# You know OZ is nuts when for or $200K.....



## wayneL (17 October 2006)

....you can buy this sh!thole in the warzone areas of Geraldton WA:

http://www.royweston.com.au/content...0&fa_range=&min_farange=&max_farange=&oid=171







..... or you can buy these in the evil empire

http://www.har.com/search/engine/indexdetail.cfm?mlnum=9564413&class=1&leadid=6&sTYPE=0&backButton=Y






http://www.har.com/search/engine/indexdetail.cfm?mlnum=8167275&class=1&leadid=6&sTYPE=0&backButton=Y






http://albany.georgia.remax.com/listings/ListingDetail_r4.aspx?LID=25349545#aTop




http://saugatuckdouglas.michigan.remax.com/listings/ListingDetail_r4.aspx?LID=24581981#aTop


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## nizar (17 October 2006)

LOL Wayne.
I didnt know you could pick up property for that cheap in the States..... mustve come down a fair bit from the "boom"


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## Milk Man (17 October 2006)

I saw a sweet dodge challenger for sale there for $5k too. I dont think the missus would let me move there though. Too bad.


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## Knobby22 (17 October 2006)

Good comparison.

Oz is nuts and it but it will take a regular hit on the head over a long period with a plank of wood (metaphorically) to get some behaviour change. 

Not likely.


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## krisbarry (17 October 2006)

There are many variables to look at here and some have been missed...

* Wages overall in the states are much lower than they are in Australia

* Minimum wage in the US is much lower than it is in Australia

* US dollar to Aud conversion rate

* Interest rates are also different

But I do see the point of making comparisons, yes the filth of Australia's house prices are really starting to bite!


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## Julia (17 October 2006)

Would the same level of comparative prices apply in larger cities of the USA?

I did hear on Radio National's Breakfast programme that Australia has some of the most expensive real estate in the world.

Julia


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## krisbarry (17 October 2006)

Yes I heard that too, some of our property is the most expensive in the world accoridng to price comparions in other OECD countries.


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## Agentm (17 October 2006)

property is cheap and living is cheap..


your life is also cheap..


ahh  to dream of living in the land of the handgun..


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## wayneL (17 October 2006)

* Wages overall in the states are much lower than they are in Australia
This only applies at the low end. For qualified/professional people, wages are generally higher.


* Minimum wage in the US is much lower than it is in Australia

These are not houses for people on minimum wage. For those people there are houses at half the price or less.


* US dollar to Aud conversion rate

Not relevant unless buying with a foreign currency. What is relevant is the ratio of wages/house prices.

* Interest rates are also different

Long term mortgage rates are not appreciably different.

My point is, away from the glitzy spots like San Diego, Boston, Miami etc housing is very reasonable. In Oz houses are even expensive in Snake freakin' Gully.

Why?


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## professor_frink (17 October 2006)

Here's something not too far from my area. just as bad here as out your way Wayne  

it's a ripper! (well according to the agent it is!)

This is more expensive, not even brick, and you get the added bonus of living in a suburb that is prone to the odd house destroying flood


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## Rough_Trade (17 October 2006)

.                                                                                                  
When the “Great Australian Dream” of owning your own home is under threat watch all rational & sanity go straight out the window. (As it will go straight out the window of that “sh!thole” Wayne posted earlier).
.


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## krisbarry (17 October 2006)

I think that statement about the "Great Australian Dream", rings more truth now, than in any other time in history.

Its just that now, a dream, a distant memory!

The sad fact of life is that many millions of people will never ever, ever, ever get to experience that dream, its an outrage, and a crying shame, and a disgrace that some should hang their heads in shame!


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## wayneL (17 October 2006)

Stop_the_clock said:
			
		

> I think that statement about the "Great Australian Dream", rings more truth now, than in any other time in history.
> 
> Its just that now, a dream, a distant memory!
> 
> The sad fact of life is that many millions of people will never ever, ever, ever get to experience that dream, its an outrage, and a crying shame, and a disgrace that some should hang their heads in shame!




Patience, Grasshopper!

Winter will come... always has, always will!


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## Julia (17 October 2006)

professor_frink said:
			
		

> Here's something not too far from my area. just as bad here as out your way Wayne
> 
> it's a ripper! (well according to the agent it is!)
> 
> This is more expensive, not even brick, and you get the added bonus of living in a suburb that is prone to the odd house destroying flood




Frinky,

I have a relative living at Dora Creek.  I haven't seen the house but it's two storied with six bedrooms, three bathrooms, formal and informal living, music room (he has a grand piano), two kitchens and a lift.  It's right on the river with its own jetty and I gather is worth a hell of a lot more than $248,000 for the shack you showed.  

I've never been to Dora Creek, and would be interested in anyone's assessment of what it's like.

