You and TS might be right about the fringes and Northern beaches, but for most other folks their dream of owning a home now is either for the market to collapse by 30 to 50%; or that they'd earn enough to be able to afford a $1M+ property. Which dream is more likely give the state of the economy and housing market?
There are a lot of new readers here so I will re post an article I cut out of the local rag on the northern beaches of Sydney 22 years ago. The article was about the previous 25 years (before 1994) and the next 25 years, we are nearly there now. Read the article, nothings changed, same old commentaries, very interesting. Click to expand.
Neither, nothing will change. Those that can and do afford expensive homes always will, those that can't will move out west or up to the Central Coast. I can't remember how many times my work mates use to say to me "why do you live on the northern beaches in a flat when you can buy a 4 bedroom house out here in the west for the same price?" It's just choice and ability to pay, I wouldn't live out west for free but happy to live and pay for the beaches area. You pay for lifestyle and in areas where there is no land left (like the northern beaches) it can only mean one thing, prices will keep on going up.
Considering how expensive it may be now, how do you explain this:
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Australians paying off debt at record levels
New figures show Australians are paying off their mortgages and other debt at record levels.
The number of Australians owning their homes outright or switching from renting to ownership has risen to its highest level since 2010, according to results from the latest St George-Melbourne Institute Household Financial Conditions Report.
Forty-five per cent of those surveyed had paid off their mortgages, while 47.3 per cent reported having no debt at all.
The level of renting, at 15 per cent, is the lowest recorded since the survey started in 2001 when 25 per cent of respondents were renting.
- See more at: http://www.skynews.com.au/business/...bt-at-record-levels.html#sthash.4Paoqpeg.dpuf
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I am out of the market for 3 reasons. 1st. the price jumped the most in the last 2 years before the sale, so the price was good. 2nd. was there was a threat of a major development next door to my building and 3rd. was that it wasn't suitable for my wife and I anymore. It meant sell, money in the bank.But it's fair to say you don't really believe this boom is going to keep going right? That's why you're out of the market.
That's not to sound doom and gloom or have no faith in the country; just for a lot of working people, housing affordability is a real concern and top line average figures can be quite misleading.
Good on you Bill, but as long as you realise you were also surfing an economic wave which is not there anymore;I started off sleeping on the couch in a mates place in Manly when I first got there in the early 80's. I use to pick up the Manly Daily and look at the property prices and just shake my head as to how could anyone buy a unit there. I just worked my ar$e off doing o/t and extra jobs just to get in the market. Bought a 1 br flat, sold, rebought, sold rebought over and over. Once I owned my own place fully I bought investment property. It has never been easy, I never finished high school and didn't go to uni, I had nothing but simple jobs. I just put my money in real estate while others were drinking as much beer as they could on a Friday night. The rest is history.
e.g. A blue collar person earning $50K a year made 1/3rd a person who earn $150K a year. But the house a better paid person can buy is, say $1M but that does not mean the house a $50K person could buy is $330K. It'd be at least $600K.
So an average income of $75K wage does not mean half the working population earn that or less while the other have evenly distributes it out; but for house prices they're more even.
It is 12 oclock. Interest rates haven't even risen yet. And prices are rising. Can't even read your own made up clock.
Your lack of understanding is stupifying. There is more to property in Australia then Sydney. Please troll away as your posts reveal as to what level of medication you are currently on. I will write it in crayon next time so you might comprehend.
As I said can't even read your own clock. In which universe have interest rates increased and values fallen ? Property prices are up massively over Australia. Maybe they're down in a few of your cherry picked locations.
After controversially lifting mortgage rates last year independently of official moves, the big banks are tipped to use the same playbook to offset earnings pressure that is showing no sign of letting up.
While the banks’ “repricing” of their mortgage books over the past 12 months provided a reprieve from adverse regulatory changes, their margins are under renewed pressure from rising wholesale funding costs and fierce competition.
The big banks blamed the rate rise late last year on the regulator’s decision to increase their capital requirements for mortgages, as recommended by the Murray fin*ancial system inquiry, to improve the competitiveness of small lenders hindered by more onerous “risk weighting” rules.
The regulatory decision spurred the big banks ”” Commonwealth Bank, Westpac, *National Australia Bank and ANZ to raise almost $20 billion in *equity from shareholders, reducing their returns.
