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.


terrance's picture
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terrance Sunday, 17 Dec 2017 at 12:24pm

so who are you voting for the the next Federal election (due prior to 2/11/2019)?

truebluebasher's picture
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truebluebasher Tuesday, 9 Jan 2018 at 1:14am

terrance... sorry for delay in reply.
GST lengthy comment was spoken from experience as it was instrumental in my business losing 90% of work and income.(Oz biggest builder 30 homes/mth down to 3 homes/mth)
You could say also my home then marriage. I knew of many others (Many) in same boat at very same time. 100's/1000's here in Games city lost 90% income from day of GST.
Men of 20 years self employment meeting at centrelink. All excellent hard working best rare breed all-round do the lot tradies never returned to Housing industry.

Firstly Labor put up GST then Libs with Democrats promised to vote it down.
Libs in office with support of Democrats signed off on GST.
Labor won back Govt with a GST wind-back pledge...and nothing!
All did the opposite to what they promised... so none deserve a vote.

I'm proud to say our family supplies it's own candidates/scrutineers/vote counters/campaigners/non voters.
I'm ashamed to say we have enough fading links to a current serving despot Pollie.

At a federal level as you referred...
Our family had a National secretary for a well known party earlier this century.
Your question is answered above (twice).

Only in OZ, is it compulsory to bankroll illegal candidates in a $Billion Judge Judy TV series?
Only in OZ can schoolkids vote with their dead grandpa's soggy ballot .
Survey says: New PM is due in April 2018 No election required as per usual.

GuySmiley's picture
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GuySmiley Friday, 19 Jan 2018 at 2:17pm

Previously in posts on this topic I have argued that Howard's move to allow SMSFs to borrow money to speculate in housing has been a major reason for the dramatic increase in prices since the mid 1990's (along with retention of negative gearing and 1/2 CGT provisions, the latter being another Howard legacy).

Some of you have challenged my view that allowing SMSFs to borrow has been a factor.

The article below appeared in today's Murdoch shit rag otherwise known as the Herald Sun.

Sheepdog's picture
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Sheepdog Friday, 19 Jan 2018 at 6:57pm

Guy.... No argument from me.... During the idiot years, also known as the boom, I debated with friends, work colleagues.. Said Howard was fucking Australia.... But people were too drunk on dollars to listen to sense.
You can see right here, where housing went from "a persons home", to an "investment". That's the thing with the capitalists... If they could get away with selling souls, they'd do it.. Hang on.... They do that anyway lol.
But yeah... Look where Howard took over.

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GuySmiley Saturday, 20 Jan 2018 at 2:36pm

Sheepdog, that graph alone ought to be enough of a reason to dispel the myth, the lie once and for all that Howard was a good PM. The failed treasurer in the Frazer government that went on to wreck the Australian economy with the carnage continuing to this day.

rees0's picture
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rees0 Saturday, 20 Jan 2018 at 4:11pm

Im no fan of little Johhny but this graph shows it wasn’t just australia. He can’t be responsible for the majorityof developed countries all having similar growth.

Cant work out how to post the pic but heres the link.

Sheepdog's picture
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Sheepdog Saturday, 20 Jan 2018 at 5:17pm

rees0.... Something stands out with your graph..... Can you see it?
Or do you want me to fill you in?
Ok... I'll fill you in... From the mid to late 90s, neo conservatism, privatisation, capitalism was the new black.... Even so called "left parties" had lurched so far to the right, that they no longer looked like left based parties.... Blair.... Clinton.... etc. In fact, Margaret Thatcher famously answered the question "what was your biggest achievement" with - "Tony Blair and new Labour"....... She basically meant that she MADE Labour into a right wing party.

Now back to the graph...... ALL those lines going UP UP UP post 1996?
They are all countries that at the time adopted the far right "turn housing into investments" policy.... John Howard was one of them.
You'll note in Europe whilst a fake housing boom was going berserk in conservative countries at the time, the socialist governed Germany had its housing prices stay relatively stable.

So yeah.... It was a worldwide plan by conservatives.... And Howard did his bit here.

happyasS's picture
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happyasS Saturday, 20 Jan 2018 at 5:56pm

sheepdog, your on the ball and I don't doubt the truth of your evaluation....but how do you explain Norway?

indo-dreaming's picture
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indo-dreaming Saturday, 20 Jan 2018 at 6:16pm

I think it's a bit simple to blame housing prices on one or two things, so many factors at work.

