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Development costs is the answer but I have explained all of this before.
P.S. As you have nade yourself the "snide remark police" I will refrain from commentng furthermore.
yet land values on the urban fringe are more expensive than ever. They're getting smaller too. How do you explain that?
ps could you forgo your snide remarks. they're not appropriate in a public forum.
The analysis that home size and quality are major contributors to higher prices ignores all the other factors driving house price momentum in Australia as well. Yes house size and quality has increased but what about the cost per square meter (including land cost) to construct a home adjusted for inflation?I think this article pretty much sums up what I have been alluding to: http://www.stubbornmule.net/2009/06/property-prices/
Houses like everything else we buy depends on WHAT (and where) you buy.GTHO Phase III in 1971 = $5300.00 .... same car today in concourse condition INXS of $350,000.
But what is this? Surely this cannot be right? Effects of Housing Qualityhttp://www.econ.mq.edu.au/Econ_docs/research_papers2/2004_research_papers/Abelson_9_04.pdf
Australian homes are among the most expensive in the world when household incomes and rents are taken into account, International Monetary Fund figures show.
As part of a move to push governments to act against housing bubbles, the fund unveiled comparative data on Thursday morning intended to underline the high cost of homes.
It shows rising prices have pushed two key measures of home values - the ratios of house prices to incomes and prices to rents - well above their long-term averages.
With houses selling for more than four times the average household income, the IMF said this ratio in Australia was much higher than its historical average.
A 24-country comparison showed that Australian homes were second only to those of Belgium when judged by this measure.
The other metric it used to measure home values was the ratio of prices to rents. This was also much higher than the long-term average in Australia, which by this criterion ranked fifth most-expensive behind Belgium, Norway, New Zealand and Canada.
He also noted Australia was among a handful of countries where price-to-income and price-to-rent ratios were ''well above'' their historical averages.
The IMF data is the latest indication of the high cost of Australian housing, which some economists believe has started to deter buyers. In April, Barclays economist Kieran Davies said prices were ''flashing red'' with prices at 4.3 times household income and 28 times annual rent, both just below record highs.
Australian houses have long stood out as expensive when compared with other nations. But Mr Zhu conceded that detecting overvaluation was ''more art than science'' and it was important to also consider factors such as credit growth and household debt.
On this front, recent figures have been less dramatic. Latest Reserve Bank of Australia figures show housing lending growing at its fastest annual pace in three years, but it is still well below the pace reached before the global financial crisis.
Household debt as a share of disposable income is also at a three-year high, at 148.8 per cent, but remains below record highs.
The analysis that home size and quality are major contributors to higher prices ignores all the other factors driving house price momentum in Australia as well. Yes house size and quality has increased but what about the cost per square meter (including land cost) to construct a home adjusted for inflation?
It's really nonsensical to argue that the price of Australian housing as a proportion of household incomes has not become historically distorted by any measure. Excerpt from an article in The Age today...
Perhaps that's due to the reality that housing affordability is an important issue to many, just not to you. Your unsypathetic and patronizing tone shows you just don't give a damn about the impact of housing affordability. That's fine, but why denigrate those who do or those impacted by this issue?I was pointing out to sydboy007 some "other" contributing factors as to WHY the price-to-income ratios were so distorted. All I hear is how HARD it is to own a home and how AFFORDABILITY is beyond the reach of the layman...
Perhaps that's due to the reality that housing affordability is an important issue to many, just not to you. Your unsypathetic and patronizing tone shows you just don't give a damn about the impact of housing affordability. That's fine, but why denigrate those who do or those impacted by this issue?
Watching this thread with interest. We're thinking of buying a property in Australia soon. My wife wants to go and have a look soon and I've been saying that things looked a bit frothy around Sydney. One of her friends is a builder in Brisbane and he was saying that Brisbane was one of the better 'buys' at the moment.
This would be a property that we would buy now to live in later. Perhaps we would rent it out for a while, a few years.
The US is the best place for bargains, but i couldn't stand living there amongst so many insular self centered rednecks, so whats the point?
CanOz
Housing affordability is a very important issue FxTrader .. don't get me wrong. My issue is using "mean averages" when the likes of Sydney and Melbourne prices is skewiffing the results. It is not good logic to only look at one small piece of the equation and come to an "informed" opinion on the subject matter. Sydboy007 is on the side of it's all to hard, ponzi scheme, affordability, housing bubble (insert negative aspirations here) side but only a few posts ago he was bragging how cheaply he bought a house in inner city Sydney and how much it is worth today. Hypocritical at best IMO ... no?
I am unsympathetic when people demand that it is their right to own a penthouse in the CBD and walk to work as a FHB. This truly sticks in my craw as the new age of entitlement Gen ? whatever's want their cake and eat it too. My first house was a 3 bedroom in the outer burbs, no driveway, no paint to walls, no window sills, no insulation, tiny bedrooms, small kitchen .... you get my drift right?
I am merely pointing out that by posting "the mean average house affordability is 7 times the average wage compared to 1970 when it was only 3" is not exactly the truth the whole truth and nothing but the truth. Yeah sure it is a statistic but there are many outliers and variables that need to be considered as to WHY this has happened which no one seems to mention when they post. Just another headline and not much substance as to WHY this has occurred. Nevermind the house we live in at 2014 is 4 times the size of the house in 1970. Nevermind the loan we have on the aforementioned house also has consolidated the car loan/credit card and big screen TV in every room. Getting warmer now?
