House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Nice Hastoes...finally a humanist perspective removing the bullshit economics from the argument. The monetary system will always find its vehicle to manufacture wealth to continue the absurdly flawed economic capitalist system. Govt, corporations and greed will sell you anything they can to perpetuate the myth...it's a glorified pyramid scheme which has (with permission granted under the guise of democracy) tragically annexed your essential needs in life - food and now shelter ie. mass production of GMO food with seed control, and now stripping away access to your own home through economic policy to inflate prices. Every positive dictum regarding the current property market comes from those who make their money from it. The sad reality will come to bear soon enough...the banks will want their return on investment and this will be your home. They will collect and conquer then shift the vehicle to the next "investment trend". Just watch what happens to your Super in the next twenty years...
Not much to add except for a short, telling anecdote...
I went to a book launch recently and got chatting to a fella. "Where do you live?" he asked.
And I told him where my house is.
"Really? I used to live just over the laneway." And he went on to explain which house was his. Turns out my deck looks out over his yard - although he doesn't live there anymore.
He explained he bought that house in 1985 and arranged it all in one day. He took out a Bankcard (remember them?), walked into the real estate and put down a $5,000 deposit straight off the Bankcard. Said he'd never saved a cent in his life prior to that.
Sold the place around 2000 for a healthy profit and the same place is now worth over a million bucks.
So what your saying is stu, swellnet is paying alright ay.
Cant complain. Of course I've made way more money by putting a deposit on a house before things went loopy.
There you go, according to the Liberals there is absolutely nothing wrong with our housing market ......... nothing to see here.
Hope you all remember this crap next election.
Interesting anecdote Stu. The times have changed! Not all that long ago it was a common occurrence for people to fly down to Tassie from Sydney for a weekend and pick up 4 or 5 properties. The prices have gone up so that happens less, but it's still reasonably common for interstate/international investors to build a portfolio of rentals around the university without ever stepping foot on the island. The local newspaper thinks it's wonderful that there's so much "confidence" in Tassie, and that prices are going up and up and up. Three pages over, however, they've got a story going about housing affordability and how difficult it is for young people. Put two and two together guys!
Hey Geoffrey what do you mean the formatting will be terrible, the spelling was even worse but you gave us a warning ha ha. Basically agree with everything you said, its always been the same, dont buy shit that you can't afford.
Being from the northern beaches the local housing market has always been difficult. The only way I could get a start was to buy in the Blue Mountains and spend several years working in Western Sydney. It is still a viable route....If you are willing to make the sacrifice.
The family homes value eventually gets passed down to the next generation, it seems that money seems to be losing its value to mathematics and risk.
The family home being passed down to the next generation is a wonderful thing - if there is a family home to passed down. While some parents have multiple properties (as well as shares/investments etc) and will bestow upon their kids a passive wealth-generating portfolio worth millions, other kids grow up without a single family unit and their respective parents are renting, building the nest egg for somebody else's kids. Nobody to blame I suppose, but the government would do well to acknowledge this.
thats where the problem is realestate equals greed at the moment
why would anyone put money in the bank as savings, when you earn no interest on it and then pay tax. The bank can give credit cards to young players and charge 15% interest daily on their mistakes and make enough money to cover the cost of fraud.We are making progress on debt which is ridiculous but seems to be working if you are willing to risk buying bank shares.Money in the bank is secure as long as they open the doors
The reason why I have money in the bank is because I'm too scared to do anything with it.
I've got enough for a house deposit down here, but I don't work enough to get a mortgage and I don't particularly want one. I'm too shy to invest it in shares on the off chance that the once in a lifetime amount of savings I have in the bank disappears in GFC 2.0. I thought about putting it into a cheap block in the bush by the sea - the kind of place that land is cheap because you have zero chance of getting any work, but I can't help but think "why put money in to a bit of land when I could use that for two decades worth of extended trips to Indo?"
of course there is the valid argument that home ownership is in fact unnecessary. quite a few younger people than myself say exactly that to me, of course at the horror of their parents.
its not something that i believe myself, but i respect those opinions too.
don,t start this mind ticking and the realisation I should have done it earlier and the knowledge its never too late
So you've got a bit of cash.....what would you do with it ?
House prices are at historical highs (bubble $) - but immigration doesn't look like it's prone to faltering.
Banks are a zero interest waste of time ?
Stocks may plummet - or they may be about to crank.
It's all gambling.
