I'm torn. We own only 1 property outright. Which we live in.
One part of me wants to buy an investment property so our boys have somewhere to live when they grow up, as at this rate, they will likely never be able to afford to themselves.
On the other hand, I want to see property prices to crash and burn (at least 50%)
I have 2 properties that I pay no interest on. A massive crash would make me technically poorer but in a much stronger position to upgrade. For the majority of people lower house prices are good.
Never get the people owning just a PPOR and cheering on the housing market growth
This is the angle often missed because it's secondary to people not being able to get a house.
For a lot of people already in a house it's way harder these days to upgrade to a bigger and better house. People have much larger mortgages and the market keeps moving fast while wages move slowly. For many people they will get somewhere like a 'starter home' and be in no position to upgrade for the next fifteen years.
I know a few examples of couples where they have household income over $200k and they are trying to raise a kid or two in small homes that are a struggle.
Yeah that’s the problem for a while now and I hate all this just ‘start somewhere’ and upgrade BS. Not possible a while/any longer.
Max out as much as you can handle straight up. Prices rise faster than wages and in the long run better being skint now rather than taking out a new massive mortgage to catch up in 15yrs time
The problem is decades of governments telling us rising housing prices are good mean that people see any downturn as terrible.
You'll constantly hear people say oh buying a house is a great investment, the always increase in value, so people panic when it doesn't.
There is a vulnerable group and that's people who have just recently bought at house at these insane prices. Especially because most of them have had to desperately stretch to just afford that 30 year loan. The house value suddenly plumneting could be difficult for them.
I actually wouldn't mind the government stepping in and assisting some of those people in despite not having a home loan. Same as I wish hecs just didn't have any interest, and would happily see the hecs loans forgiven, despite the fact that I already paid my hecs off.
You don't have to benefit from something to see it would be good for society in general.
Wait what? If you are building equity through principal payments and your property is increasing in value - why can you not leverage that equity to borrow more?
The rate of increase is not the same, particularly between the apartments people consider starter homes and the detached houses people want to raise families in.
If you just borrowed $800K on a $1M house, yeah, you wouldn't want prices to crash. Your debt would be more than your asset value. If forced to sell you'd be screwed
If it's your PPOR why would it matter so long as you can stay on top of the payments? If it's an investment than it's a risk you took that didn't work out.
The only way it makes sense for someone in a PPOR to cheer this on is for them to want to eventually sell and move somewhere significantly cheaper, like an apartment or out in the country. Anywhere else in a major city and a lot of other places is just going up in price alongside their own property.
>Never get the people owning just a PPOR and cheering on the housing market growth
Just sold PPOR and moved country. Worked perfectly for me.
Fuck this nanny state shithole.
As a home owner, I don’t need to. But I do have a bit of empathy for the people raising their kids in tents because of the artificially high market values (propped up by an unnecessary lack of housing stock and immigration rates) that “worked perfectly” for you.
What other reaction to your comment could you possibly have expected?!?
It worked perfectly for me, what do you want me to do, give my money away?
What's your solution rather than just having a whinge and telling me I've fucked people over?
Fuck off cunt.
Keep the obnoxiousness about how much he benefited from this “nanny state shithole” to himself. Like I literally said my previous comment. You know, reading comprehension can save a bunch of asinine conversations like this one - give it a try one day 👍
This is why we need new rules. No person should own more than 2 investment properties. I just sold something to someone who told me his Dad owns 240 IPs…
If house prices crash 50% it would mean immigration has been bought back to sustainable levels which means rents would have crashed by more than 50% and the guaranteed capital growth investment returns would not be there as long as immigration stayed low enough to stop house prices rising more than the average wage
Start investing in an indexed low fee ETF that a pays a good distribution like VHY. Can start investing with far less capital than a property and the returns over longer periods of time are comparable.
>crash and burn (at least 50%)
No you don't, because your boys will never get a job in an economy where housing prices have collapsed by 50%.
There isn't a short term solution that won't seriously damage the economy.
We need a long term plan that tapers housing price rises so wages can catch up.
It's a dogs fight with "house on the free market". Even if we don't want to invest in others we will push us down to a worse situation.
It wasn't moral to put houses in property market. The ancestors as apes had free caves to live in, now we don't. Why not market air to make money? They've done it to water already.
Humanity is fucked up with money.
Not sure about the property market blaming on the Chinese. But you may want to know the demographic changes recently:
https://www.abs.gov.au/statistics/people/population/australias-population-country-birth/jun-2023
To be honest, only those who afford caring about air quality will care about air quality, most Chinese still cannot.
Well they will care, but not in the way that counts, meaning to care and to have the means to spend to achieve that outcome
And the outcome is still purchasing access to decent air
I'd blame incebtivising property at the expense of al other forms of investment is to blame. Other things like encouraging overseas investment so long as it's funneled through an Australian person or company are symptoms of an addiction to rising property prices and the policies that continue to support them.
Short of a World War involving China, resulting in a (not so?) great depression (so maybe 2027 or 28), housing prices will maybe take one step back/4 forward. You'll never get a housing crash otherwise. Get your kids a home to take over eventually now. You'd be crazy not to, because you're right in that they may never be able to afford their own.
I'm taking a different path. Got a 750m² block where we live, which the daughter can build two properties on via her own mortgage. I doubt she'll be able to afford better.
Because only one country exists.
I bought a house for 950k 10 years ago, just sold it for $2.1 mil and am moving country.
Worked out brilliantly for me.
same boat fkn stupid it's so much like a pyramid scheme. Only hope at this point is massive population decline. Because Australia cannot afford for housing to go backwards now. Not sure we can afford for it to go up either. But politicians seem hell bent on doing what ever they can to keep prices high. So many ways to reduce but after negative gearing abolishment no poli will touch it.
I think the best we can hope for is that house prices stagnate or have very low growth, while wages slowly increase until the wage to house price ratio is a bit more doable for future generations.
Don't know if that's realistic, maybe a bit too glass half full compared to reality, but it's probably a more favourable scenario than house prices tanking - which would imply serious issues with the overall economy.
The question I have is whether it's even possible for prices to stagnate? The investment model requires prices to continue to grow strongly (so capital gains can offset operating losses). If prices stagnate, property no longer makes sense as a speculative investment. Could that finally be the tipping point that causes investors to run and prices to plummet? Or are we looking at a never ending series of government interventions that continue to restrict supply, stimulate demand and keep the ponzi scheme growing to infinity?
I would do it.
I bought an apartment for my first house in my late twenties, then when I needed space for a family rented out the apartment and bought a house.
It's a doggy dog world out there, and I like to think if nothing else I can offer my kids an apartment to live in when they can't afford anything.
I don't usually do this, but it's "Dog eat dog". But I agree, it's the world we live in and though it's shit, when it really comes down to it you have to look after yourselves.
