Australian Housing Affordability Discussion

[JohnK]

The bubble will burst. That is a certainty. Anyone know when, if so please advise....

 

[andye]

House prices could fall 10% (which would cause all sorts of doom-laden headlines) with only recent investors seriously out of pocket.( Doesnt mean they wouldnt behave like panicked sheep though)

 

[cove]

JohnK sell! Australia wants to keep a lid on their budget deficits so it needs some Capital Gains Tax from you.
The NSW Government is introducing a larger foreigners buying stamp duty so that will certainly slow up that part of the market.
Sydney is probably 30% overpriced based on rental returns but I doubt the market will correct by that much.

 

[drron]

The market will crash.The only unknown is when.
This situation has happened in the past-eg Tokyo at the end of the 70s.house prices had gone up 700% in the decade.Low unemployment,low interest rates,loose monetary policies.What could go wrong?
Prices kept going up but 1985-87 Japan had a recession and interest rates fell further.it caused a short wild ride.but then-

So at the end of 2011 your property was worth the same as in the early 80s.I don't think we have seen the wild ride yet so probably 8-10 years before the rug comes ouit from under property prices here.Though also likely to be 1 or 2 corrections before then.

 

[Denali]

Anyone know where they can buy a house for less than $650K in Sydney... somewhere where you would be prepared to live. You'll be struggling to find something in Mt Druitt for that much.

Premier Gladys Berejiklian announces housing affordability reforms
First home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty

 

[JohnK]

JohnK sell! Australia wants to keep a lid on their budget deficits so it needs some Capital Gains Tax from you.

That's actually not a bad idea. Sell in Sydney, pay capital gain tax, and purchase 2 investment properties in Hobart and start negative gearing all over again.

Or I can just sell and invest what's left after capital gains tax into Australian Super.

 

[burmans]

The bubble will burst. That is a certainty. Anyone know when, if so please advise....

The market will crash.The only unknown is when.
This situation has happened in the past-eg Tokyo at the end of the 70s.house prices had gone up 700% in the decade.Low unemployment,low interest rates,loose monetary policies.What could go wrong?
Prices kept going up but 1985-87 Japan had a recession and interest rates fell further.it caused a short wild ride.but then-

So at the end of 2011 your property was worth the same as in the early 80s.I don't think we have seen the wild ride yet so probably 8-10 years before the rug comes ouit from under property prices here.Though also likely to be 1 or 2 corrections before then.

I kind of agree more with andye on this one. Crash and burst are such emotive terms and house prices here have not gone up 700% in a decade here. Yes, I absolutely think houses are overvalued but in my view it's much more likely any correction would be 10-20% than the sort of figures in the above graph.

 

[BacchusMarsh]

The market will crash.The only unknown is when.
This situation has happened in the past-eg Tokyo at the end of the 70s.house prices had gone up 700% in the decade.Low unemployment,low interest rates,loose monetary policies.What could go wrong?
Prices kept going up but 1985-87 Japan had a recession and interest rates fell further.it caused a short wild ride.but then-

So at the end of 2011 your property was worth the same as in the early 80s.I don't think we have seen the wild ride yet so probably 8-10 years before the rug comes ouit from under property prices here.Though also likely to be 1 or 2 corrections before then.

Prices didn't go up 700% in a decade. The peak five-year change (reading off the right-hand axis) was 200%. Their "bubble signal" means that the 150% threshold was achieved.

So more in Sydney-like territory.

 

[cove]

With all of the major lenders adjusting their loan books away from fixed loans to principal and interest loans we may see a real slow down in lending.

 

[amaroo]

We use to live in Sydney .... now we only own. Anyway, our neighbour ran a "Big 4" treasury. Early 2000's he freaked out and decided the sky was falling ... they sold!

Nice guy. Many times over the past 16 years I've thought of him ..... bankers haven't got a F@#*ing clue!

 

[Buzzard]

Anyone know where they can buy a house for less than $650K in Sydney... somewhere where you would be prepared to live. You'll be struggling to find something in Mt Druitt for that much.

Premier Gladys Berejiklian announces housing affordability reforms
First home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty

Claymore 2559.
Cancel that, wouldn't live there.

 

[cove]

How about St Mary's?

 

[pauly7]

Prices didn't go up 700% in a decade. The peak five-year change (reading off the right-hand axis) was 200%. Their "bubble signal" means that the 150% threshold was achieved.

So more in Sydney-like territory.

How is Japan a comparison anyway - I'm pretty certain they have a validated universal oversupply of housing and a declining population that exacerbates this. Australia has a mixed supply equation - suggested oversupply of apartments in some markets but a chronic ongoing undersupply of free standing housing and an ever increasing population thanks to our governments.

Having said that I do believe because of serviceability that free standing house prices will either flatten or correct a little but a crash?? Don't think so. Apartments however in Syd BNE Mel? That is another story.

I don't know why everyone keeps painting the property market with sweeping generalisations - in AU it is very nuanced by state and housing type.

 

[BacchusMarsh]

How is Japan a comparison anyway

Wasn't me that brought it into the discussion while not understanding the numbers.

 

[BacchusMarsh]

I don't know why everyone keeps painting the property market with sweeping generalisations - in AU it is very nuanced by state and housing type.

Japan is nuanced too, as of course is pretty much every property market. Tokyo is booming right now with Airbnb and equivalents (both legal and less so) and Olympic-related demand.

Some heat will come out of parts of the "Australian market", how much is anyone's question. Vancouver might be a good leading indicator.

 

[kamchatsky]

Anyone know where they can buy a house for less than $650K in Sydney... somewhere where you would be prepared to live. You'll be struggling to find something in Mt Druitt for that much.

Premier Gladys Berejiklian announces housing affordability reforms
First home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty

I would actually buy 1 bedroom unit as close to Sydney CBD as possible.

Something like this will be good, especially Ashfield has fast train to city (10 mins train ride!):

https://www.realestate.com.au/sold/property-unit-nsw-ashfield-125220242

https://www.realestate.com.au/sold/property-unit-nsw-ashfield-123313630

https://www.realestate.com.au/sold/property-apartment-nsw-ashfield-125140766

To me, these kind of properties would be very attractive to FHBs. Forget about houses, way better off buying these close to city.

 

[whatmeworry]

We use to live in Sydney .... now we only own. Anyway, our neighbour ran a "Big 4" treasury. Early 2000's he freaked out and decided the sky was falling ... they sold!

Nice guy. Many times over the past 16 years I've thought of him ..... bankers haven't got a F@#*ing clue!

Funny how many stupid housing policies state and federal extended the housing bubble.

 

[pauly7]

Funny how many stupid housing policies state and federal extended the housing bubble.

And continue to do so - stamp duty move the latest dumb move - will go straight to price and the fat lazy real estate agents will be laughing all the way to the bank! Will only drive prices higher

 

[Deleted member]

Stamp duty is the most iniquitous impost on housing affordability ever created.
I can live with CGT , but SD is a vile money grab by the states and should be removed immediately!

 

[moa999]

And continue to do so - stamp duty move the latest dumb move - will go straight to price and the fat lazy real estate agents will be laughing all the way to the bank! Will only drive prices higher

So few 1st home buyers, I don't think it will add much to the price. Apart from in Sydney where there is almost nothing in that price range