The future of Australian property prices

Belli · 20 March 2023

I've no idea about property prices. However, I know which way my rates are headed, which is up, due to the method the local Government calculates them by averaging five years of the UCV and then applying its formula to the average. As there was a 27% increase in last year's UCV,that will carry through to next years average even if there is no increase in the UCV. I have factored in a 6% increase in my rates.

Just live in a property and the piece of dirt your building is on goes up in value. Talk about taxing unrealised gains.

qldfrog · 20 March 2023

Belli said:
I've no idea about property prices. However, I know which way my rates are headed, which is up, due to the method the local Government calculates them by averaging five years of the UCV and then applying its formula to the average. As there was a 27% increase in last year's UCV,that will carry through to next years average even if there is no increase in the UCV. I have factored in a 6% increase in my rates.

Just live in a property and the piece of dirt your building is on goes up in value. Talk about taxing unrealised gains.

60% increase received this week .....in a year....

Warr87 · 20 March 2023

Dona Ferentes said:
And one thing I've noticed is the slow, snail-paced even, pace of redevelopment in established suburbs. A lot of blame rests on the DA, the development process, that needs so many ticks before anything happens and money can be spent. Existing properties can be sold in the million dollar++ range (mostly of late at auction, so it's locked in), and then ... ... ... inaction

This is one thing I've noticed too. Anything in the news is typically on established housing, auctions, the 'big gains' there. But if supply is the issue, then why isn't more being done to increase supply? Probably a few reasons: a) the easier money is buying established and then flipping, b) new developments are riskier and far more likely to blowup in cost, c) maybe its just not as interesting for the public therefore isn't covered as much.

When I get a property, I definitely wouldn't want to build in a new development as I just don't trust to not be extorted/held to ransom for 'price increases in building supplies'. I also don't particularly like a lot of new houses being built as well (they look cheap to me most of the time). Maybe others think the same? Don't know.

Belli · 20 March 2023

Warr87 said:
When I get a property, I definitely wouldn't want to build in a new development as I just don't trust to not be extorted/held to ransom for 'price increases in building supplies'. I also don't particularly like a lot of new houses being built as well (they look cheap to me most of the time).

As well the possibility of the builder going bust and leaving nothing but a slab or framework only. I only became aware this has been a common situation recently while chatting to a few of my friends who are into property. And their view is stay well away from OTP apartments.

qldfrog · 20 March 2023

Warr87 said:
This is one thing I've noticed too. Anything in the news is typically on established housing, auctions, the 'big gains' there. But if supply is the issue, then why isn't more being done to increase supply? Probably a few reasons: a) the easier money is buying established and then flipping, b) new developments are riskier and far more likely to blowup in cost, c) maybe its just not as interesting for the public therefore isn't covered as much.

When I get a property, I definitely wouldn't want to build in a new development as I just don't trust to not be extorted/held to ransom for 'price increases in building supplies'. I also don't particularly like a lot of new houses being built as well (they look cheap to me most of the time). Maybe others think the same? Don't know.

when looking for a new better place and deciding to stick to Australia (better half call) then discarding Tasmania (too wet cold), we have the choice of new empty land (very rare as a minimum of 10 to 15 acres is required for our needs/desires) or second hand house;
we have now discarded the idea of building new due to the current market/circumstances;
It is one thing to renovate but building new prevent you from doing a lot of work, you do have to live somewhere in the process and prices/timing are not fixed/safe.
FWIW , we saw in our local area (sunshine coast hinterland) a new activity surge..more reasonable prices for lower "range" houses but not by much, more houses on the market in the last fortnight, a split between below 1.5m (mortgage buyers) and 2m plus (cash buyers) with many of the later actually increasing price back to their top a year ago.
anecdotal but..
And we should be settling the sale of our unit toward at the end of the month, now unconditional (sold roughly 10% down from peak market value)
If it helps

Warr87 · 20 March 2023

Belli said:
As well the possibility of the builder going bust and leaving nothing but a slab or framework only. I only became aware this has been a common situation recently while chatting to a few of my friends who are into property. And their view is stay well away from OTP apartments.

Yup, that too. Very real possibility, particular now.

And why stay away fro OTP apartments? I'm reluctant to buy an apartment as I don't want to have to deal with strata/body corporate.

qldfrog · 20 March 2023

Warr87 said:
Yup, that too. Very real possibility, particular now.

And why stay away fro OTP apartments? I'm reluctant to buy an apartment as I don't want to have to deal with strata/body corporate.

I believe only uninformed or having no choice people go for a property with a BC
After selling that last unit and 3 experiences of BC: 1 rental 1 commercial and 1 holiday unit:
Never again indeed
unless you buy all units in a complex and control the BC..

Warr87 · 20 March 2023

I understand the need for some mechanism for a BC/strata for communal spaces and to stop neighbours doing stupid sh*t (driving your value down), but petty people are drawn to petty positions .... seems like a hassle.

Dealing with a BC is one reason why I'd be very reluctant for an apartment.

Smurf1976 · 20 March 2023

Warr87 said:
When I get a property, I definitely wouldn't want to build in a new development as I just don't trust to not be extorted/held to ransom for 'price increases in building supplies'. I also don't particularly like a lot of new houses being built as well (they look cheap to me most of the time). Maybe others think the same?

With a house that's already built you can see exactly what you're buying. If there's a crack here and some bad paint somewhere well at least you can see it right in front of you.

