House prices
Surely you aren't seriously suggest that the solution to the housing crisis is to move to Roseberry or Zeehan? There's no work. There's no healthcare. There's no childcare. There's barely a school. It might be fine enough if you were born and raised in those places, but if you've spent as much time here as you say you have you'd know that the chances of being accepted into the community of these towns are low. Beyond that, what do these people do when they are priced out of their towns? Where do they go? People in Queenstown are already feeling the pinch because investors are buying homes and turning them into AirBnBs or hiking the rents up as much as they can so they can cover their second (or 3rd or 50th) mortgage. What's your solution for them? Move to Macquarie Island?
Can you just come out and say you are an individualist that only thinks of your own material reality and not that of the wider community? Would save the back and forth.
You dont need to move there, you just need to buy there and then become the AirBNB or landlord, and then if need be use it as a stepping stone to purchase in a place you do want to live.
Some people do it, others blow money on things like cars that just devalue.
Yes im an individualist that only thinks of my self and my families future and not responsible for the wider community.
Indo. The Idiot Savant of SN.
With himself as the "subject".
I mean that as a complement of course.
.......and a heartless c#*t to boot!
Shit tons of mortgages already on fixed rates at 3-4%.
New loans stress tested to 5 something.
RBA has mandate for full employment.
As Flollo implied, they will not blow up unemployment when a majority of the inflation is supply side shock from pandemic.
but we will see.
indo-dreaming wrote:You dont need to move there, you just need to buy there and then become the AirBNB or landlord, and then if need be use it as a stepping stone to purchase in a place you do want to live.
Some people do it, others blow money on things like cars that just devalue.
Yes im an individualist that only thinks of my self and my families future and not responsible for the wider community.
Ah yes, anyone struggling in the current housing market is clearly guilty of a moral failure.
Read a good article yesterday that said, and maybe it was obvious, but the price decline in housing won’t be due to lots of forced selling from those who can’t afford to pay their mortgage (fixed rates on lots of recent loans will protect many for 3-4 years), it’ll be because as the interest rates rise, the stress test rises too, thus limiting borrowing power.
So as you say freeride, recently the stress test has been up to around 5% or so mortgage rate. Soon that’ll get up to 6-7%, which means people seeking new loans won’t meet the stress test, thus limiting how big a loan they can take out, thus reducing the price they can pay = less available buyers in market at current prices and therefore price declines..
So those cheering for price falls (and I think they do need to come off a bit at least), but they need to realize that as prices falls, it’ll be largely in part due to the serviceability of the loans getting higher.
So that house you want may drop from $1.2mil to $1mil, but as the interest rate on your mortgage is gonna be higher as you try to buy it, you may find yourself in the same position of not being able to afford it even if it’s 20% cheaper.
If the prices do come off 20-30%, my view is it’ll be those wealthy on the sidelines waiting for a decline that snap up a ‘bargain’ relative to current price, and not the struggling FHB’s who can’t purchase at the moment.
Absolutely.
JQ wrote:indo-dreaming wrote:You dont need to move there, you just need to buy there and then become the AirBNB or landlord, and then if need be use it as a stepping stone to purchase in a place you do want to live.
Some people do it, others blow money on things like cars that just devalue.
Yes im an individualist that only thinks of my self and my families future and not responsible for the wider community.
Ah yes, anyone struggling in the current housing market is clearly guilty of a moral failure.
Thats not what im suggesting, more that if you want to get into the market you need to think outside the box and make sacrifices.
Dan is from Tassie if you go back to page one in 2016 he was already whinging about prices when you can see there was examples of houses in Tas near good waves in realistic areas to live at decent prices, go back a few years before that and most of Tassie was dirt cheap i know because most of my best mates live there one bought his first house for $30K 5 min walk from beach in the early 2000's
It sounds harsh, but if you're 30 or older and don't own a place its nobodies fault but yourself, the same people whinging and blaming everyone else, will still be here in another five to ten years whinging, when they could be finding avenues to get into the market.
Dx3 wrote:Read a good article yesterday that said, and maybe it was obvious, but the price decline in housing won’t be due to lots of forced selling from those who can’t afford to pay their mortgage (fixed rates on lots of recent loans will protect many for 3-4 years), it’ll be because as the interest rates rise, the stress test rises too, thus limiting borrowing power.
