Westpac bank is predicting a further 20+ % Sydney house price increase for next year. This country is still 4th in the world for rising house prices, though. NZ is in front of us. Half the population in dear ole' Deutschland , just rent. It's about 85% in Berlin.
The future of Australian property prices
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MovingAverage
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That is just insane.
Sydney property has been good to me over the past 15 years, but things have just been crazy here for the past 18 months. It cannot continue and for me I'm taking all my chips of the table and cashing them in--can't help but think things will be very different once the reality of higher interest rates kick in--and they will.
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imagine everybody else did this too now...
Dona Ferentes
A little bit OC⚡DC
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there is a sale in Redcliffe Qld reported.... Postwar fibro, original condition. Nice block of land, close to the water.
What did you think it would go for?
Somewhere in the $700[000]s.
What was surprising about it?
That it sold with only a sign as the only advertising and with multiple offers. We didn’t have to put it online. The board was up on the Thursday arvo. It was all signed on the Friday evening.
It was going to have an open home on the Saturday, but there was a tenant in there.
We had the two offers plus five calls. It’s not even a busy road. That’s what people are doing now – driving around, looking for houses.
Got $806,000. Cash buyer.
The house was fibro inside, in original condition. These guys [are] buying to knock down and build. To save money, I suggested they could look at selling the house off.
They put it on [Facebook] Marketplace and got 70 inquiries to take the house away. They’re saving $20,000 in demolition costs and someone’s recycling the house.
What did you think it would go for?
Somewhere in the $700[000]s.
What was surprising about it?
That it sold with only a sign as the only advertising and with multiple offers. We didn’t have to put it online. The board was up on the Thursday arvo. It was all signed on the Friday evening.
It was going to have an open home on the Saturday, but there was a tenant in there.
We had the two offers plus five calls. It’s not even a busy road. That’s what people are doing now – driving around, looking for houses.
Got $806,000. Cash buyer.
The house was fibro inside, in original condition. These guys [are] buying to knock down and build. To save money, I suggested they could look at selling the house off.
They put it on [Facebook] Marketplace and got 70 inquiries to take the house away. They’re saving $20,000 in demolition costs and someone’s recycling the house.
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That's how I bought my first house 40 years ago, the best move I ever made, owned it outright but took a lot of work to make its sellable.
MovingAverage
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Yup...and thankfully everybody else isn't doing this at the moment. I've got two IP's (houses) in the inner west and there is very little on the market for sale despite there being a lot of buyer demand. I haven't seen it like this in my time (very little supply and a lot of demand), which is why I'm offloading both properties now. Sell on greed buy of fear
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The findings are in on rampant property prices, apparently.
www.theage.com.au
From the article:
State and federal governments give billions of dollars to first-home buyers, ostensibly to improve affordability. But like other demand-side subsidies, these do not reduce overall housing costs. They improve housing access for the favoured recipients but bid up prices, making it more expensive for everyone else.
Unless something is done to boost supply, these subsidies just reshuffle a fixed housing stock.
Many submissions to the federal housing inquiry now underway argue for removal of tax concessions like negative gearing and the capital gains discount. This is a non-issue. Apart from being politically dead, it just doesn’t make much difference to affordability.
Research estimates the effect of these concessions on housing prices is tiny – about 1 to 4 per cent.
The main cause of high prices is land use restrictions — often called planning or zoning — as has been found in a string of official reports. The most recent of these reports were the NSW Productivity Commission’s White Paper and the surveys of the Australian economy by the OECD and IMF. The reason official reports keep saying that the problem is planning is because this is what the research clearly shows, both in Australia and overseas.
Planning restrictions boost prices by limiting the amount of housing that can be supplied. Apartments and townhouses are prohibited on most of our urban land, which is reserved for detached houses. Where apartments are permitted, height restrictions limit the number of dwellings they can provide. Like any other restriction on supply — for example taxi licences or import quotas — this pushes up the price.
However, land use restrictions are primarily a state and local government responsibility. What can the federal government do?
A new idea gaining wide support is that Canberra should provide incentive payments to state and local governments that reform their planning systems and build more housing.
Want to improve housing affordability? Here’s the solution
The federal government should provide incentive payments to state and local governments prepared to reform their planning systems and build more housing.
State and federal governments give billions of dollars to first-home buyers, ostensibly to improve affordability. But like other demand-side subsidies, these do not reduce overall housing costs. They improve housing access for the favoured recipients but bid up prices, making it more expensive for everyone else.
Unless something is done to boost supply, these subsidies just reshuffle a fixed housing stock.
Many submissions to the federal housing inquiry now underway argue for removal of tax concessions like negative gearing and the capital gains discount. This is a non-issue. Apart from being politically dead, it just doesn’t make much difference to affordability.
Research estimates the effect of these concessions on housing prices is tiny – about 1 to 4 per cent.
