The future of Australian property prices

[sptrawler]

I was actually watching a bodgy job this morning, the house next door had a cheap second storey put on, it is a rental and the upper floor has leaked badly into the lower floor since it was put on.
Well it will be interesting to see if it goes on the market soon, a handy man was removing about 100 or so tiles and putting sisal under the battens, from the upper floor wall flashing down to the gutter, then the tiles were put back on.
So that fix wont last long, but maybe it doesn't have to.

Well just went down for 1/4 chicken and chips x2, spoiling the missus, lo and behold when I get home there is a RE agents car and an Audi Q7 next door, surprise, surprise.
The more things change, the more they stay the same.
It will be interesting to see what it goes for, I wouldn't buy it, really it is a 1960's 2x1 with a dodgy second floor extension, that the stairs are so narrow you can't get normal furniture up, it's that bad the last tenants had bring in a fork lift to get furniture upstairs through a window. Oh and I forgot a water problem, land value is all it's worth.

 

[Smurf1976]

do not assume that crappy job is cheaper..

Agreed as such.

But if the specification for the job is to minimum standards, and the tradie doing the work is being paid minimum rates as a subbie, then it's not likely to be the best outcome.

In my case the plumbing was straightforward. I wanted two separate hot water lines run from the new water heater and the existing hot water plumbing split into two sections. One tempered line feeding the bathroom as per regulations, a separate untempered line feeding the kitchen and laundry, plus full insulation of all accessible piping. Plus the pressure reduction valve plumbed before the cold supply to the tempering valve so as to equalise pressure. Plus a one-way valve on the water circuit to the heat pump to prevent thermosiphoning.

Most plumbers would say nah mate, a single tempered line complies with regulations, don't worry about the mains pressure and no need for insulation or a one way valve. Most consumers wouldn't know any better.

Then they'd complain that they don't have proper hot water in the kitchen, that the shower temperature varies if someone turns another tap on, that energy consumption is higher than it should be and that the water heater failed after a decade.

 

[Smurf1976]

Well, if the private enterprise system of building inspectors has failed, then why not go back to government employed ones ?

The high water mark for residential construction was probably early 1990's.

Asbestos was gone, almost all tradies were well trained, government inspectors were still around, and with the overall state of the economy at the time nobody was working in a rush.

All downhill since then with the outsourcing of inspections, the reduction in the quality of trades training, the import of dodgy building materials (including asbestos tiles) and so on now add in everyone rushing to get the job done real quick.

 

[sptrawler]

Agreed as such.

But if the specification for the job is to minimum standards, and the tradie doing the work is being paid minimum rates as a subbie, then it's not likely to be the best outcome.

In my case the plumbing was straightforward. I wanted two separate hot water lines run from the new water heater and the existing hot water plumbing split into two sections. One tempered line feeding the bathroom as per regulations, a separate untempered line feeding the kitchen and laundry, plus full insulation of all accessible piping. Plus the pressure reduction valve plumbed before the cold supply to the tempering valve so as to equalise pressure. Plus a one-way valve on the water circuit to the heat pump to prevent thermosiphoning.

Most plumbers would say nah mate, a single tempered line complies with regulations, don't worry about the mains pressure and no need for insulation or a one way valve. Most consumers wouldn't know any better.

Then they'd complain that they don't have proper hot water in the kitchen, that the shower temperature varies if someone turns another tap on, that energy consumption is higher than it should be and that the water heater failed after a decade.

Been there done that, you have to know what you need, before they tell you what you want. ?

 

[sptrawler]

The high water mark for residential construction was probably early 1990's.

Asbestos was gone, almost all tradies were well trained, government inspectors were still around, and with the overall state of the economy at the time nobody was working in a rush.

All downhill since then with the outsourcing of inspections, the reduction in the quality of trades training, the import of dodgy building materials (including asbestos tiles) and so on now add in everyone rushing to get the job done real quick.

Competency standards, did away with both, competency and standards, funnily enough I helped write them and it isn't something I'm proud of and I did say at the time it is the demise of Australia's high standard of tradespeople. But I thought better to be involved and have some input, than refuse and have no input.
Now 30 years later, we are actually encouraging recognition of qualifications, that we wouldn't wipe our butts on 40 years ago.
We have such a mess going on, the education system is a mess, because we have spent 30 years paying more and more, when all that was needed was to go back to basics.
We have spent 30 years throwing money at the trades, now we can't afford to pay them, so we import them.
We encourage immigration to prop up property prices, which really is just a way of redirecting money away from seed funds for small business and industry, to a guaranteed investment in the property ponzi scheme.
We really are a lost society IMO.
I really don't know how any politician, can look at themselves in the mirror.