So as you say freeride, recently the stress test has been up to around 5% or so mortgage rate. Soon that’ll get up to 6-7%, which means people seeking new loans won’t meet the stress test, thus limiting how big a loan they can take out, thus reducing the price they can pay = less available buyers in market at current prices and therefore price declines..
So those cheering for price falls (and I think they do need to come off a bit at least), but they need to realize that as prices falls, it’ll be largely in part due to the serviceability of the loans getting higher.
So that house you want may drop from $1.2mil to $1mil, but as the interest rate on your mortgage is gonna be higher as you try to buy it, you may find yourself in the same position of not being able to afford it even if it’s 20% cheaper.
If the prices do come off 20-30%, my view is it’ll be those wealthy on the sidelines waiting for a decline that snap up a ‘bargain’ relative to current price, and not the struggling FHB’s who can’t purchase at the moment.
100%
Sorry page 2 of the thread
BTW. Still decent buys this is rural but in driving range of good waves, hour's drive to second biggest populated area in Tas.
$40K for 607m2
https://www.realestate.com.au/property-residential+land-tas-rossarden-20...
JQ wrote: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?
Work for a company in Melb. Flocks of victorians now do it. Live in tassie and work from home for companies in Vic.
freeride76 wrote:Shit tons of mortgages already on fixed rates at 3-4%.
New loans stress tested to 5 something.RBA has mandate for full employment.
As Flollo implied, they will not blow up unemployment when a majority of the inflation is supply side shock from pandemic.
but we will see.
im not convinced it’s all Pandemic supply shock Steve Yes some is but how long can they keep using the pandemic as an excuse. The worlds moved on.
Not at all Don.
Lockdowns in China still having supply side effects on goods.
donweather wrote:JQ wrote: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?
Work for a company in Melb. Flocks of victorians now do it. Live in tassie and work from home for companies in Vic.
Can we at least acknowledge that there's already people here struggling to survive in the worst housing crisis in memory and flocks of higher-paid Victorians doing it is making our lives worse? I'm not saying don't do it as many are doing it because they've been economically forced from their own homes, but it's not solving any solutions it's just forcing them on to someone poorer.
[quote=flollo
Hobart is nowhere near Copenhagen or Zurich in terms of pretty much anything other than clean air. And this is a problem.
Yeah but flollo we all know that Hobart is nowhere near anything, with shit waves and crew that can’t surf. Now if you go further north, east or west things improve dramatically and might even give Copenhagen or Zurich a run for their money.
indo-dreaming][quote=JQ wrote:indo-dreaming wrote:Yes im an individualist that only thinks of my self and my families future and not responsible for the wider community.
It sounds harsh, but if you're 30 or older and don't own a place its nobodies fault but yourself, the same people whinging and blaming everyone else, will still be here in another five to ten years whinging, when they could be finding avenues to get into the market.
This is cold hearted and detached from reality. You talk about outliers as if they aren't.
Social issues mean nothing to you despite clear relationships between health, education, class mobility and shelter. Nor can you see how these issues mean higher costs for intergenerational taxpayers as the fallout hits our services. Let alone increasing harm to our social fabric. I guess you have seen the apocalyptic vids posted on here by groundswell of homelessness in America?.
as a rusted on liberal supporter i would think you would appreciate the obsession with housing and higher mortgage borrowing comes at the expense of business productivity and investment. I have real experience in this running small and medium business. Seeking finance in innovative businesses from the big four very difficult. We all can't be tradies. (in hindsight i probably should have). Getting finance for flipping properties comparatively was much more simple.
The cost of land (rent / mortgage) is a key operating cost so when they are exorbitant it reduces the competitiveness of the business. You keep “whinging” that our wages are too high but fail to see how higher housing costs also puts upward pressure on wages. Both these factors – industry land costs and wages means we are less competitive in international markets. But in your opinion it’s the roughly 14% of Australian union members that lead to higher wages.. e.g. your dismissal EV battery Australian manufacturing
I think you know all this but it’s your bias as a current former property investor who has benefited from government support in tax and incentives as well as fortunate timing all at the expense now of generations after you who simply can’t do as you did and get in when prices are now up to 13 times annual earnings.
