The future of Australian property prices

[DB008]

Sydney is sooooooo expensive and is in a bubble..........


Think New York Is Costly? In New Delhi, Seedy Goes for 8 Figures

NEW DELHI ”” The fading bungalow at 38 Amrita Shergil Marg does not immediately shout real estate bling.

There is no tennis court, no infinity pool, no Sub-Zero refrigerator or walk-in closet. The paint is chipped, the bathrooms are musty and the ceilings have water stains. The house may ultimately be torn down.

Yet when it went up for public auction, the winning bid was almost $29 million. And many neighbors consider that a bargain. One block away, a gracious if not quite Rockefeller-ready residence once leased by the Mexican ambassador is now reportedly on the market for more than $100 million. Other nearby houses are going for $40 million to $70 million.

“The price of the Mexican residence is $110 million,” said Jorge Roza de Oliveira, Portugal’s ambassador to India. “You can buy a home in New York and Miami and Lisbon and London and keep a lot of change for that much."

 

[sptrawler]

Yes DB008, properties in Australia are going to keep doubling in value every 7 years, it doesn't worry me I own a few.
However, I can't prescribe to that belief, do you think the average price of houses in capital cities, is going to be $1m in 7 years time?
If that happens, IMO it will be supported by overseas buyers.
Which will in my opinion, leave our kids as third world workers.
They will always have to rent, probably from overseas owners, as their wages will have to be kept competitive.

It is all starting to look very much like South America. :1zhelp:
Politicians are dicks.

The only good thing is when it goes really pear shaped, the pollies will lose their pensions and perks.

 

[Bintang]

The only good thing is when it goes really pear shaped, the pollies will lose their pensions and perks.

Don't count on it. Come hell or high water the pollies will take care of themselves first.

 

[sptrawler]

Don't count on it. Come hell or high water the pollies will take care of themselves first.

That's if the same country runs the government.lol

As Asia requires more food and has less productive land, they will look further afield.
Blind Freddy can see that.
How do we sit back and say were fine, we don't use the north of the country, because it's too hot.
However you can't use it to feed yourselves, just sod off.
Best of luck with that tack.lol

What is it?
2billion above us 20 million here.
That's big odds.lol

 

[FlyingFox]

This thread has been inactive for a while so I thought I'd generate some discussion.

I don't know if it has been discussed before but the link below shows updated land holdings for publicly listed companies.

http://www.macrobusiness.com.au/2013/03/prosper-responds-to-land-banking-developers/

It was originally published by prosper. The major developers have on average greater than 10 years of land supply ...

 

[FxTrader]

This thread has been inactive for a while so I thought I'd generate some discussion.

I don't know if it has been discussed before but the link below shows updated land holdings for publicly listed companies.

http://www.macrobusiness.com.au/2013/03/prosper-responds-to-land-banking-developers/

It was originally published by prosper. The major developers have on average greater than 10 years of land supply ...

Yet building approvals for private sector houses continue their declining trend (from the ABS)...



Whatever the business drivers are for land banking by developers it's not translating into housing availability or affordability primary due to planning restrictions.

 

[FlyingFox]

A controversial but good article on from the Gen Y point of view on housing affordability.

http://www.brisbanetimes.com.au/com...-dreams-of-finding-a-home-20130404-2h9i4.html

 

[drsmith]

Banks are reducing the intro bonus increment on online saving accounts thus improving their margins.

A cut to home loan interest rates outside the RBA's moves might be on the way.

 

[ROE]

I like this quote on AFR article today on properties...

"One thing we know about house prices is that past performance is a guide to future returns. In the economist’s jargon, there are significant “serial dependencies” which means that performance tends to “persist”. "

http://www.afr.com/f/free/blogs/chr...ousing_sceptics_proved_9N9nULnQzqQtqDVjLjABJJ

the first sentence I can understand, the second sentence, there are some cool word stitch together
If some CEO speak like that in a stock, I would run but housing is different...

that mean we cant losing on housing then, buy before you are price out of the market

 

[Julia]

I'd appreciate members' comments on the wisdom or otherwise of the following:

Single, early 50's, part time teaching, following settlement of sale of family home, about $10K in Super, is considering buying one house in Sydney and one in the Blue Mountains, dividing her time between these.
Declares she hates 'this vile city of Sydney" but needs to keep a home available for two teenage sons, one 18, one 16, both deaf but very capable (older one working and younger on scholarship at Hills Grammar).

The original plan was to sell the family home then, after clearing the minimal remaining mortgage, put some into Super.

I've suggested this is the old 'too many eggs in the one basket' idea, not to mention she is failing to generate any income and incurring two lots of expenses via rates, insurances etc.

 

[drsmith]

I've suggested this is the old 'too many eggs in the one basket' idea, not to mention she is failing to generate any income and incurring two lots of expenses via rates, insurances etc.

If she's got the initial capital and income to support such an arrangement, why not.

If not, then it's a question of priorities.