 

[sptrawler]

The best thing that could happen in Australia, would be for the East Coast property prices to collapse by 50% and bring them back into reality.
Trying to lift crappy W.A, S.A, N,T prices to match isn't going to happen and probably brings us back to the thread I started years ago, "why not sell W.A to China"?
What is the other option, those States become the slaves to those who live on the East coast, but produce sod all and have property prices that are out of reach of those who live and work in the Western States to support the GDP.
Sounds like a Trump situation to me. LOL
Lets just keep those workers over West, supplying us rich service workers over East, so we can pay our ridiculous prices and rents, yep sounds like the old South baby. ?

 

[rcw1]

The best thing that could happen in Australia, would be for the East Coast property prices to collapse by 50% and bring them back into reality.
Trying to lift crappy W.A, S.A, N,T prices to match isn't going to happen and probably brings us back to the thread I started years ago, "why not sell W.A to China"?
What is the other option, those States become the slaves to those who live on the East coast, but produce sod all and have property prices that are out of reach of those who live and work in the Western States to support the GDP.
Sounds like a Trump situation to me. LOL
Lets just keep those workers over West, supplying us rich service workers over East, so we can pay our ridiculous prices and rents, yep sounds like the old South baby. ?

rcw1 gunna live on a 44 foot boat in the river... ha ha ha ha

Kind regards
rcw1

 

[qldfrog]

The best thing that could happen in Australia, would be for the East Coast property prices to collapse by 50% and bring them back into reality.
Trying to lift crappy W.A, S.A, N,T prices to match isn't going to happen and probably brings us back to the thread I started years ago, "why not sell W.A to China"?
What is the other option, those States become the slaves to those who live on the East coast, but produce sod all and have property prices that are out of reach of those who live and work in the Western States to support the GDP.
Sounds like a Trump situation to me. LOL
Lets just keep those workers over West, supplying us rich service workers over East, so we can pay our ridiculous prices and rents, yep sounds like the old South baby. ?

Can Qld join if we split brisvegas?

 

[Dona Ferentes]

This weekend's AFR

A " growing number of property investors [are] selling up to raise cash and escape from “mortgage prison” as repayments soar.

"The finding, contained in research by investment bank Jarden, comes amid an unusual winter surge in auction numbers that has perplexed some real estate analysts.

"Jarden says investor listings as a share of all listings hit a record high of 40 per cent in Sydney in June, while investors made up 36 per cent of listings in Melbourne, just shy of that city’s record. A year ago, investor listings comprised about 30 per cent of total in the two biggest cities..."

 

[dyna]

Today's ( ? ) AFR reports that NAB is now predicting a 6.9 % increase next year for Sydney house prices .
Previous forecast was for negative 3 % .

 

[sptrawler]

This weekend's AFR

A " growing number of property investors [are] selling up to raise cash and escape from “mortgage prison” as repayments soar.

"The finding, contained in research by investment bank Jarden, comes amid an unusual winter surge in auction numbers that has perplexed some real estate analysts.

"Jarden says investor listings as a share of all listings hit a record high of 40 per cent in Sydney in June, while investors made up 36 per cent of listings in Melbourne, just shy of that city’s record. A year ago, investor listings comprised about 30 per cent of total in the two biggest cities..."

And add to that the foreign investors and it's all good for the ponzi.

Wall of Chinese money to flood Australian property

In April, The SMH reported that “cashed-up Chinese buyers have re-entered Sydney’s property market with gusto”. Peter Li, co-founder of Sydney-based Plus Agency, said recent housing developments across Chatswood in Sydney had sold to Chinese buyers. “All the apartments that were still available...

www.macrobusiness.com.au

In April, The SMH reported that “cashed-up Chinese buyers have re-entered Sydney’s property market with gusto”.

Peter Li, co-founder of Sydney-based Plus Agency, said recent housing developments across Chatswood in Sydney had sold to Chinese buyers.


“All the apartments that were still available after completion were sold to Chinese buyers”, Li said, adding that half paid with cash.

McGrath’s managing director and CEO, John McGrath, also said that demand from Chinese buyers is rising across all price points.

“We have seen a strong bounce-back, especially in the last three to four months”, McGrath said.

“A lot of people are wanting to park their currency in Australian dollars and in a safe and stable political environment”.
Meanwhile, Monika Tu, founder and director of Black Diamondz Group, which markets high-end Sydney property to Chinese buyers, told The AFR that “rising interest rates are not a problem, not for international buyers from China”.

A new report from real estate firm Juwai IQI, summarised by Bloomberg, claims that 712,000 people from China will migrate to the US, Canada and Australia from 2023 to 2025.

Juwai IQI has found that Australia was the top overseas destination for Chinese property seekers in the first half of 2023, based on the number of buyer inquiries it received on its platform.

