House prices

Blowin wrote:

+
Highrise Harry celebrates migrant meat for property grinder...

Wow. Betcha if they get the flick the other mob will do exactly the same. Roll on the election anyway.

Latest rental affordability index. Interview with the lead number cruncher:
- social housing has halved over the years.
- short term accommodation reduces rental stock.
- regions affected by people leaving locked down cities.
- rent increases aren't tied to cost of living.

https://www.abc.net.au/radionational/programs/themoney/rents-continue-to...

'Brisbane property prices will start to catch up to Melbourne and Sydney’s regardless of what happens with inflation and interest rates rises.'

https://www.theurbandeveloper.com/articles/brisbane-catches-up-to-sydney...

blindboy wrote:

This has some interesting graphs. Check put the inflation adjusted one.
https://www.savings.com.au/home-loans/australian-house-prices-over-the-l...

I used to do this sort of work, transforming data into pretty pictures so that even someone as dumb as a Senior Executive could understand them.

These are the cleverest damn graphical representations I have ever seen. Smart guy putting them together. Having said that, what can be done these days with software programs has gone ahead leaps and bounds in the past 5 years. It’s all about wrestling with numbers, which very few have the patience to do (and the intelligence, but more the patience) plus software and imagination. Great stuff.

His takeouts were interesting too, but seemed to miss one obvious one. Whatever else, we are a nation, at least since late 80s, that will hock ourselves to the eyeballs for our mortgages. It’s not an enviable trait. It’s also likely to be the case over most of the western world.

Funny how much people are aggravated about ‘government controlling their lives’, while signing their life away to banks, like lemmings to a cliff. (An apocryphal metaphor, lemmings don’t run off the nearest cliff when their population gets too big.)

velocityjohnno wrote:

Are there any savers in the midst? What say you of 1.25% in current inflation environment? I thought so.

So, what response were you expecting there VJ - the ‘thought so’ bit?

Technically I would be categorised as a saver, in that I have money in the bank and no debt to speak of. I’m getting around 1.25% in an at call account. What would/should I do, in your mind?

I know that technically that money is losing value due to inflation. I also know that investing in the sharemarket would certainly make me a lot more money, until it doesn’t and wipes out 20% or 40% in an overnight crash. Or I could invest in housing, but then I get into a world of investment hurt, tax games, more maintenance as though I don’t have enough to do already, probable meetings with body corporates and the insufferable dingbats that infest them, worry about the renters and what they’re doing to the place, or worrying about not having renters, dealing with real estate agents / property managers.

Those things would leave worry lines on my forehead. For every dollar I would make I would be paying $2 in worry.

What would you do if you had a spare $100K? (that’s just a ballpark figure, not my actual savings) You can answer that as a 40 year old, a 50 year old, a 60 year old etc if you want to. I think the answer is easy if you’re 40 or even 50, but what about if you have just turned 60, or 65 (given the batshit crazy investment environment we have at the moment). Where is the threshold for you where that answer changes.

Genuinely interested.

Yep, keen to hear some opinions there.

"Funny how much people are aggravated about ‘government controlling their lives’, while signing their life away to banks, like lemmings to a cliff"

What's the alternative BF?

If I had a spare $100k I'd buy a new board, take my wife on a nice holiday and invest $20k in getting my new business off the ground. The balance ($70k) I would invest in the share market with a mixture of blue-chip shares and relatively moderate to high risk ones as well. I'd re-invest the dividends to compound for the next ten to 15 years.

Batfink I would love to do this one as a conversation, I wish there was a way where we could do a respectful discussion of this unique and increasingly insane investment environment that would not cross financial advice boundaries - and is understood so by all involved. Too much for an open forum? Send a PM via Stu if you wish and he's OK with it.

Savers have been completely stolen from since 2008. The profligate have been rewarded and now zoom past in expensive cars. Our economic system permits the accumulation of capital, to be best deployed to be most useful. Or that was how it used to work. My study of history keeps coming back to John Laws' France...

"Batfink I would love to do this one as a conversation, I wish there was a way where we could do a respectful discussion of this unique and increasingly insane investment environment that would not cross financial advice boundaries - and is understood so by all involved. Too much for an open forum?"

definitely not too much!

a heap of us losers (savers) are itching to hear what you've got...

Let it rip VJ.

Yes would love to hear it. I'm wondering what to do in the current environment. Just clearly state that it's only opinion and not personal or even general financial advice.

Go for it VJ,
Us savers need some saving...

Do it VJ.
We always hear that the difference between a comfortable retirement and descending into struggle is owning your own home.
So should we desperately chase home ownership or assuming you’re a good saver, are there better things to do with your money while you continue to rent.
At the moment I’m considering not buying a house but instead buying a few hundred acres of land out in the bush both to visit now and to hang onto for the future.
Thoughts?