Give a go to get a go.
It’s your bias because despite years of published material from experts who continue to highlight the above problems and impacts of policy that exacerbate the issue with potential real solutions to help cool the market you just dismiss. Supply and demand you say.
When all we have is houses what’s the point of doing anything else? I guess there’s bitcoin.
"The cost of land (rent / mortgage) is a key operating cost so when they are exorbitant it reduces the competitiveness of the business."
Main constraining factor in this part of the world.
Another real life and very recent example of the extremely over heated market further contributing to this housing crisis. Back in 2003 we bought our dog box 3x1 on 515sq/m for $315K. Last month our front neighbour's sold their place, very similar house to ours albeit older (circa late 70's) semi renovated and only on 395sq/m for $1.45mill. No real estate sign out front, just a "silent listing" online and sold within 3 weeks. This has been a very common theme within our street and suburb for the past year or so with absolutely no signs whatsoever of it abating. It's insane. The market feels completely out of control.
@Indo. Yesterday I read a quote from one of your political heroes in John Howard. He agrees with you, stating that he doesn't accept there is a housing crisis in this country. Fancy that. Nothing to see here folks.
You in Vicco Rabbits?
Perth FR
Ross Gittins states the bleeding obvious.
https://www.smh.com.au/business/the-economy/the-cost-of-living-is-soarin...
"The cost of land (rent / mortgage) is a key operating cost so when they are exorbitant it reduces the competitiveness of the business."
Yep that's true here too.
Dx3 good post, when the numbers of people who can look lessens and sentiment changes, that's when shifts happen.
Rabbits that sounds like an incredible increase. Just saw rellies go through the downsize and re-buy in Perth and yeah, big numbers for some.
FR yes supply issues, but almost everywhere M2 and friends inflated to the moon.
https://www.ceicdata.com/en/indicator/australia/money-supply-m2
click on 'max', note covid spike
http://www.shadowstats.com/charts/monetary-base-money-supply
US data via shadowstats
I've also noticed a lot of places in my area have been sold with no signage at all.
Local property guide hasn't had a price listed with anything for sale here over the last 2 years. Everything for sale goes on auction.
Rents are still skyrocketing and the old rental section of the weekly property guide is almost non-existent now . There used to be a couple of pages of them only a few years ago.
Rabbits68 wrote:Another real life and very recent example of the extremely over heated market further contributing to this housing crisis. Back in 2003 we bought our dog box 3x1 on 515sq/m for $315K. Last month our front neighbour's sold their place, very similar house to ours albeit older (circa late 70's) semi renovated and only on 395sq/m for $1.45mill. No real estate sign out front, just a "silent listing" online and sold within 3 weeks. This has been a very common theme within our street and suburb for the past year or so with absolutely no signs whatsoever of it abating. It's insane. The market feels completely out of control.
@Indo. Yesterday I read a quote from one of your political heroes in John Howard. He agrees with you, stating that he doesn't accept there is a housing crisis in this country. Fancy that. Nothing to see here folks.
https://www.canberratimes.com.au/story/7717232/no-housing-crisis-says-jo...
Funny that.
“ On housing affordability, Howard introduced the capital-gains-tax concession; bolstered the first-home buyers' grant; and boosted immigration – all putting pressure on housing demand. Investor entry into the housing market took off from the moment the capital-gains-tax concession began. We wallow helplessly in the backwash of these idiotic decisions.”
https://amp.smh.com.au/opinion/australia-still-plagued-by-destructive-po...
bonza wrote:Funny that.
“ On housing affordability, Howard introduced the capital-gains-tax concession; bolstered the first-home buyers' grant; and boosted immigration – all putting pressure on housing demand. Investor entry into the housing market took off from the moment the capital-gains-tax concession began. We wallow helplessly in the backwash of these idiotic decisions.”
https://amp.smh.com.au/opinion/australia-still-plagued-by-destructive-po...
Spot on article.
Although no mention of the aged care system he set up where we give a blank cheque worth billions a year to private and church providers. No scrutiny, no accountability, no worries, ka ching!
bonza wrote:Funny that.