The increased Chinese buyer activity helps to explain why Sydney home values are rising so rapidly in the face of ongoing rate hikes:

 

[qldfrog]

Poor renters,
They are not off the hook yet

Think tank blames rental crisis on record number of international students

The federal government's rush to cash in on the $40 billion international student industry has negatively ...

www.9news.com.au

 

[sptrawler]

A terrible situation for those people living in the Hawkesbury flood affected areas, I was talking to a lady who said she had been flooded 3 times in 18 months, horrible situation to find yourself in IMO.
In a lot of ways, it is like elderly people who live in transportable home parks, as permanent residents and then someone buys the park and tells them all to move out. Sad reality for a lot of people.

Where home insurance costs $30,000 a year – or you can’t get a policy at all

Calls for government solutions grow louder as Hawkesbury-Nepean Valley residents smashed by floods now can’t insure their homes.

www.smh.com.au

Insurers have begun rejecting insurance reapplications for homeowners in the flood-ravaged Hawkesbury-Nepean Valley, amid questions about the liveability of areas of Sydney at risk of extreme weather events.

For those companies still offering insurance in the area, Insurance Australia Group foreshadowed soaring premiums could preclude households from renewing their policies, with costs reaching into the tens of thousands of dollars in some instances.
“This is especially the case for homes and businesses in the Hawkesbury-Nepean Valley, where some have been built in the direct line of flood, putting lives and livelihoods at risk,” a spokeswoman said.
Residents in the Hawkesbury-Nepean Valley, extending about 63 kilometres from Lower Portland to Emu Plains, were hammered by four major floods over two years, with the most recent in July 2022 resulting in $274 million worth of damage.
Despite having one of the greatest flood risks in NSW, successive governments allowed widespread development on the Hawkesbury-Nepean Valley, placing thousands of homeowners at risk of inundation.

A spokeswoman for the insurer Hollards told the Herald the “difficult decision” had been made to limit the offering of home and contents insurance policies for properties at risk of extreme weather events to try to ensure premiums remained manageable.
A spokeswoman for the Department of Planning and Environment said the NSW Reconstruction Authority had been established to consider and plan for risk to life and property in the Hawkesbury-Nepean Valley.

But she said homeowners were “made aware” of flood risk through planning certificates when the house was purchased.


Then you have the doom and gloom articles, of what could happen, is there any wonder mental health is an issue.

‘Impossible to insure a property’: How climate change will impact your suburb or town

Southbank, Docklands, Elwood, Lakes Entrance and Queenscliff are among the Victorian suburbs and towns at the highest risk of water inundation due to climate change by 2040.

www.theage.com.au

Southbank, Docklands, Elwood, Lakes Entrance and Queenscliff are among the Victorian suburbs and towns at the highest risk of water inundation by 2040 due to climate change.
The areas of Victoria most at risk from rising sea levels and storm surges were identified in research that raises questions about whether homes, roads and businesses should be relocated in the face of encroaching water.

 

[Belli]

It's happening elsewhere in the world. Farmers Insurance pulled out of Florida recently as areas were, in its view, uninsurable. It was one of four which have withdrawn from that market. Usual tantrums and outcries of wokeness, blah, blah, blah. Whinge all you like peoples but it doesn't alter the reason for the business decision.

The tendency to litigate may also have had something to do with it too.

"In October 2022, the Insurance Information Institute (Triple-I) published data showing that Florida leads the nation in homeowner's insurance-related litigation, making up 79% of the lawsuits across the U.S. while accounting for just 9% of the total claims."

 

[Knobby22]

"In October 2022, the Insurance Information Institute (Triple-I) published data showing that Florida leads the nation in homeowner's insurance-related litigation, making up 79% of the lawsuits across the U.S. while accounting for just 9% of the total claims."

Curious. Why would that be?

 

[sptrawler]

Curious. Why would that be?

Triple-I: Extreme Fraud and Litigation Causing Florida’s Homeowners Insurance Market’s Demise | III

