The future of Australian property prices

[Garpal Gumnut]

I have looked at Cairns a few times as the market is quite cheap and in a slump at the moment. It is very tourist/boom driven, so if the AUD ever goes down that would be a good thing for Cairns property prices.

One thing to look out for, as you have already mentioned, are the body corp and insurance. Body corp seems very expensive for some unknown reason and insurance is quite high due to cyclone risk. These 2 generally take the advantage out of most cash-flow postive places, but if you are buying outright then it is a different story

Looked at Cairns maybe a yr or two back as there were a few cash flow pos places being marketed. However had similar concerns to what prawn_86 highlighted. Very dependent on tourism. With what was happening to the GC, we got put off. Mind you we were focusing more on small commercial.

Don't know what the market is doing at the moment.

Thanks.

Good info

My aim would be to rent out to those workers and professionals benefitting from an upsurge in tourism, rather than the tourists themselves.

gg

 

[DocK]

I'm 23, and while that's a very tight budget and buying a house on 55k on your own is likely to be even tougher, it doesn't look to me to be a bad decision financially.

Either I put more value in owning a home than some others here due to it's dual benefit of getting off the rent cycle and also having future access to an asset that can be leveraged highly for investment purposes, or I'm just not as frightened of paying that much

Benefits:
No terrible landlords.
Rent money is no longer dead money, and the mortgage becomes a savings plan allowing you future access to cheaper investment lines of credit.

Costs:
It's tough for a few years paying off your residence on your own. Shock horror.

I spent far too much of my time putting that together considering it will no doubt be picked apart immediately. The numbers stack up for us though, and me and my partner are the only people that need to worry about that.

To each their own, I just can't help myself when people say "It can't be done!" when what they mean is "That will be tough and less than ideal!".

Just wanted to say well done! It's great to see a youngster apply him/herself to a goal like you have. Best of luck.

 

[FlyingFox]

To each their own, I just can't help myself when people say "It can't be done!" when what they mean is "That will be tough and less than ideal!".

Firstly, good on you Vix! I wish we were/are as good with our money.

However no one said it can't be done (except in a few situations). I think what we are saying is that housing is Australia is absurdly expensive compared to most metrics and most other places around the world.

Also why should I be sold into this scheme and be indebted to the banks for 30-60 yrs? There is no guarantees that I will work myself up the property ladder. I think to some of us it sounds ridiculous to be living in or on the verge of mortgage stress just to be in a house and not even where we want to live.

In any case, I want to congratulate you once again for sticking to your plan. I wish more young people thought as hard about their financial future,myself included.

 

[wayneL]

I've also been considering moving back to the US, although I'll move to the West Coast not the East this time. Tbh, it's not just the price of housing, everything in Australia is overpriced.

It is astonishing the bang for buck you can get in parts of the US. All the more irritating the absurdity of of prices in Oz (and NZ).

 

[DB008]

Would this make an impact on property prices?

Minimum wage (sorry, some Wiki involved)

USA

As of July 24, 2009, the federal minimum wage in the United States is $7.25 per hour. Some states and municipalities have set minimum wages higher than the federal level, with the highest state minimum wage being $9.19 in Washington. Some U.S. territories (such as American Samoa) are exempt. Some types of labor are also exempt, and tipped labor must be paid a minimum of $2.13 per hour, as long as the hourly wage plus tipped income result in a minimum of $7.25 per hour.
http://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States

Australia

Australia's minimum wage is $15.96 per hour or $606.40 per week. Generally, employees in the national system shouldn't get less than this.
http://www.fairwork.gov.au/pay/national-minimum-wage/pages/default.aspx

 

[wayneL]

You're welcome anytime mate! There will be the obligatory day trip to Tijuana though.

Id be in that... been there before several times in my youf. I'd even pay for the petrol.... and the tequila

 

[McLovin]

I'd even pay for the petrol.... and the tequila

Depending on where we end up, the two may be the same.

 

[wayneL]

Depending on where we end up, the two may be the same.

Well, the only thing to be decided is who pays off the La Policía Mexicana.

 

[DB008]

But then on the flipside, does someone flipping burgers at Macca's need to be paid $16/hour?

No.