Yeah for sure the Howard government were at fault for fuelling housing prices, did some pretty silly things, but probably the biggest aspects was high immigration rates and just turning the economy around, giving people money again which meant they could borrow more so you basically take the good with the bad, if you want low unemployment, increased wages a healthy economy and low interest rates, the result is you get big rises in prices of property.

Sure housing was much more affordable before Howard under Keating in dollar terms in the early 90's you could buy a block of land where i live for under $10K a house for under $50K , but there wasn't much work or jobs to go around and if you could jag a decent job you had to borrow at very high interest rates, so its all relative.

I don't know that much about politics but all i know is the darkest days were under Keating and to make it worse at the same time we had the worst premier of Victoria Jeff Kennet, our community is still hurting from the chaos he caused with privation and amalgamating councils etc.

I didn't vote for old Johnny i hated him at the time, but life did get better under him and continued too be good under Kevin and Julia though.

truebluebasher's picture
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truebluebasher Saturday, 20 Jan 2018 at 6:43pm

As crazy as this sounds little Johnny was solely responsible for global house price rise.

Sheepdog's graph clearly shows Howard's GST to blame for OZ Housing cost blowout.

rees0's graph clearly shows Howard's War on Terror (duck and cover) price blowout.
Howards lies were thick and fast & Australia as good as started The War.(None deny that)
Graph prices sadly reflect Conservative/ Coalition of Willing bunkering down.
Right up until Obama turnaround.
Notice- (neutral 1st world Norway/Swiss/Asia/east/latins buck the trend until much later)

If any are still confused! War makes babies...Babies need extra bedrooms!
PM was pimping $5 grand for Warbabies - $15 grand for the Wartime nursery.
Each handout was simply tagged onto house price already with 40% GST price blowout.

Those were the two main OZ issues of our time. But graphs can mean a million things.

rees0's picture
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rees0 Saturday, 20 Jan 2018 at 6:50pm

I was pretty young at the time of howard so had no real idea of political landscape. I can remember keating vaguely, probably my first real memories of politics was howard taking power and the g.s.t which my parents and pretty much every adult i knew opposed. Still remember videos we watched in school probably grade 5 showing effects it had in other countries and i wasn’t keen on it even at that age.

Talking to my shaper today he commented on the fact that in 50 years of building boards he had made more money from real estate then shaping which says something.

Hindsight is easy and at least you older blokes had a chance (if it was indeed that much easier). I had no chance i wasn’t getting a mortgage for under 400 if i wanted to live within 10 mins of the beach. Crazy thing is when i look around at prices now i feel like one of the lucky ones and that was only 3 years ago.

Sometimes i freak out a bit thinking how am i gonna pay all this money back but i get by. Just like my parents and their parents etc etc i still remember the struggles and they paid 30k back in the 80’s. Just gotta be gratefull for what we got i reckon i can still get new boards can still go on trips but we need the sheepys to keep them honest too.

Gotta remember the cost of building the house as indo pointed out. Wont get much for 200k now can do a shed or cabin for 50 but thats no good if you have kids.

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Sheepdog Saturday, 20 Jan 2018 at 7:46pm

Happy... Would you say that Norway was great undervalued in say 1990? I'd suspect without going off and being a google "expert" that local politics may have played a roll in Norway. I do note a real burst around 2004/2005... My money would be on a conservative government taking over then. Maybe you could have a look at that for us? lol

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Sheepdog Saturday, 20 Jan 2018 at 7:53pm

Reeso, you write "Hindsight is easy and at least you older blokes had a chance (if it was indeed that much easier"...

It was soooooo much easier.... And don't let any boomer try to say otherwise..
As an elder gen x, I saw both housing landscapes.
Yeah.. Ok..... I own a house... Paid..... But if i sell it, I still have to fork out all that money for another house.. I tried to tell my mung bean brained mates that... They all thought they hit the jackpot... And if I sell up and rent, well rents are ridiculous, and if I put the money in the bank, interest rates are appalling....
That's the thing low interest rates reward people that want to go into debt, but don't reward prudent savers.
The whole thing is fucked. it's back to front.

truebluebasher's picture
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truebluebasher Sunday, 21 Jan 2018 at 12:32am

Best if I share my pre- GST first hand insight of Housing Mecca.

