The future of Australian property prices

[Value Collector]

A home should be affordable. It's good for the owner-occupier, their family, marriage... might even permit some innovative risk-taking ventures low to zero debt would permit.

Then there's the hiring of local tradies to work on home improvement. Results in more income being spread around. Results in people living in a healthier house. Reduces illness and costs to the health system etc. etc.

But na.

It depends on the definition of "home", I mean if a "home" is a 4 bedroom house on a 1/4 acre block within 10km of the cbd you simply will not be able to fit 1,000,000 + of them in that space,

I think Australians need to expand what they are willing to accept and where it's located.

 

[luutzu]

It depends on the definition of "home", I mean if a "home" is a 4 bedroom house on a 1/4 acre block within 10km of the cbd you simply will not be able to fit 1,000,000 + of them in that space,

I think Australians need to expand what they are willing to accept and where it's located.

Dude, I don't know anybody who expects a 1/4 acre block with a house on top to be an acceptable home. Well, we all want that for sure... just people tend to set their sight a bit lower given their $1M budget.

From my browsings, a detached home averages some $1,000 a metre for a clad/fibro home; for brick McMansion it's about $2K a metre. And that's some 30 to 40k from the CBD. Or however far Fairfield/Cabramatta is.

Within some 15km, they go for about $1.5K to $2K or more.

Flats... new ones goes for $600K to the high $700K for a 1 bedroom, or some 100m2 or less. The price per m2 is a bit crazy there, why I don't know. It's not that much closer to the station or anything. Maybe a couple hundred metres.

For old, maybe 50years+ flats... 2 bedrooms you're looking at $450K to $550K.

So I don't think apartment are cheap. If anything, it's more expensive than a detached house. Just it's within the budget of a family with two income so people just thought it's affordable to a $1.5M detached with some 120m2 of living space and a lawn to mow.


Driving around lately and you'll noticed more truckies and tradies are starting to park their truck and utes either on the street or the front of their duplex driveway. That's just accidents or stolen gears waiting to happen.


With most of the wages going to mortgage repayment, not a whole lot of businesses will do much business. The banks will do pretty well until it all collapses, then all those winnings are flushed downt he toilet anyway... so we're in for a once in two generation ride soon enough I reckon. It's going to be like the late 80s all over again.

 

[sptrawler]

Dude, I don't know anybody who expects a 1/4 acre block with a house on top to be an acceptable home. Well, we all want that for sure... just people tend to set their sight a bit lower given their $1M budget.

From my browsings, a detached home averages some $1,000 a metre for a clad/fibro home; for brick McMansion it's about $2K a metre. And that's some 30 to 40k from the CBD. Or however far Fairfield/Cabramatta is.

Within some 15km, they go for about $1.5K to $2K or more.

Flats... new ones goes for $600K to the high $700K for a 1 bedroom, or some 100m2 or less. The price per m2 is a bit crazy there, why I don't know. It's not that much closer to the station or anything. Maybe a couple hundred metres.

For old, maybe 50years+ flats... 2 bedrooms you're looking at $450K to $550K.

So I don't think apartment are cheap. If anything, it's more expensive than a detached house. Just it's within the budget of a family with two income so people just thought it's affordable to a $1.5M detached with some 120m2 of living space and a lawn to mow.


Driving around lately and you'll noticed more truckies and tradies are starting to park their truck and utes either on the street or the front of their duplex driveway. That's just accidents or stolen gears waiting to happen.


With most of the wages going to mortgage repayment, not a whole lot of businesses will do much business. The banks will do pretty well until it all collapses, then all those winnings are flushed downt he toilet anyway... so we're in for a once in two generation ride soon enough I reckon. It's going to be like the late 80s all over again.

Don't stress too much, it will come back, to what the market can bear.

 

[Value Collector]

Dude, I don't know anybody who expects a 1/4 acre block with a house on top to be an acceptable home. Well, we all want that for sure... just people tend to set their sight a bit lower given their $1M budget.

From my browsings, a detached home averages some $1,000 a metre for a clad/fibro home; for brick McMansion it's about $2K a metre. And that's some 30 to 40k from the CBD. Or however far Fairfield/Cabramatta is.

Within some 15km, they go for about $1.5K to $2K or more.