Julia


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## Slick Rick (17 October 2006)

*Self perpetuating problem?*

My two cents;

- Consider the australian cultural obsession with owning your own home, aversion to renting ('Australian dream, 'super secure', 'the best investment', 'leave the home to the kids' etc.)

- Reluctance to live away from the coast, hence greater limitations on land. Coupled with an aversion to living in flats/apartments - less economical use of space. (Magnified demand/finite supply = no market equilibrium?)

- Relative population growth? Comparative injection of foreign capital coupled with favourable exchange rates?

- 'Baby boomer effect' - what has the inheretance of a second home into the pockets of the now middle aged baby boomer population done to inflate property?

Can this market support itself? As the monetry devide between property owners and non-owners widens, will we see a change in paradigm from the new generation of income earners?

Perhaps the inability to get into the property market will breed an investment savvy generation and a shift towards renting property - as is prevalent in the US/Canada.

Obviously rent received from property is insubstantial - capital gains are the goal with investment property. But with an eventual decrease in the market for houses...?

Especially with baby boomers far more willing to unlock the equity in their homes to utilise in there retirement compared to the generation who came before them. If the baby boomers aren't leaving there homes to there children, how will the average wage earner ever get into the market. Perhaps they won't.

In the end it will be the buyers who determine the value of property.


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## Realist (17 October 2006)

Stop_the_clock said:
			
		

> The sad fact of life is that many millions of people will never ever, ever, ever get to experience that dream, its an outrage, and a crying shame, and a disgrace that some should hang their heads in shame!




Hahaha.

That is quite amusing....

Completely wrong, but quite amusing.


Much like someone telling me in 1999 that Westfield will go under because everyone will shop over the internet. Or alot of environmentalists in the 1970's telling us the new ice age is coming.  

Global warming, like people being completely priced out of the house market, are normal trends that equal out over time.  Patience!!


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## krisbarry (17 October 2006)

Realist said:
			
		

> Hahaha.
> 
> That is quite amusing....
> 
> ...




The stats speak for themselves, as every generation passes, less and less home ownership is occuring....its not rocket science its just stats!

This aint just happing within Australia, its a global problem...welcome to the world of renters!


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## professor_frink (17 October 2006)

Here's a lovely one in my area you can pick up for $925,000.

Not overpriced at all


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## wayneL (17 October 2006)

professor_frink said:
			
		

> Here's a lovely one in my area you can pick up for $925,000.
> 
> Not overpriced at all




Just the sort of house someone on $250k p/a would like to live in eh?


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## professor_frink (17 October 2006)

wayneL said:
			
		

> Just the sort of house someone on $250k p/a would like to live in eh?




Apparently  

I've seen a house not too far from that go for double that price when the boom was in full swing. It was the size of a small castle though.


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## maffu (17 October 2006)

Where abouts is that house? It looks familar, is it in the Blue Mountains?


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## professor_frink (17 October 2006)

maffu said:
			
		

> Where abouts is that house? It looks familar, is it in the Blue Mountains?




Na, it's Lake Macquarie, South of Newcastle.


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## chicken (17 October 2006)

wayneL said:
			
		

> ....you can buy this sh!thole in the warzone areas of Geraldton WA:
> 
> http://www.royweston.com.au/content...0&fa_range=&min_farange=&max_farange=&oid=171
> 
> ...



With everyone owning a GUN...not a place for me..got a friend who went to USA...came back in a hurry said that its to easy to get shot...I rather pay the high price and be reasonable safe..USA not for me


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## Smurf1976 (17 October 2006)

Stop_the_clock said:
			
		

> Yes I heard that too, some of our property is the most expensive in the world accoridng to price comparions in other OECD countries.



According to a recent study by Demographia, even Adelaide and Hobart are more expensive than most US cities after adjusting for wages.

Fair enough for Sydney maybe, but Adelaide and Hobart? Australian property is way overpriced and this will at some point end in my opinion.


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## juddy (17 October 2006)

chicken said:
			
		

> With everyone owning a GUN...not a place for me..got a friend who went to USA...came back in a hurry said that its to easy to get shot...I rather pay the high price and be reasonable safe..USA not for me





living in Rangeway, you'll wish you did own a gun.


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## wayneL (17 October 2006)

juddy said:
			
		

> living in Rangeway, you'll wish you did own a gun.




Juddy knows  

Folks,

I am not advocating we all up stumps and move to the US. We already do live in a sycophantic proxy of the place... just without the guns.

I am just questioning... WHY THE XXXX IS OUR R/E SO EXPENSIVE?


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## krisbarry (17 October 2006)

professor_frink said:
			
		

> Here's a lovely one in my area you can pick up for $925,000.
> 
> Not overpriced at all




Look at the filth, almost 1 million dollars and they call that value, the only value I see in it, is the flappy lips of a real estate agent trying to off-load it!