(1980-2000) I worked for Australia's biggest builder in Australia's busiest Housing market.
Here in Oz 'regional' capital Gold Coast.
During 1970's- 80's Only ever Victorians bought and owned homes on Gold Coast.
During the 90's... Sydneysiders sold up & piled in. Japs got sold the Empty Ghost Homes.

As nationwide today, Gold Coasters could only dream of owning a home in their own city.

Important to recall that States were like different countries. Border Gates/contraband etc. Qld had a Tyrant who whipped his subjects to work dawn till dusk for 70% less wages.
My tradie counterparts in Victoria/Sydney were working 8hr days earning 3 x my wage.

Southern Housing prices reflected their untold wealth.
Southerners park mercs into remote garages while Qlder's check rust buckets on the curb.
Trading their Family home for 1,2,3 more if you like GC beach homes for each child.
Laughing their heads off saying how cheap everything was. (Reciting Joh's mantra).

Most unfair to save 3x longer for all things in life while down south runs aircon in winter.
I too revolted & joined fellow Gold Coast families in building our own homes.
In my neighbourhood of 600mtr lots I can only recall one nearby project home.
We only got the block as no southerner cared to visit the utility poor neighbourhood twice .

Anyhow! Against the odds that's how we Gold Coasters got our houses.
Just so you know! We worked dawn to dusk/rain/dust storms the lot...Very little R&R.
Yes I know! Govt's got fingers in your pocket for that too now...I feel your pain brothers!

tworules's picture
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tworules Sunday, 21 Jan 2018 at 9:02am

Sgt truebluebasher, you should have joined the force, and now you would be sitting front row on any one of those sunshine coast beaches.If you didn't have money you soon felt the pain alright.

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GuySmiley Sunday, 21 Jan 2018 at 10:10am

"That's the thing low interest rates reward people that want to go into debt, but don't reward prudent savers".

Reward? do you think we have seen the end of the cycle yet Sheepdog? If wages remain stagnant and/or unemployment increases and/or interest rates go up and/or if China stops buying the stuff we sell what will that do to the speculators? Australians are $2.47 trillion in debt right now.

Saw a story the other night on commercial TV about this 32 year old that who apparently had a property portfolio of $50 million, but what they didn't say was how much he owed the banks and what would they do if interest rates went up and miracle boy couldn't service the debt.

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truebluebasher Sunday, 21 Jan 2018 at 12:05pm

tworules...don't ever think we never thought about escaping.
Qld Rockbandz/Footy boofs all went south, run out of fuel/ciggies back they came.
History of Australia no Qld'er ever considered moving down south for a month or more.
Best of both worlds was the only way

Granted that Housing/Rents were then still as now exhorbitant in NSW.
Important to note highest paid NSW taunted OZ by shelling out the least for their lifestyle.

This is a typical 1980's-1990's Cross Border budget.
You buy your Car in NSW (20% cheaper) but register + fill it up in Qld (20% cheaper)
Qld compulsory unroadworthy haulks littered our roads. None them there fancy jalopies.
Bulk Buy groceries/fruit & veg in NSW(10- 20% cheaper)
Buy white goods/T.V.s/presents/sports gear in NSW.(20% cheaper)
You buy your counter beer in NSW but your Slabs in Qld
NSW extra cheap Meals/Shows cheap porn enticed Qlders
Only a dickhead would buy ciggies in NSW (30% dearer)

I failed to mention Joh's slave labor camps.
Regional Dams/Mines preyed upon young lads like myself to earn a bit more.
"Non socialist" Southern firms were awarded the matching Qld Govt Housing Contracts.
Carrot was that they never had to pay the workerz. Only the best Flybyniters rocked up.

Told to get off off site. Old boss run outta town.New Southern mob now?
One month/2 months then 3 months never mattered where.
Working everyday. Not a cent to our names.
Caravan Parks kindly move us on to next mining town after moving last poor buggerz out.
All together only ever wanting enough fuel money to get back home.
To be honest! I fell for scam twice as did many others... (Is a Fair Go too much to ask?).
I experienced Scams monthly but never as large amount as other poor buggers.