Which way would you jump ?
housing for sure blowin. which is why i own, then upgraded, then upgraded.
its kinda the problem isnt it. im not greedy. i have no investment properties but I AM part of the problem.
heck. the government is probably propping house prices up through immigration BECAUSE many young people are intentionally turning away from ownership due to prices. its a vicious cycle.
then one day you look up and we are ruled by foreign corporations living in a desolate world gasping for air and water. no wait. that was Total Recall.
will Indonesia take boat people
dont despair two rules! found this one for you on a 910sq block. http://www.realestate.com.au/property-house-nsw-bomaderry-124204382 you can get some bomb proof security doors and window shields for about 3-4 grand and youll be fine mate...
just add your commission geoffrey
Love it Dan, fuck property I'm going to indo. I get that.
I know some cheap places on the central coast just above the high tide line and by the lakes... insurers are pulling out but don't let that phase you
Where you live Geoffrey? What year did you take the Govt. inflating try to stop it collapsing first home owners scheme (early 2000's)
There has never been a boom without a bust.
I have bought many places but can see the forest from the tree's and will not be a hypocrite, you got in during a downturn in the market. All these people who think they are geniuses and now millionaire's because they bought a house. Late 80's early 90's just about to repeat for this land but this time around the carousel we don't have the industry to back it up.
I see the people talk to people who are spending their equity on boats and car's (along with investment properties) this is what is making the economy tick along (with enlarged immigration) 'equity mattttte' (just check the NSW govt. stamp duty from deficit to surplus, the Reserve Bank wanted this to happen however they went to far using interest rates to stimulate Real Estate to soften the mining bust on the economy)
Gazza in the down turn if he don't go bankrupt his wife will leave him and he will give her half he will have to refinance at current prices which will cripple the bugger with the work he will have ahead of him to service the debt.
Have a read of this article @dandandan and @blowin wait for the frenzied dust to settle if you are in Melb or Syd
@mk1 Indonesian property prices are actually rising real quick also, i think it might have more to do with wage growth and inflation though?
Yeah sure there is still heaps and heaps of dirty cheap property, but some of the prices in Indonesian citys are getting crazy for Indo, my wife sister and husband have a house(no gardens, just wall to wall with neighbours) with rooms upstairs to rent to uni students not far from a university in Solo central java and they are selling there place for the equivalent of AUD $140,000.
Sydney and Melbourne are distinct markets to most of the rest. The house and unit prices are projected to be flat or fall from 2017. The real issue is the unusual low interest rate (world wide) and the associated big level of debt. There are several markers indicating a major stock market correction in 2017. This will flow onto housing prices. In Sydney there is a shortage of rental keeping prices up but investors are not coming into the market as in 2014.
So if you want to buy a property go regional, go the coast somewhere with a good beach break. There is plenty out there.
chinese property is entering its own bubble starting now. its going to burst first before we see any faltering here. when will that be? who knows.
hey there pills,
i got in either 07 or early 08 in a cheaper less glamourous outerlying illawarra suburb, but now i live a bit more central to wollongong. without going to check graphs etc, prices had been flat since the 02-03 boom. they stayed flat till about 2011 i think. now i hope what you said about gaz doesnt come true cos i fashioned him on a young version of myself ;) and id prefer it if my missuss doesnt leave me because the bubble of my pulling ability definitely burst quite a while ago. my strategy has always been to get something that you can squeeze a bit of extra yield out of, ie rent one of the spare rooms etc etc.
i only want to address one of your points, " All these people who think they are geniuses and now millionaire's because they bought a house" kind of an unfair comment i reckon. unless you have someone specific in mind...
im not entirely sure whats going to happen with house prices as im definitely no ecomomist but articles on the net have been calling for doomsday since 2013, just search housing bubble on google and click news and you can see how long they go back. This just illustrates to me that nobody knows what the f@#$ is going on, unfair system or not.
one thing i AM doing though is keeping aside a little cash to put into gold if doomsday does finally come about. Just out of interest mate, do u own your house? where are you?
That article about says it all, scary about what will happen when it all bursts.
hey pillsy, youve gotten us onto some pretty heavy politically charged stuff there. kind of the reason i cant pay too much attention to articles cos i dont know their motivations nor understand 3/4 of the stuff they are talking about. but just to give you an example:
from wikipedia on zerohedge:
- Zero Hedge's content is conspiratorial, anti-establishment, and economically pessimistic, and has been criticized for presenting extreme and sometimes pro-Russian views.