*ITS CRIMINAL TO EXPECT PEOPLE TO PAY THESE FILTHY PRICES!*


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## Porper (17 October 2006)

wayneL said:
			
		

> Juddy knows
> 
> Folks,
> 
> ...




I was on holiday in Aus a couple of weeks ago at Ninderry,Sunshine coast, 10 mins from the Beach in land.A short drive to Noosa.We looked at some land they were selling off,no covenants,all roads  laid, power etc. beautiful views of the bush  on 2 acres.$180K.

My point is you wouldn't get that in New Zealand for twice the price.I have friends in Sydney and they say prices are ridiculous there, but have you seen the prices for anywhere nice in Auckland ?

You are not alone with real estate prices being out of reach of the average wage earner.


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## nioka (17 October 2006)

The only reason home ownership seems unattainable to some is because they expect too much. They expect to start work late into their 20s have holidays, usually overseas, buy a car better than they need (probably on hire purchase), and then expect to walk into a better home than the one their parents worked most of their life for. The world doesn't owe you a living and a fancy home you have to earn it for yourself.


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## wayneL (17 October 2006)

On the USA and guns.

Like I said, I grew up there and have family there.

If you have to live in low socioeconomic areas. It is a huge problem. For the middle class, hardly anyone ever comes across the problem. My rellies in the states don't own guns and have only ever even seen them in gun stores and on coppers hips. It is a non issue for them.

The USA is a hugely segregated society based on money and/or race. You just gotta be on the right side of the track.

I'm not defending the place. I think the US stinks. Just telling how it is.

Cheers


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## wayneL (17 October 2006)

nioka said:
			
		

> The world doesn't owe you a living and a fancy home you have to earn it for yourself.




Valid comment nioka. But 200k for a stinking hellhole in a country ghetto? WTF?

These places were $40k only 4 years ago.


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## wavepicker (17 October 2006)

We live in a world where people have one bananas.

Can't understand why people still choose to invest in residential property with such poor rental yields in some areas.

The only things I can think of is fear of missing out, or they are so caught up in the trend that they think prices will continue to rise like they have the last 10 years.


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## nioka (17 October 2006)

wayneL said:
			
		

> Valid comment nioka. But 200k for a stinking hellhole in a country ghetto? WTF?
> 
> These places were $40k only 4 years ago.



I built my first 2 homes brick by brick in my spare time. No power tools or ready mix concrete either. Anything is possible in this world, you just have to want it bad enough.


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## krisbarry (17 October 2006)

wayneL said:
			
		

> Valid comment nioka. But 200k for a stinking hellhole in a country ghetto? WTF?
> 
> These places were $40k only 4 years ago.





Spot on...even the crusty cream brick units of yester-year (60's/70's)are pricing people out of the market, and that is at the lowest end of the affordable range.


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## wayneL (17 October 2006)

nioka said:
			
		

> I built my first 2 homes brick by brick in my spare time. No power tools or ready mix concrete either. Anything is possible in this world, you just have to want it bad enough.




Kudos. I sweated blood for my first property too.

But you are missing the point.


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## nioka (17 October 2006)

Stop_the_clock said:
			
		

> Spot on...even the crusty cream brick units of yester-year (60's/70's)are pricing people out of the market, and that is at the lowest end of the affordable range.



Law of supply and demand. It is the same law that is enabling you to trade, and make a profit hopefully, on the good old ASX. If you want to change one you would have to change the other.


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## wayneL (17 October 2006)

nioka said:
			
		

> Law of supply and demand. It is the same law that is enabling you to trade, and make a profit hopefully, on the good old ASX. If you want to change one you would have to change the other.




Agree! There are lots of reasons to expect this sort of scenario then\/


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## Tim (17 October 2006)

*Why is it so expensive in London?*

I often drive around all these "unaffordable areas" in Australia and what do I see? If these areas are in fact "unaffordable", then all these houses should be empty. But no, they have people in them! Someone can afford to live in these unaffordable areas. Hence it's only unaffordable for people who can't afford it. So why can so few people afford to live in unaffordable areas? Surely it comes down to supply and demand.

Forget about comparing the paint job of various houses, that's the last thing that determines the price of a house. It's all about land, and where that land is. Why is it that if I drive closer and closer to the city, a similar house to the one I live in will get more expensive the further I go?

At any one point in time, all of the real estate is owned by somebody. Real estate is always affordable for _somebody_. Back in the 60's and 70's there weren't 20 million people in Aus looking for a place to live. As the population increases, house prices will increase. Look at London, try comparing the real estate over there to Australia's prices. Maybe we should be complaining about that instead. And real estate should not be compared to the sharemarket. People put money into the market to make money, but people put money into real estate for somewhere to live. Different prioritories, different emotions.