Housing scams to look out for...
Freebie for Dearest relative/Freebie for Work colleague/Do this one for free as Bigger Contract awaits/Time line ends/Free Product trial/Others do display homes for free/Before material price rise/Before the next Rain/Before inspection/New Safety Guidelines kick in/Transport Fuel increase.... (Leave it to you guys).
freetip: Professional flybyniters park offsite with a wardrobe on those never used car hooks.

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tworules Sunday, 21 Jan 2018 at 2:30pm

All about the lifestyle, trueblue, probably good house prices in those towns around the Russ Hinze dam and take what you can sell hole in the ground shanties, to build up a portfolio.
We thought we were doin it tough, watching maggots grow out of the carpet and collecting returns on milk bottles to get out the place, at least we were surfing the BEST available waves!

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rees0 Sunday, 21 Jan 2018 at 3:22pm

In regards to interest rates. They are probably what i feel safest about. Would have to be a high percentage of home owners out there who couldn't take much more then a %1 rise without going under. I couldn't take much more then that %4 would do me and i don't even have kids and all the associated costs.

Willing to bet all of these pollies Left, Right, Green whatever would have substantial real estate portfolios in the high end of town and last thing they are going to do is take a hit on their personal wealth. Supply demand etc when you get a whole bunch of foreclosures its inevitable the market is going to tank so in this case their vested interest is of some kind of benefit to the average joe.

Pretty much ends there but and if this correction happens like so many seem to be suggesting it's not just the home owners who are stuffed, We all are the renters the subletter as well somebody owns those houses and if your deep in the bank will own it soon enough. Not to mention the halt of the economy no new jobs construction industry is stuffed that rolls on obviously.

Personally i think thats doomsdayer stuff we'll get by but as far as surfing goes unless your in a rural area (not much left of the east coast) it will be a rich mans game which is the saddest part of it all. Used to be an escape from all the stuff you didn't have wasn't gonna send your parents broke to get you a board now and then, looking around now most kids have got a grand worth of gear just to go for a paddle i don't reckon my parents spent much more then that on me in whole year.

indo-dreaming's picture
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indo-dreaming Sunday, 21 Jan 2018 at 3:54pm

I feel so lucky sometimes, my house is about 800m from the beach in either direction, one with good beachies as far as the eye can see and one with flat water and a sandy beach good for a dip.

Our house is not big but it's in a good street with a couple houses valued at over a million dollars.

Our loan repayments are about $250 a week but we pay off about $300 a week, even if interest rates went sky high and our repayments doubled we could still get by.

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crustt Sunday, 21 Jan 2018 at 4:03pm


inzider's picture
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inzider Sunday, 21 Jan 2018 at 4:47pm

I live a couple K from the ocean in a Shit street. Top dollar house goes for 250-300k. I'm so lucky when my ice fried neighbors fight on the st
Cheap rent and even cheaper entertainment

Sheepdog's picture
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Sheepdog Sunday, 21 Jan 2018 at 5:24pm

The next logical move for the men in grey suits, is now that Houses are ridiculously inflated, the thing to do would be to count the family home as an asset, therefore throwing HEAPS of lower to middle class seniors off the pension ,who have lived in their little family homes for 60 years, who had nothing to do with all of this bullshit. FORCE THEM OUT OF Carina, Randwick, Frankston.... Make them sell!! Make them blow that money - put it into surviving, so that woolies gets a cut... Force them out of the cities, into cheaper regional areas, where of course there are no doctors, or decent public transport, or family.
But hey.... it'd be great for the economy.... All that pension money saved, all that housing money thrown into the cogs.
You know it'll happen..

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Blowin Sunday, 21 Jan 2018 at 5:26pm


truebluebasher's picture
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truebluebasher Sunday, 21 Jan 2018 at 6:33pm

Blowin thanks for the thread...rees0 great post- here's a different slant on interest rates
Historic official Interest rate graphs will never reflect half the economics of the day.
It took a decade to climb from 10%(average) to 17% but only 2 years back down to 10%.
So this was never a great shock to any of the time. This is on record for all to see.