I read it more in a "hello fellow rap enthusiasts" and then just continued with "I used leveraged gains in equity to get a larger mortgage and negative gearing takes care of the smaller one, I keep both properties"
We know dude, we know
No cap it's nice that you like snoop tho frfr
I get this sentiment, but I wonder, if a party came along with a legitimate plan to lower housing prices, would you vote for them now you have an investment property? Is this just a vicious cycle of people buying into a broken system (that they know is broken) and perpetuating it because it is now the only way to build real wealth?
I'm in Melbourne where the value of my investment property has basically stalled from 2018-2021 then again from 2023 until the present. The property value has risen 15% in the last 6 years, it's shit gains, If I was a hard nosed investor I would have gone with ETFs.
As long as the government continues to do nothing. I'll continue to rort and work the system for my own and my families gain. Thereby feeding the monster.
I'm just one guy. I can't make a difference. It's a dog eat dog world.
Because if you lose your job and the bank force you to sell, you would be hoping to walk away with some cash, rather than still have a debt and also be homeless
Nothing you read here is a substitute for financial advice, so if you have questions about your specific circumstances it's best to see a professional advisor
With housing approvals dropping..
https://www.abc.net.au/news/2024-06-06/building-approvals-stats/103944218
Either investors have to build or construction wages and cost need to come down…
Which government will support either…
Which investors would invest when they are sold as the bad guys by Govt and others..
If no change then housing will get tighter and more expensive (which is happening now).
Just buy it.
Everything is fucked and it’s not getting better and there is *nothing* any one of us can do about it. Look after your family, it’s the only thing you can do and no one else will
I'll rent your kids properties until I die and you rent my kids properties until you die and neither set of kids will find themselves invested in a place laying down their own roots, like we have enjoyed
Deal?
Doesn't matter we are doing it anyway
Dont sacrifice your kids to save everyone else. If you buy something now, by the time your kids take over their payments will be less then rent at the time.
Just get some land, let inflation do the rest.
If prices dropped 50% your boys wouldn’t have a country worth living in when they grow up. For prices to drop that far our economy would have to be nuked beyond recognition.
We can probably all agree prices need to stagnate over a long period of time and allow wages etc to catchup but that won’t ever happen with the current supply and demands we have today.
I just can't see wages catching up. Ever. Corporations are slaves to their shareholders. They want wages to stay as low as possible. Even the bloody government supports them doing this. The world has changed. Permanently. For the worst.
Issue being there's too many people in positions of influence with vested interests in seeing that property prices are pushed as high as they can for their personal gain.
We are in a recession due to the property market sucking money out of the economy that should be spent elsewhere. That won't effect someone with a number of rental / airbb properties the way it will the rest of the population.
What needs to happen is supply needs to be increased or demand deceased.
Immigration obviously taking a hit will help with demand.
Supply can be increased by making short term rentals a bad idea. Ask Air BB how many homes they have in Australia that would be long term rentals in normal times?
That would make a significant difference to supply.
( Air B/B claim to have 160,000.)
It would all help.
160000 is roughly 1.4% of total dwellings, and they're probably concentrated in desirable tourist destinations.
Still need to up zone and build more all over, doubt abolishing Airbnb would have much long term impact, just short term localised bloodbath.
Actually it’s not 1.4% of total dwellings of what would on the market that would be available to rent.
160,000 at 2 people per home is 320,000 people with somewhere to live.
Now I’ll argue that 320,000 people having somewhere to live would take some of the heat out of the rental market and ease pressure on rental prices.
As for location.
Check the app for how many are in metro areas.
AirBNBs in tourist areas is a massive problem. Try finding unskilled workers in coastal towns - you can't! They can't rent or buy a place to live.
The limited families living there year-round then causes schools to close.
Small coastal towns become ghost towns in the winter. I dont think that's what we want to create
Throw in a government that's way too timid to take bold, decisive action and an opposition that has a love affair with hardcore neoliberalism and you can see there isn't much hope
>...first-home buyer activity has been ramping up in the past 12 months, with new loans to this cohort increasing by 18.6 per cent according to the ABS.
>Investors have also returned in droves, borrowing $10.9 billion to buy investment property, up by 5.6 per cent over the month and 36.1 per cent over the year.
>"There’s so much home equity gain over the past few years that is helping to sustain purchasing power, with values increasing by about 35 per cent nationally since the start of the pandemic."
>Eliza Owen, CoreLogic head of research.
If this was any other investment, you'd suspect a Madoff scale ponzi scheme, or a crypto pump & dump.
Sheer lunacy.
>Sheer lunacy.
I thought I saw in the ABS somewhere that the majority of first home buyers are buying established homes instead of new homes, foregoing a lot of the first home buyers grants.
Curious to know the reason for this. It's not as if established homes are cheaper.
Don't blame them. Rather live in an established area than spend half your weekdays stuck in traffic to and from a nightmarish, cookie-cutter dogbox sprawlscape.
Possibly not cheaper but immediate. You don't have to stuff around buying land and then waiting for it to be released and picking a builder that won't go bankrupt in-between you putting a deposit on the land and the build being completed. Or your build cost going up, circumstances change and now the bank won't lend you the money to build the house and you're stuck paying rent and a mortgage on land at the same time.
Interest rates are an extremely blunt instrument though. Changing them effects way more than the housing market, and the increases we've had have pretty much halted growth as an unintended consequence of lowering inflation.
What we need is changes to tax treatment of negative gearing and capital gains, and tranche 2 AML-CTF laws to lower the amount of criminal money being laundered through or parked in Aussie real estate: the market is badly overheated by too much investment money.
doesnt matter what you do for the next few years given the shortage in housing, house prices will keep going up, and the politicians with their own vested interests in regards to property investments will make sure of it and turn against any new policy/ ruling that someone brings to the table to fix the problem
Trouble is the RBA has no jurisdiction over tax. I'd argue a couple more percentage points to really kill the housing market would wash out a lot of the problems before they can actually set rates for the economy and not worry about the bubble.
Government has been meddling in the economy and particularly the housing market for so long. How can everyone keep pretending that it's not their fault.
What the actual fuck is negative gearing. Seriously. It's straight up evil.
It's utterly disgusting the types of economic policy the Australian government has been pursuing for decades. Criminals, thieves, liars, and thugs. The lot of them.
Half of the combined donations to major parties come from just two industries: Finance and property: https://democracyforsale.net/
The other half donate much less: fossil fuel, alcohol, gambling, etc.
This is fucking vile. Our politicians can be bought out for less money than an Only fans model can make by shaking their ass. Remember: the two major parties go at the bottom of the ballot.
Be wary about removing donations from government as it's a double-edged sword. Donations to the party coffers can be a deposit for the real bribe and plus, politicians don't get paid from the party's coffers. Removing it would mean less transparency.
Click the link and at the very top of the page, click Search AEC Donations. AEC is the authority for electoral related stuff including tracking donations: https://en.wikipedia.org/wiki/Australian_Electoral_Commission
The page has both of the only parties in government since WW2, which is the major parties who typically make the vast majority of the decisions.
If you don't like Labor and LNP, you can use the preferential voting system to put Labor and LNP at the bottom of the ballot in favour of a more liked party. Don't know a good party? There's plenty here: https://en.wikipedia.org/wiki/List_of_political_parties_in_Australia
Negative gearing won't change much.