Flats... new ones goes for $600K to the high $700K for a 1 bedroom, or some 100m2 or less. The price per m2 is a bit crazy there, why I don't know. It's not that much closer to the station or anything. Maybe a couple hundred metres.

For old, maybe 50years+ flats... 2 bedrooms you're looking at $450K to $550K.

So I don't think apartment are cheap. If anything, it's more expensive than a detached house. Just it's within the budget of a family with two income so people just thought it's affordable to a $1.5M detached with some 120m2 of living space and a lawn to mow.


Driving around lately and you'll noticed more truckies and tradies are starting to park their truck and utes either on the street or the front of their duplex driveway. That's just accidents or stolen gears waiting to happen.


With most of the wages going to mortgage repayment, not a whole lot of businesses will do much business. The banks will do pretty well until it all collapses, then all those winnings are flushed downt he toilet anyway... so we're in for a once in two generation ride soon enough I reckon. It's going to be like the late 80s all over again.

They could get a big house on a 1/4 acre block if they chose not to continue playing sardine in the capital cities

 

[luutzu]

They could get a big house on a 1/4 acre block if they chose not to continue playing sardine in the capital cities

Not really.

Looked at Campbelltown, you know where that is right? Over an hour to the city - Tolled freeway?

A new master build house on some 450m2 goes for about $800K to $900K. Empty block of similar size goes for about $450K to $500K.

But then maybe they're expecting Sydney's second airport so it's priced almost like Sydney CBD? Not sure why people want to live near an airport or under flight paths but yea.

Seems that the current market is priced not for living but for "potential" development, S.T.C.A... subject to council approval

Seem any block bigger than 450m2 is described as "huge" potential. Duplex, or townhouse, or villas. No dude, there's zoning control, there's lot size requirement, there's slope and stormwater/easement issue... there's the costs and time of building all them potential.

I don't know that many people but seems anyone with a house or two are building a granny flat at the back, turning their garage into another rental and either live in the main house or rent that out too.

The coming apartment glut, highly probable interest rate rise/s, an average personal debt in the hundreds of thousands if not a million... don't want to be a pessimist and such but I can't see how this will end well. Not just the young families on that property ladder recently, but for the entire economy.

I mean, with so much of people's wages going towards mortgage repayment, the economy can't do too well. Then if property investment suffer a loss, or just stand still... the generous negative gearing and capital gains mean nobody's going to be paying income taxes... corporate tax cuts further reduces the state revenue...

There's only so much you can collect from drivers and their phone use.

Maybe there's the infrastructure boom where the gov't and private enterprise work together, spent a lot of money and put plenty of tolls on them that nobody uses.

 

[Value Collector]

Not really.

Looked at Campbelltown, you know where that is right? Over an hour to the city - Tolled freeway?

.

You know Australia is a big place right, and there are places out side the capital cities past Campbell town, hahaha.

https://www.realestate.com.au/property-house-nsw-toormina-126938578

 

[luutzu]

You know Australia is a big place right, and there are places out side the capital cities past Campbell town, hahaha.

https://www.realestate.com.au/property-house-nsw-toormina-126938578

Do they even have schools there? jk. And it's number 4. Unlucky number, haha

Just looked up Austral, just outside of Liverpool. I didn't know you could sub-divide land to some 250m2 per lot. They don't even allow land that small in Fairfield. Minimum is 450m2 from memory.

What the heck can you build on 250m2? Unless they allow you to build over the entire lot... if Floor Space Ratio is 50%... for some $300K, slap on another $100K for a garage/house... might as well buy a flat near civilisation a bit.

 

[Value Collector]

Do they even have schools there? jk. And it's number 4. Unlucky number, haha

Just looked up Austral, just outside of Liverpool. I didn't know you could sub-divide land to some 250m2 per lot. They don't even allow land that small in Fairfield. Minimum is 450m2 from memory.

What the heck can you build on 250m2? Unless they allow you to build over the entire lot... if Floor Space Ratio is 50%... for some $300K, slap on another $100K for a garage/house... might as well buy a flat near civilisation a bit.

My whole point is that if the population was willing to move out over the blue mountains, or past the Hawkesbury river, we could have much lower property prices, its mainly because we have a growing population, boosted by immigration intent on playing sardines.

