What's your prediction on the Australian Dollar?

[NFF]

Do you think Yuan will rise if it becomes a reserve currency ?

 

[MEL_Traveller]

Do you think Yuan will rise if it becomes a reserve currency ?

I'm no economist... but I suspect the Chinese would want their currency to fall, not increase? They need to maintain enormous year-on-year growth... cheaper products, cheaper labour would help sustain that?

 

[defurax]

I'm no economist... but I suspect the Chinese would want their currency to fall, not increase? They need to maintain enormous year-on-year growth... cheaper products, cheaper labour would help sustain that?

According to The Economist, the Chinese government has been propping up the Yuan to give a signal of confidence about the economy and that if the central government stopped intervening the currency would most likely depreciate.

 

[drsmithy]

It was a shoe box sized unit in Mosman.

Average wage 1990 = $555
Average wage 2014 = $1,128

Then there was the Int rates...

1990 = IIRC >15%
2015 = Bugger all

$1m still looks cheap.

I'd rather have had a $200k mortgage in 1990 earning $30k than a million dollar mortgage today earning $60k.

 

[whatmeworry]

More predications the Aussie will fall.
Australian dollar to hit US62¢ in 2016: Morgan Stanley

 

[amaroo]

I'd rather have had a $200k mortgage in 1990 earning $30k than a million dollar mortgage today earning $60k.

LoL you must be low doc loaning on those numbers.

Whatever size mortgage you want to nominate - I'd rather pay 5% interest rate than 15% or more.

 

[drsmithy]

LoL you must be low doc loaning on those numbers.

I wouldn't take a loan on either of them. But if I had to choose between the two, the former is preferable.

Whatever size mortgage you want to nominate - I'd rather pay 5% interest rate than 15% or more.

Then you should probably go back and work on your maths.

 

[amaroo]

I wouldn't take a loan on either of them. But if I had to choose between the two, the former is preferable.

Starting to make some sense! So you have the dirts because you've never purchased a property?

Apparently ~30% never do, although it doesn't seem to stop them whinging about the ones that do!

 

[drsmithy]

Starting to make some sense! So you have the dirts because you've never purchased a property?

I was fortunate enough to purchase property about 15 years ago. Though I am about to sell it.

However, that's completely irrelevant to my point, which is that the massive property bubble is not only dragging down the entire economy, but screwing just about everyone under the age of 35 or so for the rest of their lives.

I suspect you might struggle with the concept of caring about anyone except yourself, hence the immediate assumption anyone criticising a rort has simply failed to benefit from it.

 

[amaroo]

I was fortunate enough to purchase property about 15 years ago. Though I am about to sell it.

However, that's completely irrelevant to my point, which is that the massive property bubble is not only dragging down the entire economy, but screwing just about everyone under the age of 35 or so for the rest of their lives.

I suspect you might struggle with the concept of caring about anyone except yourself, hence the immediate assumption anyone criticising a rort has simply failed to benefit from it.

I see, you've got the dirts that you only purchased one property and sat on it like an egg.

Fortune favours the brave ... the others just sit and whinge

 

[Buzzard]

in west end/ south brisbane there are some that aren't even being marketed in australia( or so the rumour goes)

About 5 or so minutes walk from my place there is a development being marketed in China, not for us Aussies. IIRC starting price is 1.5 mil.

 

[Alanslegal]

About 5 or so minutes walk from my place there is a development being marketed in China, not for us Aussies. IIRC starting price is 1.5 mil.

It's legal though, foreign buyers are allowed to buy brand new stock & developers clearly know it. If a developer knows they can get x% or so more by selling to the Chinese and it makes it more profitable than selling to locals, then that's their business imperative. If the same developer, all of sudden can't sell to foreigners, and it becomes less profitable, they may decide not to build. In a few years time when those owners do sell, there's more existing stock on the market - and only Australians can buy them. That's only a positive as we are currently really short on existing stock. My concern is that its the existing stock that Australians can buy (and foreign investors can't) that continue to sky rocket - just take a look at the weekly Sydney auction results on existing properties. I have been looking at the auction results weekly since 2013 when I was in the market to sell and buy. I saw the upward trend and decided to sell my investment unit in June 2013, it sold 20% more than an identical property that sold 8 months earlier. Fast forward 11 months to May 2014 and an identical property sold 25% more than what I sold mine for - I should have waited Anyway, developers can keep on building them fast, let the Chinese buy them all, but give us a few years when they need sell/upgrade/etc and hopefully us locals can eventually buy it off them - when the market hopefully has cooled down a bit, and a few interest rate rises to scare a few off too.

 

[eastwest101]

Specific comment about SYD and MEL property markets (which are entering or are in a bubble), I have heard a lot of commentary about crackdowns and settling scores in China, along with the bursting property bubble as being factors in a movement of money and assets out of China to any safehaven. i.e. better to lose half your money in Sydney than have it all confiscated by the party in Beijing.

