Australian Housing Affordability Discussion

[Jeffrey O'Neill]

There does seem to be less stock on the market, and fewer people looking.

the problem is as prices go higher

* seller have FOMO of higher prices
* buyers increasingly can't afford the higher price + stamp duty

So prices rise are like the share market where the tops are on thinner and thinner volumes till.......

 

[penegal]

And den, and den, and den....

https://www.youtube.com/watch?v=GKNX6dieVcc

 

[whatmeworry]

Melbourne will be affected by the car manufacturing stopping, the smelter in trouble and other businesses running roughly. The Victorian government is currently not doing too well and the traffic snarls have become legendary. The real estate market may cool quickly once redundancies become the talk around town.

Victoria Government not doing well? Last time I checked Victorians are more displeased at the Federal Government not giving us our fair share of Federal funding for infrastructure projects.

Traffic Snarls legendary? Just because your taxi trip to MEL was slowed down due to some widening on the Tulla doesn't equate to Legendary. Melbourne traffic does much better then Sydney in comparison.

Melbourne has a lot (and is getting more) "shoebox" apartments. Many are empty.

Their is a good article on how the Victorian and NSW governments are not doing enough to regulate the explosion of 1 bedroom apartments.
Plus the lack of regulations to enforce the building of family friendly apartments and how both state governments are beholden to developers and their whims.

Their will be some regulations for Fishermans bend after the monumentally stupid night time decision by the previous state planing minster (Now opposition minister) Matthew Guy to approve the area the size of the CBD to be rezoned for residential.

Planning minister Richard Wynne says the government’s recast vision for Fishermans Bend will ensure a mix of apartment sizes; such as encouraging developments higher than 12 storeys to include at least 30 per cent three-bedroom units.

https://www.domain.com.au/news/melb...pinpoint-as-developers-reign-20170203-gu35rn/

 

[dajop]

Their is a good article on how the Victorian and NSW governments are not doing enough to regulate the explosion of 1 bedroom apartments.
Plus the lack of regulations to enforce the building of family friendly apartments and how both state governments are beholden to developers and their whims.

It's no wonder high density development has such a bad name in Australia, the regulation is just tilted to developers making a quick buck. A combination of regulation and market forces in Singapore sees a massive difference in the high density living arrangements, both public and private. Most private apartment buildings have a mix of 1,2,3 & even 4 BR apartments, are part of a complex, sit on enough land that allows plenty of separation between buildings/recreation areas and have facilities installed to create a sense of community. OK climate plays its part, but it is nice to see kids running around the complex playing together in both open spaces and designated play areas, as no-one has a backyard. Many (but not all) of the high density developments in MEL & SYD are generally very much third world in comparison.

 

[pauly7]

There does seem to be less stock on the market, and fewer people looking.

Listings are definitely down - even the PR mouth pieces for the real estate agents and Domain/REA can't avoid those statistics!

 

[amaroo]

10,000 apartments for Springfield, contract signed on Friday - ambitious!

$6 billion apartment complex for Springfield | Queensland Times

The fellow has a pretty good track record https://en.wikipedia.org/wiki/Maha_Sinnathamby it might just happen.

 

[cove]

Had whatmeworry think that I haven't seen traffic snarls in Melbourne....The road to the Melbourne airport is one of the better ones as it is privately owned and run by Transurban.
I am glad we picked a place next to the Crown casino to live when we are in Melbourne even though we don't gamble. I can walk to business meetings in the city.
Victorian land taxes will punish multiple property holders in Melbourne in 2017.

 

[whatmeworry]

CBA to suspend some investors loans.

Commonwealth Bank of Australia, the nation's biggest property lender, is set to announce that it will be indefinitely suspend new finance applications for some investment home loans, in a move that could send shockwaves through the nation's hot property markets.

Read more: CBA stops some property investor loans | afr.com
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[cove]

And their business name Bankwest too.

 

[whatmeworry]

Melbourne Prices over 40 years. As you can see, wages/salaries went up ten times, while home prices went up 20 times.

 

[andye]

Melbourne Prices over 40 years. As you can see, wages/salaries went up ten times, while home prices went up 20 times.

There were much fewer dual income families in 1975 or are these household income figures?

 

[dajop]

Victorian land taxes will punish multiple property holders in Melbourne in 2017.

And new tenant protections will also make it a less attractive place to be a landlord. Definitely tilting it even more towards the tenant.

 

[LadyC]

Tell me about it! Land tax bill has increased by 150% :O

 

[RAM]

Melbourne Prices over 40 years. As you can see, wages/salaries went up ten times, while home prices went up 20 times.

Always interesting to use different starting dates, for example if you do the calculation for 30 years you get a very different relativity, and I suspect the result for 50 years would also be more like the 30 yr than the 40 year figure. So from 1985 to 2015 wages went up 4x and house prices went up 8 - not nearly the same extreme sounding outcome.

The big disconnect though, in some respects, is what it cost to service the mortgages for each of those periods.

On that basis, the ratio is not at all-time highs, those occurred in 1990.

Torturing numbers is so much fun!

 

[cove]

CBA and Bankwest and now Macquarie are changing their methods when working out whether investment loans are affordable. They are now ignoring the tax benefits of negative gearing in their cash flow analysis probably in advance of a tax law change that might happen in the future.
If other banks follow the home prices will stop rising as fast as last year in Sydney and Melbourne.

 

[cove]

Now AMP seems to be stopping too.

 

[andye]

There were much fewer dual income families in 1975 or are these household income figures?

On the other hand, in 1975 wage inflation was high enough that you would have double your income in 10 years time and 4x in 20 (even without promotions etc).
That made paying off the same home loan easier as time went on.
This is very unlikely to be the case for current buyers

 

[moa999]

Agree that I don't expect a return to 15-20℅ inflation and massive wage growth.

And a lot of people will struggle if rates go up, while I can't see the RBA putting up rates, but expect increases in the US might flow thru to higher rates as banks borrowing costs increase.

Seen a few threads on Whirlpool recently about people particularly in Melbourne who have purchased off the plan and are having valuations coming back below purchase price and can't get a mortgage.

 

[CaptJCool]

Melbourne has a lot (and is getting more) "shoebox" apartments. Many are empty.

My shoeboxes are empty ....

 

[pauly7]

Agree that I don't expect a return to 15-20℅ inflation and massive wage growth.

And a lot of people will struggle if rates go up, while I can't see the RBA putting up rates, but expect increases in the US might flow thru to higher rates as banks borrowing costs increase.

Seen a few threads on Whirlpool recently about people particularly in Melbourne who have purchased off the plan and are having valuations coming back below purchase price and can't get a mortgage.

Yup and they are ditching the apartment and townhouses. Matter of time before we see some apartment developers go belly up..