Australian Housing Affordability Discussion

[Buzzard]

The place I mentioned in #1001 sold at auction for $800k. One bid only. The auctioneer seemed surprised the one and only bid was so high.

 

[whatmeworry]

Meanwhile, here in ADL there is a 4BR home (needs work) on 7,521 sqm of land about 7 or 8km from the CBD going to auction. It was indicated to me that $650k will probably be accepted pre auction.

The place I mentioned in #1001 sold at auction for $800k. One bid only. The auctioneer seemed surprised the one and only bid was so high.

I guess someone wanted to do a knockout bid. Probably a developer.

 

[pauly7]

I guess someone wanted to do a knockout bid. Probably a developer.

Or someone from Syd or Melb moving to ADL and not caring. Happened to our family in Tas, they were bidding against mainlander retirees who can technically pay three times what property is worth down there!

 

[Jeffrey O'Neill]

Or someone from Syd or Melb moving to ADL and not caring. Happened to our family in Tas, they were bidding against mainlander retirees who can technically pay three times what property is worth down there!

Bit like whats happeneing with SYD and MEL prices when compared to China. Someone in Shanghai can buy a similar apartment at a 25% discount in SYD, even more in MEL, along with a minimum double in yield.

China is still a relatively poor country, but created another 130K of Millionaires last year to bring the total to roughly 1.34M. The growth in millionaires is roughly 10%, so it doesn't take too many of them to be interested in strayan property each year to keep the market bubbling ever upwards.

 

[drron]

food for thought-

 

[Buzzard]

I guess someone wanted to do a knockout bid. Probably a developer.

I'm actually surprised that the land can't be subdivided. It could be turned into quite a few building blocks.

 

[whatmeworry]

Bit like whats happeneing with SYD and MEL prices when compared to China. Someone in Shanghai can buy a similar apartment at a 25% discount in SYD, even more in MEL, along with a minimum double in yield.

China is still a relatively poor country, but created another 130K of Millionaires last year to bring the total to roughly 1.34M. The growth in millionaires is roughly 10%, so it doesn't take too many of them to be interested in strayan property each year to keep the market bubbling ever upwards.

Some more satire.

Chinese national, 百家姓, only got off the plane yesterday, but already he’s made $1200 out of the Australian property market.
As a member of the 13,823,233 people that make up China’s richest one percent, the 42-year-old investor says it’s hilarious that Australian Government lets him compete with their own citizens for family homes.
“I already own five” he laughs, in Chinese.

Local plumber, Bryce Moorely (33) was outbid by 百家姓 at the $1.5m mark. He says it’s very frustrating, as a working Australian citizen and a father of two, that he can’t even buy a house in the city that both he and his wife live and work in.
“We needed two incomes and two sets of parents helping out to even get us a deposit for this place” he said.

However, Bryce’s Dad says sometimes that’s just the way the cookie crumbles.

“That would ruin by retirement nest egg”
“Do I feel sorry for my son and and his wife having to rent forever in a out-of-control property bubble on wages that have remained the same since the 1980s, while my age bracket are treating ourselves to a 50% increase in wages?”
“Not really. But that’s just how it is. Don’t forget, My generation never had it easy. ”
“These whingeing millennials just need to find a job that pays better than the top one percent of China”

WATCH: Overseas Investor Outbids 8 Aussie Families To House He'll Never Step Foot In — The Betoota Advocate

 

[CaptJCool]

sellers who need to sell are forced to take a steep discount....

Once buyers start believing there is and think it will burst, they have every incentive to wait to purchase. That dries up liquidity in the property market and sellers who need to sell are forced to take a steep discount. That justifies the buyers’ belief that prices are going to fall. And that, simply put, is how a bubble bursts

If it really is a house price bubble, this is how it bursts

 

[moa999]

Correct.
And the oft retorted phrase of lack of land supply being the cause is also rubbish.

Cities like NY, HK have similar land availability issues and it hasn't stopped property bubbles bursting there before.

 

[Denali]

... Adelaide has tons of 'boganville' that is appropriately priced - think $300k. Meanwhile in Sydney & Melbourne even undesirable areas are getting up there....

My sisters old neighbours house sold for $1mil. In Blacktown. Blacktown! In my mums street, about a dozen houses sold/knocked down for McMansions and more to come. Big blocks, 800sq mtrs.

 

[knasty]

I live out West too and just got my Valuer General unimproved land valuation. It's doubled since the last one so I'm not looking forward to my next rates notice.

 

[Denali]

I live out West too and just got my Valuer General unimproved land valuation. It's doubled since the last one so I'm not looking forward to my next rates notice.

