House prices

Blowin's picture
Blowin started the topic in Friday, 9 Dec 2016 at 10:27am

House prices - going to go up , down or sideways ?

Opinions and anecdotal stories if you could.

Cheers

velocityjohnno's picture
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velocityjohnno Thursday, 25 Nov 2021 at 5:25pm

Hey FR, the article was very mainstream, but I did learn that there were wartime price controls on Australian housing (price, rent) until 1949, and that housing doubled when these were removed as the prices returned to the mean of inflation felt elsewhere throughout the war. And, throughout the 19th century house pricing did not inflate beyond a range (Gold Standard might have had something to do with that)

Immigration was also mentioned as a driver for increasing prices, which I thought was a tell, given the source...

freeride76's picture
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freeride76 Thursday, 25 Nov 2021 at 5:36pm

True.
That was useful information.

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velocityjohnno Thursday, 25 Nov 2021 at 8:18pm
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.

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Patrick Friday, 26 Nov 2021 at 3:08pm

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...

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flollo Friday, 26 Nov 2021 at 3:44pm

'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...

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batfink Friday, 26 Nov 2021 at 4:16pm
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.)

batfink's picture
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batfink Friday, 26 Nov 2021 at 4:38pm
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.

AndyM's picture
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AndyM Friday, 26 Nov 2021 at 5:57pm

Yep, keen to hear some opinions there.

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zenagain Friday, 26 Nov 2021 at 7:32pm

"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.

velocityjohnno's picture
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velocityjohnno Friday, 26 Nov 2021 at 8:53pm

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...

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sypkan Friday, 26 Nov 2021 at 11:15pm

"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...

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freeride76 Saturday, 27 Nov 2021 at 6:57am

Let it rip VJ.

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gsco Saturday, 27 Nov 2021 at 8:50am

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.

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san Guine Saturday, 27 Nov 2021 at 9:09am

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

AndyM's picture
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AndyM Saturday, 27 Nov 2021 at 9:13am

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?

AndyM's picture
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AndyM Saturday, 27 Nov 2021 at 9:14am

..

I focus's picture
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I focus Saturday, 27 Nov 2021 at 9:16pm
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.

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seaslug Saturday, 27 Nov 2021 at 10:05pm

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

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seaslug Saturday, 27 Nov 2021 at 10:06pm

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

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seaslug Saturday, 27 Nov 2021 at 10:07pm

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

seaslug's picture
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seaslug Saturday, 27 Nov 2021 at 10:08pm

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

zenagain's picture
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zenagain Sunday, 28 Nov 2021 at 12:55am

Me too.

I was 1.

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etarip Sunday, 28 Nov 2021 at 6:37am

#metoo stories always bring a tear to my eye Zen

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Sprout Sunday, 28 Nov 2021 at 9:27am
campbell's picture
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campbell Sunday, 28 Nov 2021 at 9:37am

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

Blowin's picture
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Blowin Wednesday, 22 Dec 2021 at 6:00am

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...

Craig's picture
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Craig Wednesday, 22 Dec 2021 at 7:31am

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.

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GuySmiley Wednesday, 22 Dec 2021 at 8:00am

The prosperity gospel right there no doubt ...

Dx3's picture
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Dx3 Wednesday, 22 Dec 2021 at 8:57am

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.

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indo-dreaming Wednesday, 22 Dec 2021 at 9:08am
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.

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GuySmiley Wednesday, 22 Dec 2021 at 10:23am
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

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Cockee Thursday, 23 Dec 2021 at 4:20pm

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

thermalben's picture
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thermalben Monday, 27 Dec 2021 at 7:29pm

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/

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udo Tuesday, 28 Dec 2021 at 10:40pm
seeds's picture
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seeds Wednesday, 29 Dec 2021 at 6:55am

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

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blackers Wednesday, 29 Dec 2021 at 7:42am

They are selling a footpath for $400K ?

goofyfoot's picture
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goofyfoot Wednesday, 29 Dec 2021 at 8:10am
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

Craig's picture
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Craig Wednesday, 29 Dec 2021 at 8:25am

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

chook's picture
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chook Wednesday, 29 Dec 2021 at 11:16am
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.

Blowin's picture
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Blowin Monday, 17 Jan 2022 at 12:56pm

Median rent at Crescent Head AKA The Worst Good wave in Australia* is now $680 per week!!!!!!! 55% rise in 12 months.

Country soul is expensive!

https://www.smh.com.au/property/news/shore-and-ore-two-factors-driving-r...

*Alternatively …….The Best Bad Wave in Australia.

freeride76's picture
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freeride76 Monday, 17 Jan 2022 at 1:03pm

Still seeing a crash ahead this year?

AndyM's picture
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AndyM Monday, 17 Jan 2022 at 1:15pm

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.

Blowin's picture
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Blowin Monday, 17 Jan 2022 at 1:22pm

Oh, it’s turning alright.

The fever is gone. Joints are still moving but not at the blistering rate and the days of just whacking a bigger number on a joint you just bought are over. Top end prices around here aren’t shifting.

It’ll take a bit of cultural adjustment to alter the course of two decades of froth and bubble, but they’s a comin’.

August last year was the top.

Interest rate rises will end the party as surely as the crowd discovering the new keg is full of frothy warm urine.

Scummo is jetting in highly skilled food delivery technicians as quickly as he possibly can but he’s pushing shit uphill with a sharp stick

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goofyfoot Monday, 17 Jan 2022 at 1:33pm
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

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bonza Monday, 17 Jan 2022 at 1:40pm
freeride76 wrote:

Still seeing a crash ahead this year?

no

freeride76's picture
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freeride76 Monday, 17 Jan 2022 at 1:44pm

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

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chook Monday, 17 Jan 2022 at 1:56pm
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!

GuySmiley's picture
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GuySmiley Monday, 17 Jan 2022 at 3:58pm

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.

thermalben's picture
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thermalben Monday, 17 Jan 2022 at 4:46pm

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.

GuySmiley's picture
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GuySmiley Monday, 17 Jan 2022 at 5:35pm

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!!