 

[againsthegrain]

A controversial but good article on from the Gen Y point of view on housing affordability.

http://www.brisbanetimes.com.au/com...-dreams-of-finding-a-home-20130404-2h9i4.html

its just a state of mind, you don't need to start renting from the bank to start a family.

 

[FlyingFox]

I'd appreciate members' comments on the wisdom or otherwise of the following:

Single, early 50's, part time teaching, following settlement of sale of family home, about $10K in Super, is considering buying one house in Sydney and one in the Blue Mountains, dividing her time between these.
Declares she hates 'this vile city of Sydney" but needs to keep a home available for two teenage sons, one 18, one 16, both deaf but very capable (older one working and younger on scholarship at Hills Grammar).

The original plan was to sell the family home then, after clearing the minimal remaining mortgage, put some into Super.

I've suggested this is the old 'too many eggs in the one basket' idea, not to mention she is failing to generate any income and incurring two lots of expenses via rates, insurances etc.

I would have to agree with you on this. She would be much better off with more income producing assets given that she will not otherwise have any capital outside of the properties and have very little savings. However...

If she's got the initial capital and income to support such an arrangement, why not.

If not, then it's a question of priorities.

+1

 

[FlyingFox]

its just a state of mind, you don't need to start renting from the bank to start a family.

I think there are many more issues raised in the article above that. Also you need to feel slightly financially secure to start a family.

Either renting or renting form the bank in the current inflated market cause a rather large drain on income.

 

[sydboy007]

I'd appreciate members' comments on the wisdom or otherwise of the following:

Single, early 50's, part time teaching, following settlement of sale of family home, about $10K in Super, is considering buying one house in Sydney and one in the Blue Mountains, dividing her time between these.
Declares she hates 'this vile city of Sydney" but needs to keep a home available for two teenage sons, one 18, one 16, both deaf but very capable (older one working and younger on scholarship at Hills Grammar).

The original plan was to sell the family home then, after clearing the minimal remaining mortgage, put some into Super.

I've suggested this is the old 'too many eggs in the one basket' idea, not to mention she is failing to generate any income and incurring two lots of expenses via rates, insurances etc.

Tell her to by somewhere nice in the city.

I live in the Inner West and quite often feel like I'm back at my parents on the South Coast.

Got the serenade of the frogs right now, and a few cicadas thrown in. Find it quite soothing

I fear anyone who things sydney is crowded, fast paced, hectic has never been overseas.

 

[qldfrog]

Single, early 50's, part time teaching, following settlement of sale of family home, about $10K in Super, is considering buying one house in Sydney and one in the Blue Mountains, dividing her time between these.
Declares she hates 'this vile city of Sydney" but needs to keep a home available for two teenage sons, one 18, one 16, both deaf but very capable (older one working and younger on scholarship at Hills Grammar).

As I understand it, would be a massive investment in two houses with matching never ending costs yet no income???
In my opinion, better off with one house and rent for the actual needs of sydney residency( how long will it be required there? can she not match the rent with the sydney property $ equivalent in investments and be free of the worries as well as added flexibility
I would never go that way
but I am not a wise person in any case...

 

[Julia]

Thanks for responses - much appreciated.
Fine to own property in addition to that in which you live, but - especially when there are no other investments and no Super to speak of - I'd have thought that additional property needs to generate an income.

There seems to be a naive belief that just simply owning property is a sure ticket to massive capital gains.

 

[sptrawler]

I'm tending to think it is window of opportunity to look at buying a property in the U.K.

I've only thought about it recently, but it may be a winner.lol

 

[damien275x]

It's amazing how much the sentiment has changed in two years. The good news is that the young people I know are skilling up, earning more, saving more, and not buying houses, we're renting, sharing, doing everything we can to avoid paying for them because (in our opinion) it's a waste of life to be stuck working long hours in an unstable job market just to hang onto a house that does nothing but cost you.

The downside is that even though prices have kind of stopped going up/gone backwards, the people holding the properties *still* believe they're worth what they want, even though they put them to market and they just don't sell. I don't see a lot of these changing hands anytime soon if they're holding on to them. The positive is that due to old age, they will die first so if they won't sell, long term they have to give them over for free via inheritance etc anyway. What good is a pile of bricks when you can't wipe your own ass. Yes they can be rented out, but most people have a captal gain strategy, not a positive cash flow one, which is sad. If you went for passive income you'd be OK, but most people are kind of holding on hoping they make a giant profit when they sell. They won't.

 

[DB008]

It's amazing how much the sentiment has changed in two years. The good news is that the young people I know are skilling up, earning more, saving more, and not buying houses, we're renting, sharing, doing everything we can to avoid paying for them because (in our opinion) it's a waste of life to be stuck working long hours in an unstable job market just to hang onto a house that does nothing but cost you.

Rent for 30 years, own nothing.
Get a mortgage, pay it off after 30 years, own a house/unit/property.

It's your choice really.