The future of Australian property prices

[over9k]

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.

Yeah, vanishingly few people use wage increases, promotions etc to make their current life easier. Almost everyone simply continue having a very hard time but now paying an audi off rather than a kia or whatever.

 

[Warr87]

Yeah, vanishingly few people use wage increases, promotions etc to make their current life easier. Almost everyone simply continue having a very hard time but now paying an audi off rather than a kia or whatever.

That's very true. I understand wanting to spend money and have nicer things but I think people take it too far. There's a myriad of reasons, but obviously looking good to friends is one of them. Probably the same reason they don't want to downsize the house, don't want the 'friends' to think you're having a hard time because you can't pay the mortgage of a 2.6mil house. I mean.....how scandalous.

I admittedly spent my undergraduate years poor AF and working multiple jobs. I have no interest in returning to days of worrying so much about finances, particularly if its self-imposed like this situation.

But to bring it back to the article, as it's been mentioned they won't be the only one. Will this be one of the sparks to set it off? Who knows. But its probably indicative of a larger portion of people--even in the upper echelons.

 

[qldfrog]

no sure if due to Noosa proximity, but a house : nice but just on 10 steep acres today appeared on the market and offered at 3.6m, with my wife thinking they must have done a typo..so basically, for local and informed of the market people, we are not sure if a house is valued at 2.xx or 3.xx..that's a bloody big amount to save or borrow, even when earning a bit of coins...
my view just below 3m, my wife below 2m...will keep you posted.Had agents looking at our place this past week

 

[Warr87]

It's crazy. Unless there is a massive correction in prices I don't forsee myself getting a house any time soon.

My super is going good though. Will probably have enough money for a house from that when I eventually retire haha.

 

[over9k]

That's very true. I understand wanting to spend money and have nicer things but I think people take it too far. There's a myriad of reasons, but obviously looking good to friends is one of them. Probably the same reason they don't want to downsize the house, don't want the 'friends' to think you're having a hard time because you can't pay the mortgage of a 2.6mil house. I mean.....how scandalous.

I admittedly spent my undergraduate years poor AF and working multiple jobs. I have no interest in returning to days of worrying so much about finances, particularly if its self-imposed like this situation.

But to bring it back to the article, as it's been mentioned they won't be the only one. Will this be one of the sparks to set it off? Who knows. But its probably indicative of a larger portion of people--even in the upper echelons.

At the end of the day, it's simple effort/sacrifice vs reward. My brother just turned a promotion down because of the very simple fact that it was 15% more money for about 40% more work. He knew what doing so meant for him/his family.

(They're not exactly short of money though so he was in the position of being able to say no, which a lot of people really can't)

 

[divs4ever]

no sure if due to Noosa proximity, but a house : nice but just on 10 steep acres today appeared on the market and offered at 3.6m, with my wife thinking they must have done a typo..so basically, for local and informed of the market people, we are not sure if a house is valued at 2.xx or 3.xx..that's a bloody big amount to save or borrow, even when earning a bit of coins...
my view just below 3m, my wife below 2m...will keep you posted.Had agents looking at our place this past week

that depends on the ( Noosa ) house , i used to work with an architect student who went on to designing some very interesting ( and expensive ) houses on the QLD North Coast , what doesn't attract you might a 'must-have ' feature for others ( i am very negative on pools but they can be a key feature for other buyers , those bloody hot tubs seem to be another deal-clincher for some )

 

[wayneL]

The 260k p/a woman kinda reminded me of some of my readings of the Stoics:

"If you live in harmony with nature you will never be poor; if you live according what others think, you will never be rich." .... Lucius Annaeus Seneca

Our friend Seneca had many other thoughts along these lines too.

 

[over9k]

The 260k p/a woman kinda reminded me of some of my readings of the Stoics:

"If you live in harmony with nature you will never be poor; if you live according what others think, you will never be rich." .... Lucius Annaeus Seneca

Our friend Seneca had many other thoughts along these lines too.

Women are far more materialistic than men though. Once you get to a certain point with (a lot of) men, the money is nothing other than keeping score with other men.

I personally don't care - the money is simply to keep my kids and wife in a decent life. I literally do not think about what everyone else have.

Meanwhile, my neighbour's wife quite literally only wants a new porsche SUV because it's the most expensive one. You try telling her that the cheaper range rover is better...

One of my friends can't even convince his mrs that a 2nd hand car, even of the same model she wants to buy new, can be perfectly good. She's utterly convinced that they *have* to buy a new one.

 

[Smurf1976]

. My brother just turned a promotion down because of the very simple fact that it was 15% more money for about 40% more work. He knew what doing so meant for him/his family.

At various times I've been in every marginal tax bracket from below the threshold to the highest rate.

No doubt so have many so to be clear that's not a boast, just saying "been there, seen that".

If the source of income is employment then at either end you are owned.

At the top well if you're being paid big $ there's a reason for that, there's almost certainly some serious responsibility that comes with it and whoever's paying expects results.

At the bottom well if you're on minimum wages then you're easily replaced.

At either end someone owns you. Not a problem if you're happy with that, big problem if not.