www.iii.org

June 23, 2022

Florida Press Office: Mark Friedlander, 904-806-7813, markf@iii.org
ST. JOHNS, Fla., June 23, 2022—With its overabundance of unneeded new roofs on homes, and flashy lawyer billboards at every turn claiming massive settlements on claims, Florida’s insurance market is on the verge of failure. Even more, this man-made catastrophe is causing financial strain on resident consumers, as the annual cost of an average Florida homeowners insurance policy will skyrocket to $4,231 in 2022, nearly three times more than the U.S. annual average of $1,544, according to an Insurance Information Institute (Triple-I) analysis.
“Floridians pay the highest homeowners insurance premiums in the nation for reasons having little to do with their exposure to hurricanes,” said Sean Kevelighan, CEO, Triple-I. “Floridians are seeing homeowners insurance become costlier and scarcer because for years the state has been the home of too much litigation and too many fraudulent roof replacement schemes. These two factors contributed enormously to the net underwriting losses Florida’s homeowners insurers cumulatively incurred between 2016 and 2021.”
Two major hurricanes made landfall in the state since 2016: 2017’s Irma and 2018’s Michael. No direct hits occurred in Florida over the past three hurricane seasons (2019-2021). Florida, however, is the site of 79 percent of all homeowners insurance lawsuits over claims filed nationwide while Florida’s insurers receive only 9 percent of all U.S. homeowners insurance claims, according to the Florida governor’s Office. To illustrate how lawsuits have weighed on insurer operating costs, JD Supra, citing the Florida Office of Insurance Regulation (OIR), reported $51 billion was paid out by Florida insurers over a 10-year period and 71 percent of the $51 billion went to attorneys’ fees and public adjusters. The 2020 and 2021 cumulative net underwriting losses for Florida’s homeowners insurers totaled more than $1 billion each year.
“The state’s homeowners insurers have been forced to respond to these unfortunate market trends this year by restricting new business, non-renewing existing policies and even canceling policies mid-term. What’s more, four homeowners insurance companies have been declared insolvent since February — all while more Americans are moving to Florida than any other state” Kevelighan stated.

 

[Knobby22]

Triple-I: Extreme Fraud and Litigation Causing Florida’s Homeowners Insurance Market’s Demise | III

www.iii.org

June 23, 2022

all while more Americans are moving to Florida than any other state” Kevelighan stated.

It is only going to get worse down there. Amazing.

 

[farmerge]

A terrible situation for those people living in the Hawkesbury flood affected areas, I was talking to a lady who said she had been flooded 3 times in 18 months, horrible situation to find yourself in IMO.
In a lot of ways, it is like elderly people who live in transportable home parks, as permanent residents and then someone buys the park and tells them all to move out. Sad reality for a lot of people.

Where home insurance costs $30,000 a year – or you can’t get a policy at all

Calls for government solutions grow louder as Hawkesbury-Nepean Valley residents smashed by floods now can’t insure their homes.

www.smh.com.au

Insurers have begun rejecting insurance reapplications for homeowners in the flood-ravaged Hawkesbury-Nepean Valley, amid questions about the liveability of areas of Sydney at risk of extreme weather events.

For those companies still offering insurance in the area, Insurance Australia Group foreshadowed soaring premiums could preclude households from renewing their policies, with costs reaching into the tens of thousands of dollars in some instances.
“This is especially the case for homes and businesses in the Hawkesbury-Nepean Valley, where some have been built in the direct line of flood, putting lives and livelihoods at risk,” a spokeswoman said.
Residents in the Hawkesbury-Nepean Valley, extending about 63 kilometres from Lower Portland to Emu Plains, were hammered by four major floods over two years, with the most recent in July 2022 resulting in $274 million worth of damage.
Despite having one of the greatest flood risks in NSW, successive governments allowed widespread development on the Hawkesbury-Nepean Valley, placing thousands of homeowners at risk of inundation.

A spokeswoman for the insurer Hollards told the Herald the “difficult decision” had been made to limit the offering of home and contents insurance policies for properties at risk of extreme weather events to try to ensure premiums remained manageable.
A spokeswoman for the Department of Planning and Environment said the NSW Reconstruction Authority had been established to consider and plan for risk to life and property in the Hawkesbury-Nepean Valley.

But she said homeowners were “made aware” of flood risk through planning certificates when the house was purchased.


Then you have the doom and gloom articles, of what could happen, is there any wonder mental health is an issue.

‘Impossible to insure a property’: How climate change will impact your suburb or town

Southbank, Docklands, Elwood, Lakes Entrance and Queenscliff are among the Victorian suburbs and towns at the highest risk of water inundation due to climate change by 2040.

www.theage.com.au

Southbank, Docklands, Elwood, Lakes Entrance and Queenscliff are among the Victorian suburbs and towns at the highest risk of water inundation by 2040 due to climate change.
The areas of Victoria most at risk from rising sea levels and storm surges were identified in research that raises questions about whether homes, roads and businesses should be relocated in the face of encroaching water.

And in the mantime those greedy eye-one Shires and councils continue to rake in the rates regardless of risk.

 

[qldfrog]

And in the mantime those greedy eye-one Shires and councils continue to rake in the rates regardless of risk.

And approve new dev in flood areas, planting more trees and preventing clearing to ensure the next catastrophic fire season..and we will blame it on climate change.....

 

[Dona Ferentes]

And approve new dev in flood areas, planting more trees and preventing clearing to ensure the next catastrophic fire season..

Bit convoluted, there. We build on farmland, and perpetuate the sprawl because it's easier than reinventing the existing urban footprint.

fire seasons aren't necessarily catastrophic, but they come around regularly. Ditto floods.

Planting 1 tree for another (mature one) cut down reduces shade in urban areas dramatically. The outer suburbs are wastelands/ heat bubbles for decades.