The future of Australian property prices

[young-gun]

There is no return on property because it is not a profit generating investment.

It is just a home someone pays a meager amount of money for the right to reside in the property.

You want to be an investor ? Come up with an idea for a product, develop it, risk it all on your idea and you've done something wonderful.

Invest in said company and you're doing a good thing for the world.

You are confusing an average joe investor with an entrepreneur.

Housing investment is just a parasitic, communist, ponzi scheme resembling a Stalinist system.

The whole debt based global economy is a ponzi scheme, get over it. It'll be corrected soon enough anyway. You need to spend less time complaining and more time preparing for coming opportunities.

 

[young-gun]

its worth noting that while this is correct, perceived or actual shortages or surpluses can be quite fickle.. while the supply side is quantifiable the demand side is a little more subjective with housing composition (household size) can change rapidly...

for eg. i have read articles coming out of California circa the top of the boom in 2005, where they estimated as much as 1million under-supply in homes and described as the driver behind the boom-boom pricing.. within 2 this picture had reversed and they had a massive oversupply as the household size which was at all time lows in 2005 (slightly above 2) had become around 3 ppl per household

Sorry WG they were Mr magoos words, I left out quote tags*

 

[Bill M]

A housing investor is no better than a drug dealer, pimp or stand over man.

You crack me up Mrmagoo, in fact I nominate you to the "ASF members going troppo" thread for this week.

Well done, you win!!

Link here:https://www.aussiestockforums.com/forums/showthread.php?t=17823&page=5&p=737767&viewfull=1#post737767

 

[RandR]

Capitalism is brilliant. You deserve a return on that hard work.


A house is not an asset class it is a place to live. By profiting on housing you don't create anything of value. You hurt people. A housing investor is no better than a drug dealer, pimp or stand over man.

Property (and housing) has been as asset class before capitalism was even invented.

A housing investor is providing accomodation to others at a cost that will (generally) be cheaper then purchasing that accomodation. Thats a service of value

A housing investor is providing accomodation to others who have been unable to fund the capital expenditure or obtain financing to purchase a place to live. Thats a service of value.

You almost sound bitter and resentful the way you describe real estate investors Mrmagoo, is there a reason for that ?

 

[Mrmagoo]

Property (and housing) has been as asset class before capitalism was even invented.

A housing investor is providing accomodation to others at a cost that will (generally) be cheaper then purchasing that accomodation. Thats a service of value

A housing investor is providing accomodation to others who have been unable to fund the capital expenditure or obtain financing to purchase a place to live. Thats a service of value.

You almost sound bitter and resentful the way you describe real estate investors Mrmagoo, is there a reason for that ?

No, investors in the construction industry do as you describe. The term property investor has come to mean those who purchase already built houses on the expectation they will become more expensive to purchase down the track.

Which is in no way providing a service to anyone or anything other than making the cost of living higher for others.

If they were investing in companies which built loads more houses for people I'd tend to agree but they clearly don't and they get tax breaks and special interventions from the government, making it a socialist adventure. Funny how socialism never seems to help those who need help.

 

[moXJO]

Bullocks. Landlords charge every single cent they can regardless of their costs. What a larf.

And they will charge more if their cost of holding goes up. I actually agree with some of your points. But geeze magoo you sure do hate property.

 

[Izabarack]

The term property investor has come to mean those who purchase already built houses on the expectation.....

that the equity will increase over time and be no more than an accumulation strategy in a diversified portfolio. Capital gain is only of passing interest in calculating the return on the money, over and above rent revenue, I invested in the property.

Well, that is how it was for me. I bought a house using the support of what I had already accumulated and then someone else used the property as a cheap (relative to buying their own) place to live and has also contributed to my increase in equity.

Iza

 

[satanoperca]

Been a while since last post, travelling throughout South East Asia for the last few months.

While abroad have been looking a property prices compared to local salaries.

Conclusion, if you wish to live in a safe, beautiful country with free health and social services then Oz property doesn't look overpriced. On all the metrics discussed in this thread it does.