 

[Smurf1976]

FWIW I note that, using NAB's online calculator, a 3% rise in interest rates adds just under 41% to monthly repayments on a 30 year loan.

That there is the elephant in the room in my view.

Inflation is rising that's a fact.

Will there be a forced increase in interest rates? If so well that's where the real pain starts I expect.

 

[over9k]

FWIW I note that, using NAB's online calculator, a 3% rise in interest rates adds just under 41% to monthly repayments on a 30 year loan.

That there is the elephant in the room in my view.

Inflation is rising that's a fact.

Will there be a forced increase in interest rates? If so well that's where the real pain starts I expect.

Yeah, and then you torpedo your economy.


It's almost as if there's only so long you can kick a can down the road for.

 

[wayneL]

Yeah, and then you torpedo your economy.


It's almost as if there's only so long you can kick a can down the road for.

Incoming torpedo?

 

[sptrawler]

If you are in your 60's, you have seen enough booms and busts, to realise this is shaping up to be a big one IMO.
It will be quite interesting IMO to see how it unfolds, especially in Melbourne /Sydney massive mortgages dependent on massive wages and low interest rates, that sounds as though the elastic band is stretched about as far as it will go.

 

[againsthegrain]

If you are in your 60's, you have seen enough booms and busts, to realise this is shaping up to be a big one IMO.
It will be quite interesting IMO to see how it unfolds, especially in Melbourne /Sydney massive mortgages dependent on massive wages and low interest rates, that sounds as though the elastic band is stretched about as far as it will go.

Back in the days a 30k first buyer grant would fix things right up, add another 0 now sir, sink more bad tax dollars into the black hole

p.s corona virus demonstrated to us the population can be pushed quiet far and do sht all about it, especially in aus. Now that the govt knows aus population will quiet happily eat sht and say thanx let it rip

 

[sptrawler]

Back in the days a 30k first buyer grant would fix things right up, add another 0 now sir, sink more bad tax dollars into the black hole

Well there is nothing better in a time of massive change, which we definitely are entering into, than a scared and money hungry workforce. As @ humid has said on numerous occasions there is great money in FIFO work, but not many are interested, well if this transition to renewables is going to cause a huge amount of work in the outback, we will need a huge amount of workers to make it happen in a relative short period of time.
Let's see what happens, when it becomes the money, or the house. ? Try explaining to the missus, but honey I won't be home all the time, can't we just downsize and tighten the belt, maybe you get a second job instead?

 

[againsthegrain]

Well there is nothing better in a time of massive change, which we definitely are entering into, than a scared and money hungry workforce. As @ humid has said on numerous occasions there is great money in FIFO work, but not many are interested, well if this transition to renewables is going to cause a huge amount of work in the outback, we will need a huge amount of workers to make it happen in a relative short period of time.
Let's see what happens, when it becomes the money, or the house. ? Try explaining to the missus, but honey I won't be home all the time, can't we just downsize and tighten the belt, maybe you get a second job instead?

More economically viable to downgrade the missus ?

 

[sptrawler]

More economically viable to downgrade the missus ?

Interesting times coming, if you read in the future of generation and storage thread, over in general chat, the amount of remote work is going to be incredible.
With covid and restrictions on importing labour, this is going to cause a huge headache, as Australians historically over the last 20 years, have been reluctant to work outside the cities.
How the government reverses that trend will be interesting, but they are very upbeat about unemployment numbers dropping and huge household mortgages are a very good motivator.

AEMO’s step change model showed the amount of electricity across the energy grid would nearly double by 2050 from 180 to 330 terawatt hours, as coal exits, petrol and diesel cars are replaced by electric vehicles and gas-fired industrial processes are electrified.

No matter how you look at it that is a lot of work, feet on the ground stuff, to not only put in enough new renewables to replace the existing power stations, but also double that.
Then add to that the feet on the ground to change over from a fossil fueld car fleet to a BEV car fleet and all the infrastructure required, this all to happen in the next 30 years.
Well someone's going to be busy, it is either 457's or barristers from Sydney/Melbourne.

 

[qldfrog]

More economically viable to downgrade the missus ?

2 young ones swap??

 

[Smurf1976]

If you are in your 60's, you have seen enough booms and busts, to realise this is shaping up to be a big one IMO.

I suspect something many are unaware of is just how long it all takes.

Those who weren't born at the time will no doubt have heard reference to the 1991 recession.

What they probably don't realise is that unemployment started rising rapidly from the second half of 1989 and didn't even start to come down until the end of 1993. It took the whole of the 1990's to overcome in practice and throughout that time "any job is a good job" was very much the thinking.

Then there's interest rates. They trended up throughout the whole of the 1970's and 80's with the final push up, from about 13% to 17% on mortgages, being during 1988 and 89 and blowing up the economy once again, it having also gone bust at the start of the 1980's.

So the "1991" recession was a full decade of economic misery in practice for many. Once the genie gets out of the bottle, it's a massive task to put it back in.

 

[sptrawler]

@Smurf1976 my oldest is 43, he has never seen how difficult things can get, it just appears to me that there are too many coincidences lining up ATM.
I'm not a great believer in coincidences.