After a year of strong growth, a fall in Sydney home prices has dragged the national average flat in the last month of 2015.
While the national average capital city home price rose 7.8 per cent over 2015, it went nowhere in December and actually fell 1.4 per cent over the last three months of the year.
Sydney was the prime mover on all fronts - its 11.5 per cent annual gain was the strongest of any capital city market and its 2.3 per cent third quarter decline also the biggest.
Gladstone, Qld
The construction phase for three LNG facilities created a house price boom in Gladstone, but it started winding down in 2012 as workers began seeking jobs elsewhere and developers started constructing a mass of dwellings. Many of the workers that remain in the area have been accommodated in camps, circumventing the local housing market.
Moranbah, Qld
Moranbah’s median house price grew by roughly 30 per cent each of the 10 years to 2012 to reach $750,000, while rents were $1800 per week, on average. Then the mining companies began operating fly-in, fly-out workforces in temporary workers’ camps and the property market went into free fall. The median house price is now $215,000, houses typically take eight months to sell and rents are $300 per week.
Muswellbrook, NSW
The Hunter Valley was another location hurt by zealous developers amid a downsizing coal industry, Hotspotting.com.au said. The region was booming until recently, attracting a swarm of developers, who built too many houses. Muswellbrook has been the worst affected. The median house price has been falling since 2012 and is now the same as it was five years ago.
Newman, WA
House prices in the Pilbara town of Newman are lower than they were five years ago and fell 22 per cent in the past 12 months. A massive iron ore mine was recently constructed near the town, but the mining company involved became wary of paying high rental costs to accommodate its workers. Its solution was to build a 2000 room village so that employees wouldn’t need to live in local housing.
Port Hedland, WA
The end of the resources boom has also blown a hole in Port Hedland housing demand. A little over two years ago, Port Hedland had a median house price of $1.3 million. Today it is $850,000. The median weekly rent has dropped from $2500 to $1000.
Surat Basin, Qld
The Surat Basin, just west of Brisbane, is a major coal seam gas field. Towns such as Chinchilla and Roma once boomed ”” until oversupply killed their markets. There are about 15,000 resources workers in the area, but 94 per cent are now accommodated in workers camps, according to Hotspotting.com.au.
Karratha, WA
Karratha home values used to be over $800,000, but prices have fallen across all the region’s suburbs over the past year to reach approximately $500,000. Falling prices were also a result of developers building too many houses. Hotspotting pointed out that in the 10 years before 2011, Karratha dwelling approvals averaged 183 per year. In 2012 and 2013 there were more than 1300 total approvals.
Don't bother. They're rich old blokes who had it too easy to know what adversary looks like.
I am out of the market for 3 reasons. 1st. the price jumped the most in the last 2 years before the sale, so the price was good. 2nd. was there was a threat of a major development next door to my building and 3rd. was that it wasn't suitable for my wife and I anymore. It meant sell, money in the bank.
Now with record low interest rates prices have moved even further north and perhaps further big increases are over. Maybe when interest rates start to rise prices might stagnate or go slightly south, that is the feelings I have. However when I go looking at property there are still swarms of people all doing the same thing, so for now it is still stable.
If I was somebody new to property buying now, I would wait. Bank the money, build a pot and wait for interest rate increases and see if it shakes out a few people. Things change all the time, when I bought my house in 2009 up here on The Central Coast it was expensive and hard to find. It seemed very difficult for me to find the right place. 2 years later (around 2011) the markets froze. They could not sell 2 br timber houses on 500 SQM for 200K. Today they are selling everything that comes onto the market, so the time to buy may not be now.
The whole point of my original post was that 60% discounts do not happen in the areas where I am interested in, doesn't matter if it's houses, flats or timber bungalows. The best I reckon we will ever see would be a 10% drop when interest rates start going up or a long period of stagnation.
I started off sleeping on the couch in a mates place in Manly when I first got there in the early 80's. I use to pick up the Manly Daily and look at the property prices and just shake my head as to how could anyone buy a unit there. I just worked my ar$e off doing o/t and extra jobs just to get in the market. Bought a 1 br flat, sold, rebought, sold rebought over and over. Once I owned my own place fully I bought investment property. It has never been easy, I never finished high school and didn't go to uni, I had nothing but simple jobs. I just put my money in real estate while others were drinking as much beer as they could on a Friday night. The rest is history.
