House prices

JQ wrote:

Well to my mind Andy, the topic at hand concerned the news article and people contributing to this forum.

JQ when you ask if “anyone” is talking about immigration and racism I assume you mean anyone.
Shades of the old Laurie McGuinness side step.

Whilst Aussie price rises in houses has been big, can anyone explain what has happened in NZ that see those sort of insane rises, which almost make Aussie prices seem reasonable? Auckland prices are off the charts!

Would it be a large number of Kiwi's returning home during Covid combined with low interest rates? Supply issue also?

a bit of corona inspired, billionaire monkey see-monkey do, filtering down the classes perhaps dx3...

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.busines...

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.busines...

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.thefutu...

much safer than oz... the tech billionaires have already thrown us to the wolf warriors...

we're just a diversion tactic

or the new zealand bunker's sacraficial lamb...

I have a mate who specifically moved to NZ cpla months ago seeking refuge from the coming climatic apocalyptic event. currently trying to buy now
Mind you he also retreated to the the Blue Mountains back in 2012 for a week to avoid the Mayan apocalypse that never eventuated. Hancock made a motza from that.

I reckon a big part of it is purely FOMO and speculation DX3. It makes no sense, but it makes slightly more sense as an investor than, for example, Bitcoin. They are banking on it rising forever and ever. My wealthier mates are utterly obsessed and completely driven by the fear of not having a home + investment property or two + shack/AirBnB. It consumes them and it's all they talk about, even when the waves are pumping or the Cats are winning.

There it is folks. dandandan has hit the nail on the head.
Buying your first home is very difficult because buying your second and third houses is so ridiculously easy with negative gearing and capital gains tax concessions.
Wealthy Melbournites have been buying up houses on the coast big time in the last decade or more. Rent it out on airbnb. Doesn't matter if you make a big loss because you can right it off with negative gearing. It's got to be one of the easiest ways to minimise your tax while enjoying the weekends at your beach house that's only going up in value.
But hey, let's all point the finger at the immigrants and pretend they are the ones pumping up demand rather than the people who own 5 investment properties.

Blowin wrote:

From the parallel world of NZ.

Totally not a Ponzi….lol.

https://www.interest.co.nz/news/111216/rise-past-year-total-value-our-ho...

Quote:

“From July 2020 to June 2021, total nominal annual GDP has been about $331 billion, a rise of $14 billion. During the same time, house values have risen to $1.65 trillion, a rise in the same year of $420 billion. In that year, the rise in house values will have exceeded the rise in economic activity in the country by an eye-popping 30 times.
It is little wonder there is growing scepticism about this renewed frenzy and where it's taking us.“

So if you were 30 times more productive than everyone else in the workforce, you kept pace with housing affordability. lmao

.."To them, it’s all part of the fun of being a professional gambler..."
https://www.smh.com.au/business/the-economy/don-t-believe-the-boys-who-c...

Is there a way....is there even a taste for, limiting how many dwellings a person/couple can own?

I understand that such a limitation, even if small in scope, falls under the umbrella of 'planned economy', and that's anathema to many people, including everyone on the right and LNP side of politics.

But, even as a thought project, is it possible? How would it work, and what would the results be?

Tweed Shire has huge housing shortage issue. Many people living in cars etc. Whilst all around me are investment properties and air bnb all sitting empty. I don't like restrictive policies either, but for f..ks sake, empty dwellings whilst families live in cars. Priorities????

stunet wrote:

Is there a way....is there even a taste for, limiting how many dwellings a person/couple can own?

I understand that such a limitation, even if small in scope, falls under the umbrella of 'planned economy', and that's anathema to many people, including everyone on the right and LNP side of politics.

But, even as a thought project, is it possible? How would it work, and what would the results be?

Just kill negative gearing on IP's...

1. Remove the tax deductibility of interest and other expenses (rates, insurance, realestate management fees, etc) on investment properties.
2. Require the payment of taxes on all capital gains realised on investment properties regardless of how long they’re held (so not just on 1/2 the capital gain if the investment property is held for over 1 yr).
3. Provide a 6 month period allowing investors to sell their properties before the changes come into effect.

Sit back and watch what happens.