 

[luutzu]

My whole point is that if the population was willing to move out over the blue mountains, or past the Hawkesbury river, we could have much lower property prices, its mainly because we have a growing population, boosted by immigration intent on playing sardines.

I think property is just in a bubble at the moment.

There's plenty of land around Sydney still.

Sure people prefer to live closer to the city where transport, amenities and jobs are easier to come by. But even around where I live I see a fair few new apartment sitting empty. They've been on the market at least 6 months now... no lights on at 8pm.

 

[Value Collector]

Sure people prefer to live closer to the city where transport, amenities and jobs are easier to come by. .

if there was a shift away from they capital cities, more of those would start appearing else where.

 

[Smurf1976]

My whole point is that if the population was willing to move out over the blue mountains, or past the Hawkesbury river, we could have much lower property prices

What's really needed to make that work is for business to realise that there are places other than Sydney and Melbourne where they can locate.

In the past big companies had offices in places like Adelaide and even a few in places like Launceston. These days it's incredibly concentrated in the big two cities and that has created a situation where anyone needing employment in a white collar job would be well advised to base themselves in Sydney or Melbourne and that fuels demand for property in those cities no matter what the price.

I'm sure that if a lower rate of company tax applied to all companies with greater than x% of their total workforce located in parts of Australia other than the current major cities then a lot of the "problems" preventing decentralisation would magically disappear.

 

[InsvestoBoy]

if there was a shift away from they capital cities, more of those would start appearing else where.

Barnaby Joyce, is that you?

Jokes aside, do you think they start appearing by magic? I think you have it backwards.

If the Government would build infrastructure that matches what's available in the capitals:
- Schools,
- Hospitals,
- Shops (groceries, doctors, etc),
- Fast internet.

and then incentivise business to open offices, teachers and doctors to move, and thus create jobs there, then people would move there! Undoubtedly. The cost of living and pressure to make ends meet is simply too high to not.

But they don't. It's almost as if they have a vested interest in the status quo.

 

[McLovin]

if there was a shift away from they capital cities, more of those would start appearing else where.

Infrastructure in Australia is generally hopeless. How does a city the size of Sydney have no metro? Why does someone going to Penrith get on the same train at Central as someone going to Newtown? There are plenty of people who could work from home and only come into the office every now and then, but they can't because the internet in Australia is third world.

If they build a credible rail network along the east coast with HSR then all those places between Sydney and Canberra become commuter towns. Ditto Newcastle. I'd much rather live in the Southern Highlands than out in Western Sydney.

 

[luutzu]

Infrastructure in Australia is generally hopeless. How does a city the size of Sydney have no metro? Why does someone going to Penrith get on the same train at Central as someone going to Newtown? There are plenty of people who could work from home and only come into the office every now and then, but they can't because the internet in Australia is third world.

If they build a credible rail network along the east coast with HSR then all those places between Sydney and Canberra become commuter towns. Ditto Newcastle. I'd much rather live in the Southern Highlands than out in Western Sydney.

I guess the planners were thinking that someone from Penrith wouldn't be catching anything from Central anyway. And if they do, there's the "express" and a couple of changes.

Australia definitely need high speed rail along the coasts. There's hardly anything between Sydney and Newcastle. That's a lot of real estate by the water and bushes.

 

[Value Collector]

Barnaby Joyce, is that you?

Jokes aside, do you think they start appearing by magic? I think you have it backwards.

If the Government would build infrastructure that matches what's available in the capitals:
- Schools,
- Hospitals,
- Shops (groceries, doctors, etc),
- Fast internet.

and then incentivise business to open offices, teachers and doctors to move, and thus create jobs there, then people would move there! Undoubtedly. The cost of living and pressure to make ends meet is simply too high to not.

But they don't. It's almost as if they have a vested interest in the status quo.

chicken or the egg.

But with the money you would save on housing by moving to say Coffs Harbour for example, you could afford a car, and with less traffic and smaller distances transport wouldn't be a worry.

 

[InsvestoBoy]

chicken or the egg.

But with the money you would save on housing by moving to say Coffs Harbour for example, you could afford a car, and with less traffic and smaller distances transport wouldn't be a worry.

