Australian Housing Affordability Discussion

[UP4014]

Had a call from the agent who sold us our house in inner-suburban Melbourne to myself and my wife-to-bed almost exactly 12 months ago.

We paid just over $1.2m, and now we've got a private bidder wanting to offer us $1.55m. Apparently they inspected the house but couldn't get the capital together at the time.

Decisions decisions.

I bought a place in Bowral last year, the day after I signed the contract the agent came back and said someone was offering me $20K plus any out of pockets for me NOT to buy it.

I did buy it and 12 months later the bank valued it 15% higher.

It's a shocker really and will need to slow down.

Matt

 

[badseed]

It's a nice feeling! We had a similar offer (similar numbers) when we purchased a place 12 years ago (before we even settled) ... FYI, we didn't take it and have no regrets 12 years later

I think we'll refuse also given that it really is our dream home. And I'm not at all certain that $250k extra (after stamp duty) would get us something that'd make it worthwhile. Or motivate me enough to bother repacking and unpacking everything yet again!

Given that we didn't have to go into debt for it (thanks to the Bank of my partners Dad), the value of the asset doesn't really mean that much either.

 

[Foreigner]

I think we'll refuse also given that it really is our dream home. And I'm not at all certain that $250k extra (after stamp duty) would get us something that'd make it worthwhile. Or motivate me enough to bother repacking and unpacking everything yet again!

Given that we didn't have to go into debt for it (thanks to the Bank of my partners Dad), the value of the asset doesn't really mean that much either.

There's extras in agent's commission too.

 

[JohnK]

....back to the topic at hand. If you are considering all costs associated with a property then you also need to consider all income associated with it. For your hypothetical investment property, if you are considering interest as tax deductable then you would also need to consider capital appreciation (or otherwise) for the same time period, not at point of sale. This would then give a true picture of how that asset performed over the period.

But that creates more problems as property prices fluctuate.

Oh and whose responsibility is it to get a true valuation? The investor? More costs that are not necessary.

But going totally off-topic I am really against the concept of paying income tax on any type of investment. e.g. 2 people of the same age get their first job together and earn the same money. The first person spends all their money on gambling, eating out every day and going overseas regularly and after 40 years has nothing to show for it and ends up sponging off the system. The second saves their money and after having enough for a deposit buys a property and rents it out. Why is this person expected to pay tax on the money they have saved? And then after 40 years when they make a tidy profit out of the sale of the property they have to pay a capital gain tax?

Why are we penalising the person who is working for their future? At 65 years of age the person with the property does not need a handout yet the person who has lived their life without caring for future is still sponging. I strongly believe the tax system in place is not fair for all.

 

[alieninperth]

John,

I suspect you are right with the tax system not being fair for all. However, I don't think we'll see eye to eye on the housing issue. It's been fun debating it though. Maybe we'll continue at a PER drinkies.

 

[Foreigner]

Spring's first weekend and I wonder how properties will move at auctions.

 

[Foreigner]

Preliminary results reveal auction clearance rate dips below 70%:

http://www.domain.com.au/news/super...t-ever-september-auction-day-20150926-gjvh10/

 

[eastwest101]

Preliminary results reveal auction clearance rate dips below 70%:

http://www.domain.com.au/news/super...t-ever-september-auction-day-20150926-gjvh10/

They should work for Qantas - a very Sydney-centric waste of electrons that really doesn't tell us anything about the market more than 15km from Martin Place in Sydney.

 

[Warks]

Here's another big one:
St Leonards 'superlot' of nine houses reaps $66m

I think Sydney within 20km of the city is doomed to look like [insert high-rise city here]. I was down at Gladesville at the weekend and looked to the southern shore of the harbour - it's become almost uniform 'box' flats along and set back from the water in the last ten years. All the old industrial sites have gone and the result is a colourless bland mixture of dull with boring. Compare that with the harbour east of the Bridge.

 

[Alanslegal]

Here's another big one:
St Leonards 'superlot' of nine houses reaps $66m

I think Sydney within 20km of the city is doomed to look like [insert high-rise city here]. I was down at Gladesville at the weekend and looked to the southern shore of the harbour - it's become almost uniform 'box' flats along and set back from the water in the last ten years. All the old industrial sites have gone and the result is a colourless bland mixture of dull with boring. Compare that with the harbour east of the Bridge.

What a lotto like win for the owners. The average land size is 700sqm and they netted over $7m each ... win. It would be terrible for the adjacent owners and tenants with such an ugly behemoth rising in the middle of the suburb.

 

[JohnK]

I think Sydney within 20km of the city is doomed to look like [insert high-rise city here]. I was down at Gladesville at the weekend and looked to the southern shore of the harbour - it's become almost uniform 'box' flats along and set back from the water in the last ten years. All the old industrial sites have gone and the result is a colourless bland mixture of dull with boring. Compare that with the harbour east of the Bridge.

