I have given up buying a house

[Realist]

The thing is, about the only attraction of Perth is the low cost, easygoing lifestyle. It is missing so much of what makes a world class city.

Now that it is becoming an expensive, stressed place to live, it has no attraction.

When crude is > $100 bbl, it won't be a very good place to live at all.

Agreed.

Anyone who thinks Perth housing should be as expensive if not more expensive than it is now should consider it is the most isolated city in the world. It has a relatively small populations. Its business sector is a joke apart from Resources, WA is so big and so empty it is scary. It is cashing in on the Resources boom, which we all know will not last forever.

Just drive through some old former gold mining towns in the outback to see what happens to places that cash in on a gold rush when the rush ends.

Perth could be a ghost town in 5 years time when young people move to Sydney and Melbourne to find work to fund the exhorbent 30 year mortgages on the houses they bought and can't sell.

 

[Smurf1976]

Smurf,you`ve heard the saying,a sucker born every minute.
Well,I think your posts explains it well.
It doesnt explain the booming housing market though. Or people who refuse to live within their means. Or did I miss something here?

Nope, you didn't miss anything. It wasn't an attempt to explain the housing market, just that I've had more than enough of the incredible arrogance that the boom seems to have inspired.

It's time to stop buckling to pressure and getting rid of whatever it is that some profit-driven real estate investor (or the person who chose to rent some poorly built and located property) finds annoying. Anyone who doesn't foresee problems with noise near highways, nightclubs or industrial zones shouldn't be making decisions about property, or anything else of importance, in the first place. They clearly aren't thinking too much.

It comes down to one word - GREED.

 

[krisbarry]

Nope, you didn't miss anything. It wasn't an attempt to explain the housing market, just that I've had more than enough of the incredible arrogance that the boom seems to have inspired.

It comes down to one word - GREED.

Well said Smurf.

I keep hearing the same thing....just work hard and you can achieve home ownership, what a load or cr*p. We have many examples on this board of young people who work hard, and earn good money, that are or have given up on home ownership.

I just keep getting told to adjust my living style, save harder, and move out into the wide open expanses.

What....eating baked beans for the next 30 years and live 2 hours out of the city, in a 1 bedroom mobile home, no room for a family is there... Thats no life!

All this just to keep the peace and so a few olds can be greedy.

Give me a break....thank god we have the reserve bank...ready and willing to push the trigger on a rate rise come 2nd of August

 

[visual]

Well said Smurf.

I keep hearing the same thing....just work hard and you can achieve home ownership, what a load or cr*p. We have many examples on this board of young people who work hard, and earn good money, that are or have given up on home ownership.

I just keep getting told to adjust my living style, save harder, and move out into the wide open expanses.

What....eating baked beans for the next 30 years and live 2 hours out of the city, in a 1 bedroom mobile home, no room for a family is there... Thats no life!

All this just to keep the peace and so a few olds can be greedy.

Give me a break....thank god we have the reserve bank...ready and willing to push the trigger on a rate rise come 2nd of August

Ye well thats how the olds got their ivestor properties in the first place,what the hell makes you think yu shouldnt be sacrificing anything for something you want,get a life.

 

[visual]

Nope, you didn't miss anything. It wasn't an attempt to explain the housing market, just that I've had more than enough of the incredible arrogance that the boom seems to have inspired.

It's time to stop buckling to pressure and getting rid of whatever it is that some profit-driven real estate investor (or the person who chose to rent some poorly built and located property) finds annoying. Anyone who doesn't foresee problems with noise near highways, nightclubs or industrial zones shouldn't be making decisions about property, or anything else of importance, in the first place. They clearly aren't thinking too much.

It comes down to one word - GREED.

Smurf,I agree there,
but this is not then connected to a generational issue,this type of behaviour happened with the first boom,remember the tulip story,one bulb ended up costing hundreds of thousands of dollars in todays money and that was,what! more than 200 years ago, I`m guessing here : so it`s human behaviour coming to rear its ugly head,just like the lazy are using the same behaviour to explain their inability for hard work.