Business as usual for the foreseeable future.

https://www.smh.com.au/business/the-economy/don-t-believe-the-boys-who-c...

gsco wrote:

1. Remove the tax deductibility of interest and other expenses (rates, insurance, realestate management fees, etc) on investment properties.
2. Require the payment of taxes on all capital gains realised on investment properties regardless of how long they’re held (so not just on 1/2 the capital gain if the investment property is held for over 1 yr).
3. Provide a 6 month period allowing investors to sell their properties before the changes come into effect.

Sit back and watch what happens.

This will kill the current housing market and given the masses of debt Australian's are in on houses I can't see any government implementing this anytime soon (or ever for that matter).

That's the issue for the housing scenario in a nutshell donweather. Aussie economy would be destroyed in the event of a significant housing crash, but more than that, any government that moved to implement policy changes that looked likely to impact people's wealth related to housing would be voted out. And a government (particularly the current crop) isn't going to do anything that puts their power at risk, they look after themselves first, then the public. No amount of 'it's for the greater good to see prices come down' will change their policy positions.

In my view, only interest rate rises can cool the market as policy changes won't, because policy changes won't happen.

Dx3 wrote:

That's the issue for the housing scenario in a nutshell donweather. Aussie economy would be destroyed in the event of a significant housing crash, but more than that, any government that moved to implement policy changes that looked likely to impact people's wealth related to housing would be voted out. And a government (particularly the current crop) isn't going to do anything that puts their power at risk, they look after themselves first, then the public. No amount of 'it's for the greater good to see prices come down' will change their policy positions.

In my view, only interest rate rises can cool the market as policy changes won't, because policy changes won't happen.

100%

Let's not forget Shorten took a negative gearing restriction policy to the last election.

Reality is the majority of Australians are home owners and quite happy to see their houses rise in value.

I'm not so sure Indo. My house has increased in value but if I want to trade up that doesn't help me much. Sure I could borrow to buy a fancy car but that's not really my cup of tea.

mattlock wrote:

I'm not so sure Indo. My house has increased in value but if I want to trade up that doesn't help me much. Sure I could borrow to buy a fancy car but that's not really my cup of tea.

I get that, but pretty much everyone would rather their house rise in value than decrease or even stagnate, if you bought a house a few years ago for say $300K and its now worth $800K there is many benefits.

1. It's just a nice feeling knowing what you own is worth more and you are only paying $300K plus interest rather than $800K plus interest, its also nice when rents also rise and you pay less to the bank than you would if you rented or if you are smart you pay more than you need too and pay your loan off faster.

2. If for some reason you can't afford to pay off the loan and the bank sells it or you need to sell it, you will come out in front, while otherwise if prices just stagnate you could just break even or even lose money, especially if bank sells it at auction cheaper.

3. It would suck to buy a house for $300K and housing prices crash and its only worth $250K, much much rather it be worth $800K even if there is a crash it might fall to $700K but with such rises, unlikely to end up less than you paid for it.

4. You now have equity you can borrow against if you like to buy another house or start a business etc or even help your kids get a home.

5. If shit hits the fan in your life for some reason and need to cash out you come out in front with $$$ instead of just paying the loan off, be it a divorce or some crazy operation that is needed to save your or a loved ones life.

6. When you get old, you can cash out and travel or rent, if your house rises more in value than other areas you can also move to an area where houses are cheaper

There is probably more advantages, but when you are already in the market there is not really any disadvantages to rising house prices but there is advantages.

Personally i like the idea of my home value rising especially rents rising as I hope to retire in Indo and rent my house out.

Actually one negative is property value rises might mean higher rates.

" You now have equity you can borrow against if you like"
Indo I think this is the biggest down side to increasing house prices. It's like we're all a bunch of gambling addicts that win big and then plug all our winnings back into the pokie machine. Helping your kids out - yes I agree. But I don't know if you have noticed the explosion of new BMWs, Audis, Merc's, Jaguars, etc cruising around nowadays thanks to people's "free" money derived from their new found equity in real estate. These are the pokie players increasing the profit margins of others at the expense of a financial windfall most of them will never see again. Pretty sad really.