- news reports identified Daniel Ivandjiiski, a Bulgarian-born former hedge-fund analyst who was barred from the industry for insider trading by FINRA in 2008, as the founder of the site
- Former Zero Hedge writer Colin Lokey said that he was pressured to frame issues in a way he felt was "disingenuous," summarizing its political stances as "Russia=good. Obama=idiot. Bashar al-Assad=benevolent leader. John Kerry=dunce. Vladimir Putin=greatest leader in the history of statecraft." Zero Hedge founder Daniel Ivandjiiski, in response, said that Lokey could write "anything and everything he wanted directly without anyone writing over it."
- Often distrustful of the 'establishment' and almost always bearish, it's known for a pessimistic world view
- Economist and New York Times columnist Paul Krugman describes Zero Hedge as a scaremongering outlet that promotes fears of hyperinflation and an "obviously ridiculous" form of "monetary permahawkery
i only bothered reading 3/4 of the wiki page,
i dont know what significance half of that stuff means just sounds like american mumbo jumbo but i only wanted to illustrate that not evertyhing you read is gospel.
there were a few pretty extreme points drawn in the article also.
hey geoff, the charts don't lie
Earlier people were getting into baby boomers about how the rules are stacked in their favour. They are but ....... what were these boomers doing in their late teens and twenties having grown up in the sound asleep conservative Australia of Robert Menzies?
Well, it was a cultural revolution of music, drugs, sex, fashion and lifestyle but apart from all that they were standing up to the law and demanding change from their politicians e.g Vietnam. Out of necessity the boomers became politically involved/aware and the cultural and social reforms and movements followed. If today's 20somethings want change they will have to become politically involved and demand it, don't see it happening any other way.
see ya pretty good on those security quotes on the 'home of brave' you little bleeder you
Floyd writes "what were these boomers doing in their late teens and twenties having grown up in the sound asleep conservative Australia of Robert Menzies?
Well, it was a cultural revolution of music, drugs, sex, fashion and lifestyle but apart from all that they were standing up to the law and demanding change from their politicians e.g Vietnam. Out of necessity the boomers became politically involved/aware and the cultural and social reforms and movements followed. If today's 20somethings want change they will have to become politically involved and demand it, don't see it happening any other way. "
Please excuse me while I try to swallow my vomit.... I could pick that to pieces, Floyd... But I'll just make several quick points..... Firstly it's widely recognized the 60s sub culture started in 1963... The main leaders of the sub culture weren't boomers at all.. At that stage they were in the early to late 20s, those born just before and during ww2....
Menzies had nothing to do with the introduction of the pill, a society changing drug.
Menzies left office in 66...
The boomers have turned their back on everything they did stand for, and now watch Tracy Grimshaw, snarling at boat people, young "no hopers", unions, and talking absolute bullshit about "how hard they worked", when in reality they were having tax free liquid lunches, going on strike for better pay, and enjoying every weekend off.
You don't think going on strike for better pay was a risky move that paid dividends for everyone ?
almost 100 % increase in five years
bubble? sustainable? deplorable?
"Domain Group chief economist Andrew Wilson says Chatswood’s strong buyer profile of the local Chinese community has acted as a significant demand driver contributing to higher prices.
Chatswood’s median house price has risen 91.6 per cent over the five years to September, and nine per cent this year alone. It now rests at $2.29 million. "
sorry detox ,was a Gunston moment.
Prices up again in Sydney and Melbourne, primarily driven by very high levels of immigration.
I see no sign of a lessening of immigration and thus no change in the fundamental laws of supply and demand.
And believe me, those high prices in Syd/Mel are feeding into the rest of the coastal/regional real estate prices.
Yes Stu, born late '61, so technically a boomer.
Until I was in my late 30's or early 40's, I was the beginning of Gen X. True, they changed the definition which used to define baby boomer as born up to July '60 or 61, then somewhere along the way the academics changed the definition. Sort of shows how pointless those generational definitions are. One of the main Australian demographics experts still maintains that BB'ers ended July '60 or 61. Anyways.
Thanks for the chat Geoffrey. Not after an argument, up for a debate. The underlying idea I was putting is that it it so much harder now, so much harder and so much riskier, and the vast majority of people making those arguments have no idea how things have changed.
Blowin asked earlier where I would put my money now. I have some money, it's in a bank, and a fair whack in a defined benefit super scheme. I would not go into housing because you are now in position where you could lose big time. It's gonna snap, and when it does a huge number of people are going to be underwater. I don't want to see that for home owners, but I'm happy to see people who have investment houses take a bath. They've been supported all the way via negative gearing, now capital gains concessions, and when they do their arse they will get more tax deductions for their losses, and fark me, all that government support to people who were already doing well (mostly) just so house prices could go through the roof.