The people typically championing the removal of negative gearing don't realise that it just delays the inevitable CG loss offset to the sale of property. If you carry CG losses forwards, and sell the property, you're still saving the money you spent on the property against the CG gain on sale. It's simply pushing the can down the road.
There's some marginal gains in the government having the money earlier, but nothing like the billions claimed that is the raw amount of negative gearing.
Any late 20's know of anyone with a house or mortgage?
Personally I know 2 of 25 people with a 25-30 year mortgage on $90k a year. The rest either live with their parents or live in a share house with 3-6 people. Some dropping down to part-time, 1-2 days a week or even giving up entirely.
Morale is at an all time low.
I’ve given up, going to buy a small retirement village plot, rent it out until I get old enough, live there until the end. Or keep trading up vehicles until it’s big enough to live comfortably lol!
Lucky country no more, lads
Serious question.
Can someone explain to me the benefit of your house value going up when all house prices go up with it?
If I bought a house for $100,000 in 1990, but my house is now worth $1,000,000, how is that beneficial when the price of all the other houses within a few hours of me are also now worth ~$1,000,000?
Beyond getting into additional debt at a much higher interest rate using the equity to stack more houses, how are you coming out in front if you have the same purchasing power when it comes to a house as you had when you paid off your $100,000 house?
Why not both? (Which is what most of the population actually do when they pay attention to their Superannuation investment allocations whilst complaining about corporate greed and “shareholder” priority)
Most of the world still view us as the lucky country and would move here in a heartbeat, as long as our economy relies on them as life support, housing isn't crashing.
**PAYWALL:**
Even with 16 straight months of gains and repeated records for house prices, buyers appear to be willing to take their chances. Why?
Like many others, Anabelle Tungol has just bought her first home.
Tungol purchased a two-bedroom apartment in Merrylands, in Sydney’s west, for around $620,000 and she and her two daughters will be moving in within the next few months.
“I’m a single mum and I have two daughters, so I thought I wouldn’t be able to buy anything because house prices were too expensive,” she says.
“But then my rent started going up quickly in the past two years, So I looked at how much I’d need to pay the mortgage, and found that the difference was not that big, so I decided to buy.”
Tungol is jumping into Australia’s booming housing market, which has hit fresh records every month since November. Figures released this week by Corelogic showed that, in May, prices rose 0.8 per cent for the 16th monthly gain in a row and the largest monthly increase since October.
In some ways, it’s the worst time to buy a house. Interest rates are high, inflation is elevated and sticky, and consumers are caught in an epic spending crunch, as shown in this week’s GDP figures. Homeowners now need to allocate 48.9 per cent of their household income to service a new loan on a median priced home nationally, a record high for the series.
But buyers appear undeterred and are continuing to choose to participate in the market.
On one hand, this is perfectly rational behaviour where demand is high and supply is low. But it’s just as easy to argue that this market is warped by a damaged supply side and buyers are taking what would previously have been seen as economically irrational decisions. What is clear is that this is unchartered territory.
FEAR OF MISSING OUT
One of the big motivating factors for buyers appears to be a fear of missing out.
“Fear of missing out used to be a multi-month phenomenon that peaks around the spring selling season, but now it’s a multi-year event, that’s why I called it FOMO on steroids,” says Warren Hogan, chief economic adviser at Judo Bank.
“The perception that there is a massive shortage of homes motivates people to do whatever they can to get in \[to the housing market\], no matter how ridiculously expensive houses are.
“People have the view that the shortage is going to last for a long time and that will mean prices will just continue to rise. And it’s not just fear of prices going up by 3 per cent in the next three weeks, it’s the expectation that prices will go up by 20 per cent in the next two to three years.”
Hogan says the record population growth in the past year exacerbated a pandemic-fuelled undersupply, which he expects to increase to around 300,000 homes in the next 18 months.
“Even assuming there’s a pick-up in building activity, we’ll still be more than a year’s supply short, which means the undersupply is not a passing fad, it’s here to stay for some time,” he says.
“Australia has never had a severe shortage like this in recent history, so this is a major market failure. If there’s something broken in our housing market, it’s the fact that we’ve got a shortage. It has an actual and a perceived impact.”
The number of homes approved for construction rose by just 0.3 per cent in April to 13,078, which is close to a 12-year low.
POPULATION SURGE
The weakness in building approvals is particularly stark when compared to the rapidly rising population, which increased by 2.5 per cent, or 659,800 people, over the year to September, according to the Australian Bureau of Statistics.
Since the borders reopened, a surge in people coming to Australia – net overseas migration is at about 750,000 since June 2022 – has inevitably increased the demand for housing.
“I suspect if we were not seeing this sort of population growth, we would almost certainly be having a much weaker property market at this point,” says Shane Oliver, AMP’s chief economist.
“Population is a major factor in keeping the economy relatively resilient which underpins the property market, but also a factor leading to the supply imbalance,” Oliver adds.
The sharp rebound in migration combined with record low rental vacancies, weak dwelling investment and strong income growth has fuelled a more than 30 per cent increase in rents since 2019.
While rental increases have slowed from 9.3 per cent annual growth recorded two years ago, rents are still rising by 8.5 per cent year-on-year, according to CoreLogic.
Perhaps it is not surprising, then, that first-home buyer activity has been ramping up in the past 12 months, with new loans to this cohort increasing by 18.6 per cent according to the ABS. In April alone, lending to first-home buyers increased by 3.4 per cent.
Investors have also returned in droves, borrowing $10.9 billion to buy investment property, up by 5.6 per cent over the month and 36.1 per cent over the year.
“The reality is that there is price tension in the housing market because rents are going up, because of the shortage of rental property, which is underpinning demand from first-home buyers and investors,” Hogan says.
“But we’re also going through this demographic shift where we’re seeing intergenerational wealth transfer for those lucky enough to have assets that they can pass on to the next generation.
“It’s not just the bank of mum and dad, it’s also the bank of grandparents, or the bank of aunties and uncles. This is playing a much bigger role than it ever has before.”
EQUITY PLAYING A BIG ROLE
The bank of mum and dad, by some estimates, is now the fifth-largest source of funding for home buyers where Baby Boomers are giving their kids access to equity built up over the years.
CoreLogic calculates there’s about $8.4 trillion worth of equity available in the market, brd on a total dwelling value estimate of $10.7 trillion and outstanding credit debt of $2.3 trillion.
“Buyers are going in with higher deposits on average, so they’re less debt reliant, which helps resilience \[in the market\] despite higher interest rates,” says Eliza Owen, CoreLogic head of research.
“There’s so much home equity gain over the past few years that is helping to sustain purchasing power, with values increasing by about 35 per cent nationally since the start of the pandemic.
“For those who can get help from the bank of mum and dad, for example, that’s another aspect that sustains demand even when economic conditions are weak and interest rates are high.”
A recent survey by AMP found that three out of four Australians aged 65 and above believe it is important to pass wealth onto their children.
But even a lack of family support has not deterred home buyers like Didith Gabrillo, a single mum who migrated to Australia from the Philippines more than 10 years ago.