I can already afford a car. But I catch public transport everywhere.

I did actually look at what jobs are going in and around Toormina because I'd love to be out of Sydney.

My industry is IT. I've invested 15 years of my life into it, have a senior technical role which is challenging and rewarding.

In the whole Coffs region there are only 4 jobs going on Seek. 4 in total. In Sydney they post 4 new IT jobs probably every hour.

All 4 of those jobs are entry level low paying crap like "mobile phone repair technician" and "IT support". No challenge, no opportunity for growth, soul crushing work.

Maybe housing is cheap there because all the people I know from between Bellingen and Sawtell have moved to either Sydney or Brisbane...

 

[Value Collector]

I can already afford a car. But I catch public transport everywhere.

I did actually look at what jobs are going in and around Toormina because I'd love to be out of Sydney.

My industry is IT. I've invested 15 years of my life into it, have a senior technical role which is challenging and rewarding.

In the whole Coffs region there are only 4 jobs going on Seek. 4 in total. In Sydney they post 4 new IT jobs probably every hour.

All 4 of those jobs are entry level low paying crap like "mobile phone repair technician" and "IT support". No challenge, no opportunity for growth, soul crushing work.

Maybe housing is cheap there because all the people I know from between Bellingen and Sawtell have moved to either Sydney or Brisbane...

My original comment was that if the population in general spread out it would lower the concentration of sardines.

There is no reason that some of the industries that are in the capital cities couldn't move out into other regions, and hence bring jobs with them. there is no reason why Australia's population is limited to the arbitrary number of cities we have, except for that no one seems to want to be the first to move (either house or business)

 

[McLovin]

There is no reason that some of the industries that are in the capital cities couldn't move out into other regions, and hence bring jobs with them. there is no reason why Australia's population is limited to the arbitrary number of cities we have, except for that no one seems to want to be the first to move (either house or business)

A small population makes it hard to decentralise, you need some scale to attract workers and industry. Sydney and Melbourne are not big cities by global standards, they just lack adequate infrastructure that makes living anywhere outside 10km of the CBD an hour trip each way to get to work. It's a far easier task to unscramble the transport links into the big cities that creates satellite cities, like Newcastle, Bowral, Wollongong even Canberra than trying to set up an IT hub in Coffs Harbour. It keeps Sydney at the centre but makes living and working outside the metro area viable and possible.

 

[InsvestoBoy]

My original comment was that if the population in general spread out it would lower the concentration of sardines.

Very insightful, if X then X and also if Y then Y. Are you going to tell me that if Z then it would Z too?

You said it's a chicken and egg problem but it's not. Salaried workers don't move to the boonies if there are no jobs or infrastructure. Investment is needed. Business and Government have the capacity to make investment. For example we seem to have $1 billion to give to Adani, or $17 billion on F-35 fighter jets.

I personally don't make anything near 1 billion dollars.

There is no reason that some of the industries that are in the capital cities couldn't move out into other regions, and hence bring jobs with them. there is no reason why Australia's population is limited to the arbitrary number of cities we have, except for that no one seems to want to be the first to move (either house or business)

The internet in Sydney is barely adequate for my job. At my last job, the internet I had at my house was better than the office internet (of a NYSE listed technology company with a market cap of nearly $150 billion USD).

You might say "that's because you work in IT". But white collar workers in all sectors need fast internet because everything is on the cloud these days.

There is a BIG REASON why certain industries can't move out of capital cities, and short termism from successive Governments unwilling to make investments (there is that word again) is that reason.

 

[sptrawler]

My original comment was that if the population in general spread out it would lower the concentration of sardines.

There is no reason that some of the industries that are in the capital cities couldn't move out into other regions, and hence bring jobs with them. there is no reason why Australia's population is limited to the arbitrary number of cities we have, except for that no one seems to want to be the first to move (either house or business)

The reason that everything is centralised around Sydney, Melbourne, is because that is where the executives want to live.
The problem is, they drag middle and lower management with them, then the plebs have to compete with them for properties.
The good thing is, there is only so many upper and middle management jobs, and also only so many cashed up foreigners.
So the market will become saturated, and prices will drop, to the dislike of many posters who have properties in these areas.