Buying off the plan you've got the added problem of construction quality.

Dona Ferentes · 20 March 2023

I have only ever bought existing stock, on separate title. I suppose there's a certain amount of luck, and timing, that this has been the way, But it's always made the most sense.

wayneL · 20 March 2023

I'm not sure I'd buy anything built in the last few years

Smurf1976 · 20 March 2023

Warr87 said:
Dealing with a BC is one reason why I'd be very reluctant for an apartment.

There's a lot of horror stories around.

No doubt some are just fine but it seems that BC's do attract people with a certain view of the world. Those who don't like x and think nobody else should do it either. Or, worse still, the "back in my day...." mentality.

Even something as simply as drying laundry or heating the apartment in winter can become a nightmare due to silly rules they come up with.

Belli · 21 March 2023

Smurf1976 said:
Buying off the plan you've got the added problem of construction quality.

That is what some of my friends were implying plus they told me construction contracts can give the builder the ability to change or substitute certain items or finishes i.e you're not getting what you thought you were paying for.

Warr87 · 21 March 2023

Smurf1976 said:
With a house that's already built you can see exactly what you're buying. If there's a crack here and some bad paint somewhere well at least you can see it right in front of you.

Buying off the plan you've got the added problem of construction quality.

wayneL said:
I'm not sure I'd buy anything built in the last few years

Construction quality is definitely something I'm weary of.

Smurf1976 said:
There's a lot of horror stories around.

No doubt some are just fine but it seems that BC's do attract people with a certain view of the world. Those who don't like x and think nobody else should do it either. Or, worse still, the "back in my day...." mentality.

Even something as simply as drying laundry or heating the apartment in winter can become a nightmare due to silly rules they come up with.

Yea, exactly. They'd hate me too. I wouldn't be opposed to malicious compliance haha.

Belli said:
That is what some of my friends were implying plus they told me construction contracts can give the builder the ability to change or substitute certain items or finishes i.e you're not getting what you thought you were paying for.

I've heard similar things. And a friend who used to work in the construction industry said something similar—and he also said he doesn't trust any house that takes shorter than 18months to build. If it's done right, it apparently takes at least that long or they're cutting corners.

qldfrog · 21 March 2023

Has our qld premier just added rental control today?
That will amplify rental shortages... no doubt...
Incredible 40 y of ongoing failure of socialism in the EU or at least France,and our alp stooges repeating every mistake again and again expecting different outcomes...

Smurf1976 · 22 March 2023

Belli said:
That is what some of my friends were implying plus they told me construction contracts can give the builder the ability to change or substitute certain items or finishes i.e you're not getting what you thought you were paying for.

Without blaming them as such, one issue is the ignorance of consumers.

There's an awful lot of products the average consumer perceives as high quality when in truth they're nothing of the sort.

That fancy chrome spout for the bath? Well it's actually metallised plastic but hey, call it chrome if you like.

That "builder series" appliance - that's the stripped down version sold at a lower price.

Your new home has a 6 star energy rating? That's nice, it's always good to know it meets the absolute minimum standard allowed by law.

The electrical installation complies with AS/NZS 3000 and the plumbing and drainage complies with AS/NZS 3500? Excellent news - because if it didn't then you'd find nobody willing to connect power and water supply to it. Nothing fancy here, just the law. Bit like saying the car's roadworthy.

Lots more like that. Cheap or minimum specifications marketed as though it was some sort of special "premium" thing worth a fortune.

PS - there's a reason builders put downlights everywhere. The cheap ones are $6.99 each and that's before volume discounts which cut that price even lower.

There are of course good builders, good products, well built houses and so on but there's also a lot of things the public thinks are good that are at best nowhere near as expensive as most seem to think they are and at worst are simply not good products.

Belli · 22 March 2023

Smurf1976 said:
There's an awful lot of products the average consumer perceives as high quality when in truth they're nothing of the sort.

You're likely to be correct. I haven't taken much notice (actually none) of property since we bought this place in 1996. Only when I was doing renovations did costs, such as $6,600 for 140 sqm of silver-top ash for decking, come into it. Basically it was "Here is a signed cheque; you fill in the numbers."

dyna · 22 March 2023

Smurf1976 said:
That fancy chrome spout for the bath?

Reminds me of something else you really ought to replace or reduce the pressure with a valve in the line. ( PLV )
Those pretty ,chrome flexible hoses under the sink are chinese rubbish that can burst at any time of the day or night , maybe while you're away on holiday , flooding the place.

againsthegrain · 22 March 2023

dyna said:
Reminds me of something else you really ought to replace or reduce the pressure with a valve in the line. ( PLV )
Those pretty ,chrome flexible hoses under the sink are chinese rubbish that can burst at any time of the day or night , maybe while you're away on holiday , flooding the place.

don't you turnoff your mains when you go on a holiday?

qldfrog · 22 March 2023

againsthegrain said:
don't you turnoff your mains when you go on a holiday?

switch off pump if only for a few days week end away indeed, and switch off power to areas unused
But these flexi hoses should be changed regularly. Nothing is permanent, even copper pipes slowly slim down and develop micro leaks....then full leaks.
Unsure about plastic pipes as not really used here for too long (for domestic housing), they are widespread in the US, and they will soon be replaced by cardboards tubes anyway to save geant narvals from sniffing coke in the artic...

The future of Australian property prices

Belli

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Warr87

Belli

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Warr87

qldfrog

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Smurf1976

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