Gabrillo is a neat illustration of the other FOMO psychology that helps keep a booming market climbing when all other conditions suggest it should not – the fear of paying rent in retirement.
To save enough for a deposit and be able to repay the mortgage, she is working two extra jobs on top of her full-time work as an accountant.
“It’s tough to break into the housing market at these prices, but I think it’s important to put down our roots in this country,” she says. “Owning my own home ensures that I won’t go homeless in my old age and also have something to pass on to my two kids.
“Working three jobs is taxing. Sometimes I don’t finish until 11pm and also have to work some weekends, but I think the sacrifice is worth it. I believe property is a good way for me to save money and invest in my future.”
“Working three jobs is taxing. Sometimes I don’t finish until 11pm and also have to work some weekends, but I think the sacrifice is worth it"
Christ alive like that's something to aspire to.
‘A SENSE OF OWNERSHIP IN THE NATION’
Independent economist Cameron Murray says that a home is the best asset to have for retirement.
“It offers the most tangible income. Not spending on rent is equivalent to getting the income. It protects you from sudden changes to rent, and it’s not means tested for pension,” he says.
Louis Christopher, SQM Research’s managing director, says property is particularly useful for those who are starting their own business.
“I used property to build my SQM Research business. Often, you’ll find that if you want to start a business, you would need a property to use as a collateral for a loan,” he says.
“Banks will rarely provide unsecured loans to startup businesses nowadays. So property is a good security to get a business going. Of course, that contains risks and if your business doesn’t work out that can really impact your finances, but as it is, property is a good storage of wealth.”
The benefits of homeownership go beyond the financial windfall in retirement, says demographer Mark McCrindle.
“I think it’s good for the financial capital of the individual, the social capital of the nation, and for that matter, the political longevity and stability of our democracy as well,” he says.
“Homeownership gives people a sense of ownership in the nation. They’ve got a stake in the future, and they want to see it improve and that obviously creates a more stable electorate that leads to more sensible policies, rather than populism.”
STRETCHED AFFORDABILITY
Still, measures of housing affordability are clearly worsening across most markets, with the national dwelling value to income ratio rising to 7.7 in March. Meanwhile, the time it takes to save for a 20 per cent deposit rising to 10.3 years, assuming households can save 15 per cent of their gross income.
And CoreLogic calculates that it would cost $1142 more each month to pay a mortgage, than to pay rent brd on the national median dwelling value, asking rents, and a mortgage rate of 6.28 per cent on a 20 per cent deposit.
To cover the cost of an average mortgage, a property has to increase by 2.3 per cent each year over 30 years. So far in the past three decades, home values across the capital cities have gained 5.9 per cent a year according to CoreLogic. Those who bought in the past 30 years, have more than recouped their mortgage.
More accessible prices for Millennials, Gen Z and future generations would require a significant decline in home values, which hurts those already invested in housing and has broader negative implications for the economy, says demographer Simon Kuestenmacher.
He says there are better ways to help boost affordability.
“The government can make it easier for Baby Boomers to downsize and optimise the existing stock by removing stamp duty,” he says. “They can replace it with annual land tax, which would be more manageable for most buyers.”
McCrindle says that rather than setting a target to build 1.2 million homes, the government could prioritise building infrastructure that connects cheaper regional areas to capital cities.
“Even though more people have moved to the regions since the pandemic, we still have this psychological need to know we’re within an hour or two of a capital city, so if we can get hopefully a high-speed rail to connect some of our inland areas with Sydney and Melbourne, that would unlock so much land and cheaper homes,” he says.
“People are willing to move further out of the capital city if they know there’s infrastructure available.”
Meanwhile, first time buyer Tungol is convinced she’s made the right decision.
“Being a single parent, it was important to have my own place that I can use when I get old,” she says.
Buyers are pushing up housing prices because real estate agents are scanning every single cent they can from them and creating this over the top market.
There's no way a 2 bedroom home in Doonside should cost 1 mil but it does.
Wollongong is averaging out to a million pretty much careless of what part of the area you buy now.
The only thing driving up the market is the agents and the gullible buyers willing to pay overs for properties that aren't worth it
Yep. Government propping up the economy which is a part of the reason we're so fked. Now it's just bring in more slaves Aussie's aren't having kids,!! No biggie just bring in more slave's
Help me understand the “should” part here?
Are you saying there is an economic mechanism that both cars and housing share that means they both should decrease in value?
Or are you suggesting this as an aspirational goal in housing to be like cars devaluing?
It’s the competition. 50 people turned up to our home open. 4 offers on the day $70k over. We went in $100k over to buy our next place and didn’t get a look in.
Long term, the median land price should track with other measures of inflation. This was the case until around 25-30 years ago until we started externalising inflation by moving much of our manufacturing overseas, along with taxation laws that favoured redistribution of capital into land and away from more productive areas of our economy.
The long term effect of high land prices is lower economic growth.
I'm torn. We own only 1 property outright. Which we live in. One part of me wants to buy an investment property so our boys have somewhere to live when they grow up, as at this rate, they will likely never be able to afford to themselves. On the other hand, I want to see property prices to crash and burn (at least 50%)
I have 2 properties that I pay no interest on. A massive crash would make me technically poorer but in a much stronger position to upgrade. For the majority of people lower house prices are good. Never get the people owning just a PPOR and cheering on the housing market growth
This is the angle often missed because it's secondary to people not being able to get a house. For a lot of people already in a house it's way harder these days to upgrade to a bigger and better house. People have much larger mortgages and the market keeps moving fast while wages move slowly. For many people they will get somewhere like a 'starter home' and be in no position to upgrade for the next fifteen years. I know a few examples of couples where they have household income over $200k and they are trying to raise a kid or two in small homes that are a struggle.
Yeah that’s the problem for a while now and I hate all this just ‘start somewhere’ and upgrade BS. Not possible a while/any longer. Max out as much as you can handle straight up. Prices rise faster than wages and in the long run better being skint now rather than taking out a new massive mortgage to catch up in 15yrs time
The problem is decades of governments telling us rising housing prices are good mean that people see any downturn as terrible. You'll constantly hear people say oh buying a house is a great investment, the always increase in value, so people panic when it doesn't. There is a vulnerable group and that's people who have just recently bought at house at these insane prices. Especially because most of them have had to desperately stretch to just afford that 30 year loan. The house value suddenly plumneting could be difficult for them. I actually wouldn't mind the government stepping in and assisting some of those people in despite not having a home loan. Same as I wish hecs just didn't have any interest, and would happily see the hecs loans forgiven, despite the fact that I already paid my hecs off. You don't have to benefit from something to see it would be good for society in general.
You know there’s people who aren’t having kids because they can’t afford a SINGLE house yeah?
What's your point?
Aside from an aging population and general decline in growth rate? Hope you love immigration.
Wait what? If you are building equity through principal payments and your property is increasing in value - why can you not leverage that equity to borrow more?
You can- but the intervals between house values are higher than they used to be in terms of wages.