I left for US/Europe Aug '87 you couldn't give Gold Coast land away for $26,000 a block
When away the world jolted with Black Monday stock market crash.
We returned in November and the same block had an extra $10K on the sign.
By mid 1988 you couldn't get a block under $60,000
Investors now banking on land not shares. (Nothing to do with Keating or Interest rates)

This is when Gold Coasters were forced to jump in.
Biggest momentum shift in OZ Housing history had nothing to do with Australia at all.
This was all about Die Yuppie Die!
Comparable to War breaking out as mentioned in earlier post

When we approached the banks for loans we were all declined.(Sorry! Investors Only)
Married couples of 2 X 20 year employment with 40% deposit deemed too much risk?
So tough were conditions that even bank staff were turned down in own branch.

Plan B was only natural...Hit up the parents and in-laws for a loan.
Easy, as a 10% loan rate was a fair return on what In Laws were getting from their banks.
Never believe official Term deposit rate. That has so many hoops, none ever see the return.
Move in/Pay rent to the in-laws. In-laws help out on Building site...all move ahead.
This was the done thing every way you turned. Very few could build a home on their own.

As I said at the start that the peak 17% interest rate fell quickly to 10% in just 2 years.
Canny in-laws were rewarded with safest highest net returns in the market.
So be it at kidz expense,again this was common. Handshake stood firm. None were sour.
Another momentous shift in housing finance never recorded. This was mainstream finance.

indo-dreaming's picture
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indo-dreaming Sunday, 21 Jan 2018 at 6:39pm

I often wonder if high house prices are in the governments favour, not only for things like stamp duty or whatever, but just in the sense most people work to pay their mortgage, if they pay off their mortgage early they are more likely to retire early it kind of puts pressure on the government to cough up a pension.

While if you have to keep on working longer and longer to pay of you mortgage then it doesn't matter to much if they raise the retirement age and pension age.

The older people get until they get their pension the less money the government pays out as they have more chance of dying, and it it's not such a big deal if they keep raising the age you can get the pension at and eventually it will be at an age where half the people are dead anyway. (although to be fair people are living longer)

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indo-dreaming Sunday, 21 Jan 2018 at 6:40pm

@ Crustt Yep.

rees0's picture
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rees0 Sunday, 21 Jan 2018 at 7:20pm

Funny you say that basher cause it's exactly what i had to do. i sold my car for 15 k, saved every penny and borrowed 5 k from my mum to stump up the deposit for a piece of land me and the missus actually want to live on. Quickly realised i wasn't going to get close to loaning the money to build a house whilst paying rent so moved in with the in laws for 12 months while we saved and built feels weird to me been happy about practically enslaving myself for 30 years.

Sure wasn't easy and no way i could have done it in the time frame on my own i'd only just be there now and probably priced out anyway. Thats whats stopping a lot of people around my age, the sheer time it takes to save 40-50k if you haven't got the option of help from your parents or a partner to help save the cash it just seems so far away.

If anythings going to slow down the market i reckon that's what it will be, people just feeling like its impossible so not entering the market at all. My biggest concern is that they will change the foreign ownership laws. Lost count of the amount of new duplexes in shithole suburbs I've worked on sold to chinese investors but at least theres something filtering through.

Sheepys point about making the family home an asset is a scary one. Kind of happening in a way in that plenty of baby boomers are selling up moving into retirement villages or buying 200k worth of caravan and landcruiser when a lot of people are probably counting on the inheritance to either pay off or buy a house of there own.

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Sheepdog Sunday, 21 Jan 2018 at 8:05pm

That's all moot, indo..... They could raise it to 80..... But the vast proportion of 75yo wont have a job and will qualify for disability, especially labourers who bodies are broken. And I think the disability pension is similar to the aged pension... So no real saving there. They wouldn't want those folk listed as "unemployed". That'd blow out the unemployment stat.

So lets look at a scenario of a hypothetical "mrs Jones", 80yo, widow - husband died peacefully in 2014, in their Kedron home of 55 years. She's lived in the inner north of brisbane since the day she was born... She's slowed down a bit since MR Jones passed away.. But she still tends to her garden. Her loving youngest son calls in and does the mowing though.. She can afford a taxi once a fortnight to the shopping ctr, which is only 3 minutes drive away. Her children, grandchildren visit ever few days, and she's a member of the local bingo club which she loves.

Mr jones was a simple worker... A good man.... When he passed, they still had savings.
Thanks to his lifetime of work, they still had some $400 000 dollars in savings, earning interest and subsidising their retirement. Of course things were better in their 60s, when they were getting 8% interest, not 2.5% like today.

But Mrs Jones today is thankful she has a PART pension. That $400 000 and interest counted as income does whack a fair bit off the pension. But the health care card, seniors discounts etc really helps. And as a society, it's the least we could do for her, after being a wonderful mum, bringing 3 great Australians into this world, and now her grandkids too... Not to mention she cared for her ailing husband for 7 years till his demise, saving YOU THE TAXPAYER nursing home fees of $70 per day x 365 x 7 ($180k).
Now, Mrs Jones house... Just a simple qlder... 1/4 acre.... 4br .. She's put a lift in because those stairs aren't getting any smaller.
She never asked for the boom. In fact, it depresses her, seeing her grand children priced out. She cant really help them with money, even though she has some... If she gives them money, the government counts it as "gifting"... They will still count it as HER money for 5 years. Her pension wont go up because the government will count that gifted money as hers.... So she'll lose that interest from the bank, but it wont be replaced.

Her house is now valued at 950k, mostly thanks to the size of the block, and well looked after qlders are all the rage - very rare now. The rates are ridiculous... But she gets by... She takes joy in the fact that when she passes, her 3 boomer kids will all be able to pay off their mortgages with the sale of the property... And that cash will be left to her grandkids, hopefully helping them pay off the uni debts.


Dear old Mrs Jones..... She just lost her pension.... The 2.5% on her 400k savings simply isn't enough. 10k doesnt even pay the utilities.

She has 2 choices

1- move to Dalby, a lifetime away from her spiritual home, her kids her bingo, her doctor... Minimal services.. No friends . But there's a house for 150k...... After moving, that leaves her with 1.2m in the bank on 2.5%
That allows her 30k per year to survive.... $570pw....
Her medicines etc are now full price. Her son cant mow the lawns, so need to pay for that, and any other issues
A very lonely existence, but at least she kept the inheritance her and Mr Jones worked so hard for. Mrs Jones passes away 4 years later. Her body was found 5 days after she died.

2 - She doesnt want to leave Kedron... Its her home.... A creepy nursing home rep talks her into living in aged care.. By the age of 87, all the money is gone... But at least she can get the pension now..............

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thermalben Sunday, 21 Jan 2018 at 8:05pm

Re: Phillip Island - I reckon it’s probably one of the most affordable regions that’s close to quality waves, anywhere in the country. Not really too far to Melborne either.

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GuySmiley Sunday, 21 Jan 2018 at 8:55pm

@sheepdog, if only Mr and Mrs Jones had established a discretionary family trust at anytime during their marriage and/or working life. That queenslander and $400k wouldn't be owned by anybody but the trust allowing Mrs Jones to now qualify for the full pension because the trust directors, of which she is one along with her children, have deemed she should only be paid enough income (and not a cent more) to allow her to qualify for the full pension. And should Mrs Jones need to go into a nursing home the family home is safely tucked up as a trust and not personal asset .... want to know more? well just ask pretty much every LNP parliamentarian and probably 1/3 - 1/2 on the Labor side.

Discretionary Family Trusts the favoured vehicle to avoid tax payments and to maximise middle class welfare. I could go on for some time as how trusts can cook the books is favour of the nation's real leaners. Speaking of which former Joe Hockey has a family trust and his Sydney house is currently on the market for $8 million.

@ben, its all after the gold rush. while its still relatively cheap compared to many places its was dirt cheap not too long ago, the last nail in that coffin was the influx of workers to build the desal and as you say not too far from Melb and getting closer with improvements to the highway.

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crustt Monday, 22 Jan 2018 at 9:26am

@Ben, affordability of housing in the area is relative to lower wages, if you were buying into that area live at the moment, your only going to earn half the wage, unless you get a government job. Then on top of that your day to day expenses are way more. I bet indo's rates are twice that of Melbourne.

For any of you looking at moving house you may want to look at this link, timed with a winter in Indo after selling , you could get a healthcare card on return and start looking at houses.

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indo-dreaming Sunday, 11 Feb 2018 at 3:47pm

Was just looking on seems property price in my area have risen again, a year or two ago you could still get a small house in the high two hundreds, now its hard to even get a block for that looks like the mid to high three hundreds is the new entry point.