 

[Julia]

The RBA is only doing their job, and that is to re-distribute wealth.

I again want to just take this opportunity to thank the RBA :

Much more of this adulation towards the RBA and you will be representing them as Australia's answer to communism.

I suspect the RBA members might be somewhat confused to be told it is their job to redistribute wealth.

You might prefer to live in a socialist system, Stop the Clock. But no, in such a system everyone is required to make a contribution so that would count you out smartly.

Julia

 

[Realist]

Ye well thats how the olds got their ivestor properties in the first place,what the hell makes you think yu shouldnt be sacrificing anything for something you want,get a life.

So you are saying - yes you need to sacrifice your life by living cheaply for many years like your olds did.

Then you say "Get a life"

Which one is it?


You seem confused.

 

[visual]

So you are saying - yes you need to sacrifice your life by living cheaply for many years like your olds did.

Then you say "Get a life"

Which one is it?


You seem confused.

Realist,honestly I`ve already got two children,do I really have to teach you as well. :
sacrifice leads to achievement,equals a life,eg.you have to work hard to have a level of satisfaction and pride for a job well done. :

 

[Buster]

I am using Buster's post as an example only for my point. My point applies to property bulls in general, not solely Buster, and applies to posts on ASF and elsewhere. I see comments like this as evidence of the property bulls getting worried about the state of the market. The denial phase is turning to fear....

Errr.. I dunno if I qualify as a property bull, Yes I own my own home here in WA and own an investment property in the ACT, but a property magnate I aint..

But suggest applying this concept to housing and the bulls start hurling the insults about growing up etc. That is not the response of a rational evaluation of the market. It is the madness of crowds. That urge to target anyone who chooses to be different. Also known as "peer pressure" it is what makes it seem necessary to do all manner of irrational things. And it's common near market tops when the masses are heavily invested.

Hmmm.. Not intended to be construed as an insult, more a reality slap.. Not targeting either, he started the thread!! Perhaps you should re read the original thread email and the one I responded to. Skiting about stuffing your hard earned into investments (I'll be right Jack!!)while your parents and mates are picking up the tab for accomodation, and then whining about the 'sacrifices' his generation have to make.. Puuleeesse!!

I'm tipping he's not yet come to grips with the fact that the world owes him absolutely nothing, and if he wants to make something of himself he better start figuring out what he, not everyone around him, needs to do in order to achieve it.. He needs to get out of the nest and stretch those wings..

Stop the Clock Your parents owned their own home at 31? Well, they have done exceedingly well, but I wouldn't suggest that as the norm.. My parents struggled and where well into thier forties before they freed themselves of repayments, and the same can be said for many of thier peers.. I would suggest that is probably more the norm...

Cheers boys,

Buster.

 

[Buster]

Housing in Australia is pretty ridiculously priced at the moment, particularly in WA. I've lived in the US and am originally from South Africa, and I have never seen such a pre-occupation with real estate like the locals have here.

Interestingly I find the prices here in Aust reasonable when compared to many other countries, I too have lived in the US and I don't have a hope of buying a 'reasonable' property in California.. Luckily I didn't have to pay the $US3K a month rent from my pocket.. And the UK isn't much better..

As an eligible first home buyer, earning over 85k a year, I just can't stomach the Perth market at the moment. Its one thing for investors to expect a good return from real estate, but what is happening in Perth is out of control.

Totally agree with you here, although I don't belive investors are driving the market here any longer, nor have they for some time.. I couldn't see too many savvy investors shelling out 400k for a $200 - 250 a week return..

25% growth per year for the past 2-3 years just seems wrong somehow - I figure the only way this has been sustained is due to foreigner's weighing in with Pounds....

Perth was seriously undervalued about 5 years ago though, I saw the initial 'boom' as a bit of a catch up.. however as you say it's definately turned into a feeding frenzy.. there is going to be lots of hurt when the rates rise a percent or more.. which is when I will be looking to expand my portfolio.. Always cracks me up to see the current affair shows with the people whining about how they can't continue with a quater percent rate rise.. If you are unable to absorb an extra 80 - 100 bucks a month your are truley living a champagne lifestyle on a beer budget..