..

zenagain wrote:

"Funny how much people are aggravated about ‘government controlling their lives’, while signing their life away to banks, like lemmings to a cliff"

What's the alternative BF?

Zen If I had a spare $100k I would spend on drinking, gambling and women, the rest I would waste... bom bom.

If I had a spare $100k I'd buy a new board, take my wife on a nice holiday and invest $20k in getting my new business off the ground. The balance ($70k) I would invest in the share market with a mixture of blue-chip shares and relatively moderate to high risk ones as well. I'd re-invest the dividends to compound for the next ten to 15 years.

Zen if I had $100k I would spend on drinking, gambling and women... the rest I would waste... bom bom.

Must be Northern Irish I focus, "I spent a lot of money on booze, birds and fast cars. The rest I just squandered." George Best

I once said Gazza's IQ was less than his shirt number and he asked me: 'What's an IQ

They say I slept with seven Miss Worlds. I didn't. It was only four. I didn't turn up for the other three.

In 1969 I gave up women and alcohol - it was the worst 20 minutes of my life.

Me too.

I was 1.

#metoo stories always bring a tear to my eye Zen

https://www.passiveinvestingaustralia.com/

Good points Geoffrey .
Working with a young (mid 20s) sparky on a job the other day. He moved to the south west from country Victoria, bought a block in one of the many subdivisions in Margs (still a fair bit cheaper than vicco apparently) built a house and is on his way . Id say he be in around 550 with the house built. That's a lot of money , but in your 20s gives him a long working life left to pay off an appreciating ( hopefully) asset and over time wages / earning potential increase etc, the future for him is bright.
Go hard and pay off as much as you possibly can on a variable rate ( as mentioned above interest only is a mugs game if you want to see the end) any extra you pay is available for redraw if you need it , smash that loan .
I started in the real estate race late ( mid 30,s.long story .too much surfing)but have paid more than double off the weekly payment ever since and have seen a 25 year loan almost nailed in half the time .
I see lots of nurses, cops and teachers being used as examples of the people who cant afford to live / buy anywhere ? Strange example I reckon, they all earn great money and have access to cheaper loans than most of us so not sure about that point ? I am a tradesman and earn a lot less than my teacher and nurse friends that's for sure ( lot less paid holidays too)
Great forum btw , very interesting observations

Great morals there, pump and dump..

Exposing kids to the housing market at that age instead of going out camping/adventuring/just general growing up is so wrong.

The prosperity gospel right there no doubt ...

If a house currently worth $670k is worth $1.3mil+ in fucking Clyde anytime in the next 10 years, then may god have mercy on all our souls.

Blowin wrote:

Look , there’s obviously no perfect way to put a line under the top of the market but……

https://www.dailymail.co.uk/news/article-10330311/amp/How-six-year-old-b...

Reality is the parents have basically bought the kids an investment property (although obviously also given them decent pocket money and taught them to save, so not a criticism on kids or even parents)

But imagine how many parents have purchased investment properties with the idea of ensuring their kids either have a house or if a few kids have a house they can sell to have a very healthy deposit.

There must be so many families doing this that must be another factor in pushing up prices.

Dx3 wrote:

If a house currently worth $670k is worth $1.3mil+ in fucking Clyde anytime in the next 10 years, then may god have mercy on all our souls.

X2

Get set for a religious experience boys as it's almost a certainty.

Stumbled across this note from October: the property is right next to Splendour in the Grass (abuts the M1 too).

“I attended an interesting auction on the weekend. Treetops is a 9 lot rural CT subdivision. The expected range suggested by agent Greg Price from Ray White Bangalow was around $4 mil, There was heated biding and it finally settled at an unexpected $8.3 mil. This price makes the retail sales for this rural residential subdivision implausible for retail sales even in today’s overheated market. These buyers will have trouble recouping and this is a display of buyer over-exuberance.”

https://raywhiteruralbangalow.com.au/properties/sold-rural/nsw/wooyung-2...
https://www.byronpropertysearch.com.au/hot-properties/

Land 129 sq m - 400K +
https://www.realestate.com.au/property-residential+land-qld-caloundra+we...

Yes Udo what a joke. I pretty sure that’s 3 houses next to it on similar blocks.
This is living!!!?

They are selling a footpath for $400K ?

blackers wrote:

They are selling a footpath for $400K ?

Ha!
You could design a pretty interesting house to suit the block but 129m2 is unbelievably small. That’s nuts

Besides that teeny slice of land, what are those road markings about? Mario Kart level?

thermalben wrote:

Stumbled across this note from October: the property is right next to Splendour in the Grass (abuts the M1 too).