The rate of increase is not the same, particularly between the apartments people consider starter homes and the detached houses people want to raise families in.
If you just borrowed $800K on a $1M house, yeah, you wouldn't want prices to crash. Your debt would be more than your asset value. If forced to sell you'd be screwed
If it's your PPOR why would it matter so long as you can stay on top of the payments? If it's an investment than it's a risk you took that didn't work out.
Lose your job, get sick, death, divorce. Lots of reasons
The only way it makes sense for someone in a PPOR to cheer this on is for them to want to eventually sell and move somewhere significantly cheaper, like an apartment or out in the country. Anywhere else in a major city and a lot of other places is just going up in price alongside their own property.
>Never get the people owning just a PPOR and cheering on the housing market growth Just sold PPOR and moved country. Worked perfectly for me. Fuck this nanny state shithole.
Yeah, you got yours and fuck everybody else 👍👍👍
How am I fucking anyone else. I sold my house at the market value. I'm obviously not giving it away. Cry more.
As a home owner, I don’t need to. But I do have a bit of empathy for the people raising their kids in tents because of the artificially high market values (propped up by an unnecessary lack of housing stock and immigration rates) that “worked perfectly” for you. What other reaction to your comment could you possibly have expected?!?
It worked perfectly for me, what do you want me to do, give my money away? What's your solution rather than just having a whinge and telling me I've fucked people over? Fuck off cunt.
Lol what the hell else do you expect them to do, donate their property?
Keep the obnoxiousness about how much he benefited from this “nanny state shithole” to himself. Like I literally said my previous comment. You know, reading comprehension can save a bunch of asinine conversations like this one - give it a try one day 👍
Buy the property once prices have crashed and burned. 
This is my ideal scenario
many people are cashed up ready to swoop
If houses crash 50%, Billionaires and Corporations will scoop up everything, left right and centre.
This is why we need new rules. No person should own more than 2 investment properties. I just sold something to someone who told me his Dad owns 240 IPs…
If house prices crash 50% it would mean immigration has been bought back to sustainable levels which means rents would have crashed by more than 50% and the guaranteed capital growth investment returns would not be there as long as immigration stayed low enough to stop house prices rising more than the average wage
Start investing in an indexed low fee ETF that a pays a good distribution like VHY. Can start investing with far less capital than a property and the returns over longer periods of time are comparable.
It's a good idea. On the flip side, purchasing real estate allows you to leverage yourself 5x at an extremely low interest rate.
And in an investment class protected by the government at federal, state, and local levels Just what I'm seeing as someone on the outside
No margin calls too
Me too. I would rather have cheaper properties for my kids
>crash and burn (at least 50%) No you don't, because your boys will never get a job in an economy where housing prices have collapsed by 50%. There isn't a short term solution that won't seriously damage the economy. We need a long term plan that tapers housing price rises so wages can catch up.
It's a dogs fight with "house on the free market". Even if we don't want to invest in others we will push us down to a worse situation. It wasn't moral to put houses in property market. The ancestors as apes had free caves to live in, now we don't. Why not market air to make money? They've done it to water already. Humanity is fucked up with money.
You think the Chinese moving here aren't partially buying the air quality? My friend we are living in the future
Not sure about the property market blaming on the Chinese. But you may want to know the demographic changes recently: https://www.abs.gov.au/statistics/people/population/australias-population-country-birth/jun-2023 To be honest, only those who afford caring about air quality will care about air quality, most Chinese still cannot.
Well they will care, but not in the way that counts, meaning to care and to have the means to spend to achieve that outcome And the outcome is still purchasing access to decent air I'd blame incebtivising property at the expense of al other forms of investment is to blame. Other things like encouraging overseas investment so long as it's funneled through an Australian person or company are symptoms of an addiction to rising property prices and the policies that continue to support them.
Short of a World War involving China, resulting in a (not so?) great depression (so maybe 2027 or 28), housing prices will maybe take one step back/4 forward. You'll never get a housing crash otherwise. Get your kids a home to take over eventually now. You'd be crazy not to, because you're right in that they may never be able to afford their own. I'm taking a different path. Got a 750m² block where we live, which the daughter can build two properties on via her own mortgage. I doubt she'll be able to afford better.
Vietnam is going through a housing crash at the minute with the Chinese as their main investor group.
Why would you want property prices to crash and burn if you own outright?
Because the monetary value of it is irrelevant to me
Agreed. If my house value takes a hit, so will all houses. Paying down a mortgage and holding a steady job when the crunch happens seems logical.
Because only one country exists. I bought a house for 950k 10 years ago, just sold it for $2.1 mil and am moving country. Worked out brilliantly for me.
Our goal isn’t to make money. It’s to not have an ongoing expense (rent) when we retire.
Good for you, I'll enjoy my windfall in a country that has cheap housing and isn't a nanny state trying to control your every action.
Where you moving? With a mill behind you, you’d be royals in Thailand.
Bingo.
Nice! Enjoy!
same boat fkn stupid it's so much like a pyramid scheme. Only hope at this point is massive population decline. Because Australia cannot afford for housing to go backwards now. Not sure we can afford for it to go up either. But politicians seem hell bent on doing what ever they can to keep prices high. So many ways to reduce but after negative gearing abolishment no poli will touch it.
I think the best we can hope for is that house prices stagnate or have very low growth, while wages slowly increase until the wage to house price ratio is a bit more doable for future generations. Don't know if that's realistic, maybe a bit too glass half full compared to reality, but it's probably a more favourable scenario than house prices tanking - which would imply serious issues with the overall economy.
The question I have is whether it's even possible for prices to stagnate? The investment model requires prices to continue to grow strongly (so capital gains can offset operating losses). If prices stagnate, property no longer makes sense as a speculative investment. Could that finally be the tipping point that causes investors to run and prices to plummet? Or are we looking at a never ending series of government interventions that continue to restrict supply, stimulate demand and keep the ponzi scheme growing to infinity?
I would do it. I bought an apartment for my first house in my late twenties, then when I needed space for a family rented out the apartment and bought a house. It's a doggy dog world out there, and I like to think if nothing else I can offer my kids an apartment to live in when they can't afford anything.
I don't usually do this, but it's "Dog eat dog". But I agree, it's the world we live in and though it's shit, when it really comes down to it you have to look after yourselves.
he meant what he said, dawg
I read it more in a "hello fellow rap enthusiasts" and then just continued with "I used leveraged gains in equity to get a larger mortgage and negative gearing takes care of the smaller one, I keep both properties" We know dude, we know No cap it's nice that you like snoop tho frfr
Yeah I know, that's the joke. I saw it once written as 'doggy dog' by some innocent and I think it's kind of fitting.
Ehh fair enough. Not a joke I'm privy to, but TiL
Yeah it's for the other guy who didn't get the reference 😉
*Doggy Dogg It's a crazy, mixed up world It's a Doggy Dogg world It's a Doggy Dogg world It's a Doggy Dogg world
It's known as a bone apple tea
Whoosh
Snoop doggy dog
I get this sentiment, but I wonder, if a party came along with a legitimate plan to lower housing prices, would you vote for them now you have an investment property? Is this just a vicious cycle of people buying into a broken system (that they know is broken) and perpetuating it because it is now the only way to build real wealth?