I think we have learned nothing from examples around the world. Continuing to high-rise density housing without the adequate infrastructure in place. It is not fun sitting in gridlock for 15-20 minutes.

I guess it is a case of take the profits for everyone involved and damned the consequences?

 

[whatmeworry]

What a lotto like win for the owners. The average land size is 700sqm and they netted over $7m each ... win. It would be terrible for the adjacent owners and tenants with such an ugly behemoth rising in the middle of the suburb.

Recently in Glen Waverley (MEL), a home on a 4000sqm block sold for $6mill. Over 20km from the city but in a school zone the Chinese love.

 

[amaroo]

Well done to the vendors - excellent marketing!

 

[Pushka]

We live near one of SA's best public primary schools and major International public high school. We even have people (Chinese mainly) knocking on our door and real estate agent letters (stating Chinese buyers) ready and waiting. We have a large block (800 sq metre) about 6 k's from CBD.

Our previous home - they knocked down 2 houses next door and installed multi dwelling townhouses so poorly constructed they needed constant airconditioning to be liveable. We moved out within 6 months and just realised - Chinese buyers bought it. Good luck to them!

 

[whatmeworry]

Our last great Treasurer now says he wanted to change negative gearing and super rules rules.

He now says he wanted to re-skew negative gearing toward new housing so there was an "incentive to add to the housing stock rather than an incentive to speculate on existing property".

It wasn't what he said while he had the job.
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When Labor put forward rather mild measures that would have reduced super tax concessions Hockey said only Labor wanted "to introduce new taxes and have new changes on superannuation".
"The last thing you would want to do to people relying on investment income is to hit them with a new tax," he said.

Now Joe Hockey says he wanted to tax the rich all along

 

[whatmeworry]

Chinese investors now getting zero deposit loans.

One of China's biggest financial institutions is offering zero-deposit home loans for off-the-plan apartments in Melbourne and the Gold Coast, a practice at odds with efforts by Australian regulators to tighten lending standards and cool the property market.
The banking division of PingAn Insurance, which has a listing in Hong Kong, was spruiking the loans to Chinese investors at a conference in Shanghai last week.
"Become an Australian property owner with zero down payment," said one slide displayed at the conference. "Join hands with PingAn and realise your overseas property dream," said another.

Read more: Zero deposit loans for Chinese investors to spur Australian property market | afr.com

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[burmans]

Chinese investors now getting zero deposit loans.

The property market is already cooling, sounds like a fast way to lose money to me!

 

[whatmeworry]

Probably a key reason why Negative gearing is still around.

 

[whatmeworry]

At one end of the renter's market in Melbourne.

Tents pitched on a balcony and in the corner of a living room are being advertised to renters from $390 a month in one of the more outrageous signs of Melbourne's desperate rental market.
The listings were posted on two classified websites in recent weeks.
One of the tents, advertised for $130 a week, is part of an apparent illegal boarding house at the Lacrosse building in Docklands, the apartment tower currently at the centre of a flammable cladding controversy.
The Korean-language listing said the two-bedroom apartment at 673 La Trobe Street was shared between six people.

Read more: Multiple tents found pitched in Melbourne apartments and rented out

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While Liberal party donors making out handsomely in Fishermen’s bend.

Senior Liberal party figures and donors, including the party's federal treasurer, have reaped multi-million windfalls from the former Baillieu government's signature urban renewal project in inner Melbourne.
An investigation into the controversial Fishermans Bend project has found Liberals' honorary treasurer Andrew Burnes is among a slew of party activists and donors who either bought into the renewal precinct before it was rezoned or were long-term property owners that pressed for redevelopment of the area.
Others include auto dealer John Ayre and BRW rich-listers John Higgins and Harry Stamoulis​.

Read more: Liberals profit at Fishermans Bend

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In July 2012, then planning minister Matthew Guy stunned the political and property worlds when he rezoned a massive 250 hectares of low-rise industrial South Melbourne and Port Melbourne to "capital city", effectively doubling the size of the Melbourne CBD.
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It was the most contentious decision by a Victorian planning minister for decades.
The widely criticised move triggered a dramatic increase in land values and a development frenzy of 46 apartment towers – some reaching more than 60 storeys – that have been proposed or approved in the precinct since January 2014.

Read more: Liberals profit at Fishermans Bend

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The Sunday Age is not suggesting any inside knowledge or wrongdoing on the part of any of the landholders.

Read more: Liberals profit at Fishermans Bend
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[cove]

We have a proposed 90 storey building near us in Southbank Melbourne. All pretty crazy when there is a fire and you have to walk down the fire escape stairs. The approvals process in Melbourne seems to add millions to the lucky developers who get the green light.
Have done a walk down 38,17 and 15 floors over time due to fire alarms and no I would not want to do a 90 floor evacuation.