Obviously is not as simplistic as that and is only part of the story of the apparent property bubbles in Sydney and maybe Melbourne, other factors such as low interest rates, land supply, development and building costs, urban infill, taxation system treatment of negative gearing and capital gains, the demographic of ageing population and smaller family unit sizes etc

 

[hummel]

I know this has turned into a real estate thread however just my opinion.

First home buyers need to lower their expectations, they don't need the latest and greatest.

I'm 29 and bought my first place at 21ish. Rates were 8% at the time but money was easy to get.

However I didn't go and spend 400k on an inner city townhouse or apartment. I paid 240k in the outer sth east. Not ideal and not flash but it served a purpose.

Many friends of mine complain about affordability...and these same friends live in Bondi and Mosman...renting. They simply won't make the sacrifice. It's time Gen Y grows a pair of balls and goes without just for a little bit.

 

[drsmithy]

I know this has turned into a real estate thread however just my opinion.

First home buyers need to lower their expectations, they don't need the latest and greatest.

I'm 29 and bought my first place at 21ish. Rates were 8% at the time but money was easy to get.

However I didn't go and spend 400k on an inner city townhouse or apartment. I paid 240k in the outer sth east. Not ideal and not flash but it served a purpose.

Many friends of mine complain about affordability...and these same friends live in Bondi and Mosman...renting. They simply won't make the sacrifice. It's time Gen Y grows a pair of balls and goes without just for a little bit.

Thirty-odd years ago a typical single-income family could generally buy a reasonable abode without needing ongoing welfare, Government assistance or extreme sacrifice, and they'd have it paid off in 10-15 years.

Today - indeed, for probably the last ten years - a (now) typical dual-income family can barely afford a home even with ongoing welfare (childcare assistance), Government purchase assistance (first home buyers grants), weathering a decade or more of reduced living standards, pretty much anywhere in the country, in an age of record low interest rates, and they'll likely never pay it off.

The youth of Australia need to be told: your parents paid half - if that - as much for their homes in real terms as you did. Your grandparents even less. It's not your fault. No amount of "going without just for a little bit" makes a half-million-dollar-plus [usually ****box apartment, or house on a tiny block in a far-flung suburb] affordable on sixtyish grand a year, or even a hundred-ish grand a year.

 

[whatmeworry]

Affordability of Melbourne homes.

 

[moa999]

Thirty-odd years ago a typical single-income family could generally buy a reasonable abode without needing ongoing welfare, Government assistance or extreme sacrifice, and they'd have it paid off in 10-15 years.
.

Really.
30-40 odd years ago, unless you were a white collar worker you struggled to get a mortgage of a bank, or a returned servicemen, having to use the more expensive solicitors or co-op forms of financing.

A lot of the increase in house prices are due to structural changes
- greater availability of credit
- expansion of credit multiples (and bank leverage)
- dual income households
As well as the obvious lack of land release.
Also of note is that many older workers accommodation (eg. What is now expensive inner city housing that has been meaning renovated) were small cottages, often cheaply constructed - something many of today's new home buyers just won't accept

 

[drsmithy]

Affordability of Melbourne homes.

Expensive, Affordable and Cheap all need to be bumped down one level (ie: affordable is under 3.0, cheap is under 2.0), but otherwise an excellent depiction (and demonstrates Howard & Costello's disastrous influence). Where is it from ?

 

[drsmithy]

A lot of the increase in house prices are due to structural changes
- greater availability of credit
- expansion of credit multiples (and bank leverage)
- dual income households

Ah. I guess that's why cars and big TVs have gotten so much more expensive as well - people just have more money !

Also of note is that many older workers accommodation (eg. What is now expensive inner city housing that has been meaning renovated) were small cottages, often cheaply constructed - something many of today's new home buyers just won't accept

Sure they will, but why would they when building the house is the cheap part ? Construction costs haven't increased in real terms for decades, and may even have dropped (albeit with lower quality alongside). The bubble is entirely in the land component.

If you're buying a house + land package, building a small two-bedroom house vs a larger 3 or 4 bedroom is probably only 10% difference in total cost. This is reversed from the past, where most of the cost was in the structure and therefore building a smaller house made a significant difference in total price.

 

[whatmeworry]

Expensive, Affordable and Cheap all need to be bumped down one level (ie: affordable is under 3.0, cheap is under 2.0), but otherwise an excellent depiction (and demonstrates Howard & Costello's disastrous influence). Where is it from ?

It was posted to Reddit a few times and another site but looks like it was posted to Wikipedia commons by a guy called Stephen wratten. Can't find out who he is.

Melbourne House prices from 1965 to 2012 using stats from the ABS and REIV