As for my posting style it is not for the feint hearted. If people are willing to post redonkolous claims without any substance other than charts stolen from Steven Keenes website then I was under the impression that there is a right of reply with equal amount of redonkolous claims the other way. If this is interpreted as denigrating or patronizing to their opinion then I apologize in the first instance if I have offended their over sensitive egos.
As I actually dabble in real estate and have a little bit of practice on the subject matter at hand other than buying one house and being a slave to a mortgage than I assumed (wrongly as it turns out) that my experience would be taken with more than a grain of salt.
But I digress ... real estate is a commodity like any other that can be bought and sold to make a profit. It is all in the timing and location. I currently have 4000m2 of zoned CBD for either a 30 unit motel site or 2 storey town houses. As the market in the city where it is located has gone off the boil I am prepared to sit on it until the market cycles yet again.
But what would I know ...
I honestly don't know where you are coming from Trainspotter?
For the uninitiated, you are a failed property developer (Horizon Homes). No excuses.
You have an ego bigger than the state you live in.
You post views from your abode (not even waterfront) and try to impress people.
****ing try hard.
I honestly don't know where you are coming from Trainspotter?
For the uninitiated, you are a failed property developer (Horizon Homes). No excuses.
You have an ego bigger than the state you live in.
You post views from your abode (not even waterfront) and try to impress people.
****ing try hard.
+1. I've learned so much from this forum, TS included.Macquack that's literally added nothing to this conversation except pathetic personal attacks. Are we to only take input from people sipping champagne on their yachts at Marina Mirage? Historically that hasn't ended too well either. Do we need to post our CV to have an opinion?
Trainspotter I don't agree with everything you say but I appreciate many of your posts because they generally contain more than "No, I'm right and your generation are the worst ever!" Getting involved in a game of getting 1 up on others doesn't help - you can put your perspective out there but it's hardly worth the energy to convince others to share it.
"forum
noun
1. a meeting or medium where ideas and views on a particular issue can be exchanged."
To some of the posters who seem to have forgotten what a forum is for, it's for sharing opinions and viewpoints in the hope that we might learn something from each other or get a different perspective to those we are used to. You don't need to agree, just try to keep the level of responses above
I honestly don't know where you are coming from Trainspotter?
For the uninitiated, you are a failed property developer (Horizon Homes). No excuses.
You have an ego bigger than the state you live in.
You post views from your abode (not even waterfront) and try to impress people.
****ing try hard.
Waterfront living is not what it is cracked up to be. Better to be up the hill a bit with uninterrupted views of the ocean as you look down on the people in the waterfront
The buyers started queuing at about 7.30am for their allotted appointment with a sales agent. There was little doubt that Sydney's latest off-the-plan offering - Darling Square at Darling Harbour - was going to be a sell-out.
And by late afternoon on Saturday it was.
Lend Lease executive project director, Rob Deck, said there were more than 5000 inquiries in the lead up to Saturday's public launch for the 40-storey tower on the site of the Entertainment Centre and a seven-storey "boutique" block beside it.
...
On Saturday evening, Lend Lease confirmed prices had ranged between $700,000 and more than $3.5 million.
Mr Brown said the premium apartment market was as strong as he's experienced in 20 years.
"The quality of current development, limited supply and strong local and international demand is driving the demand and we believe there will be strong growth over the coming five-year period," Mr Brown said.
Kel Fitzalan, 44, of Lavender Bay, a partner at PriceWaterhouse Coopers, was so excited about Darling Square he bought two apartments - a one-bedder with a study on the 24th floor for $1 million and a two-bedder on level 26 for $1.6 million.
"I've got an eight-year-old and a 10-year-old and hopefully in 10 years time it's somewhere they can stay when they're going to university," Mr Fitzalan said.
They would be rental properties initially, once the building is complete in 2017, and he has little doubt he'll find a tenant. "With the way that city traffic's going, people want to be closer to their work and they want to be close to university," he said.
"I'm very confident there will be great demand for rental."
Ermmmmm you did not get what I posted obviously. The home loans are MASSIVE because the house sizes are a lot larger. Surely syd you of all people can recognise this fact? If they have hit retirement age and still have a mortgage debt is mainly due to them SPENDING on filling their BIGGER houses and keeping up with the Joneses' with the latest doodads that they must have. Consumerism and all that ... we are no longer content to raise 6 kids in the 3 bedroom bungalow and keep the single roof over our heads ....... OH WHY BOTHER !
You are right .... property is doomed we should all just do a Steven Keen and sell now and avoid losing 50% of our home value when this massive ponzi scheme comes crashing down
Macquack that's literally added nothing to this conversation except pathetic personal attacks. Are we to only take input from people sipping champagne on their yachts at Marina Mirage? Historically that hasn't ended too well either. Do we need to post our CV to have an opinion?
Trainspotter I don't agree with everything you say but I appreciate many of your posts because they generally contain more than "No, I'm right and your generation are the worst ever!" Getting involved in a game of getting 1 up on others doesn't help - you can put your perspective out there but it's hardly worth the energy to convince others to share it.
"forum
noun
1. a meeting or medium where ideas and views on a particular issue can be exchanged."
To some of the posters who seem to have forgotten what a forum is for, it's for sharing opinions and viewpoints in the hope that we might learn something from each other or get a different perspective to those we are used to. You don't need to agree, just try to keep the level of responses above
View attachment 58396
Now THAT is a load of nonsense. Raising 6 kids in a 3 bedroom bungalow was never the norm but was and still is the sole domain of the irresponsible.
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