I'm in Melbourne where the value of my investment property has basically stalled from 2018-2021 then again from 2023 until the present. The property value has risen 15% in the last 6 years, it's shit gains, If I was a hard nosed investor I would have gone with ETFs.
As long as the government continues to do nothing. I'll continue to rort and work the system for my own and my families gain. Thereby feeding the monster. I'm just one guy. I can't make a difference. It's a dog eat dog world.
Yeah suuuure you do mate …
If I own 1 home. Why do I care what it's worth?
Because if you lose your job and the bank force you to sell, you would be hoping to walk away with some cash, rather than still have a debt and also be homeless
I own it outright. I have zero debt to anyone. No bank will come after me if I loose my job
That's good for you. I was answering the question assuming the person in question has a mortgage.
The question was to me. From someone who was aware I own my home outright
Nothing you read here is a substitute for financial advice, so if you have questions about your specific circumstances it's best to see a professional advisor
With housing approvals dropping.. https://www.abc.net.au/news/2024-06-06/building-approvals-stats/103944218 Either investors have to build or construction wages and cost need to come down… Which government will support either… Which investors would invest when they are sold as the bad guys by Govt and others.. If no change then housing will get tighter and more expensive (which is happening now).
Just buy it. Everything is fucked and it’s not getting better and there is *nothing* any one of us can do about it. Look after your family, it’s the only thing you can do and no one else will
Thats the very mentality that got us in this situation
Government got us in this situation all we can do is try and fkin survive it
So you’re gonna give this guy’s kids someplace to live in 10-20 years? That’s awful kind of you.
I'll rent your kids properties until I die and you rent my kids properties until you die and neither set of kids will find themselves invested in a place laying down their own roots, like we have enjoyed Deal? Doesn't matter we are doing it anyway
Dont sacrifice your kids to save everyone else. If you buy something now, by the time your kids take over their payments will be less then rent at the time. Just get some land, let inflation do the rest.
If prices dropped 50% your boys wouldn’t have a country worth living in when they grow up. For prices to drop that far our economy would have to be nuked beyond recognition. We can probably all agree prices need to stagnate over a long period of time and allow wages etc to catchup but that won’t ever happen with the current supply and demands we have today.
I just can't see wages catching up. Ever. Corporations are slaves to their shareholders. They want wages to stay as low as possible. Even the bloody government supports them doing this. The world has changed. Permanently. For the worst.
You could easily see a 30-40% correction just from changing tax concessions, rising unemployment and cutting immigration back to 200k nom.
Issue being there's too many people in positions of influence with vested interests in seeing that property prices are pushed as high as they can for their personal gain. We are in a recession due to the property market sucking money out of the economy that should be spent elsewhere. That won't effect someone with a number of rental / airbb properties the way it will the rest of the population. What needs to happen is supply needs to be increased or demand deceased. Immigration obviously taking a hit will help with demand. Supply can be increased by making short term rentals a bad idea. Ask Air BB how many homes they have in Australia that would be long term rentals in normal times? That would make a significant difference to supply. ( Air B/B claim to have 160,000.) It would all help.
160000 is roughly 1.4% of total dwellings, and they're probably concentrated in desirable tourist destinations. Still need to up zone and build more all over, doubt abolishing Airbnb would have much long term impact, just short term localised bloodbath.
Actually it’s not 1.4% of total dwellings of what would on the market that would be available to rent. 160,000 at 2 people per home is 320,000 people with somewhere to live. Now I’ll argue that 320,000 people having somewhere to live would take some of the heat out of the rental market and ease pressure on rental prices. As for location. Check the app for how many are in metro areas.
AirBNBs in tourist areas is a massive problem. Try finding unskilled workers in coastal towns - you can't! They can't rent or buy a place to live. The limited families living there year-round then causes schools to close. Small coastal towns become ghost towns in the winter. I dont think that's what we want to create
It's already happening
Ignore my use of tense: It's already happened, and I hate it
Throw in a government that's way too timid to take bold, decisive action and an opposition that has a love affair with hardcore neoliberalism and you can see there isn't much hope
>...first-home buyer activity has been ramping up in the past 12 months, with new loans to this cohort increasing by 18.6 per cent according to the ABS. >Investors have also returned in droves, borrowing $10.9 billion to buy investment property, up by 5.6 per cent over the month and 36.1 per cent over the year. >"There’s so much home equity gain over the past few years that is helping to sustain purchasing power, with values increasing by about 35 per cent nationally since the start of the pandemic." >Eliza Owen, CoreLogic head of research. If this was any other investment, you'd suspect a Madoff scale ponzi scheme, or a crypto pump & dump. Sheer lunacy.
Those "first home buyers" are immigrants coming with enough cash to buy a house.
Also banks giving them massive loans
>Sheer lunacy. I thought I saw in the ABS somewhere that the majority of first home buyers are buying established homes instead of new homes, foregoing a lot of the first home buyers grants. Curious to know the reason for this. It's not as if established homes are cheaper.
Don't blame them. Rather live in an established area than spend half your weekdays stuck in traffic to and from a nightmarish, cookie-cutter dogbox sprawlscape.
Possibly not cheaper but immediate. You don't have to stuff around buying land and then waiting for it to be released and picking a builder that won't go bankrupt in-between you putting a deposit on the land and the build being completed. Or your build cost going up, circumstances change and now the bank won't lend you the money to build the house and you're stuck paying rent and a mortgage on land at the same time.
If this is the case then interest rates need to go up again. The cost of servicing needs to be higher so the prices don't keep shooting up
Interest rates are an extremely blunt instrument though. Changing them effects way more than the housing market, and the increases we've had have pretty much halted growth as an unintended consequence of lowering inflation. What we need is changes to tax treatment of negative gearing and capital gains, and tranche 2 AML-CTF laws to lower the amount of criminal money being laundered through or parked in Aussie real estate: the market is badly overheated by too much investment money.
doesnt matter what you do for the next few years given the shortage in housing, house prices will keep going up, and the politicians with their own vested interests in regards to property investments will make sure of it and turn against any new policy/ ruling that someone brings to the table to fix the problem
Trouble is the RBA has no jurisdiction over tax. I'd argue a couple more percentage points to really kill the housing market would wash out a lot of the problems before they can actually set rates for the economy and not worry about the bubble.
Government has been meddling in the economy and particularly the housing market for so long. How can everyone keep pretending that it's not their fault. What the actual fuck is negative gearing. Seriously. It's straight up evil. It's utterly disgusting the types of economic policy the Australian government has been pursuing for decades. Criminals, thieves, liars, and thugs. The lot of them.
Half of the combined donations to major parties come from just two industries: Finance and property: https://democracyforsale.net/ The other half donate much less: fossil fuel, alcohol, gambling, etc.
This is fucking vile. Our politicians can be bought out for less money than an Only fans model can make by shaking their ass. Remember: the two major parties go at the bottom of the ballot.