I'm doing a RTW this year, l'll pop into LAX, but Mexico, l'm not so sure McLovin. Their drug war is out of control, but l've never tried Viagra (or Oxy), LOL! (All jokes)

 

[MrBurns]

Prices contine to ease across the board, outer suburbs the worst, inner suburbs are difficult between $1 and $2 million, suburbs such as Richmond (inner Melb) are actually booming.

Commercial property is very badly hit, banks dont want to lend .....why ? maybe they know something we dont.

 

[FlyingFox]

Would this make an impact on property prices?

Minimum wage (sorry, some Wiki involved)

USA


Australia

Not really. See McLovin comments. USA also as a much greater spread on income. I think the 90/10 ratio (ratio of the 90 percentile of income to the 10th percentile) there is something around 11 and here is somewhere between 4-5.

 

[Garpal Gumnut]

I do like Mexico.

They have such binding contracts.

My only contact with the country was a weeks stay in Nuevo Laredo in the early 70's.

Not a place to plant ones super.

gg

 

[Mrmagoo]

Would this make an impact on property prices?

Minimum wage (sorry, some Wiki involved)

USA


Australia

People on $15.96 an hour do not buy houses, nice try though.

 

[Mrmagoo]

No.

I'm doing a RTW this year, l'll pop into LAX, but Mexico, l'm not so sure McLovin. Their drug war is out of control, but l've never tried Viagra (or Oxy), LOL! (All jokes)

Inflation killed the economy. No debate there. The cause of inflation and HOW it destroys the economy is a different debate.

The church of the far right will say a 15.96 an hour wage in a trillion dollar economy caused inflation, those with half a mathematical brain know high minimum wages are the result of inflation. They're the god damned minimum, they're what people demand so that when they put in a days work at the end of it they can just afford to survive.

That doesn't fuel inflation. Think harder.

 

[DB008]

People on $15.96 an hour do not buy houses, nice try though.

But people on ~$30 an hour do......wait....hold on.....

 

[Mrmagoo]

But people on ~$30 an hour do......wait....hold on.....

The argument you're making is a classist political argument. It is about nothing more than the long held belief of a class stratified society.

The argument is attractive to skilled workers as they see it enabling them to pay someone to do their laundry cheaper. What they don't realise is that such a move would undermine the strength of the economy, removing the demand for their skills, landing them unemployed and in the same situation as the initial unskilled group.

For examples, see the USA. Their economy failed and are their wages sky high ? LMAO.

 

[Julia]

I'm 23, and while that's a very tight budget and buying a house on 55k on your own is likely to be even tougher, it doesn't look to me to be a bad decision financially.

Either I put more value in owning a home than some others here due to it's dual benefit of getting off the rent cycle and also having future access to an asset that can be leveraged highly for investment purposes, or I'm just not as frightened of paying that much

I spent far too much of my time putting that together considering it will no doubt be picked apart immediately. The numbers stack up for us though, and me and my partner are the only people that need to worry about that.

To each their own, I just can't help myself when people say "It can't be done!" when what they mean is "That will be tough and less than ideal!".

I can't see anything to be picked apart at all. Totally congratulate you on your forward thinking and willingness to do it a bit tough in the short term for the longer term benefit.

Wish more had your attitude.

 

[DB008]

The argument you're making is a classist political argument.

Political? What?
I shall reply tomorrow.....

 

[FlyingFox]

The argument you're making is a classist political argument. It is about nothing more than the long held belief of a class stratified society.

The argument is attractive to skilled workers as they see it enabling them to pay someone to do their laundry cheaper. What they don't realise is that such a move would undermine the strength of the economy, removing the demand for their skills, landing them unemployed and in the same situation as the initial unskilled group.

For examples, see the USA. Their economy failed and are their wages sky high ? LMAO.

On the contrary, you remove many of the incentives for upskilling. Who would want to put them selves through 10 yrs of medical school if there isn't a significant gain to be had from this? (not taking the cost involved into account)

 

[FlyingFox]

Inflation killed the economy. No debate there. The cause of inflation and HOW it destroys the economy is a different debate.

The church of the far right will say a 15.96 an hour wage in a trillion dollar economy caused inflation, those with half a mathematical brain know high minimum wages are the result of inflation. They're the god damned minimum, they're what people demand so that when they put in a days work at the end of it they can just afford to survive.

That doesn't fuel inflation. Think harder.

Well put. And of course it's a feedback loop.