“ On housing affordability, Howard introduced the capital-gains-tax concession; bolstered the first-home buyers' grant; and boosted immigration – all putting pressure on housing demand. Investor entry into the housing market took off from the moment the capital-gains-tax concession began. We wallow helplessly in the backwash of these idiotic decisions.”
https://amp.smh.com.au/opinion/australia-still-plagued-by-destructive-po...
Gee's funny that straight after a recession with interest rates of 17%, unemployment over 10% a government actually trying to encourage people to build and buy houses and trying to create Jobs and actually encourage investment in housing that provides rentals.
Rabbits68 wrote:@Indo. Yesterday I read a quote from one of your political heroes in John Howard. He agrees with you, stating that he doesn't accept there is a housing crisis in this country. Fancy that. Nothing to see here folks.
Good on him, but I've never said there is or isn't a housing crisis, ive only said prices are dictated by supply and demand (and what people can borrow), and of course when demand increases faster than supply prices rise
And of course high property prices are also a result of an extremely long period of prosperity in Australia.
bonza wrote:Funny that.
“ On housing affordability, Howard introduced the capital-gains-tax concession; bolstered the first-home buyers' grant; and boosted immigration – all putting pressure on housing demand. Investor entry into the housing market took off from the moment the capital-gains-tax concession began. We wallow helplessly in the backwash of these idiotic decisions.”
https://amp.smh.com.au/opinion/australia-still-plagued-by-destructive-po...
Howard also allowed for the first time cashed up backers running SMSFs to borrow to speculate in housing, never ever underestimate the impact this had on demand
Bonza, guysmiley, got it in one. The decision to allow SMSF to invest in houses was actually the big super-charger.
“ and actually encourage investment in housing that provides rentals.”
How’s that working out indo?
“The national rental vacancy rate fell to 1 per cent in March, halving year-on-year, with all capital cities now operating in a landlord’s market”
https://amp.smh.com.au/property/news/australia-faces-national-rental-cri...
A few year’s ago it was reported that 9 out of 10 negatively geared properties were not ‘new’ properties. In other words, negative gearing had close enough to zero effect on providing additional properties.
Just the facts.
“Just the facts” Maybe Pauline can make a cartoon to explain it all to us.
Imagine what the $5billion hit to revenue would be worth now.
“Using the 2010–11 losses declared, Mr Eslake estimated a cost to revenue from negative gearing of $5 billion; this was, he contended, a 'pretty large subsidy from people who are working and saving to people who are borrowing and speculating'. More than that, he continued:
...it's hard to think of any worthwhile public policy purpose which is served by it. It certainly does nothing to increase the supply of housing, since the vast majority of landlords buy established properties: 92% of all borrowing by residential property investors over the past decade has been for the purchase of established dwellings, as against about 72% of all borrowing by owner-occupiers.
Precisely for that reason, the availability of 'negative gearing' contributes to upward pressure on the prices of established dwellings, and thus diminishes housing affordability for would-be home buyers.”
“Mr Eslake also disputed the idea that the abolition of negative gearing would force up rents. The alleged 'landlords strike' of the mid-1980s, he argued, was based on an erroneous reading of history: rents had only risen rapidly in two markets, Sydney and Perth, because both cities had unusually low rental vacancy rates at the time. Yet in other capital cities, where vacancy rates were higher, growth in rents were either unchanged or, in the case of Melbourne, actually slowed.
Mr Eslake continued that notwithstanding this history, if a large number of landlords were to sell their properties in response to the abolition of 'negative gearing', this would not necessarily be a bad thing for renters:
That would push down the prices of investment properties, making them more affordable to would-be home buyers, allowing more of them to become home-owners, and thereby reducing the demand for rental properties in almost exactly the same proportion as the reduction in the supply of them. It's actually quite diicult to think of anything that would do more to improve affordability conditions for would-be homebuyers than the abolition of 'negative gearing'.
There's no evidence to support the assertion made by proponents of the continued existence of 'negative gearing' that it results in more rental housing being available than would be the case were it to be abolished..”
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economic...