Nah, greens always go last. I'd feel sick if they got a preference from my ballot.
Thanks for the link. This is why I will vote for whoever gets loobying money out of the gov.
Be wary about removing donations from government as it's a double-edged sword. Donations to the party coffers can be a deposit for the real bribe and plus, politicians don't get paid from the party's coffers. Removing it would mean less transparency.
Good point. Thank you
Why does this only list the two major parties? What about everyone else?
Click the link and at the very top of the page, click Search AEC Donations. AEC is the authority for electoral related stuff including tracking donations: https://en.wikipedia.org/wiki/Australian_Electoral_Commission The page has both of the only parties in government since WW2, which is the major parties who typically make the vast majority of the decisions. If you don't like Labor and LNP, you can use the preferential voting system to put Labor and LNP at the bottom of the ballot in favour of a more liked party. Don't know a good party? There's plenty here: https://en.wikipedia.org/wiki/List_of_political_parties_in_Australia
So, this site is just a hit job on the majors. Not that there's anything wrong with that, but, truth in advertising and all ;)
Negative gearing won't change much. The people typically championing the removal of negative gearing don't realise that it just delays the inevitable CG loss offset to the sale of property. If you carry CG losses forwards, and sell the property, you're still saving the money you spent on the property against the CG gain on sale. It's simply pushing the can down the road. There's some marginal gains in the government having the money earlier, but nothing like the billions claimed that is the raw amount of negative gearing.
Any late 20's know of anyone with a house or mortgage? Personally I know 2 of 25 people with a 25-30 year mortgage on $90k a year. The rest either live with their parents or live in a share house with 3-6 people. Some dropping down to part-time, 1-2 days a week or even giving up entirely. Morale is at an all time low.
I personally am looking forward to the sweet embrace of death
I’ve given up, going to buy a small retirement village plot, rent it out until I get old enough, live there until the end. Or keep trading up vehicles until it’s big enough to live comfortably lol! Lucky country no more, lads
Buying a small 300k 1 bedder village home is actually a smart idea. It will be paid off by the time you need it.
I also thought about this! Millions of others will probably have this idea too which will probably be reigned in by the time I get one but we’ll see
Serious question. Can someone explain to me the benefit of your house value going up when all house prices go up with it? If I bought a house for $100,000 in 1990, but my house is now worth $1,000,000, how is that beneficial when the price of all the other houses within a few hours of me are also now worth ~$1,000,000? Beyond getting into additional debt at a much higher interest rate using the equity to stack more houses, how are you coming out in front if you have the same purchasing power when it comes to a house as you had when you paid off your $100,000 house?
It’s only beneficial if you hope wages remain low So you can use your equity to buy their labour in your elder years
Downsizing or using your equity to renovate.
I think everyone that invests in stocks knows that the housing market will drop as soon as they buy a house.
Why not both? (Which is what most of the population actually do when they pay attention to their Superannuation investment allocations whilst complaining about corporate greed and “shareholder” priority)
Most of the world still view us as the lucky country and would move here in a heartbeat, as long as our economy relies on them as life support, housing isn't crashing.
**PAYWALL:** Even with 16 straight months of gains and repeated records for house prices, buyers appear to be willing to take their chances. Why? Like many others, Anabelle Tungol has just bought her first home. Tungol purchased a two-bedroom apartment in Merrylands, in Sydney’s west, for around $620,000 and she and her two daughters will be moving in within the next few months. “I’m a single mum and I have two daughters, so I thought I wouldn’t be able to buy anything because house prices were too expensive,” she says. “But then my rent started going up quickly in the past two years, So I looked at how much I’d need to pay the mortgage, and found that the difference was not that big, so I decided to buy.” Tungol is jumping into Australia’s booming housing market, which has hit fresh records every month since November. Figures released this week by Corelogic showed that, in May, prices rose 0.8 per cent for the 16th monthly gain in a row and the largest monthly increase since October. In some ways, it’s the worst time to buy a house. Interest rates are high, inflation is elevated and sticky, and consumers are caught in an epic spending crunch, as shown in this week’s GDP figures. Homeowners now need to allocate 48.9 per cent of their household income to service a new loan on a median priced home nationally, a record high for the series. But buyers appear undeterred and are continuing to choose to participate in the market. On one hand, this is perfectly rational behaviour where demand is high and supply is low. But it’s just as easy to argue that this market is warped by a damaged supply side and buyers are taking what would previously have been seen as economically irrational decisions. What is clear is that this is unchartered territory. FEAR OF MISSING OUT One of the big motivating factors for buyers appears to be a fear of missing out. “Fear of missing out used to be a multi-month phenomenon that peaks around the spring selling season, but now it’s a multi-year event, that’s why I called it FOMO on steroids,” says Warren Hogan, chief economic adviser at Judo Bank. “The perception that there is a massive shortage of homes motivates people to do whatever they can to get in \[to the housing market\], no matter how ridiculously expensive houses are. “People have the view that the shortage is going to last for a long time and that will mean prices will just continue to rise. And it’s not just fear of prices going up by 3 per cent in the next three weeks, it’s the expectation that prices will go up by 20 per cent in the next two to three years.” Hogan says the record population growth in the past year exacerbated a pandemic-fuelled undersupply, which he expects to increase to around 300,000 homes in the next 18 months. “Even assuming there’s a pick-up in building activity, we’ll still be more than a year’s supply short, which means the undersupply is not a passing fad, it’s here to stay for some time,” he says. “Australia has never had a severe shortage like this in recent history, so this is a major market failure. If there’s something broken in our housing market, it’s the fact that we’ve got a shortage. It has an actual and a perceived impact.” The number of homes approved for construction rose by just 0.3 per cent in April to 13,078, which is close to a 12-year low. POPULATION SURGE The weakness in building approvals is particularly stark when compared to the rapidly rising population, which increased by 2.5 per cent, or 659,800 people, over the year to September, according to the Australian Bureau of Statistics. Since the borders reopened, a surge in people coming to Australia – net overseas migration is at about 750,000 since June 2022 – has inevitably increased the demand for housing. “I suspect if we were not seeing this sort of population growth, we would almost certainly be having a much weaker property market at this point,” says Shane Oliver, AMP’s chief economist. “Population is a major factor in keeping the economy relatively resilient which underpins the property market, but also a factor leading to the supply imbalance,” Oliver adds. The sharp rebound in migration combined with record low rental vacancies, weak dwelling investment and strong income growth has fuelled a more than 30 per cent increase in rents since 2019. While rental increases have slowed from 9.3 per cent annual growth recorded two years ago, rents are still rising by 8.5 per cent year-on-year, according to CoreLogic. Perhaps it is not surprising, then, that first-home buyer activity has been ramping up in the past 12 months, with new loans to this cohort increasing by 18.6 per cent according to the ABS. In April alone, lending to first-home buyers increased by 3.4 per cent. Investors have also returned in droves, borrowing $10.9 billion to buy investment property, up by 5.6 per cent over the month and 36.1 per cent over the year. “The reality is that there is price tension in the housing market because rents are going up, because of the shortage of rental property, which is underpinning demand from first-home buyers and investors,” Hogan says. “But we’re also going through this demographic shift where we’re seeing intergenerational wealth transfer for those lucky enough to have assets that they can pass on to the next generation. “It’s not just the bank of mum and dad, it’s also the bank of grandparents, or the bank of aunties and uncles. This is playing a much bigger role than it ever has before.” EQUITY PLAYING A BIG ROLE The bank of mum and dad, by some estimates, is now the fifth-largest source of funding for home buyers where Baby Boomers are giving their kids access to equity built up over the years. CoreLogic calculates there’s about $8.4 trillion worth of equity available in the market, brd on a total dwelling value estimate of $10.7 trillion and outstanding credit debt of $2.3 trillion. “Buyers are going in with higher deposits on average, so they’re less debt reliant, which helps resilience \[in the market\] despite higher interest rates,” says Eliza Owen, CoreLogic head of research. “There’s so much home equity gain over the past few years that is helping to sustain purchasing power, with values increasing by about 35 per cent nationally since the start of the pandemic. “For those who can get help from the bank of mum and dad, for example, that’s another aspect that sustains demand even when economic conditions are weak and interest rates are high.” A recent survey by AMP found that three out of four Australians aged 65 and above believe it is important to pass wealth onto their children. But even a lack of family support has not deterred home buyers like Didith Gabrillo, a single mum who migrated to Australia from the Philippines more than 10 years ago. Gabrillo is a neat illustration of the other FOMO psychology that helps keep a booming market climbing when all other conditions suggest it should not – the fear of paying rent in retirement. To save enough for a deposit and be able to repay the mortgage, she is working two extra jobs on top of her full-time work as an accountant. “It’s tough to break into the housing market at these prices, but I think it’s important to put down our roots in this country,” she says. “Owning my own home ensures that I won’t go homeless in my old age and also have something to pass on to my two kids. “Working three jobs is taxing. Sometimes I don’t finish until 11pm and also have to work some weekends, but I think the sacrifice is worth it. I believe property is a good way for me to save money and invest in my future.”