Then again, perhaps I'm too conservative, but I still remember watching my repayments 'boom' when the interest rates hit 18% a generation ago..

My money will stay in various other investments - much of it cash based (bring on the rate rises ) - and maybe in a few years I'll move onto cheaper pastures...and actually pay a reasonable amount for my first home.

Hope it works out for you.. please tell me you arn't bludging off your parents too.. ;-)

Regards,

Buster.

 

[Buster]

This 25% a year growth on real estate started in the east (NSW) and has finally reached the west (WA).

This complete obsession with real estate will eventaully die a painful death, and the sooner it does the better.

Its like a stock that booms in share price (AMU/CDU, ring a few bells) everyone is talking about it and everyone wants a piece of it.

When the stock dumps, nobody will want to own it and no-body will be talking about it.

AUSTRALIA, YOUR OBSESSION WITH HOUSING IS....G A M E O V E R!

Print your post out, save it in a scrap book and revisit it every four or five years to see how it pans out.. I'm tipping you will never be referred to as 'the Oracle'..

Cheers,

Buster.

 

[tech/a]

THE central bank is likely to lift interest rates again in August with stronger-than-expected wholesale inflation pointing to a significant pick up in consumer prices, economists said today.

Kewl this will knock a few more property investors off their purches

They will only raise rents so far, then realise that their investments are going backwards, then they will sell out of the property market and move onto greener pastures.

Sounding a lot like Kris Barry with the Adelaide address??

Property investors in the main bought at prices well below current market.
Most I know incuding myself allowed for interest rates to go to 9%.
Some including myself have minimised gearing and as such interest rates would be annoying but a cost of business.

Careful selection of investments particularly when investing capital in the size of Property purchases (How many buy shares on the scale of 2 or more houses???) calculated use of others money (Lenders) will pave the road to financial security.Working for a living ensures survival/mediocrity at best.

Investing in small parcels really will have little influence on life style.
There are times to stick your head on the block (Even momenterily) and times to pull it in.

Few take the opportunities presented in quantities large enough to make a difference.

 

[Bobby]

Hey Tech,

Good to here from you mate !

Whats pommy land like ?

bob.

 

[money tree]

It is cashing in on the Resources boom, which we all know will not last forever.

and from another thread:

Anyone who thinks China's demand for resources is a 3 year trend is dreaming, they could quite easily be growing for the next 150 years along with India.

Where will the 2.5 billion Indians and Chinese get their resources to build buildings, power plants, jewellery, computer parts etc?

Well they'll get alot of them off 20 million Aussies.

Depression my ass!! It's boom times for the rest of our lives possibly!

Which one is it? You seem confused.

confused indeed.

 

[emma]

Some information to ponder.
ABC Counterpoint Columnist - Michael Warby - The High Cost of Land & Houses - broadcast 24/7/2006

"Michael Warby is a teacher and freelance consultant and writer. He explains why it can actually be in the interests of politicians to keep housing prices high.

We are used to thinking Sydney house prices are somewhat over-the-top, but house prices in Australian cities generally are fairly amazing.

Adjusting for differences in income, houses in Australian cities average almost 40% dearer than houses in Canada's 8 major cities. Houses across 67 major US cities average about a quarter cheaper than in Australia's major cities.
Yet, we have a mere 20 million people to share among an entire continent. Only 0.1% of our land is covered by our major cities. Why are Australian metropolitan house prices so high?

You probably think of "property" as just a thing. Like a car, or a house, or a fridge. Actually, it is better to think of property as collections of attributes.

For example, if you need official permission to build houses on land, then control of the attribute "suitable for housing" is being shared between the property owner and officials. The owner gets any financial return, but only if official permission is granted to build in the first place.

This is, of course, the current situation in Australia. And has been for many years. But, generally speaking, only from some time after World War Two. It was not always the case.

Now, if control of the attribute "suitable for housing" is shared between the property owner and officials, do we think that this will increase or decrease the tendency for land to be made available for housing?

To ask the question is to answer it. Clearly, it will reduce the tendency for land to be made available for housing. Which is, after all, why the requirement for official permission was imposed in the first place.

And reducing the tendency for land to be made available for housing will clearly raise the value of the land that already has houses on it.

But, how much will it reduce the tendency for land to be made available for housing?

Let us consider the incentives for officials. Increases in the value of land with houses on it, means increased revenue from all taxes derived from the value of said land. Such as council rates and stamp duty on the sale of the land. If officials are more restrictive, governments get more revenue. Because the price of housing land goes up.

Now, homeowners vote. And they greatly outnumber housing market entrants. Homeowners sitting on housing land increasing in value are getting wealthier - Which makes them happier voters. Another incentive for officials to restrict the amount of land being made available for housing.

If official permission is required to build things, then the people in the building things business need access to officials. A classic way to get such access is political donations.

Another incentive for officials to restrict the amount of land available for housing (This without even considering the question of bribery & corruption.)

Now, if this is a sensible way to look at things, one would expect that the price of housing land would have gone up far more than the price of building a house.

Which is precisely what has happened. From 1973 to 2003, the price of
building a standard three bedroom house in Australia's cities went up
sevenfold or eightfold depending on the city. Which is at or less than the rate of inflation over that period-consumer prices went up eightfold. But building houses is a competitive business.

Over the same period of time, the average price of the land that house sat on went up 16fold in Melbourne, 18fold in Perth, 19fold in Brisbane, 51fold in Sydney and 70fold in Adelaide.

Which is not exactly what has happened to the value of farming land in Australia.

In 1973, the land was about a third of the cost of the average house in
Sydney, Melbourne, Perth and Brisbane and a mere seventh of the cost in
Adelaide. Now it is about four-fifths of the cost in Sydney, three-fifths of the cost in Adelaide and about half the cost in Melbourne, Perth and Brisbane. That's very expensive land rationing.

The people who are penalised by all this.are not developers, purchasing access to officials through political donations, or officials with tax-paidcareers in making housing scarcer and more expensive. Or folk who already own their homes and get wealthier and wealthier by the effects of land
rationing.

The people who are penalised are the people paying rents that are higher than they need to be. The people trying to scrape together mortgages that are much higher than they need to be. And the people who see the dream of
owning a house rise ever more out of their reach.

Land is a basic resource. Restricting access to it by land rationing does not make for a fairer, more equal or a more harmonious society.

Another way to look at it is that, if you live in urban Australia, much of the value of your home is, official permission. Much of the cost of any mortgage you are paying is, official permission. And much of the value of any rent you are paying is, official permission. Those planning officials, they're from the government and they're here to help you."

 

[krisbarry]

Marriage and family 'on hold'

YOUNG couples struggling to buy their dream home are putting off marriage and delaying having children.

A national housing summit heard yesterday how the rising cost of home ownership is forcing couples to sacrifice quality of life.
Housing affordability has deteriorated significantly in the past 20 years, with at least 750,000 households now paying more than 30 per cent of their income on housing.

Professor Julian Disney, who chaired the summit in Canberra, said "crazy" house prices were having a wide-ranging impact on the community.

"In some cases, that's leading to them, for example, delaying marriages, or quite a common impact is not having children because they don't believe they can afford it as well as aspire to a house," he said.

"It's really a pretty grim outlook which has been building for quite a long time."

The summit heard that average house prices relative to income had almost doubled in the past decade. At the same time, the proportion of first-home buyers had fallen by about 20 per cent and average monthly payments on new loans had risen by 50 per cent.

As reported in The Courier-Mail yesterday, the gap between what people can borrow and the cost of an average established house in Queensland has blown out to almost $100,000.

Research by the Urban Development Institute of Australia also showed that local, state and federal taxes account for $90,000 of the average $437,000 price of a new house and land package.

Professor Disney warned that looming interest rate rises would exacerbate the problem.

"Prices are still rising in most parts of Australia. Rents are now starting to rise substantially, and that will get a lot worse," he said. "We've got more mortgage defaults."