"Having experienced the damage that asset price bubbles can cause, we must be especially vigilant in ensuring that the recent experiences are not repeated." – Ben Bernanke, Federal Reserve Chair, January 3, 2010
Hahahaha!
As average regional house price tops $700,000, expert drops bombshell.
"I think affordability is becoming a hurdle," Dr Powell said.
Thank fuck she clued us in on that one.
https://www.abc.net.au/news/2022-04-29/regional-housing-markets-approach...
Still looks completely mental out there in the real world to me.
https://www.smh.com.au/property/news/maroubra-house-sells-post-auction-f...
freeride76 wrote:Still looks completely mental out there in the real world to me.
https://www.smh.com.au/property/news/maroubra-house-sells-post-auction-f...
First home owners spending $1.5million +. That is nuts. I found that article shocking.
Received a letter box drop from a Real Estate agent boasting about how the place in the link below had set a record for the area.
That’s well north of $3 million, I’m guessing mid to high threes.
So don’t know about the average stuff but the top shelf stuff still seems to be going gangbusters.
https://m.realestate.com.au/sold/property-house-nsw-east+ballina-138203818
"Having experienced the damage that asset price bubbles can cause, we must be especially vigilant in ensuring that the recent experiences are not repeated, but hold my beer"...
https://harpers.org/archive/2008/02/the-next-bubble/
good article from a long time back
"Following a brief recession in 1921, federal policy accommodated progress by keeping interest rates below the rate of inflation. Pundits hailed a “new era” of prosperity until Black Tuesday, October 29, 1929."
velocityjohnno wrote:https://harpers.org/archive/2008/02/the-next-bubble/
good article from a long time back
"Following a brief recession in 1921, federal policy accommodated progress by keeping interest rates below the rate of inflation. Pundits hailed a “new era” of prosperity until Black Tuesday, October 29, 1929."
Yep - history doesnt repeat but if often rhymes. The parallel to the 1920's to today is quite incredible.
soggydog wrote:freeride76 wrote:Still looks completely mental out there in the real world to me.
https://www.smh.com.au/property/news/maroubra-house-sells-post-auction-f...
First home owners spending $1.5million +. That is nuts. I found that article shocking.
As is 2 teaches paying $3.7M for a house.
that bit sounded suss.
When little Johnny Howard became PM a nice home on the mid coast cost us 58k,
( the neighbors thought we were crazy for paying that much), eleven years and much back slapping and bragging later that same joint was worth 350k. So it took 200 years to get to 58k and then ten more of a Liberal govt. to be seven times its value. This was something John Howard was very proud as it made all his rich mates a lot richer. When Labors Mark Latham ran for PM on a promise to ditch negative gearing he was absolutely belted and lost. Now we are getting cashed up east coast investors snapping up everything sight unseen from Streaky Bay to Victor Harbor. They sell their inherited dump for a few million then come over here and buy several nice houses and retire. Fuck off.
Blowin wrote:Oh, it’s turning alright.
The fever is gone. Joints are still moving but not at the blistering rate and the days of just whacking a bigger number on a joint you just bought are over. Top end prices around here aren’t shifting.
It’ll take a bit of cultural adjustment to alter the course of two decades of froth and bubble, but they’s a comin’.
August last year was the top.
Interest rate rises will end the party as surely as the crowd discovering the new keg is full of frothy warm urine.
Scummo is jetting in highly skilled food delivery technicians as quickly as he possibly can but he’s pushing shit uphill with a sharp stick
The above was a response to a query from Freeride whether I thought house prices were about to go down.
Here’s the current quarterly house price movements nationwide. Averages are buoyed upwards by regions and weighed down hard by downward trend in the Sydney / Melbourne market leaders.
Iceberg dead ahead Captain!
Their maths doesn’t really add up to me, but I think Labor’s 30-40% housing ownership plan is a good idea…at least people will get into a home of their own… it seems like there will be limited places…anything’s better than what we have now though for the battlers….evidently you can buy their percentage out at anytime on current market value…if it’s true...thumbs up from me.
The quote above was from January this year.
Curious to see how much down turn will eventuate in current high demand areas such as the NSW North Coast.
Prices being quoted last week still seem to be going up.
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers