Australian Housing Affordability Discussion

[whatmeworry]

If you don't build prices will go up even more.. We have a growing population, development is needed, and it can't all be 100km from cbd

Would help if investors rented out their homes.

Sydney's housing affordability crisis is being artificially inflated by up to 90,000 properties standing empty in some of the city's most desirable suburbs, experts say.
Vacant properties were among the "perverse outcomes" of tax incentives that encouraged some investors to favour capital growth over rental returns, according to the analysis by the UNSW's City Futures Research Centre.

Thousands of empty homes adding to Sydney's housing crisis, experts say

 

[Tortuga]

Actually an article about oversupply in Melbourne the over day.


Seems Chinese love Melbourne apartments.

Where do you get information like that? Is there a way you can see what demographic is buying where/what?

 

[whatmeworry]

Where do you get information like that? Is there a way you can see what demographic is buying where/what?

This is the OP's response on Reddit.

Source is pricefinder.com.au.
No political motive here, I'm not trying to start the RAHOWA or anything. Just noticed this in the course of my work and thought it was sort of interesting.
I guesssss...playing devil's advocate, the only political spin you could put on this is that the high Chinese demand for inner-city apartments is behind the shoddy quality of the dwellings that are going up now, but that's more of a shortcoming by the developers and the regulatory authorities, rather than anything the purchasers are doing wrong.
Interesting comments about the community aspect of it - I guess this is really no different to Oakleigh being traditionally Greek, or Carlton being Italian; the only difference is that this is inner-city instead of suburban.

 

[whatmeworry]

Analysis by UNSW’s City Futures Research Centre claims that negative gearing is fuelling housing unaffordability.

Sydney's housing affordability crisis is being artificially inflated by up to 90,000 properties standing empty in some of the city's most desirable suburbs, experts say.
Vacant properties were among the "perverse outcomes" of tax incentives that encouraged some investors to favour capital growth over rental returns, according to the analysis by the UNSW's City Futures Research Centre.

Read more: Thousands of empty homes adding to Sydney's housing crisis, experts say
​

 

[PLANT]

Hi all,
So those that have rented and owned....and now rent.
Is it wiser to rent and have a large amount of savings to live or own with little savings?
I'm thinking of Ross Greenwood(money guy) remember an article that had him renting opposite the Sydney Opera house and investing\living on his income and savings that was not tied up in a Mortgage.....
I know diversification ie. property, shares, Super and cash.
I know Rent have to be flexible because once a lease finishes you may have to pay more or kicked out and find somewhere else to inhabit\live.
Obviously family, income and job play a large part in the option.
But in 2016....which is better now from those that have experience doing both.....Owning and\or renting?

 

[JohnK]

But in 2016....which is better now from those that have experience doing both.....Owning and\or renting?

I've been paying rent in Brisbane for ~8 years and own my own apartment in Sydney. I've paid ~$120,000 in rent. Money wasted. Should've bought an apartment in Brisbane. Hindsight.

The ideal situation would be to own your own home/apartment and invest the rest yourself. Play the stockmarket game.

 

[travelislife]

At the end of the day I look at bank interest on a mortgage as rent. So the calculation is mortgage interest (i.e. don't include principal) + ownership costs (maintenance, rates etc.) is it equal to, less than or greater than the rent I would have to pay for the same property?

Now owning a 625k property on an 80% 500k loan is $2080 a month. Assume $250 a month in ownership costs. So your cost to live there is $2330 a month. Now if the same property is only $1800 a month to rent on a pure cashflow basis you would be better to rent and invest the spare $530 each month.

But, what this doesn't take in to account is if you view your PPOR as also part of your investment strategy. Essentially if you believe the properties value will increase by $530 or more a month you are better to own with the mortgage as when you sell it is 100% tax free income.

I know a few builders who do well out of the buy PPOR, renovate then sell. 100% legitimate tax free income if you know what you are doing and don't mind living in half built houses for periods of time.

 

[cove]

It appears that house values are falling everywhere except Melbourne. If you wait 12 to 18 months you might be able to snare a home for 10% to 20% less than now.

 

[Pushka]

It appears that house values are falling everywhere except Melbourne. If you wait 12 to 18 months you might be able to snare a home for 10% to 20% less than now.

They seem pretty constant in Adelaide. Probably because they never really increased.

 

[GarrettM]

It appears that house values are falling everywhere except Melbourne. If you wait 12 to 18 months you might be able to snare a home for 10% to 20% less than now.

Melbourne must follow suit eventually surely? The amount of apartment building going on there at the moment staggered me.

 

[UP4014]

Hi all,
So those that have rented and owned....and now rent.
Is it wiser to rent and have a large amount of savings to live or own with little savings?
I'm thinking of Ross Greenwood(money guy) remember an article that had him renting opposite the Sydney Opera house and investing\living on his income and savings that was not tied up in a Mortgage.....
I know diversification ie. property, shares, Super and cash.
I know Rent have to be flexible because once a lease finishes you may have to pay more or kicked out and find somewhere else to inhabit\live.
Obviously family, income and job play a large part in the option.
But in 2016....which is better now from those that have experience doing both.....Owning and\or renting?

Stats suggest you are better off in the long term owning your property by the age you retire.

 

[earlyriser]

Melbourne must follow suit eventually surely? The amount of apartment building going on there at the moment staggered me.

Isn't the amount of apartment building going on in every major city staggering? I am in Canberra and they are going up everywhere. Sydney and Wollongong too. The building going on in the Wollongong CBD right now is staggering. Funny thing here in Canberra is I can look off my balcony and to the right there is 24 levels of luxury apartments going up (mostly sold) while to my left there is a ~20 story apartment building that would be lucky to have 30% of apartments lit up at night.

Just learned today that 2x22 levels of luxury apartments are going up in Gunghalin down here also.

 

[CaptJCool]

For all develop in Adelaide,

..: Sensational-Adelaide :.. Construction and Developments in SA

endless high rise high end going up. Melb is flooded and greed is God, right ?

 

[cove]

Because apartments are mostly replaceable you need to get a location that has something a bit special. That said apartments are good if you can pull the door shut and off you go travelling. Whether you need a pool, spa, storage area for clobber, two or more easy to park car bays, a concierge are all needed to be ticked off. A lot of these add to the cost each month separate from a mortgage.
If you want to make money you need a house on a large block near public transport.

 

[JohnK]

Isn't the amount of apartment building going on in every major city staggering?

Ludicrous. Those making the decisions have got rocks in their head.

But a very clever way to sell the future invasion of Australia ahead of of time....

 

[GarrettM]

Because apartments are mostly replaceable you need to get a location that has something a bit special. That said apartments are good if you can pull the door shut and off you go travelling. Whether you need a pool, spa, storage area for clobber, two or more easy to park car bays, a concierge are all needed to be ticked off. A lot of these add to the cost each month separate from a mortgage.
If you want to make money you need a house on a large block near public transport.

Had a quick gander at some of the developments on the edge of the Melbourne CBD. Flagstaff and QV I think they were. If I was in the market they would be on my list. If I ever do move to Melbourne though it'd likely be to the middle suburbs.

 

[cove]

Many apartments are advertised as lifestyle assets with a well dressed couple sipping champagne.....it will be hard to make a dollar on any of these as the developer usually has about 30% plus gross profit built into the new pricing.

 

[james4321]

The ABS projections show Australian population growth from 23 million in 2012 to between 37 and 68 million by 2016 and between 42 and 70 million by 2101. So the present pattern of single site housing will mean huge areas of land around cities being developed for housing to cope with that growth. Considering even just the effect on agricultural land that will cause, then maybe we need to consider a future housing strategy that is based on high rises rather than single units. Such high rise developments would need retail, housing, leisure areas etc and so could become effectively satellite cities in their own right. If employment ops are included (eg service industries for that population "pod"?) then our transport gridlock would be assisted as well. I beleive that we will need those units available for long term rentals, (25+ years?) I think we have to get away from the "quarter acre castle" mentality, and that then means a change to our historical "investment property" mindset. I think that negative gearing is an outdated concept, and should be completely phased out of our psyche. Its a big contributor to price distortion in housing, and I beleive the day is approaching when first time buyers will no longer be able to enter the market, and the bubble will inevitably burst. Long term rentals will become the norm, and the real estate nonsense about rent being "dead money" and "wasted" will be shown to be just that - nonsense.

 

[JohnK]

Stop foreign money laundering in Australia. Not a citizen / permanent resident than you cannot own any property. That will give first time home buyers a chance at owning their own home.

 

[Mal]

Stop foreign money laundering in Australia. Not a citizen / permanent resident than you cannot own any property. That will give first time home buyers a chance at owning their own home.

The issue is much bigger than just foreign investment (and tbh, foreign investors aren't generally smart enough to buy anything other than glitzy marketed apartments/houses) , investors who rent out property for tax reasons also inflate the market. That needs to be dealt with as well.

It is a global issue, and London has the same pressures.