I always remember someone saying that _if you think real estate is expensive now, try waiting 10 years_.


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## wavepicker (17 October 2006)

*Re: Why is it so expensive in London?*



> At any one point in time, all of the real estate is owned by somebody. Real estate is always affordable for _somebody_. Back in the 60's and 70's there weren't 20 million people in Aus looking for a place to live. As the population increases, house prices will increase.




I understand the point, it's logical. But what happened in for example Japan since 1990. Here you have a country with a 125,000,000 population, bugger all land, and the average price of land has fallen over 80% since then. Why??

Historically most credit induced bubbles end up in bust. Determining when the bust ends up coming is the hard thing.


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## robots (17 October 2006)

hello,

aus has just caught up with the global economy and you are dreaming if you think it is going to go bust

but hey, keep up the fear and get those put option premiums increasing

others have mentioned, everybody wants everything today, and those who cant have probably can have if they change things

thankyou
robots


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## wayneL (17 October 2006)

robots said:
			
		

> hello,
> 
> aus has just caught up with the global economy and you are dreaming if you think it is going to go bust




_"...prices have reached what looks like a permanently high plateau." _
-Irving Fisher (october 1929)


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## juddy (17 October 2006)

robots said:
			
		

> aus has just caught up with the global economy and you are dreaming if you think it is going to go bust




I just love this chart. Are Japan and the US part of the global economy? hehe


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## robots (17 October 2006)

hello 

lets just see what happens

thankyou
robots


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## moses (17 October 2006)

Sydney RE prices are expensive because enough of the world's wealthy and leisurely have discovered they can work and play by the world's most spectacular harbour and still shop in New York. The rest of Oz flows out from there.


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## RichKid (18 October 2006)

Smurf1976 said:
			
		

> According to a recent study by Demographia, even Adelaide and Hobart are more expensive than most US cities after adjusting for wages.
> 
> Fair enough for Sydney maybe, but Adelaide and Hobart? Australian property is way overpriced and this will at some point end in my opinion.




So do I get this 'inter-market' analysis right? The US housing market is supposed to be waaay overpriced (see bearish articles elsewhere on ASF) and due for a fall, so a loong way down to go, BUT if they are so much cheaper atm than Australia then we can only imagine how much further our property market has to fall.....but it can't be that bad, what are we missing here? Are we only looking at select properties in the US? Are we comparing apples with oranges? How do we quantify this??


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## TjamesX (18 October 2006)

RichKid said:
			
		

> So do I get this 'inter-market' analysis right? The US housing market is supposed to be waaay overpriced (see bearish articles elsewhere on ASF) and due for a fall, so a loong way down to go, BUT if they are so much cheaper atm than Australia then we can only imagine how much further our property market has to fall.....but it can't be that bad, what are we missing here? Are we only looking at select properties in the US? Are we comparing apples with oranges? How do we quantify this??




http://www.demographia.com

Is where the analysis is done comparing house prices and average household income. Australia has the most severe unaffordability across the board according to this measure (the data is probably 12 months old by now)...

Sydney is more unaffordable than New York and London
Adelaide is more unaffordable than Boston and Toronto

I think US is reacting stronger to their housing market at the moment because;

1) They have just reached the peak and everyone is expecting the crash
2) In general I believe their development policies are much more relaxed than Australia so in the event of a boom, developers build more capacity at a rapid rate while prices are high which then leads to oversupply...
3) Australia's develpment is much more restricted (in a sense artificially restricting supply... state land release policies etc) desptie high prices

The above is only my anecdotal evidence

I think Aus will be feeling the effects of the boom for many many years to come and we are no where near then end.... remember at the top of the boom most people are homeowners and in general happy with their new found wealth - its only over time while these high prices continue and people move into the house market at 90% lend do the negative effects start to get realised.

The average debt to asset ratio across Australia has continued skyward since 2003 despite house prices (except in WA) going nowhere

TJ

Ohh and I found another good one on rea.com.au in Geraldton. This add is bragging about a place renting for $240pw with a long term tennant. How much do they want for it.......wait for it........ 328k   why would someone pay for something that is so negatively geared in a country town..... oh thats right I forgot - because of the capital gain.... : 

http://www.realestate.com.au/cgi-bi...header=&c=94637782&s=wa&snf=rbs&tm=1161050537


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## wayneL (18 October 2006)

Check out what you can get in Houton Texas for 325K

http://search.har.com/engine/doSear...eymap=&keymap2=&keymap3=&newsearch=1&offset=1

eg this waterfront






WTF?


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## Bloveld (18 October 2006)

This 3 bedroom shack looks good for 54 mil.

http://goldcoast4.california.remax.com/listings/listingdetail_r42.aspx?LID=17969017#


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