Check the fine print on land size. One of our investment properties mysteriously lost about 200sq mtrs in size. Waiting for a response - dont want to pay any more tax/rates than we have to but where's our land, dude?

 

[Jeffrey O'Neill]

me thinks the feds will step in and educate the marketer that strayan property prices ONLY go UP. This kind of flyer is near treasonous.

…”It’s not a liquidation sale,” Mr Jones told the Financial Review. “That is not the situation. We’ve got between 40 to 45 units to sell. We want to start specific campaigns over various stock to pricepoint it to make sure we get sales.”

From the sounds of it even at the reduced price the apartments aint worth the $$$$.

Come on Reus, you need to get them chinamen to snap up these bargains.

 

[equus]

It's doubled since the last one so I'm not looking forward to my next rates notice.

Depends what's happened to all the other land values. If all the other land has tripled, your rates could go down :shock:

 

[JessicaTam]

Depends what's happened to all the other land values. If all the other land has tripled, your rates could go down :shock:

I don't know if any local council would drop their % if all property values went up. They would just take the extra income.

 

[RAM]

I don't know if any local council would drop their % if all property values went up. They would just take the extra income.

Funny you should say that...

Always pays to ask the question. In this case a worthwhile phone call and I was well-educated by the NSW Valuer General's Dept about the land valuation and how councils determine the rates from them.

BTW - did you know you can object to your valuation and there is a specific kit they send you to help you to do so? You need to have site specific factors such as say lack of on-street parking, busy road, dangerous intersection nearby, emergency services main transit route, flightpath, localised flood zone - the list is long.

equus is correct.

Councils are allowed to increase their rates by a certain amount IN TOTAL so the huge uplift in values (true some up to 3x previous valuation in NSW) - does not translate to 3x rates necessarily.

It can see some people's rates fall whilst others may go up by 50% or more (as is the case locally). All thanks to a glorified 'spreadsheet' linear programming model sold as a high tech program to councils.

 

[whatmeworry]

I don't know if any local council would drop their % if all property values went up. They would just take the extra income.

In my area, one suburb got invaded by hipsters (and artsy types that can't afford Brunswick anymore) and rates in nearby suburbs went down. In Victoria, IIRC all councils can't raise rates beyond the rate of inflation. My council kicked up a stink. However the amount of cough they spend on stuff that isn't related to core council stuff. For example, near the Footscray arts centre they spent 100k on a "rock installation". 100k on a pile of rocks...

 

[JessicaTam]

Funny you should say that...

Always pays to ask the question. In this case a worthwhile phone call and I was well-educated by the NSW Valuer General's Dept about the land valuation and how councils determine the rates from them.

BTW - did you know you can object to your valuation and there is a specific kit they send you to help you to do so? You need to have site specific factors such as say lack of on-street parking, busy road, dangerous intersection nearby, emergency services main transit route, flightpath, localised flood zone - the list is long.

equus is correct.

Councils are allowed to increase their rates by a certain amount IN TOTAL so the huge uplift in values (true some up to 3x previous valuation in NSW) - does not translate to 3x rates necessarily.

It can see some people's rates fall whilst others may go up by 50% or more (as is the case locally). All thanks to a glorified 'spreadsheet' linear programming model sold as a high tech program to councils.

Thanks for that. I leave today more knowledgable than I started.

 

[equus]

BTW - did you know you can object to your valuation and there is a specific kit they send you to help you to do so? You need to have site specific factors such as say lack of on-street parking, busy road, dangerous intersection nearby, emergency services main transit route, flightpath, localised flood zone - the list is long.

Funny you should mention that. One man's trash is another's treasure. My place has a "drainage easement" registered over it. Means that in times of heavy rain (like now), it flows with run off. Normally, it is dry. We are on tank water entirely, and have a dam for the garden and livestock - and it is of course in the low point and in the drainage easement (drainage easement basically means we can't build things there - but who would want to?).

For us, the geography that means we get good run off, and a dam that is normally spring fed (due to the subterranean flow even when there is nothing on the surface), is of great value. However, I successfully used the presence of the drainage easement to object to a land valuation increase - and got the valuation lowered as a result, as this was a specific attribute of the property not considered in the general locality wide indexation. Total cost was a few minutes to fill in the form, and a stamp to send it back - the result (whilst not large), is an ongoing saving on rates.

 

[cove]

I saw that the banks are altering what they can lend to investors in both size of loans and cost of loans. This has been brought about by the price bubbles in Melbourne and Sydney where hovels have been bought and sold for ridiculous prices.There has been a disconnection in the rental value and the price of the home. This will bring tears to those who get stuck with a dump or two.