job will take, so do you load it up to cover yourself and lose out to a lower quote or do you risk working part of the job for nothing.
You also get clients that try to play one quote against another, "I really want to use you but X quoted less, so can you match that?" "Er, no"
If you need the work, you might have to do it at the lower price, but you won't have a happy tradie, and may not get his best work.
I know a lot of tradesmen, worked with all sorts, most of them are honest and hardworking and do their best, but there's plenty of cowboys too that take advantage of a client's lack of knowledge and rob them blind.
And that price quoted for etarip seems fucking ridiculous, I could get two new homes built for that.
Word of mouth is the best reference. I would be trying to find a builder that I can see other work he has done and talk to past clients about if I am spending that kind of money.
Mind you, I recently got dragged into a job by my brother up in Melbourne, fuck there's some work going on up there, on a two week invoice immediate payment deal for a builder on two sites the clients have both been waiting over two years for the renos to be completed, and the fucker has, so far, stiffed us, been a couple of months, I left the site after not getting paid for a month. The foreman is still ringing begging us to come back, can't find other tradies apparently. Pay us first and we'll see if we can fit it in is our response. Tomorrow is D=Day for this prick, cleared funds or it's going to get nasty. No violence or threats of, I'll start with a letter from my lawyer mate telling him I'm going to start trying to wind him up for trading whilst insolvent first. See if that shakes the tree.
And there's plenty of shit tradesmen, or guys pretending they are tradies out there. Plumbers who don't have gasfit qualifications, chippies who can't cut a mitre or use a nail gun properly, guys who pick up a paintbrush and call themselves a painter. I was on a job this year watching a concreter who decided he could lay floors, destroyed the job and it had to be all ripped up.
It's a jungle out there.
Good luck with your reno's @etarip, if you live on the surf coast or bellarine and you need a painter who does great work and doesn't rob people let me know and I'll come and have a look and will give you a good hourly rate, but don't ask me for a quote.
goofyfoot wrote:donweather wrote:indo-dreaming wrote:I think the price of tradies has skyrocketed just because of demand over the last decade or two the demand has been crazy there is just so much work, tradies can pick and choose what they want and jobs they dont want put crazy prices on or pick who they work for.
Covid made thing's even worse as you had to factor in possible material cost increases.
My advice to anyone getting anything done by a tradie, get a minimum of three quotes, you will be shocked at how much prices can vary.
Although a price too cheap should be viewed with caution, better paying a reasonable price for a job well done, than saving money and getting a rushed or cut corners B grade job.
Most tradies I contact don’t even give me a quote. Must be great to be in a position where you can pick and choose your work.
That will all come to a crashing halt in the not too distant future.
“ Must be great to be in a position where you can pick and choose your work. ”
It is a good feeling Don, it’s only taken over 10 years of doing shithouse jobs and just saying yes to everything that comes along and under quoting and making mistakes and no money and working for the wrong type of client to get to that position.
If anyone is envious of being in that position stop whining about it and get off your arse and do something about it.
My point was is that all prospective client's may actually end up being a real client one day. So if they reach out to you asking for a quote, at least given them the dignity of saying that you won't be quoting this time around. Be respectful to all and respect will come back your way.
If you really are a good tradie then client's customers are your true business.
Anyway, we've probably gone way off tangent on this thread.
donweather wrote:goofyfoot wrote:donweather wrote:indo-dreaming wrote:I think the price of tradies has skyrocketed just because of demand over the last decade or two the demand has been crazy there is just so much work, tradies can pick and choose what they want and jobs they dont want put crazy prices on or pick who they work for.
Covid made thing's even worse as you had to factor in possible material cost increases.
My advice to anyone getting anything done by a tradie, get a minimum of three quotes, you will be shocked at how much prices can vary.
Although a price too cheap should be viewed with caution, better paying a reasonable price for a job well done, than saving money and getting a rushed or cut corners B grade job.
Most tradies I contact don’t even give me a quote. Must be great to be in a position where you can pick and choose your work.
That will all come to a crashing halt in the not too distant future.
“ Must be great to be in a position where you can pick and choose your work. ”
It is a good feeling Don, it’s only taken over 10 years of doing shithouse jobs and just saying yes to everything that comes along and under quoting and making mistakes and no money and working for the wrong type of client to get to that position.
If anyone is envious of being in that position stop whining about it and get off your arse and do something about it.
My point was is that all prospective client's may actually end up being a real client one day. So if they reach out to you asking for a quote, at least given them the dignity of saying that you won't be quoting this time around. Be respectful to all and respect will come back your way.
If you really are a good tradie then client's customers are your true business.
Yes totally agree.
At least have the decency to let them know you won’t be providing a quote.
From my experience: I find it nearly impossible to get quotes. Most never return my phone calls or bother showing up. They need to be heavily chased.
Here’s a good one. Just off I-70, around the corner from my happy place - Moab. Ideal for starting a cult, shooting guns…
Perfect spot to base yourself for the Moab 240 trail run too!
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers