House prices
The RBA wont have a choice on interest rates if inflation really runs (dependant on the areas of the economy and reasons).
Note massive government spending is fuel to the fire.
Pretty much all booms rely on easy available credit expansions, credit that is available for higher or rising risk.
If you reduced the credit availability by increased lending standards it would likely reduce the greater fool scenario and take a lot of heat out of the housing market.
Not that I see it happening with government backed guarantees for banking.
The RBA is well aware of all this and the tight rope they must walk just keeps getting narrower and they will have to move.
"If you reduced the credit availability by increased lending standards it would likely reduce the greater fool scenario and take a lot of heat out of the housing market."
That already happened in Oct last year.
Lending standards were tightened considerably for mortgages.
indo-dreaming wrote:Let's remember in 85 Hawk with Paul Keating as treasurer negative gearing was scrapped and then in 87 Hawk actually brought it back in, which says all we need to know.
All getting rid of it does is reduce rental availability, creating higher rental prices..
First part correct Indo, second part completely debunked, but urban myths are hard to kill.
freeride76 wrote:RBA will want to see evidence of wage growth through economy.
They've been crystal clear on that over successive bulletins.
Absent that, tightening will be weak and transitory, same as 2012, last time we had a tightening cycle.
Don't forget, the RBA charter is two-fold: Inflation and employment.
I'm not sure where they are looking (public sector ?) but the wages in the IT sector have ballooned in the last 12 months; 30 year olds earning $1500+ per day - good on them ! I've heard of developers leaving 12 months ago earning 90k to return on 200k !!
Much of this is because of almost no immigration and even offshoring seems to have been wound back. Some of it is payback for being let go when Covid hit (a LOT of contractors were let go with 10 days notice or had their rates substantially cut.
Not surprised monkey boy. When wage rises come they won’t be even through the economy, (like the old days). Different sectors will go up much faster than others. IT especially was an area where immigration was used to keep wages down and also so Australian companies didn’t have to do any training up. I saw quite a few of those imported IT workers in action and my impressions were very average indeed. Often cost, and probably paid, much more than the local workers beside them, the locals invariably better.
batfink wrote:indo-dreaming wrote:Let's remember in 85 Hawk with Paul Keating as treasurer negative gearing was scrapped and then in 87 Hawk actually brought it back in, which says all we need to know.
All getting rid of it does is reduce rental availability, creating higher rental prices..
First part correct Indo, second part completely debunked, but urban myths are hard to kill.
It's far from being debunked.
At the time they brought back negative gearing they believed it was the sole reason for pushing up rental prices, now they believe there may have ALSO been other factors involved in pushing up rent prices.
The reality is the tax benefits of negative gearing encourages people to purchase rental properties, this provides more rental properties, the more rental properties the more competition and more reasonable rent prices are.
Its common sense that if you take incentives away from people to have rental properties, you will end up with less rental properties, which means more competition for rentals equaling higher rental prices.
The only argument that could be made is these rental properties could be permanent home owners.
I focus wrote:Pretty much all booms rely on easy available credit expansions, credit that is available for higher or rising risk.
So much bingo, it doesn't get much easier than 0.1% and the commercial rates that allows. The whole economic clock functions as a result of the interest rate cycle...
indo-dreaming wrote:Plus why would developers want to build places to sell at a lower price than market value???
Someone would need to pay the developers for that loss of revenue.
Indo, I clearly said median price + inflation-adjusted to the time of settlement. There was no mention of a lower price (although there would be a legit case for that as well).
Revenue itself doesn't matter as much as the margin. The scheme needs to achieve economy of scale so the fixed cost can be driven down. Look at the recent collapse of Condev and Probuild, heaps of revenue but collapsed. Why? How can Probuild, a company with ~$1.5B in revenue and >$5B in pipeline collapse? In this hot market?
Here's a great article that talks about some issues, I recommend people read it.
https://www.smartcompany.com.au/industries/construction-engineering/cond...