After being a bear for a while, my mindset is changing and I cannot see Oz property going into crash mode in the future, stagnation yes.

Given all the vested interests in property and the RBA determination to make sure it does not reset itself, they will keep on lowering rates, I am rapidly coming to the conclusion that in the next year or two will be an opportunity to buy again. Renting may be more financially beneficially but I would rather be a slave to banks than some two bit, dumb arsed landlord any-day.

As for the argument to get ride of negative gearing, I think I will be long gone before I can see any govnuts going down that path.

While I agree with most of the sentiment in this thread about property being overpriced, sometimes one must accept, it is what it is and being fair has little to do with it.

For those that believe it is overpriced, keep renting. For those that see opportunity or just want a home, go forth and purchase.

Best wishes to you all.

 

[Uncle Festivus]

I agree with Mrmagoo, although I think the point of distinction is being lost on a few posters? The distinction is between a property investor of existing properties & a property investor who builds new dwellings. There is a big difference between the 2 as to the service that they provide to the community. The former competes with those who simply need a place to live and forces prices up while the latter provides a place to live and, all things being equal, provides price stability?

Now the fact remains that the system is highly accomodative for the investor ie negative gearing etc, and it has also been the paradigm that property is used to fund ones retirement, but this has been at the expense of those just starting out who also wish to do the same. One poster just blithely has assumed that property will 'always go up' - that is not a guarantee, as all the low hanging fruit has been picked by this baby boomer generation who have made the rules and exploited them.

For example, take Sydney, where I recall from memory that there are several suburbs where the median price is $1m plus. Do you really think you can even make 5% compound every year ad infinitum? And these aren't harbour-side premium properties, just your average suburban shack. You will probably counter that wages will be rising commensurably. Unfortunately we are well and truly part of the global economy so our wages will be tied to it, which means we have to compete with the likes of China, Thailand etc

As the government won't do the right thing and eliminate negative gearing, I think 'the market' will eventually undertake the task of bringing house prices back to affordable levels so everybody can afford to simply live without having to work 3 jobs to pay of the house who's price has been forced up by unproductive investors?

 

[moXJO]

I think there is a big misconception with 'property investors' and 'dumb investors'.
In saying that I consider most people who refuse to invest in property on some bias as dumb investors. Also thinking that a property investors only avenues is buy and hold for cap or rental yield is just plain dumb.

 

[rryall]

Just wondering if anyone would seriously consider buying property overseas if they could obtain dual residency?

http://www.heraldsun.com.au/realest...ffered-residency/story-fndcursx-1226520952618

 

[Bill M]

Been a while since last post, travelling throughout South East Asia for the last few months.

While abroad have been looking a property prices compared to local salaries.

Conclusion, if you wish to live in a safe, beautiful country with free health and social services then Oz property doesn't look overpriced.

Thanks for a balanced and informed point of view. I too have spent many years travelling in SE Asia and as you say, what we have here in Australia just can not be compared with what they have there.

Now check this out:

---
A BEACH box in Victoria without power or water has sold for a record $275,000.

The price tag does not include the land the shed sits on as this remains government-owned.

Link here: http://www.heraldsun.com.au/realestate/investing/rye-beach-box-sets-sales-record/story-fndcursx-1226521686941
---

Some people can whinge and moan all they like about the price of real estate in Australia but it all comes down to one thing, as long as someone is willing to pay for it that's all that counts, anything else is just wishful thinking.

 

[Mrmagoo]

Thanks for a balanced and informed point of view. I too have spent many years travelling in SE Asia and as you say, what we have here in Australia just can not be compared with what they have there.

Now check this out:

---
A BEACH box in Victoria without power or water has sold for a record $275,000.

The price tag does not include the land the shed sits on as this remains government-owned.

Link here: http://www.heraldsun.com.au/realestate/investing/rye-beach-box-sets-sales-record/story-fndcursx-1226521686941
---

Some people can whinge and moan all they like about the price of real estate in Australia but it all comes down to one thing, as long as someone is willing to pay for it that's all that counts, anything else is just wishful thinking.

bla bla mate. House prices already coming down.

