The Great Aussie Housing Bubble - Reality or Fantasy?

[StockyGuy]

We are similar Age Divs4ever

You know I learned more from my father from what he didn't do than from what he did do!

Similar story When 16 Dad had a chance to purchase a large 5-bedroom home 15K from Adelaide
Price $30K Dad called the agent and said he would sign a contract for $29,000--Great we are moving!
The agent arrived with a contract for $30K and Dad sent him packing.

30 years later I saw it for sale at $695K -----
Today it would be twice that!
I can imagine Dad's face if you told him one day that THAT property would be valued at $1 million.

Would look just like the faces of those reading this thread when I suggest that in 20 years their $1 million
property is likely to be valued at $2 million.
Not that it means anything if it's your ONLY property PPR.

I expect your trend prediction is very solid for Australia - the only way is way up for Aussie housing prices...... but let's acknowledge that all that relies on continuing massive immigration AND foreign buyers. I think it's a very safe bet there - meaning I expect that's a safe assumption and so on. But that's what it IS based on.

It calls to mind that old chestnut about the politicians who turn on and off the tap for immigration typically having a rather healthy property portfolio.

Any sort of ideological change, such as maybe net zero migration at the extreme, WOULD jeopardise these continuing great returns. Not likely to happen, but also not beyond imagination that it might.

 

[farmerge]

I expect your trend prediction is very solid for Australia - the only way is way up for Aussie housing prices...... but let's acknowledge that all that relies on continuing massive immigration AND foreign buyers. I think it's a very safe bet there - meaning I expect that's a safe assumption and so on. But that's what it IS based on.

It calls to mind that old chestnut about the politicians who turn on and off the tap for immigration typically having a rather healthy property portfolio.

Any sort of ideological change, such as maybe net zero migration at the extreme, WOULD jeopardise these continuing great returns. Not likely to happen, but also not beyond imagination that it might.

@StockyGuy but we need politicians who are thinking past that comfortable leather lounge chair they occupy for 3 years and nothing beyong that. Of course there are some in the House how profess to be there for the countries betterment, but not many.

 

[divs4ever]

I expect your trend prediction is very solid for Australia - the only way is way up for Aussie housing prices...... but let's acknowledge that all that relies on continuing massive immigration AND foreign buyers. I think it's a very safe bet there - meaning I expect that's a safe assumption and so on. But that's what it IS based on.

It calls to mind that old chestnut about the politicians who turn on and off the tap for immigration typically having a rather healthy property portfolio.

Any sort of ideological change, such as maybe net zero migration at the extreme, WOULD jeopardise these continuing great returns. Not likely to happen, but also not beyond imagination that it might.

i am not against immigration , but i want properly controlled immigration

i hear about rumors about various rorts to get migrants in Australia despite the fact our infrastructure is inadequate

healthy growth is good , growth for growth's sake creates bubbles and crises and pain

 

[wayneL]

i am not against immigration , but i want properly controlled immigration

i hear about rumors about various rorts to get migrants in Australia despite the fact our infrastructure is inadequate

healthy growth is good , growth for growth's sake creates bubbles and crises and pain

And civil unrest, especially when there are cultural incongruencies.

 

[divs4ever]

And civil unrest, especially when there are cultural incongruencies.

that is already occurring already in the area i have moved out of

should be a perfect site for a future Olympic Games OOPS ! that is already planned

assuming Woke culture doesn't turn the Olympic Games into a farce first ( not just a financial failure )

 

[Country Lad]

It's not------- it is simply a reflection of supply and demand.

Most people miss this point - our government certainly ignores it.

Part of the growth is internal population increase but what is ignored is the demand from immigration. Latest figures indicte that there are a bit more than 40,000 residences built per quarter so let's say 170,000 per year.

The immigration figures:

Even with allowance for emigration and the fact that these figures would include family units, when adding in the Aussies also looking for houses to buy or rent, there is obviously serious competition for the approximately 170,000 homes being built per year, which I would suggest plays a far greater role in the increases than costs.

 

[farmerge]

Most people miss this point - our government certainly ignores it.

Part of the growth is internal population increase but what is ignored is the demand from immigration. Latest figures indicte that there are a bit more than 40,000 residences built per quarter so let's say 170,000 per year.

The immigration figures:
View attachment 166113
Even with allowance for emigration and the fact that these figures would include family units, when adding in the Aussies also looking for houses to buy or rent, there is obviously serious competition for the approximately 170,000 homes being built per year, which I would suggest plays a far greater role in the increases than costs.

And getting far worse than better.

 

[StockyGuy]

Maybe going a little too conspiratorial with this one, but I wonder if property-rich politicians also have a sorta "playing the long game" interest in giving away Commonwealth land to "traditional" owners. If there's less available land for the rest of us, for residing but also farming activities, the value of more scarce normal property becomes by definition higher - even without all the other factors that are pumping up price...

 

[sptrawler]

The background rumblings increase.

The economy is being driven by a ‘bankocracy’ housing boom

A political strategy to increase property values, and win votes, is being amplified by a banking industry seeking higher profits.

www.afr.com

 

[qldfrog]

Maybe going a little too conspiratorial with this one, but I wonder if property-rich politicians also have a sorta "playing the long game" interest in giving away Commonwealth land to "traditional" owners. If there's less available land for the rest of us, for residing but also farming activities, the value of more scarce normal property becomes by definition higher - even without all the other factors that are pumping up price...

Underlying the Voice scheme.
For these not aware of the official WEF/UN agenda, we human ,have to relegate 30% of land and sea use to nature.initially, part of the dehumanisation.
As Australia is less populated, we are expected to go much much higher to compensate for high density countries..same for US..and the aim is to keep cities constrained with increased population while pushing people of the bush and farmers out.
Aborigineses land ownership and rights one of the means..but hey feel free to open your eyes. Look at UN WEF programs....
Otherwise, one carzy conspiratist I am. I even debunked the bats and pangolin Covid origin, tell you how brainless and white nazi patriarchal I am....
Anyway, RE is going up long term here as long as the sheeps stay sheeps here

 

[Garpal Gumnut]

Alan Kohler really nails it, in this article in the Grauniad. This is one in a series by him on housing.

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

Australian housing wealth is meaningless, destructive and fundamentally changing our society | Alan Kohler

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

www.theguardian.com

gg

 

[divs4ever]

Alan Kohler really nails it, in this article in the Grauniad. This is one in a series by him on housing.

Australian housing wealth is meaningless, destructive and fundamentally changing our society | Alan Kohler

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

www.theguardian.com

gg

location, location and inflation

not a difficult formula , but for good capital gains ( after inflation-adjustments ) you need to see the next popular locations

a bit of government immigration madness usually helps ( but turns densely populated areas in ghettos )

 

[orr]

Alan Kohler really nails it, in this article in the Grauniad. This is one in a series by him on housing.

Australian housing wealth is meaningless, destructive and fundamentally changing our society | Alan Kohler

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

www.theguardian.com

gg

It's an lift from his Quarterly Essay out today...
50 odd years of very poor policy work to get us to this inequitable situation; let's hope we can fix it in less.

I personally have no quarms as to how many homes any one person can own... But I personally think there is a bare minimum number as to how many someone can reasonably afford to live in.

 

[Dona Ferentes]

Alan Kohler really nails it, in this article in the Grauniad. This is one in a series by him on housing.

Australian housing wealth is meaningless, destructive and fundamentally changing our society | Alan Kohler

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

www.theguardian.com

gg

evidently I've read 7 articles already and can't access. (must have slipped inadvertently to bas's links).

 

[Garpal Gumnut]

evidently I've read 7 articles already and can't access. (must have slipped inadvertently to bas's links).

I created an acct. with Mr. Scott and his issue and heirs, and those of his butler, nanny and chauffeur, so I can read 7+ articles of the Guardian with a promise to consider donating later on this evening. It also enables me to joust with Bas when he is not on ASF.

It's an lift from his Quarterly Essay out today...
50 odd years of very poor policy work to get us to this inequitable situation; let's hope we can fix it in less.

I personally have no quarms as to how many homes any one person can own... But I personally think there is a bare minimum number as to how many someone can reasonably afford to live in.

Thanks @orr. I was unsure where it was being serialised/fully published.

gg

 

[mullokintyre]

CBA joining in the boomer bashing.
The question is, how much of the extra spending

The question is, how much of that increase in spending has been forced on baby boomers.
The following chart shows the increases in essential spending versus discretionary spening.

The biggest increase of all the groups is the 12.5% increase in health costs.
Us old baby boomers would be spending a much greater percentage of the iwealth on health than say the 18-44 group.
They are less likely to spend on Apparell and household goods, one of the few decreasing costs over the period.
They are more likely than say an 18 year old to have household insurance, car insurance, funeral insurance etc, another area that has had a decent increase.
So it maybe that the Essential costs are what has forced the boomers to spend more money.
Needs someone like Bernard Salt to deconstruct the data.
Mick

 

[qldfrog]

Some of the BS about RE as IP

https://www.news.com.au/finance/money/investing/one-investment-with-massive-returns-despite-the-negativity/news-story/869ec67f4d8f6399c2ebcbff773b8972

I noticed the ongoing cost (wo mortgage) being said at 1% on average...
Seriously?
Rates,power,water,body corporate and repair being 1%?
Even without any mortgage , it was not easy to make a positive return in my experience.
I might be wrong but our $650k unit happily sold this year was near the $7k BC fees , not mentioning the rest.
And if you own a house and no BC..better in my opinion, insurance and rates/repairs will reach well above 1% I think.
Happy to have any other better experience given.
I consider these pushing media articles fraudulent in nature..
Added: our IPs were not a bad deal due to RE capital gains but after taxes and inflation, I would not consider them stunning..or worthwhile considering the dramas and bothrr

 

[orr]

For those with an interest pump into youtube .... before you shell out $20 for the Quarterly Essay;

The Great Divide: Austraila's Housing mess....

should prompt an hour discourse with Alan K on the topic.

 

[sptrawler]

For those with an interest pump into youtube .... before you shell out $20 for the Quarterly Essay;

The Great Divide: Austraila's Housing mess....

should prompt an hour discourse with Alan K on the topic.

I posted Alan in the inflation thread, probably worth posting it here as well.

Australian housing wealth is meaningless, destructive and fundamentally changing our society | Alan Kohler

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

www.theguardian.com

 

[Smurf1976]

50 odd years of very poor policy work to get us to this inequitable situation; let's hope we can fix it in less.

Trouble is, I really don't think many grasp the true nature and extent of the problem.

We're going down the track of a society that sees little point in hard work since the benefits it ought bring are becoming unattainable. For now there's peace but ultimately this isn't sustainable since it's not only not creating wealth, it's becoming a hindrance to that which does create wealth.