Here are some ways on how the scheme can achieve economy of scale and drive the fixed cost down (and hence provide sustainable margins):
1) Scheme needs to structure panel contracts so suppliers sign onto something like 5 + 5 years. This is in alignment with the services industry. In contrast to the job by job tender approach (which leads to a zero-sum game), it provides certainty and guarantee of work over longer periods of time. Hence, suppliers who want to be awarded the contract tend to price them more favorably as they get exclusive rights to work in the scheme for a prolonged period of time. I worked on many tenders and on all sides of the equation. From my experience, a scheme like this would favor a panel contract and successful suppliers would benefit greatly.
2) Consolidation of land prior to commencement so development has a concentrated geographical footprint. Think about this - let's say that you are developing 500 units but spread across 10 different locations into 10 x 50 unit buildings. Your overall site management costs would be higher than building 500 units in one location. This is where the government can help - their power to consolidate land is much greater than what you and I can do. There needs to be a minimum threshold size for which the scheme can be applied and in my opinion, it should be in 4 figures. Effectively, it can secure suppliers' consistency of location which enables them to set up operations close by over a longer period of time. This will drive their fixed cost down.
3) Security of cash flow. Obviously, a government-backed scheme like this would minimise the risk of default. Look at the Probuild case, many are questioning if and when will they be able to get paid - https://www.smartcompany.com.au/industries/construction-engineering/prob.... Minimising this risk will enable suppliers to operate with lower working capital requirements and less risk hence, improving their margin position. Also, imagine the contrast to the building industry if suppliers got paid every 15 days? Trust me, that would be super tempting for many.
These are just 3 ways to make this scheme enticing to suppliers and there are more. There is nothing revolutionary here, just different tweaks and applications of already existing models in the market.
Just a thought, if the aim of the exercise is to provide homes and increase affordability then tweak negative gearing so that you get it if you provide a home ie 12 month lease, but if it’s weekend and holiday accomodation you absorb the cost yourself.Another effect of this might be that people who claim annual negative gearing whilst only renting for Xmas new year period would have to shoulder more of their own burden.
@ flollo fair enough missed that bit, you have obviously given this some thought.
IMHO a realistic way of creating low cost housing is building small modular pre fab housing in factories then put on small blocks, whole estates like that.
They would be slums of the future though.
Robwilliams wrote:abc today
https://www.abc.net.au/news/2022-04-28/rental-crisis-housing-gilmore-fed...
I can't for the life of me figure out why governments of all types are still just talking about this issue and have no plan of action besides some bullshit election promises. Homelessness is going to be the No. 1 social issue in Australia sooner than everyone thinks. And we're not just talking about your average wino hobo wondering the streets. It's already pointing to whole families and young kids that cannot afford a place to live. Once this problem gets rolling hopefully somebody will stand up and take notice.
And one can't blame the government either. How many investors who entered the property market prior to this real estate boom have just jacked their rents up because the market indicates they can. Fair enough it's a free market, but inflation really hasn't affected their investment property that much in the past two years, so why would they be an absolute arsehole to their tenant by putting them under additional financial stress. After all the tenants are the ones bearing the brunt of everyday cost of living increases which is now compounded by the greed of the landlord.
Anyway I'm probably one of those commie/socialist types you keep hearing about so apologies for my rant. I'll just go back to dusting my portrait of Vladimir Lenin.
indo-dreaming wrote:@ flollo fair enough missed that bit, you have obviously given this some thought.
IMHO a realistic way of creating low cost housing is building small modular pre fab housing in factories then put on small blocks, whole estates like that.
They would be slums of the future though.
Why suggest it then?
Also, there clearly are legislative mechanisms to begin to deal with housing issues, your rejection of these seems to be purely ideological.
AndyM wrote:indo-dreaming wrote:@ flollo fair enough missed that bit, you have obviously given this some thought.
IMHO a realistic way of creating low cost housing is building small modular pre fab housing in factories then put on small blocks, whole estates like that.
They would be slums of the future though.
Why suggest it then?
Also, there clearly are legislative mechanisms to begin to deal with housing issues, your rejection of these seems to be purely ideological.
Why suggest it?
Because small blocks with small pre fab housing is one of the very few ways to create affordable housing, the other is to flood the market with land.
It has nothing to do with ideology the reality is real estate prices are driven by supply and demand, and supply is getting less and demand is getting more and more.
No legislation can change these drivers very much.
I don't care if you don't accept reality or not.
Except it's not just supply and demand. Existing legislation is a key driver of it.
I'm looking at a PBO document right now that shows quite clearly we'd save tens of billions of dollars if we legislated away the kinds of tax breaks and financial incentives given to those that see houses as a way to make themselves rich. CGT concessions and negative gearing chief among them.
If you got rid of those two incentives, a lot of the heat would disappear out of the system as people with spare cash looked elsewhere to turn a buck. Returns on housing are only high because legislation encourages speculation.
@dandandan
Then why do all these countries have the same issue?
But im sure they all have varied legislation.
You can still get dirt cheap land in Australia its just in places with a decent supply and very low demand.
"House-price-to-income ratio in selected countries worldwide as of 3rd quarter 2021, by country"
https://www.statista.com/statistics/237529/price-to-income-ratio-of-hous...
@indo
“ demand is getting more and more.”
You seem blind to why this might be.
Legislation had a large part in creating demand, it defies all evidence and expert advice to deny that changes in legislation could wind things back.
I suggest that it’s your reality that’s distorted.
Strangely enough, this graph tells quite a different story.
Australia has far outstripped global house prices and this was pre-Covid.
From the same article -
"No one solution will solve the housing affordability problem. Experts favour utilising the tax system over tampering with supply."
https://www.afr.com/property/11-ways-to-make-housing-more-affordable-201...
This article is a few years old and of course prices have gone up another easily another 30%+ since then.
Despite having a long time to deal with it, what's the government done?
Absolutely zero.
Nothing.
SFA.
So what happened, you may well ask.
What happened around 2001 to kick off this runaway market?
Well, in the four years to March 2001, buying was dominated by owner-occupiers and prices rose moderately.
Then from mid-2001, investors began invading the housing market.
And house prices began to rise very, very fast.
In the year to March 2001, investors borrowed $29 billion to buy or build rental housing. Two years later, they more than doubled that to $61 billion a year. And that lifted the average growth in prices from 7.5 per cent to 17.5 per cent a year.
But why, you ask plaintively.
In mid-2001, the Howard Government halved the rate of capital gains tax. Ordinary workers now had to pay twice as much tax on wage and salary income as investors paid on gains from asset speculation.
Overnight, speculating in rental housing became vastly more profitable.
I expect the global.house price index is based on all countries, that includes many developing countries where things are very different.
For example in indonesia outside of Bali and big cities, prices generally don't rise at crazy rates because most people don't have the ability to borrow money many dont even have bank accounts as more just cash based so prices are limited by money they can save and scrape together borrow from family etc plus land is easier to get rezoned or just build on.
While its very different in places like Jakarta with high demand limited supply and many people have the ability to borrow large sums of money as have bank accounts and less cash based, all create higher prices.
BTW. As your article points out, investors create and supply rental properties, this is a good thing.
Anyway if you don't have a property you have two choices, save your arse off and buy somewhere affordable when Labor get in and interest rates rise and everything goes to shit and prices drop.
And then you will actually see price rises in the future as a positive.
Or just keep whinging about higher price's and think one day some government is going to change some regulation that is magically going to change things
USA market is cooling rapidly: https://wolfstreet.com/2022/04/27/mortgage-volume-gets-crushed-by-spikin...
