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Old 02-10-2019, 07:13 PM
 
2,333 posts, read 3,090,048 times
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Quote:
Originally Posted by Tall Traveler View Post
I used to think that and maybe they do but when you convert that million dollar Aussie house to US dollars, it's only around $700K US....still pricey but not far from desirable US cities prices.

I've been thinking for some time that they could have a US style 2007-2010 real estate crash but it hasn't happened. Maybe you'll just get a soft crash.

One thing I'll say, Australia is still a desirable country for many around the world and I don't see that changing any time soon.
Desirable for who though. Not many Europeans I know would swap their pension system or health system for what's on offer in Australia.


House prices are incredibly expensive if look what you get for the price. Indeed some of the main US cities are dear these days, but no city or indeed town of any size would be described as cheap in Australia.


WE have one of the highest out of sync comparisons with personal debt to earnings in the world. Mostly due to inflated house prices. Indeed Australians have a near 'spiritual' belief in the salvation of real estate , but ever declining numbers are getting on board, but an increasing number who do get loans, tie themselves to a lifetime of debt mortgage, perhaps beyond, which can hardly be a good thing nor should be the case or way to live a life.


The reason nothing has happened is that the government has supported the banking sector in several ways, to keep afloat inflated housing assets. Be that through foreign speculators, turbo immigration, First Home Owners Grants, unregulated brokers , approving those that shouldn't really have been, but treated as products.
Not forgetting ever growing numbers on casual contracts or/and in unstable work.


Australia, is but one country, seen by many in the worlds developing nations as a potentially desirable place. Same applies to USA, Canada, Europe, NZ and richer Asian countries. Not sure it means too much at the end of the day.
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Old 02-10-2019, 09:55 PM
 
Location: Andorra
76 posts, read 14,536 times
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I know a lot of people who are waiting for a crash but it's been a good decade now!!!

It's a huge part of the economy here. Seems way too big to fail to me
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Old 02-10-2019, 11:46 PM
 
2,333 posts, read 3,090,048 times
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Quote:
Originally Posted by aaa555www View Post
I know a lot of people who are waiting for a crash but it's been a good decade now!!!

It's a huge part of the economy here. Seems way too big to fail to me
It's been a horrible decade in reality, with house prices rising to unstainable prices. While the banking industry may be too large to fall, housing has got way ahead of itself. The reasons for change has been explained. USA and Ireland and Spain were saying the same thing. Greed fine when all going well, but nothing like fear to bring things down.


An economy based on housing? Really do you find that sustainable, longer term?
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Old 02-11-2019, 12:04 AM
 
2,424 posts, read 3,078,408 times
Reputation: 1925
Quote:
Originally Posted by Tall Traveler View Post
I used to think that and maybe they do but when you convert that million dollar Aussie house to US dollars, it's only around $700K US....still pricey but not far from desirable US cities prices.

I've been thinking for some time that they could have a US style 2007-2010 real estate crash but it hasn't happened. Maybe you'll just get a soft crash.

One thing I'll say, Australia is still a desirable country for many around the world and I don't see that changing any time soon.
From about 2000 until 2013 house prices in much of Australia didn't grow beyond inflation. From 2013 until 2017 they boomed. Now the tide is receding. A 10%-15% fall is probably a good thing, although most of it is happening in the outer suburbs. The inner cities are holding up pretty well. The lending standards never got anywhere near as lax as they did in the US. There are plenty of examples of predatory lending, but not on the industrial level that they achieved in the US before the GFC.
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Old 02-11-2019, 02:40 AM
 