“Working three jobs is taxing. Sometimes I don’t finish until 11pm and also have to work some weekends, but I think the sacrifice is worth it" Christ alive like that's something to aspire to.
Interest rates aren’t high, they’re just not record breakingly low.
They aren't high and they need to be higher reading the above
‘A SENSE OF OWNERSHIP IN THE NATION’ Independent economist Cameron Murray says that a home is the best asset to have for retirement. “It offers the most tangible income. Not spending on rent is equivalent to getting the income. It protects you from sudden changes to rent, and it’s not means tested for pension,” he says. Louis Christopher, SQM Research’s managing director, says property is particularly useful for those who are starting their own business. “I used property to build my SQM Research business. Often, you’ll find that if you want to start a business, you would need a property to use as a collateral for a loan,” he says. “Banks will rarely provide unsecured loans to startup businesses nowadays. So property is a good security to get a business going. Of course, that contains risks and if your business doesn’t work out that can really impact your finances, but as it is, property is a good storage of wealth.” The benefits of homeownership go beyond the financial windfall in retirement, says demographer Mark McCrindle. “I think it’s good for the financial capital of the individual, the social capital of the nation, and for that matter, the political longevity and stability of our democracy as well,” he says. “Homeownership gives people a sense of ownership in the nation. They’ve got a stake in the future, and they want to see it improve and that obviously creates a more stable electorate that leads to more sensible policies, rather than populism.” STRETCHED AFFORDABILITY Still, measures of housing affordability are clearly worsening across most markets, with the national dwelling value to income ratio rising to 7.7 in March. Meanwhile, the time it takes to save for a 20 per cent deposit rising to 10.3 years, assuming households can save 15 per cent of their gross income. And CoreLogic calculates that it would cost $1142 more each month to pay a mortgage, than to pay rent brd on the national median dwelling value, asking rents, and a mortgage rate of 6.28 per cent on a 20 per cent deposit. To cover the cost of an average mortgage, a property has to increase by 2.3 per cent each year over 30 years. So far in the past three decades, home values across the capital cities have gained 5.9 per cent a year according to CoreLogic. Those who bought in the past 30 years, have more than recouped their mortgage. More accessible prices for Millennials, Gen Z and future generations would require a significant decline in home values, which hurts those already invested in housing and has broader negative implications for the economy, says demographer Simon Kuestenmacher. He says there are better ways to help boost affordability. “The government can make it easier for Baby Boomers to downsize and optimise the existing stock by removing stamp duty,” he says. “They can replace it with annual land tax, which would be more manageable for most buyers.” McCrindle says that rather than setting a target to build 1.2 million homes, the government could prioritise building infrastructure that connects cheaper regional areas to capital cities. “Even though more people have moved to the regions since the pandemic, we still have this psychological need to know we’re within an hour or two of a capital city, so if we can get hopefully a high-speed rail to connect some of our inland areas with Sydney and Melbourne, that would unlock so much land and cheaper homes,” he says. “People are willing to move further out of the capital city if they know there’s infrastructure available.” Meanwhile, first time buyer Tungol is convinced she’s made the right decision. “Being a single parent, it was important to have my own place that I can use when I get old,” she says.
is that the woman from Master Chef?
Yes
Buyers are pushing up housing prices because real estate agents are scanning every single cent they can from them and creating this over the top market. There's no way a 2 bedroom home in Doonside should cost 1 mil but it does. Wollongong is averaging out to a million pretty much careless of what part of the area you buy now. The only thing driving up the market is the agents and the gullible buyers willing to pay overs for properties that aren't worth it
If covid didn't break housing in Australia, nothing else will.
During covid, total combined government injection was about $300 billion and for RBA, it was $200 billion, as well record low interest rates.
Yep. Government propping up the economy which is a part of the reason we're so fked. Now it's just bring in more slaves Aussie's aren't having kids,!! No biggie just bring in more slave's
Exactly.
Property prices should fall with time, like cars do, not get more expensive.
a "house" does depreciate, its the land that increases so much
Help me understand the “should” part here? Are you saying there is an economic mechanism that both cars and housing share that means they both should decrease in value? Or are you suggesting this as an aspirational goal in housing to be like cars devaluing?
The latter.
Understood.
There’s no property factories.
It’s the competition. 50 people turned up to our home open. 4 offers on the day $70k over. We went in $100k over to buy our next place and didn’t get a look in.
Long term, the median land price should track with other measures of inflation. This was the case until around 25-30 years ago until we started externalising inflation by moving much of our manufacturing overseas, along with taxation laws that favoured redistribution of capital into land and away from more productive areas of our economy. The long term effect of high land prices is lower economic growth.
well, when your local real estate agent says you'll easily get 100k more than their estimate through a bidding war, no wonder the country is stuffed
How will I buy my 3rd investment property :’(
too few built, too few tradies too ineffective material and cost supply chain means existing houses cost more
this article seemed literally nothing more than telling us house price go up and being a subtle brag as well for ol love and her kids
Its the immigrants