Bloke and his wife at work just bought a 4 bedroom house, rumpus room, spa bath, pool ect... under 500k. First home buyers. I'm happy for them. They work hard, saved hard. Rather than paying 600k for some 3 bedroom shack they got a good deal.

Prices are coming down fast.

 

[satanoperca]

Mrmagoo,

How far do you predict prices will fall?

What is your trigger point to buying?

Just curious, you seem a little angry that they are not affordable. I'm just wondering what you perceive as affordable or thus acceptable.

Cheers

 

[Mrmagoo]

Mrmagoo,

How far do you predict prices will fall?

What is your trigger point to buying?

Just curious, you seem a little angry that they are not affordable. I'm just wondering what you perceive as affordable or thus acceptable.

Cheers

Pretty straight forward to work that one out really isn't it ? Do I really need to dignify that one ? LMAO.

Lets see... house is to live in... when I get married and my wife decides to have babies.

The trigger point is... what I can afford ?

 

[RandR]

Pretty straight forward to work that one out really isn't it ? Do I really need to dignify that one ? LMAO.

Lets see... house is to live in... when I get married and my wife decides to have babies.

The trigger point is... what I can afford ?

It is a pretty relevant question ...

... but from your answer it appears your summary seems to be, you just want it easy, and you dont want too have to work to hard for a house ... but the work only begins when you buy one

... so good luck with that.

You can probably afford plenty right now ! Me and my partner are on ordinary wages at present, and yet weve purchased a house while still in early 20's. Theres plenty of stock around that available for first home buyers in affordable price ranges were we are from. We'll get the dream house after weve paid off the relatively small amount of debt on this one which is on track to be done when we turn 30.

 

[Mrmagoo]

It is a pretty relevant question ...

... but from your answer it appears your summary seems to be, you just want it easy, and you dont want too have to work to hard for a house ... but the work only begins when you buy one

... so good luck with that.

You can probably afford plenty right now ! Me and my partner are on ordinary wages at present, and yet weve purchased a house while still in early 20's. Theres plenty of stock around that available for first home buyers in affordable price ranges were we are from. We'll get the dream house after weve paid off the relatively small amount of debt on this one which is on track to be done when we turn 30.

Bla bla housing industry rubbish bla bla

Yes you can buy with 2 incomes everyone knows that you're not good.

 

[McLovin]

Conclusion, if you wish to live in a safe, beautiful country with free health and social services then Oz property doesn't look overpriced. On all the metrics discussed in this thread it does.

There are though plenty of other countries that offer what you describe above and don't have property prices near Oz prices. Pretty much anywhere in Europe, outside the major capitals. And of course the US does too, albeit with much more restricted free health care.

I've lived in a few places around the world, Sydney is extremely expensive, not just for property but for everything. Based on my own anecdotal evidence, I'd say that rents in New York would be slighty ahead of Sydney but NY is ridicuously cheap for everything else compared to Sydney (I'm talking 30-40% cheaper). Wages are roughly the same. Take housing in that context, afterall you still need to buy food, pay utilities, get to and from work, and Australia (or at least Sydney) looks very expensive.

 

[againsthegrain]

Not too sure about that, Australia is a great country to live in but I think its being blown a little out of proprotion.

Healthcare is free, however public hospitals, doctors, nurses are in shortage and many do complain that Aussie healthcare system is alot worse then other poorer countries. Also you still paying for dentist, ambulance call our is 1k if you don't have private or membership. So really the system is great if you have private cover, in which case im sure its the same story in other countries.

Not to mention we pay the highest taxes in the world.

As for being safe, any country is dangerous if you are in the wrong place at the wrong time, http://www.news.com.au/national/mobs-racist-tirade-against-bus-passenger-caught-on-camera/story-fndo4cq1-1226522521354

Beatifull, yes no disagreements there.

 

[McLovin]

Not to mention we pay the highest taxes in the world.

No we don't. Not even close.