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groundswell Sunday, 11 Feb 2018 at 5:38pm

In my current area its fairly cheap but because prices have gone down and continue to go down its hard to get a loan from the banks.

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Sheepdog Sunday, 11 Feb 2018 at 11:58pm

Limestone coast, Groundswell..... If you don't mind living 20 minutes inland, you can get a big house for 140k..... 200k will get you a mansion...... Google Millicent... 20 minutes to a pretty good beachie.... A 4wd will open up many possibilities ..... See ya soon ;)

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crustt Monday, 12 Feb 2018 at 6:55am

Check this out indo, I was keeping my eye on this place when we was selling our place. In my mind it was a bargain. Property has always been cheap down your way, but look out the developers are moving in, they flip houses, fuck the area and move on to the next place. Probably Millicent.

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velocityjohnno Tuesday, 1 May 2018 at 6:55pm

Who owns New Zealand now?

Good doco, describes the reasons for the lessening affordability which afflicts many Western nations. Very interesting that key indicators of certain flows are not tracked or measured. Worth a watch.

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velocityjohnno Monday, 27 Aug 2018 at 7:51pm

Exciting stuff from the perspective of documenting the economic history of it all, salient quotes:

"NEARLY half of all homeowners are now shackled to their mortgage, with refinance rejections up significantly ... in less than a year as banks rattled by the royal commission drastically tighten borrowing rules."

"On top of this, granular cost breakdowns must be provided. After the royal commission revealed in March that expense checks were so lax as to be borderline illegal, new tests have been imposed requiring in some cases detail of weekly, fortnightly, monthly, quarterly and annual spending in as many as 37 categories from alcohol and haircare to shoes and pets, as well as doctor visits."

"Mark Hewitt — general manager of broker and residential at AFG which arranges 10,000 home loans a month — said would-be borrowers whose budgets were at breaking point or beyond could still get a loan if they had equity, a clean repayments history and the ability to ditch key expenses such as fees for private school if under the pump."

"Some people seeking their first home loan are signing documents in which they promise to cut their spending if a new loan is approved."

Ouch. Rules have changed as offshore interest rates rise. This happens again and again in history as easy money gives way to the tap being turned off. I remember the rising cycle of Australian rates after 2004 and how it evaporated cashflows going into local discretionary spending (such as surf shops & apparel), as people chose to keep paying the mortgage increases. Cutting private schooling for a child and informing them they would be going to a new school and have to make friends all over again is particularly harsh, can't believe he said that.

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indo-dreaming Monday, 27 Aug 2018 at 8:00pm

House prices where i live (Phillip Island) over the last year have just gone through the roof.

It's really no surprise though Melbourne today hit over 5 million people with 125,000 people added in the past year (like adding the population of Darwin each year)

300-400K just for a block of land where i live now, back in the 90's same blocks were as low as 3-4K

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velocityjohnno Monday, 27 Aug 2018 at 8:35pm

It's gone absolutely mental here as well. Migration from both Sydney and Melbourne (people who were long time residents) is mostly going to regional Victoria, probably a heavy concentration near the coast. 3-4K on Philip island, wow. We're at the stage that even if prices halve they are still historically expensive compared to incomes.

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GuySmiley Monday, 27 Aug 2018 at 9:54pm

Elsewhere here and in the broader media there has been perhaps 100s detailed discussions/articles on AU house prices. It is true immigration rates is a factor but to what degree? Perhaps more so Australia's taxation, investment and SMSF rules have caused speculation in housing on an unprecedented scale over the last decade. Lets get specific with some facts. There are 5,000 registered Airbnb rentals on the Mornington Peninsula (source: Mayor of the MP Shire on Melbourne radio last week). In Lorne on the Surfcoast 73% of all houses are holiday houses (source: Lorne real estate agent last week). I also know one person on Phillip Island who owns 9 short term holiday rental properties. These numbers are highly likely to be replicated up and down the Victorian coast (and all around AU). So I would argue its property speculators forcing up prices down the coast.