.. $1M in less than 10 years. Yeah no conflict of interest at all in trying to solve the housing crisis.
.. but wait there's more - "Albanese owns another investment property in Dulwich Hill, a two-storey duplex he bought in 2015 for $1.175 million"

Just Sell them says Bottle
https://www.realestate.com.au/news/surf-star-jay-thompson-jumps-on-board...|slot_1

Just mentioned in the "interesting thread"

About how i once bought a block on Russel Island well over 15 years ago, for about $18K sold it a few years latter for about $30K (it was a pretty good spot in a real good area with views)

Just had a look and the place is still dirt cheap, which is pretty amazing as although its kind of isolated and you have ferry cost to get there and back and more expensive to build as need to get materials in, its still not far from Brisbane.

It also has so many positives such a truely beautiful spot, remote in feel with a community vibe, no waves but if you get a decent boat and you still have options with Stradbroke north even South, and great fishing and in this day and age with internet & solar etc its more realistic than ever.

https://www.realestate.com.au/buy/in-russell+island,+qld+4184%3b/list-1?...

indo-dreaming wrote:

Just mentioned in the "interesting thread"

About how i once bought a block on Russel Island well over 15 years ago, for about $18K sold it a few years latter for about $30K (it was a pretty good spot in a real good area with views)

Just had a look and the place is still dirt cheap, which is pretty amazing as although its kind of isolated and you have ferry cost to get there and back and more expensive to build as need to get materials in, its still not far from Brisbane.

It also has so many positives such a truely beautiful spot, remote in feel with a community vibe, no waves but if you get a decent boat and you still have options with Stradbroke north even South, and great fishing and in this day and age with internet & solar etc its more realistic than ever.

https://www.realestate.com.au/buy/in-russell+island,+qld+4184%3b/list-1?...

Why such small blocks? If I was to live on an island I wouldn’t want neighbours 3-4m away from me!!

Pretty much standard bock sizes, mine was larger though i think 800m2 i think they might have been divided up in the 80s, it had a bad reputation for a while as lots of blocks sold were in low-lying areas that could be built on, so a lot of people got ripped off.

Don't know about now but there was quite a few illegal buildings, houses that had been built without permits and inspections.

Actually a very similar thing happened were i live in the 70 or 80s a developer somehow created and estate on swamp land sold off all the blocks but nobody could get permits to build, so pretty much worthless...been taken over by the shire now though.

Those surfboards would go yellow very quickly in that yard.

https://www.theage.com.au/national/nsw/byron-blues-how-mega-money-and-gl...

Here's a recent take on the ongoing Byron attraction/wealth/pricing/homelessness/uniqueness saga.

FR - accurate for many people without access to housing?

Btw it's cold as a witches tit down here, not very inviting.

@VJ , great article

https://www.realestate.com.au/news/rip-curl-founder-catches-a-break-and-...

@udo , unbelievable, valued at 1.15 million and sells for 8 million.

Article looks pretty accurate to me VJ.
Lots of rental properties packed to the rafters including tents in the backyard, and definitely a significant homeless population.
And although Byron still trades on its alternative reputation, it’s generally hipster entrepreneurs these days.
The bohemians have moved from Byron and also Mullumbimby out towards Lismore and beyond where rentals and house prices are a lot more realistic.
Hemsworth is wrong, people do know what they’ve got they just can’t afford to live there, and/or the shit social situation has made it untenable.

just a toxic mix of greed/entitlement/status obsession that characterises huge swathes of the Australian middle class/urban populations.

udo wrote:

https://www.realestate.com.au/news/rip-curl-founder-catches-a-break-and-...

Did you see the other co-founder Brian Singer , bought a house at Byron for $22m?

Blowin your new neighbours are still in the mode of valuing all aspects of life via price. Added to that the Australian dream of low-balling an object, then selling at above the market price: "Got it for a steal! Sold it way above what it's worth!" "Bought it for nothing on the trading post!" Or from the Castle, when the son brings back their latest bargain "Put the chicken coop over there, son."

Price discovery is useful in a market, and it can be added that markets exist wherever people exchange goods whether using mediums of exchange or not. However, it's not the sum-total of how country towns work, and these guys are starting off on the wrong foot. Yes, it's an urban thing; this is the kind of area in the city I was a teenager in - you can still find great people there, but the amount that will offer you 1/2 the value for your house in casual conversation makes you want to reach for the noose and nearest tree.