The main cause of high prices is land use restrictions — often called planning or zoning — as has been found in a string of official reports. The most recent of these reports were the NSW Productivity Commission’s White Paper and the surveys of the Australian economy by the OECD and IMF. The reason official reports keep saying that the problem is planning is because this is what the research clearly shows, both in Australia and overseas.
Planning restrictions boost prices by limiting the amount of housing that can be supplied. Apartments and townhouses are prohibited on most of our urban land, which is reserved for detached houses. Where apartments are permitted, height restrictions limit the number of dwellings they can provide. Like any other restriction on supply — for example taxi licences or import quotas — this pushes up the price.
However, land use restrictions are primarily a state and local government responsibility. What can the federal government do?
A new idea gaining wide support is that Canberra should provide incentive payments to state and local governments that reform their planning systems and build more housing.
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‘Miserable’: Woman slams $260k job
Kate Thomas* makes a whopping $260,000 a year, yet she likens her salary to “golden handcuffs” leaving her trapped in a job that makes her “miserable” because she needs to pay off a mega mortgage.
www.news.com.au
With articles like this the market sure is looking toppy, don't think the can can be kicked for much longer.
I want to believe that, though I thought the same thing 10 years ago. It eventually has to come down. But I also agree with the comment in there that there is an obsession within Australia to own a house. I still get weird looks or negative comments when I say I am willing to rent and wait right now instead of plunging into the market. Apparently having such views is just odd, at the very least.
‘Miserable’: Woman slams $260k job
Kate Thomas* makes a whopping $260,000 a year, yet she likens her salary to “golden handcuffs” leaving her trapped in a job that makes her “miserable” because she needs to pay off a mega mortgage.
With articles like this the market sure is looking toppy, don't think the can can be kicked for much longer.
MovingAverage
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Just trying to work this out…are we suppose to feel sorry for this woman?‘Miserable’: Woman slams $260k job
Kate Thomas* makes a whopping $260,000 a year, yet she likens her salary to “golden handcuffs” leaving her trapped in a job that makes her “miserable” because she needs to pay off a mega mortgage.
With articles like this the market sure is looking toppy, don't think the can can be kicked for much longer.
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Lol, MA, i think the idea is when your "battler" is on $260k a year and miserable ?, we have reached a level of craziness which can not carry on..even with inflation, 270k is not bad and i would be very happy with just a quarter of that nowadays..retired..
This year i am in negative figures. :-(
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Let's not forget, the article says her partner works as well.
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MovingAverage
Just a retail hack
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Agree.
Feel free to call me an unsympathetic cold mofo, but I have absolutely no sympathy for this woman's extreme first world problem. Oh, poor old me I earn $260k and feel trapped
Give me a f'ing break.I think they hint at that. I also don't understand why selling the 2.6mil house is out of the question? Why not downsize? Sounds self-imposed. They don't have my sympathy as they've chosen to take up on the extra income and not have a fulfilling job. Losing out on $40k/yr is obviously a lot, but her income would still be above $200k/yr .... again, not sure why downsizing is not an option if a fulfilling job is such a priority for her. It's apparently very easy to sell a house these days so no issues there.
This was probably more what they were trying to do. Tow the line between battler and crazy despite the wealth. I think it rings hollow though. Also, in the article, while its stated that her partner works they still couldn't afford the mortgage if she took a $40k/yr paycut to work where she wants. What happens when interest rates rise? If she's in such dire straits she should really consider downsizing to a more managable level because its sounding more and more like a disaster.
perhaps the article should be, $260k/yr doesn't give you sound financial acumen .....
MovingAverage
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Exactly, if she thinks she has stress now...just wait until she sees her mortgage interest rate rise just a mere 1%. She is probably just one person of 10,000s in that position. Talk about a house of cards
Exactly. A 1% increase on a 2.6mil house is likely going to hurt.
I was curious so a quick calc, assuming they borrowed most of it and at the current average of 2.3% the monthly repayments are around $10,500/month. If those went up by 1%, it's now $12,200.
I honestly can't imagine paying $10,000/month for a mortgage. But then I'm definitely not on $260k/yr, lol.
over9k
So I didn't tell my wife, but I...
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Textbook case of lifestyle creep. More news at 11.
MovingAverage
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At $10.5k per month that is $126k after tax dollars per year!. They would no doubt be on the highest marginal tax rate of 45% so just do the pre tax earning calculation to determine before tax salary required to service that...yikes
Yup. I recently got an increase as I changed jobs. I was very cognisant of life-style creep. Will admit the temptation was there to have a better car, better place to live, etc. But I'd rather not be worse off after getting a better job. But I guess not everyone thinks like that.
Yup. after tax her income is approx $14k/month. Certainly no wiggle room, unless shes living on 1min noodles, lol.
