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I have to say the writing appears to be on the wall. I guess there is just one question, is the Aus housing market going to go "pop" like the US or a flattening off like the UK and NZ.
Looking at the country comparison house pricing index, I believe the Australian government made a humongous mistake in 2008 with the first home owners grant stimulus. The Market should have been given the time to cool. I think anyone about to enter the Aus property market really needs to look for bargains in the least heated areas to try and buffer against any sudden decrease in prices.
Once Mongolia and the iron ore operations there come on strong, there wont be as much need from China for a lot of Australia's ore and there goes the flood of money that has been coming into Australia. Companies like Rio Tinto know that which is why they are one of the prime movers into Mongolian operations.
I tend to think that it'll flatten out and remain stable for a few years, but then again I am not an economist.
One of the key reasons property remains over priced is the lack of supply - whether this is due to the state governments not releasing enough land for development and/or the need here to own property I am not sure.
It is seriously over priced though. A 3 bedroomed apartment across the road from us went for $1.8m last year (and it was listed at $1.2m) .
Rental yields in Australia are terrible, their is no way i would consider purchasing a rental at the moment.
Having said that i think housing prices will stay flat or fall slightly, we all need somewhere to live and their are two huge differences between current Austrlia and pre GFC USA. First we still have a total lack of supply (try finding a place to rent) and secondly our lending practices pre GFC were much tighter.
I did find and interest article the other day that said australias lowest income earners carry about 1/2 the debt as a % of their income than our middle income earners do. Unlike pre GFC USA were the level of debt to income was very similar regardless of a persons wage.
I agree with wanneroo, the only way the housing market will crash is if china stops buying our resources.
Too bloody expensive!!! Bubble's bursting anytime soon! As for buying a house here - need to take out a loan with the bank - anytime now/soon, one needs to do so without laughing all the way to the bank!!!!!
Even if there is a shortage of housing, there is only so long you can sustain people with Holden budgets and Ferrari prices. Eventually the debt burden will be a significant drag that will be impossible to ignore.
Even if there is a shortage of housing, there is only so long you can sustain people with Holden budgets and Ferrari prices. Eventually the debt burden will be a significant drag that will be impossible to ignore.
I think the shortage argument is largely a myth perpetuated by the real estate industry. The housing shortage belief was very strong in many parts of the US and Ireland before the bubble burst even at government level.
Once people refuse to pay the prices and believe the market will tank, a huge amount of buyers exit the market and you go from a "shortage" situation into a "surplus" situation. From there it could be a gentle correction if handled well or a steady slide over 3-5 years. Looking at the Aus governments performace on this issue over the last few years it is a big worry.
I think the shortage argument is largely a myth perpetuated by the real estate industry. The housing shortage belief was very strong in many parts of the US and Ireland before the bubble burst even at government level.
Once people refuse to pay the prices and believe the market will tank, a huge amount of buyers exit the market and you go from a "shortage" situation into a "surplus" situation. From there it could be a gentle correction if handled well or a steady slide over 3-5 years. Looking at the Aus governments performace on this issue over the last few years it is a big worry.
There are genuine shortages in Sydney, but probably not Brisbane or Adelaide. I'm not familiar with the other capitals. The shortage largely comes from population growth coupled with developers not being able to bring more supply to the market cost effectively for various reasons (State govt charges, lack of land, high labour costs). If more buyers were to leave the market, they would only fuel the already extremely tight rental market driving up rental returns and bringing in more investors. Try finding a rental anywhere in Sydney.
Cannot see how present over inflated prices can be sustained with so many folk in Australia on pretty average wages.
The Economist rated Australian property as the most over priced in the world a couple of years ago and it's increased further since then.
Australians having such an extreme love affair with housing makes it difficult to predict the outcome as some folk will "almost starve" in order to service a morgage.
The market here in WA has slowed as know two different people who have been unable to sell places,in recent months.
Can't help but think that there are going to be some very tough times ahead for this country when the down turn does come and come it will.
Cost of living for most things is far too high to the point were some folk are saying enough is enough and quit the country.
Not too many years back there was a concern with regards the high number of Australian born leaving the country. This may well return when the tides turns with added effect on price declines.
Cannot see how present over inflated prices can be sustained with so many folk in Australia on pretty average wages.
The Economist rated Australian property as the most over priced in the world a couple of years ago and it's increased further since then..
Yes, used to be Sydney was pretty much the only "expensive" housing market, and that was only 10 years ago or less that that was true. Now all the big cities are up there, with a small price variance, or at least not enough to have a clear winner in the affordability category. Not when you factor in wages for that city. I laughed at an article they had about Sydney housing recently and they were talking up areas where you could "hurry, hurry, still get a bargain!" - I recognised a few areas known for things like frequent drive-by shootings and other similar unpleasantries. $350k to live in those nightmares, small older houses/apartments. (And only another $100k turning it into a bunker )
Perth, to me, is ridiculously over-priced. How does the "location, location, location" real estate mantra fit there? Mining wages used as an excuse again? Even though the majority of us don't earn that.
Quote:
Originally Posted by the troubadour
Australians having such an extreme love affair with housing makes it difficult to predict the outcome as some folk will "almost starve" in order to service a morgage.
The market here in WA has slowed as know two different people who have been unable to sell places,in recent months..
Asking too much? Thinking they can still get the overinflated prices of yesteryear before people finally woke up to the delusion? I'm sure there are buyers. Just not the panic buying anymore. Neighbours sold their house about three years ago now. At the height, lucky for them. 11 offers, at asking price and higher. They got $38k more than what they wanted and the place needed work! "Only" for .... $788k
Quote:
Originally Posted by the troubadour
Can't help but think that there are going to be some very tough times ahead for this country when the down turn does come and come it will.
Cost of living for most things is far too high to the point were some folk are saying enough is enough and quit the country..
We're some of those folk. Can't retire here. And since we want to travel, Perth is the worst base in the world to do that from. And with the price of all basics constantly rising, if we stayed, we wouldn't have much left to spend on travel. Not wanting five-star first class travel by any means but even trips close to home are over-priced with far too much of the same dry, flat bleak landscape in between.
Nice beaches though
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