My family owns 1 house and a holiday house up north end central coast, technically we will take a big haircut if house prices crash, but it isn't real money anyway. You have to live somewhere.
Where it all went wrong was when housing went from being somewhere you lived to a vehicle to get rich quick, supported by stupid policies by governments, none worse that Peter Costello's capital gains concessions. Economically stupid, politically playing to the wealthy, socially corrupt policy.
We are still fighting our way out of the catastrophe of the Howard/Costello years. We will be for a while yet. Hawke/Keating set Australia up for great wealth, Howard/Costello made sure where that wealth went.
Further disclosure, I have two kids, aged 17 and 19. They will be fine because we will look after then and are going to die one day. It's every other kid their age. They are priced out, and that is the tragedy.
Geoffrey, well done if you have worked your arse off etc. So have lots of others who are still underwater. Don't under-estimate how lucky you have been. Working your arse off is not nearly enough these days. Not even close to it.
So if house prices are overvalued, then by how much ?
What should be the true price of a $1M dollar home at Thiroull, a $600K home at Ballina , a 300K place at Bicheno or a $900k home in Sydney ?
If a correction came what sort of percentage are we looking at ?
I see houses on Ballina island with a price tag of $550k and to me they're worth about about mid to high $300k.
But that's irrelevant, obviously they're worth what someone will pay, and they're still selling.
There's a part of me that hope's for a drop of around 30% to bring things to a "sensible" level -
units in East Perth have dropped in value by 18% so maybe it could happen in certain areas but of course WA is a bit of a special case.
Ballina island ?
Never heard of it. Do I need to walk behind a magic waterfall and past a cream puff tree to get there ?
Met an English gent was buying one of those Ballina places . Is putting down a deposit and renting it for a couple of years before selling it at an increased price......Sound familiar ?
Thiroull? you will soon be corrected when you type that into realestate search with a $mil deposit for a coal miners cottage
Ballina island? It's the part of Ballina that's surrounded by water...
Yeah it's the flat part which includes the CBD and shops, as distinct from East Ballina and West Ballina.
Some nice old houses but lots of really average brick and tile as well. As mentioned, overpriced (of course) IMO.
Negative gearing has had a huge impact on prices. If you go to an auction if the investors don't get it, they drive the price significantly higher. Take them out of the market and there would definitely be a correction, maybe 25% at a guess. Having never had the ambition to become a landlord I have refused to take part. I'll leave it to Howard's aspirational classes battling along on a couple of hundred thousand a year with millions of dollars worth of real estate to tide them over their declining years. Pet hate? Listening to talk of real estate prices in the surf. Why not just tattoo dickhead on your forehead?
Lot of old houses in Thirroul, no doubt about it, but it's a part of its charm. Thank fuck people have held onto those miners cottages and let the built environment recall the suburb's mining and railway history. However, there's also a lot of new houses, especially along the coast road and in McCauley's estate - big money in each of those blocks.
All that is by the by really, the real estate down here is being driven by outward pressure from Sydney. It's just an hour and a bit train ride to Central and if you can pull that off then you can - or at least you could - buy a house for half the price of a Sydney equivalent. Seems that little disparity has been corrected though.
housing is the chancre on the cock of the australian economy
Anyone else want to put their hat in and say that 25-30% wouldn't be an unreasonable correction?
And will it be possible to bring enough political pressure to bear to have the major parties really address negative gearing, or are the expectations of the "winners" too entrenched?
BB, skiting about how much money you've made from real estate is bloody vulgar.
My father just went backwards in a real estate sale to the value of $300k (from 1.8m to 1.5m).
He's a baby boomer and after all the killings he's made over the years, I feel sorry for him not one little bit. He'll get by.
hey batfink. all good mate always up for a chat too, not the biggest fan of arguing. Now you say your happy to see people who have investment houses take a bath, wouldnt it be nicer to to be happy to see some regulatory change to meet those ends as opposed to those people who have investments losing out? dont hate the player, hate the game type thing. I personally think no person should be thought ill against if they have made gains as long as they have acted honestly and within the law. And if we do have some regulatory change, those wiley cats who have made some headway under the current system will probably work out another way to get ahead of the pack once the goal posts are moved. id say thats just human nature.
Bang on BB. I can't even feign interest in real estate. Had to read the pages when it was time to buy but quickly took the Daryl Kerrigan oath: It's not a house, it's a home.
Could care less about investment in housing, I find the whole notion perverse. I've got a yard, a shed, room for my kids to play, and a deck to drink arvo beers. Without being patronising I think it'd be wonderful if everyone had the same.
Best of luck to everyone searching for their own homes.