All jokes aside, it is tough. I know people who works very hard but still could only afford to rent. Also know people who does not work all that hard, but that's because they're "white collar", and still couldn't really buy a house - maybe a flat... or a modest house if they're both working - I guess that's why some people like to marry rich people and some people just like to make money by any means
.
I love how an 11% YOY increase is a fall and record low interest rates are increasing interest rates and improving employment conditions indicate a recession.
This guy cherry picked a few mining towns.
Not that it matters as the "property clock" is complete bull****. The only cycle we've seen in property has ben "up, up and up some more".
Quincy Magoo (or simply Mr. Magoo) is a cartoon character created at the UPA animation studio in 1949. Voiced by Jim Backus, Quincy Magoo is a wealthy, short-statured retiree who gets into a series of comical situations as a result of his nearsightedness, compounded by his stubborn refusal to admit the problem.
https://en.wikipedia.org/wiki/Mr._Magoo
Funny how art imitates life now isn't it
Even when FACTS are presented he still refuses to admit he is wrong. Get out of Sydney and open your eyes.
This is like an episode of the loony tunes. Australia is not in recession. Interest rates have not risen. Property prices have been increasing. If anything, we're at 12:15. That is assuming this made up clock has any resemblance to reality.
This is like an episode of the loony tunes. Australia is not in recession. Interest rates have not risen. Property prices have been increasing. If anything, we're at 12:15. That is assuming this made up clock has any resemblance to reality.
THE most telegraphed US rate rise in history is expected to provoke bigger moves on financial markets than what’s been seen so far.
The federal funds rate today rose a quarter of a percentage point to a range between 0.25 per cent and 0.5 per cent. The Australian dollar’s reaction to the US Federal Reserve’s first rate hike in almost a decade was fairly muted, while the local share market rallied.
But Commonwealth Bank of Australia economists predict a stronger response to play out over the next few days.
“We haven’t yet seen the full reaction, partly because a lot of market participants around the globe were closed for business given the time zones,” CBA chief economist Michael Blythe said.
CBA’s head of international economics Richard Grace said the biggest moves will be in the 24-hour period kicking off in the Asian Monday morning, once traders have digested the news over the weekend.
Mr Grace tipped equity markets to soften over the next three trading days, saying volatility may pick up.
“(And) I think the market reaction to the second Fed funds rate hike, which we think will be in March, will be larger than the one we’ve seen now,” he said.
Your words not mine
Have you thought this might be a"global" clock and not specific to Australia and is to be used as a reference point only?
So when the banks raised interest rates last year above what the RBA had sanctioned this did not occur in your world right? As per the link I provided. Watch what they will do in the next few months as they blame the "cost of funding" because the US of A is doing it
http://www.news.com.au/finance/us-f...s/news-story/00e170643b03a7acd6488c7879fa921d
Naaahhhh ... interest rates aint rising eh?
Australia is not in recession but look what happened in the Eurozone. Did they have a recession? You betcha.
So you think this is all about Sydney right and prices have gone up and up and up ALL across Australia but you fail to perform the most simplest research that EVIDENCES regional Australia house prices are falling dramatically and not just in the "cherry picked" mining towns I posted. Go and have a look at Townsville (which by the way has suffered a 20% decline)
Here is another "cherry picked" town ... Oh yeah and not mining either ... DERP !!
2010 Mt Tarcoola, Geraldton average median price $448,000
2015 Mt Tarcoola, Geraldton average median price $373,000
A $75,000 LOSS in 5 years on median price range for 1 suburb
Another suburb in same town has lost over $80,000 in the same period. I will place the link here http://www.domain.com.au/suburb-profile/wandina-wa-6530 for you to gorge yourself on actual DATA and FACTS
You Sir, are a replicant of your moniker. I bid you adieu in your trolling exercise as the bait you are using is a bit smelly and the fish do not feel like biting (read educating) you anymore.
P.S. Like it or lump it we are not completely isolated to global market forces which will have an effect on The future of Australian property prices.
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