Yesterday's summit is part of a push for a new National Affordable Housing Agreement between Commonwealth, state and local governments.

Housing Industry Association managing director Ron Silberberg said national leadership was needed to address the growing "housing divide".

"This is not a typical housing cycle. New factors are affecting the location and cost of affordable housing and (will) be exacerbated by further interest rate rises," he said.

"Without a national approach and a new agreement, the crisis will be lengthy.

"We need leadership to reduce planning and building regulation that creates barriers to home ownership and low-cost rental housing, placing more people on public housing queues."

ACTU president Sharan Burrow said a national affordable housing agreement would strengthen public housing, expand non-profit housing organisations and provide more effective help for home buyers.

UDIA Queensland president Brent Hailey said the process associated with implementing the GST and other state-based policies had increased taxes and charges for new home buyers in Queensland by more than 400 per cent over five years.

At the launch of its Industry Inquiry Into Affordable Home Ownership in Queensland yesterday, the Urban Development Institute of Australia urged the State Government to put a moratorium on infrastructure charges for two years.

The call has been supported by another development industry group, the Residential Property Council, which said a moratorium on new charges was essential.

But Deputy Premier Anna Bligh said that while the cost for home owners should be kept as low as possible, the housing sector had to accept a fair share of developer charges.

She said the existing structure appeared to be the most workable.

"Shifting developer charges on to councils could have councils in debt which would have a negative impact on all ratepayers," Ms Bligh said in a statement.

As part of an ambitious list of recommendations the UDIA has called for an independent authority similar to the Australian Bureau of Statistics and managed by a Board of Directors appointed by the Queensland Government, to be established.

The UDIA wants it to provide annual reports on land supply issues for all major growth centres in the state.

According to the UDIA, this would be money well spent.

But the State Government said the land monitor could add an unnecessary level of bureaucracy which could cost land owners even more.

Ms Bligh said a SEQ Land and Housing Monitor Program had been instituted which would provide quarterly assessment with reports publicly available.

In time this was expected to include a regular survey of land holdings.

A previously arranged meeting between the UDIA and relevant directors general and the Office of Urban Management would be held in coming weeks.

 

[krisbarry]

It looks like the chorus of people singing "I am being priced out of the housing market" is getting louder and louder

 

[nelly]

The Urban Development Institute of Australia (UDIA) has released a report highlighting a $100,000 gap between household earnings and the cost of an average home.

The group has called for the state and federal governments to dedicate a minister to handle housing affordability.

The report calls for a new independent monitoring authority and a two-year moratorium on increases in government charges, which it says have risen by 400 per cent in five years.

UDIA president Brent Hailey says the charges and a shortage of land are pushing affordability to the brink.

"If we had a minister for housing affordability who looked across the whole spectrum of the issues and brought them all together, rather than a group of individual ministers who look at their own particular portfolios, that would certainly be of benefit," he said.
cheers

 

[Tim]

It looks like the chorus of people singing "I am being priced out of the housing market" is getting louder and louder

And it will continue forever. The fact is, most people can afford a house somewhere, but that somewhere is not where everyone wants to live. More people want to live in desirable locations (eg. inner and outer suburbs of capital cities) than there is enough housing for, hence why prices go up.

Investors in fact make the situation worse (but not for themselves), because they increase the number of buyers out there looking for houses, and reduce the supply considerably of houses available for home owners. Basic economics says that if there are too many people wanting to buy a scarce product, prices will go up. There is nothing a government enquiry can do about it.

So if you think it's hard to buy a house now, try waiting ten years.

"Don't wait to buy property, buy property and wait."
-Robert G Allen

 

[krisbarry]

The problem we have here is that cities are meant to be populated by the young ones, who work, educate themselves, build busines', pay taxes, populate, and bring life to the city. Once they start aging and retire there is no need for them to still be hanging on in the city.

The olds have hung on way too long, and not only hung on, but bought up around them.

There is the problem

What use does a young person have out in the middle of no-where, except if they are a farmer or miner or work in tourism/hospitality, not much employment going on in these shanty outback towns.