“I attended an interesting auction on the weekend. Treetops is a 9 lot rural CT subdivision. The expected range suggested by agent Greg Price from Ray White Bangalow was around $4 mil, There was heated biding and it finally settled at an unexpected $8.3 mil. This price makes the retail sales for this rural residential subdivision implausible for retail sales even in today’s overheated market. These buyers will have trouble recouping and this is a display of buyer over-exuberance.”

https://raywhiteruralbangalow.com.au/properties/sold-rural/nsw/wooyung-2...
https://www.byronpropertysearch.com.au/hot-properties/

near where the burnt out car is on the side of the road? damn.

Still seeing a crash ahead this year?

Extremely difficult to imagine.
It feels like a little heat has gone out of the market (or maybe it's just a slight pause while everyone's on holidays) but it aint going backwards.

AndyM wrote:

Extremely difficult to imagine.
It feels like a little heat has gone out of the market (or maybe it's just a slight pause while everyone's on holidays) but it aint going backwards.

Not going backwards here.
People are still keen as fuck to get out of Melbourne

freeride76 wrote:

Still seeing a crash ahead this year?

no

I think with Omicron people are even keener to get the hell out of the city if they can.

freeride76 wrote:

I think with Omicron people are even keener to get the hell out of the city if they can.

very keen to leave Sydney -- moving down the south coast in a couple of week!

Interest rates is the key. With inflation in the US going ever higher the Fed will start increasing rates 6-12 ahead of the expected time and most likely at x2rate hike expected. No matter what our Reserve Bank governor has said in the past Australia will be forced to follow the US with rate hikes late this year or early next. When rates increase step back as people divest themselves of their speculative investments. The higher the price the bigger the fall. Of course if Labor is in power by then, well it’s all their fault, I can see the Murdoch and 9infotainment headlines now when, in truth, it’s the neo-liberal stooges of Central Bank governors the world over. When the cost of money is next to zero expect the flight to property and shares (see last decade.

I remember seeing houses on the Northern Beaches (Cromer) in 2009 for $650K and thinking "they're dreaming". So we bought a 2br apartment in Narrabeen instead.

We sold the unit in 2013 as we needed a bigger place, so thought we'd rent for a year and then get back on the property ladder when my wife went back to work - and once the property priced started to come down. Finally realised in 2015 that we were completely priced out of the market. Cheapest 3br house anywhere east of Frenchs Forest was $1.3m.

So we moved to the Tweed, and bought a nice 4br house near the beach for less than a single bedroom apartment in Dee Why. And now it's exploded up here too, with extraordinary growth in the last few years. Just dumb luck on my part.

Has the market reached the top? I have no idea. But I honestly can't imagine it slowing down much, especially anywhere near the coast.

And even if it eases 10%, 20%, it'll still be astronomical compared to ten years ago.

There’s a joke in our family about property. Think through all the tried and tested past practices, policy and history of economics and prudent money management to determine what you should do and then do the complete opposite. Crazy stuff.

Suggest each segment of the market will react differently but factors like is the coastal house a primary or secondary residence, how much debt is involved, proximity to good quality health care and schools, when employers will demand people return to cbds etc will all determine the long term sustainability of this sea/tree change, or segments of it.

From what we observed in the lead up to Xmas and into the new year it seems the majority of houses on the GOR are secondary places of residence meaning it’s possible there will be a sell off, if debt is high, once rates go up but who knows, do the exact opposite to what your logic tells you!!

Ha! I like that.

Property sayings within our extended family:

Real estate is only expensive the day you buy it

Property is the dumbest money you'll ever make

*all drawn from the current 50 year+ property/asset inflation

thermalben wrote:

I remember seeing houses on the Northern Beaches (Cromer) in 2009 for $650K and thinking "they're dreaming". So we bought a 2br apartment in Narrabeen instead.

We sold the unit in 2013 as we needed a bigger place, so thought we'd rent for a year and then get back on the property ladder when my wife went back to work - and once the property priced started to come down. Finally realised in 2015 that we were completely priced out of the market. Cheapest 3br house anywhere east of Frenchs Forest was $1.3m.

So we moved to the Tweed, and bought a nice 4br house near the beach for less than a single bedroom apartment in Dee Why. And now it's exploded up here too, with extraordinary growth in the last few years. Just dumb luck on my part.

Has the market reached the top? I have no idea. But I honestly can't imagine it slowing down much, especially anywhere near the coast.

And even if it eases 10%, 20%, it'll still be astronomical compared to ten years ago.

Yep, just dumb luck really. I'm in the same boat. Bought my section in '99 when houses in my street were selling for $160k. They're all between 1 and 2 million now. I think most Gen Xers thought they'd been shafted, considering we left school amongst a recession and high unemployment. Turns out we won the demographic lottery. Good for those of us that own houses, not so much for the younger punters that don't.
Like you say Ben, it's just paper wealth unless you relocate somewhere in the muffle of nowhere.