@Blowin
I reckon your question of “why” is pretty much rhetorical - we both know that Australian society is changing continually and encourages and rewards being a shallow, greedy prick.
Throw into the mix the fact that it’s quite uncool to call out bad behavior, generally speaking.
So greatly reduced social consequences for arseholes.
Also, my personal theory is that with a rise in narcissism, people have got thicker skin.

Just remember this whole topic come 2022/2023. When the world economy is gonna shit itself and the arse will collapse out of the housing market.

How do you figure that Don?
Jeez wouldn’t it be long overdue.

More suited to this thread.

AndyM wrote:

Indo I used to live adjacent to Russell for years, used to go and help my mate do real estate valuation jobs over there on a regular basis.

It's cheap for a reason, has been for decades.
Some serious social issues, heaps of substance abuse.
The cheap blocks are small and generally swampy.

Again, for the younger generation to be pushed/forced into living in places like that (as much as it has some physical assets) is not a step forward in my books.

So if

Much of that is not true.

All the blocks listed online are over 500m2 that's not small, the Australian average block size according to ABS data is 474m2 heaps of new estates have block sizes of 400m2 or less, even in 300-350m2 range

And you can see from the pics and type of vegetation on real-estate.com that most are not swampy.

They are cheap because.

1. Bad past reputation (many blocks were swampy even affected by tide and couldn't be built on, these were rezoned long ago)
2. large supply and low demand.
3. lack of ammenities, services, employment etc (although with the digital age not as big issue)
4. Access only by water
5. Extra cost to build due to access
6. Other aspects like most blocks have decent sized trees that cost money to be removed including the stumps.

I don't know about the social problems, heard and read various views, but these areas always attract unique characters, people escaping issues, any area with cheap property will also attract low social economic demographic because it's affordable.

Anyway you are missing the whole point, IMHO low income earners that want to get into the market need to be smart and not think they are going to be able to afford to buy in the suburb they like.

Buy elsewhere and use the property as a stepping stone, i did it myself, my sister did it with a rental in Rockhampton while living on Sunny coast..

Anyway, although i feel for those not in the market, it is what it is.

Is there a country on earth with a successful growing economy and affordable property?

I vert much doubt it.

I personally cant see it ever getting better, because property is a limited commodity with an ever increasing demand.

Even if there is a crash of some kind, it won't really be more affordable because interest rates will be high, the prices are dictated by what people cam afford to borrow or what the banks will allow people to borrow.

Kinda off topic but down my area there talking a potential homelessness crisis. The local paper was stating the perfect storm of booming house prices, short stay rentals (where you can make a years rent in a few weeks over summer here), high demand/low supply with people moving into there holiday houses. Fucking kills me that families are getting shunted out so the fucking greedy cunts can make even more money for a few weeks and then let the house lay dormant all year. I dare say people who are moving down into the holidays are just here to weather the covid storm and be back to the city when suits. Families getting fucked off for some North Face puffer jacket Lulu lemon leggin wearing cunts to stand out front of coffee shops lining the parking lots with BMWs Rangerovers etc. KILLS ME!!!

The homeless and displaced just need to harden up and move to places like Russell Island ;)

https://www.realestate.com.au/property-house-qld-russell+island-432309478

VJ's tips for locals keeping up with gentrification

1. The Land Rover Discovery 4 is a beacon of gentrification. Although 5 years old, it is kept by the country set, as the model after lacks its squareness chic.
2. With covid, late model 2016 diesel examples are listed in the 70-80K ask, which we all know is absolutely ridiculous. But there's a way around it.
3. A 2006 Discovery 3 petrol V6 is about 15K in clean condition. It largely looks the same. Buy one, spray the wheel arches, take the '3' off the back. You now look like you are swimming in nouveau riches. With the money you save you can buy a puffer jacket to really fit in. And send your mechanics' kids to private school.

I say all that in jest but I really do quite like the shape of them. And new Defender looks the goods. So yeah, there's that aspirational streak in me, too. Puffer jackets I'm really conflicted on though. Dad had one and it was the daggiest thing ever in the early 1980s - I reckon today's puffers are going to get really daggy again, really quick. But they look so warm in their synthetic goodness...