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velocityjohnno Monday, 27 Aug 2018 at 10:08pm

That's a good argument GS, all of those things have added to it. FHG too. Also it's the very easy finance terms until recently, perhaps foreign funds a bit as well. One thing I noticed doing paper rounds with the kids was the amount of houses in town that wouldn't pick up their paper each week, and after a bit it's easy to conclude they are holiday places or being land banked. Makes for quiet streets in winter which is nice.

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Blowin Monday, 27 Aug 2018 at 10:33pm

Those joints have always been holiday towns with the associated vacancy rates.

If you question immigration’s role then you’re missing the truth by a very wide margin.

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happyasS Monday, 27 Aug 2018 at 10:51pm

Unless population growth is exceeding construction then there's no fundamental reason it should cause rental price increase and thus house price increase. My understanding is that construction has well and truly kept up. IMO the primary cause is speculation. Yes a booming population does 'feed' speculation because investors see the likelyhood for growth. It's the old population equals gdp equals growth ponzie scheme that will eventually fail but that's another topic all in itself. But the enabler of speculation is the ludicrous rules that still exist. To think you are subsidised through negative gearing for investment choices that are making a loss is just moronic. Your losses mean the investment is unproductive. So why subsidise it?

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Blowin Monday, 27 Aug 2018 at 11:02pm

So you’re saying that even if Australia’s population was still the 17 million it was in 1998 then house prices would still be where they are now due to the power of speculative investments alone ?

Come on HappyasS , maybe you’re forgetting that the immigrants speculate as well ?

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happyasS Monday, 27 Aug 2018 at 11:29pm

Course not. Its linked and nuanced.
Though im sure I read once about countries that had increasing house prices but negative population growth. they weren't exemplars of Australia but interesting to read about. Anyhow never intended to dimisish your argument, population is a factor if for no other reason than gdp groeth, Prices do go up. But i reckon population growth also creates a breeding ground for speculators. If they see an economy that's shows all the traditional hallmarks for 'growth' over the next 30 years then speculative risk is reduced, particularly for relatively stable assests like land/bricks/mortar that will always be in demand.

So yes. I agree. Population counts.

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velocityjohnno Thursday, 30 Aug 2018 at 2:46pm

Going to international capital markets (where rates are rising) to borrow short term to lend long term into domestic housing... When those rates rise, someone's gotta pay...


best scene from the truly brilliant 'Margin Call':

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GuySmiley Thursday, 30 Aug 2018 at 3:43pm

I forget the exact number but there are 100,000s (perhaps 1/2 million plus ) of interest only house loans out there that need to be refinanced over the next 2-4 years. The refinancing has already started. To refinance the existing interest only loan the borrower must agree to a interest + principle loan with the associated extra monthly replacement of many $100's of dollars.

That's one factor, a second factor is the very large number of "liar loans" out there where the borrower and/or their broker lied about the borrower's income and expenses to maximise the amount borrowed (we've heard about this in the royal commission).

Thirdly, the Reserve Bank and the ACCC have forced new lending requirements on banks in terms of reserves held and also in terms of the amount borrowed as a the percentage of the house valuation.

Four, crack down on foreigners buying here.

Five, Labor's promised tightening of negative gearing and CGT provisions for house speculation.

Six, wages flatlining.

All of these factors but especially the first 3 have seen investors leave the market in great numbers. It has also seen the start of investors selling their "rentals". Local real estate agents I'm talking too are saying the market started to peak in late 2017 and was trending backwards as early as March 2018. Everywhere is different and some areas are bucking this trend. Houses 6 months ago were sold quickly and generally at or higher than asking price whereas now they are staying unsold and when sold are selling for much less than the asking price.

Given all of the above I think we are in for a sustained downturn in housing. If the bank excesses discovered in the royal commission are all true we could be in for some sort of crash.

Good one

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Blowin Thursday, 30 Aug 2018 at 4:41pm

“Westpac's mortgage book is about $400BN (according to Bloomberg 2018). 14 basis points is 0.14%. Which is about $500M. It's a small increase percentage-wise but its a big number in dollar bills. That's $500M less to spend on the high street and in the supermarket. Soon to be $1.5BN when the other 3 follow suit.“


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velocityjohnno Thursday, 30 Aug 2018 at 5:46pm

Yep. 500M less on restaurants, into fuel, at Big W - and that's just WBC, before the other 3 re-assess. I've heard the um, less reputable lenders are still lending into housing in a big way though.