2,333 posts, read 3,090,048 times
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Quote:
Originally Posted by BCC_1 View Post
From about 2000 until 2013 house prices in much of Australia didn't grow beyond inflation. From 2013 until 2017 they boomed. Now the tide is receding. A 10%-15% fall is probably a good thing, although most of it is happening in the outer suburbs. The inner cities are holding up pretty well. The lending standards never got anywhere near as lax as they did in the US. There are plenty of examples of predatory lending, but not on the industrial level that they achieved in the US before the GFC.
Not quite true. Prices increased some 20% a year for three years in early 00's in Sydney. It then stagnated some what until about the time mentioned above and inflated some 70%.
During this time, wages went up 13% from recall. The jury is out on more lax here than USA. I've heard both sides. What I do know is housing distress is rising in Australia, especially WA as people run into difficulty paying. The amount some half of the population have in savings, is scary, come a unexpected crisis. That suggests not such a big difference from USA.
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Old 02-11-2019, 05:20 AM
 
Location: Brisbane
561 posts, read 277,004 times
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Once the Royal Commission recommendations are legislated and the mortgage broking industry is wiped out, it will be interesting to see the impact on credit growth and lending standards.
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Old 02-11-2019, 05:43 AM
 
Location: Australia
605 posts, read 211,618 times
Reputation: 1104
But do not forget that many people who are buying and selling are not borrowing. People are selling deceased estates, downsizing, etc. Only people who have borrowed in the past five years in Sydney should be at risk of mortgage stress.

One thing that pushed the prices is the very high cost of building and renovating. That does not seem to be changing and it seems nothing can be done by a tradesman for much under $100 an hour. Building or renovating becomes too expensive so people decide to move instead.

Royal Commissions do not have to be acted on. Some are pretty well completely ignored.
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Old 02-11-2019, 05:57 AM
 
Location: Brisbane
561 posts, read 277,004 times
Reputation: 609
Quote:
Originally Posted by MarisaMay View Post
But do not forget that many people who are buying and selling are not borrowing. People are selling deceased estates, downsizing, etc. Only people who have borrowed in the past five years in Sydney should be at risk of mortgage stress.

One thing that pushed the prices is the very high cost of building and renovating. That does not seem to be changing and it seems nothing can be done by a tradesman for much under $100 an hour. Building or renovating becomes too expensive so people decide to move instead.

Royal Commissions do not have to be acted on. Some are pretty well completely ignored.
Both parties have indicated complete adoption of the recommendations. There is no political capital to be gained for the coalition to not implement. The real risk is that the ALP will go deeper and act quicker than the recommended timeframes.

With regard to renovation costs, a couple of years ago I did an extension here in Brisbane. At the same time I had a mate doing an almost identical extension in Sydney. Same square meterage, same number of bathrooms, comparable finishes, easy site access etc. Mine cost 200k, his cost 600k. Crazy.
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Old 02-11-2019, 07:08 AM
 
2,424 posts, read 3,078,408 times
Reputation: 1925
Quote:
Originally Posted by MarisaMay View Post
But do not forget that many people who are buying and selling are not borrowing. People are selling deceased estates, downsizing, etc. Only people who have borrowed in the past five years in Sydney should be at risk of mortgage stress.
Agree to a certain extent. High wage growth, falling interest rates and the growth of two income families was a huge shift up in house prices.

So far there is no obvious sign of stress in arrears or defaults, just a lot of the same hysterical pundits in the media who have been predicting a crash for the last 20 years. I'm sure Harry Dent is due for a tour...
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Old 02-11-2019, 06:59 PM
 
Location: Australia
605 posts, read 211,618 times
Reputation: 1104
Quote:
Originally Posted by Aussiehoff View Post
Both parties have indicated complete adoption of the recommendations. There is no political capital to be gained for the coalition to not implement. The real risk is that the ALP will go deeper and act quicker than the recommended timeframes.

With regard to renovation costs, a couple of years ago I did an extension here in Brisbane. At the same time I had a mate doing an almost identical extension in Sydney. Same square meterage, same number of bathrooms, comparable finishes, easy site access etc. Mine cost 200k, his cost 600k. Crazy.
That difference in renovation costs does not entirely surprise me though it is certainly a huge difference. A family member has just, after a year of going through applications etc, got a detailed price for a reno. It has probably cost $30k to get this designed and approved but all the variations would be charged at at least $100 per hour. A decision has been made now to try to sell. But it is all supply and demand.
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