Saw some articles about NZ Mum and Dad "loans" ot help the kids buy a house (cant recall where I read that) and there was an article in the SMH today about Sydney coming off the boil (whatever that means) but Brisbane powering ahead (mmmmm...really ?).
Do Houses really get more affordable when mortgage rates rise ? Only if the house prices drop and you have the deposit I guess.
indo-dreaming wrote:BTW. As your article points out, investors create and supply rental properties, this is a good thing.
Anyway if you don't have a property you have two choices, save your arse off and buy somewhere affordable when Labor get in and interest rates rise and everything goes to shit and prices drop.
And then you will actually see price rises in the future as a positive.
Or just keep whinging about higher price's and think one day some government is going to change some regulation that is magically going to change things
wow.
AndyM wrote:Strangely enough, this graph tells quite a different story.
Australia has far outstripped global house prices and this was pre-Covid.
From the same article -
"No one solution will solve the housing affordability problem. Experts favour utilising the tax system over tampering with supply."https://www.afr.com/property/11-ways-to-make-housing-more-affordable-201...
This article is a few years old and of course prices have gone up another easily another 30%+ since then.
Despite having a long time to deal with it, what's the government done?
Absolutely zero.
Nothing.
SFA.
So what happened, you may well ask.
What happened around 2001 to kick off this runaway market?Well, in the four years to March 2001, buying was dominated by owner-occupiers and prices rose moderately.
Then from mid-2001, investors began invading the housing market.
And house prices began to rise very, very fast.In the year to March 2001, investors borrowed $29 billion to buy or build rental housing. Two years later, they more than doubled that to $61 billion a year. And that lifted the average growth in prices from 7.5 per cent to 17.5 per cent a year.
But why, you ask plaintively.
In mid-2001, the Howard Government halved the rate of capital gains tax. Ordinary workers now had to pay twice as much tax on wage and salary income as investors paid on gains from asset speculation.
Overnight, speculating in rental housing became vastly more profitable.
Just a comment on that chart. It is an index chart that shows house increases from a set baseline. It demonstrates that the increase itself in Australia has been faster than the global index over the last 20 years. What is probably the case is that the baseline itself could've been much lower in Australia at the start of the measured cycle (in 2000). This could mean that Australia was dirt cheap back in the day compared to the global index which is probably true. Top European destinations were always insanely expensive and probably didn't rise as much as Australia during the same period (in terms of year-on-year growth rate). A lot of capital comes down here due to cheap real estate (especially once considering large sqm properties). Hence, the pace was much faster.
Indo's chart is showing the price of the property vs the current income. Also an important chart and in the past, people were buying houses for 2-3 annual salaries. This was before my time but data suggests that even Sydney was in this scenario back in the 70s. But now, the situation is nothing like that. In Sydney, you need 13 salaries to buy a home. But globally, the situation is also very difficult. And that is what Indo is saying.
2 perfectly legit and important graphs but different indicators. It's not apples for apples.
Nicely done Flollo
Hmm interesting Flollo we sure have gone from dirt cheap to crazy expensive
Where i live in less than 30 years prices have gone from being able to get blocks around or even under $6k to $7.5k in the mid 90s to now the almost the same blocks are on the market for $600k to $750k
So a one hundred times price increase.
And houses similar increases, cheap house then was about 60k expensive 120k now if your super lucky maybe get one in high 600k and houses over 1.2k
indo-dreaming wrote:Hmm interesting Flollo we sure have gone from dirt cheap to crazy expensive
Where i live in less than 30 years prices have gone from being able to get blocks around or even under $6k to $7.5k in the mid 90s to now the almost the same blocks are on the market for $600k to $750k
So a one hundred times price increase.
And houses similar increases, cheap house then was about 60k expensive 120k now if your super lucky maybe get one in high 600k and houses over 1.2k
Well yeah, that's the core of the problem. And this is what index charts are used for, to compare the pace of change over the selected sample set. The problem with Australia is that the pace of change is just too fast for people to get adapted. So many are losing in this game. As I previously wrote, I grew up in Europe, born in 1985 and I'll write a bit more about it when I find the time. Since then, even as a kid, I've known places like Monaco, Zurich, Amsterdam, etc.. were insanely expensive even for a weekend visit. Forget about real estate, everyone I knew would be called insane to even think about it. I even remember (now a long time ago) one of my friends with a Swiss passport, a doctor in physics leaving Zurich due to the cheaper cost of living elsewhere.
But what we have now is that places like Hobart are approaching prices in Zurich and Copenhagen. I mean, seriously? I love Australia with my whole soul but let's put things into perspective here, Hobart is nowhere near Copenhagen or Zurich in terms of pretty much anything other than clean air. And this is a problem.
Definitely a problem, and a problem which was caused by legislation and could potentially be solved by legislation.
Saying that "I don't think anything would really make much difference" and that releasing more land is the real solution is clear nonsense.
nahh its not a problem.
stop whinging. people just need to save and buy somewhere affordable.. to pitch their tent.. like a carpark, somewhere west of bourke.
at least labor's inflation fault will be good for savers who can finally afford their account fees.
flollo wrote:But what we have now is that places like Hobart are approaching prices in Zurich and Copenhagen. I mean, seriously?
https://www.news.com.au/lifestyle/relationships/marriage/the-most-bogan-...
Zurich got nothing on this. Copenhagen maybe that tractor riot.
Had a bit of a look around last night, and a look at all 1st home owner schemes (there's a lot!) and there's still - just - a few good opportunities in pricing real people could pay off near some coasts.
https://www.abc.net.au/news/2022-04-28/why-rba-add-to-cost-of-living-pre...
"Instead, the central bank watches "core" or "underlying inflation", which takes out the most extreme of these price moves.
These two measures — the trimmed mean and weighted median — were a lot lower at 3.7 and 3.2 per cent, respectively.
But they were also much higher than forecast — economists were again about 0.5 percentage points off the mark, and the Reserve Bank and Treasury boffins were even further adrift.
The most recent RBA forecasts expected core inflation to peak at 3.25 per cent around the middle of the year and then fall.
Instead, the actual numbers are well above that and expected to rise even further.
This is important because the Reserve Bank is tasked with, among other things like maintaining low unemployment, keeping inflation between 2-3 per cent.
Australia's inflation rate is now very clearly well above that target, which is why most economists expect the Reserve Bank to act sooner rather than later by raising interest rates, probably next Tuesday afternoon (May 3)."
So, now the economists are coming into line with the swaps traders? Who woulda thought?
velocityjohnno wrote:Had a bit of a look around last night, and a look at all 1st home owner schemes (there's a lot!) and there's still - just - a few good opportunities in pricing real people could pay off near some coasts.
Like on a floodplain?
haha! Not that I could see, but probably a more interactive shark experience in these areas...
"That's why higher inflation is beneficial to borrowers as the "real" value of their debt is falling compared to the general increase in prices and wages.
It's also why the current situation is terrible for savers, such as young people trying to build up a deposit to buy a home or older people living off bank deposits or other low-risk investments.
Their interest earnings are not keeping up with rising costs, so the value of their savings is shrinking.
Cherelle Murphy agrees with David Plank that the extremely low level of interest rates in the face of a strong economy shows they should be increased quickly.
"Why wait? Let's get on with getting rates off the record low," she says.
"We've got a 0.1 per cent cash rate. This is not a normal cycle."
Also from article above.
https://www.macrobusiness.com.au/2022/04/mortgage-bomb-set-to-blow-up-au...
MB puts the potential rises into dollar terms
velocityjohnno wrote:"That's why higher inflation is beneficial to borrowers as the "real" value of their debt is falling compared to the general increase in prices and wages.
Yes, the good old inflation wiping the debt out. I still remember one of my professors in uni talking about debt and inflation. He said: 'Noone pays the debt off. They wipe it out with inflation.' I can't remember the subject and context but I think it was about monetary policy with a context on government debt. It was a long time ago so not sure about the specifics. But his statement stuck with me forever.
“after thirteen years of producing the Rental Affordability Snapshot, it is clear that housing in Australia is broken”
https://www.macrobusiness.com.au/2022/04/australias-rental-crisis-to-lea...
yep flollo, aka 'the tax one man in a million understands'
nothing remains unmoving. Deploy with that in mind.
also, I did read the link posted with the failure of the development companies, the profit margins quoted were incredibly small! You mentioned it might be the system of competitive tendering (I paraphrase) that is part of this - saw that first hand, we'd often win a tender, then when I was sent out to assess the job (after! sales quoted it) I'd be back to them 'ah, it's going to take longer' - but we won the job and maybe broke even, if I worked really quick lol.. That said, overall, we did pretty well, there was fat in the work back then, a good overall yearly profit, some sacred cow projects, biggest profit throughout the whole enterprise... so seeing 0.7% returns I was like, wha?!
garyg1412 wrote:Anyway I'm probably one of those commie/socialist types you keep hearing about so apologies for my rant. I'll just go back to dusting my portrait of Vladimir Lenin.
Pretty bloody good rant though Gary. As you say, you’re probably one of those commie types like me (ironic, settle down) As much as I fear sounding like grandpa Simpson, the Oz that I grew up in actually had some sense of the fair go. The ‘stuff you Jack, I’m alright’ was the meme of the day in terms of phrases of abuse. Nobody wanted to be thought of that way. At least that was the fantasy I have created, but we were a different people back then, IMHO. The world continues to befuddle me.
Really interesting times. I’ve been predicting economic turmoil for decades, predicted 9 of the last two recessions, so I’ve got that in my favour.
There is in imaginary world I have lived in, where eventually companies stock values will return to historical means(averages). Profit and assets long term determine stock prices. My super stayed in the market until about 5 years ago, which at the time was my estimation of retirement. Moved it into more defensive assets and have been waiting for a crash since. Still the stock market has defied what I thought were reasonable value metrics. The tech stocks may well be appropriately valued by a different,8 perhaps not yet discovered metric.
But the stock market has moved up and down in a range between its historical high, and 7000 plus. Last week saw a fall of around $50B in one day (reports I read at the time). Such a drop was once front page news, now it was a small story on the inside fold of page 2 or 4. Perhaps we have become used to volatility.
Something’s feels different though. I’ve been expecting a big crash forever. Still think we are one bad shake from economic dark times, but have no idea what will be the straw that breaks the camel’s back.
Anyway, footy’s on. Time out.
2 things - will it be top-down, or bottom-up? This might be the first time in a while that it’s actually both at once. The overextension of the entry level has never been this rampant or aggressive. Further, I can’t see the leveraging of the top end of town ever being this high either, especially in assets that carry so much contagion.
Secondly, with the cash that still remains in the economy, there’s still those who want to play. But what do they do? Invest in late cycle property market? Late cycle equities market? Or keep it in cash and watch it diminish in real value? Where is the opportunity today for gain? Or do you get defensive and take the smallest loss possible?
Sentiment is very important. What would you do? (Obviously all suggestions are general in nature and do not constitute financial advice)
$1m loan at 2.5% = $3,951 per month (P+I) - common current rate (+- here and there)
$1m loan at 5% = $5,368 per month (P+I) - where the rate might go, assuming 10 x 0.25% hikes and also retail banks passing on 1 for 1 ratio
Some can absorb it, some can't. Income and disposable cash still remain the king. Hence, I think any political party or institution will bend over themselves to keep the unemployment low and cash coming in as much as possible. Even if it means deterioration of the living standard through higher inflation.
bonza wrote:nahh its not a problem.
stop whinging. people just need to save and buy somewhere affordable.. to pitch their tent.. like a carpark, somewhere west of bourke.
at least labor's inflation fault will be good for savers who can finally afford their account fees.
There is still very affordable places in most states of Australia some even near quality waves more remote areas of WA & SA, Vic (Portland & 90 mile beach area) Tas (West Coast) NSW much harder maybe Kempsey area best bet, QLD (Islands in Moreton bay) possibly options much further north but yeah not near waves.
Friend of mine from Sydney in his 50's bought his first place in SA a few months ago, pretty cheap, yeah sure it might drop in value if interest rates go up, but in the long run it will be worth much more than he paid and he now has his little place to retire and not continue to pay other peoples homes off.
indo-dreaming wrote:There is still very affordable places in most states of Australia some even near quality waves more remote areas of WA & SA, Vic (Portland & 90 mile beach area) Tas (West Coast) NSW much harder maybe Kempsey area best bet, QLD (Islands in Moreton bay) possibly options much further north but yeah not near waves.
Friend of mine from Sydney in his 50's bought his first place in SA a few months ago, pretty cheap, yeah sure it might drop in value if interest rates go up, but he now has his little place to retire.
Sure, it's cheap on the West Coast of Tassie - what ya gunna do a for a job though?
Plenty of things you can do online these days and you would be surprised the jobs that would come up once you knew people in the area, mining, fishing, farm hand etc
Plus a good place to retire, summers are mild and often offshore and never flat, spend May to Oct in Indo and Nov to April on the West Coast Tas.
Prices cheap and a shitload going to Auction so could get even cheaper.
https://www.realestate.com.au/buy/in-tasmania/list-1?activeSort=price-asc
Indo. Pretend you r early 30’s. Not a tradie (i.e. need a office location to commute to). Your wife similar position. You r about to have your 1st child. Think about the support mechanisms. Would you move to those places you listed? And then when you answer yes. Think of the 10 friends you have and tell me what would they do in similar situations? How many in 10? And then if you still can’t see my point. Tell me why isn’t everyone else doing it?
Ok, this is getting a bit pointless. Real estate in proximity to quality jobs, schools and health services (and other similar things) will always hold value for a reason. It’s not realistic to expect many people to move into remote villages with a lack of quality services. Ok, someone pulls it off here and there but it’s an exception, not a rule.
There are places close to quality waves which haven’t moved in price for the past 10 years since I first started looking. There’s a reason for that. Personally, I could sell what I have and live there mortgage free. But nothing to do with the exception of surfing, I can’t realistically live there with my 3 kids and maintain sanity. The whole country dies at 6PM with rare exceptions. Some of these towns are dead all the time.
bonza wrote:Indo. Pretend you r early 30’s. Not a tradie (i.e. need a office location to commute to). Your wife similar position. You r about to have your 1st child. Think about the support mechanisms. Would you move to those places you listed? And then when you answer yes. Think of the 10 friends you have and tell me what would they do in similar situations? How many in 10? And then if you still can’t see my point. Tell me why isn’t everyone else doing it?
You dont need to live in the place you buy, you dont even need to like it, you just need to be able to afford to get yourself into the market. (maybe right now the only exception as a time to buy in)
In my late 20's i was only getting $17 an hour doing some shitty labouring job living in a van in a caravan park but for one whole year(actually it was a little over a year) i saved my hardest, i didn't even get drunk once or buy lunch once, i saved $17K and took a small loan out and bought a decent block in a good position on Russell Island, sold it for double the price a few years latter that was the deposit for my house i now have, that we actually purchased as a investment property so could borrow more as was to be rented out.
My sister did the same lived on the sunny coast(with flatmates) couldn't afford to buy there, so she bought a house in Rockhampton, was rented out, it went up in value and she sold and it enabled her to buy in a place she really wanted.
Both of us couldn't buy directly in the places we wanted and had to use different avenues to be able to purchase in the places we wanted.
We also put off having kids for years because we didn't want to have kids until we had a house.
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers