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Housing Bubble thread.

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ironpo    2,764

I have a small house outskirts canberra 500 k

That's nearly the outskirts of Sydney these days

Cheers

IVP

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roxii    4,003

3 bed, 1 bath, 1 car "villa" in Mt Druitt (You know, Struggle Street) for $410 k.

$750 k + for a 2 bed fibro house in Revesby

The ones in Revesby are all being bought knocked down and made into duplexes. It's where I work so watch it happening almost daily.

 

Block of land at the new Cronulla estate is 2.5 mill if you want beach views.

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Flanman    1,097

I have just built a new house and moved in earlier this year. Mine is a retirement decision for 4 years time. I am 60 kms from Sydney in a great estate with the minimum size block being 700 sqm (they are up to 1400 sqm). We have access to pools, gym, tennis courts, trails, exercise equipment and security around the area.

 

Despite all this, I cannot fathom the price of some of the houses our way. A house 4 doors down sold for $1.1M and on the other side of the suburb, 1 sold for $1.4M. how the hell do you afford this or keep your investment value ?? They don't rent much in this suburb as you pay a levy for all the facilities.

 

We got in a bout 18 months ago (land) then locked in a price for the house. Not huge but well enough for us to live in. We owned our old house so haven't got much owing with the changeover.

 

I feel sorry for my kids, although my son bought into a duplex 5 years ago. At least he is in there.

 

FM

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Rocket Salad    1,059

Soon this thread will slip down the pages. I have a feeling it will bumped back up within 2 years with a lot of...."we seen it coming but did nothing"

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Parkside    731

One issue being that self funded retirees are getting stuff all return on their money through term deposits etc and are turning to real estate for better gains, further increasing demand.

 

Funny, I am helping my Mum with buying a property for this exact reason.

Edited by Parkside

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Parkside    731

What does a small house on the outskirts of Sydney cost these days? And by small, I mean 110sqm. You know, without the pool, aircon & European appliances, like our parents built on the outskirts of the city. It's just the outskirts are a lot further out now.

 

Would honestly like to know, but then does anybody build a small affordable home any more?

 

 

 

We are as south as you get without being in Wollongong. Median 3 Br House price in Engadine is $800,000 Prices rising every quarter. demand driven by people from out of the area. they have a choice of buying a 2 br unit in eastern suburbs or a 3 bedroom house near national park and train to city. Lots of boomers keen to cash in and downsize.

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Ex-Hasbeen    3,802

I suppose it's the price of land (supply/demand) that has led to the increase in house sizes over the years. People don't want to undercapitalise the house. In the 50's/60's, you built a 120sqm, 3 bedroom home with 1 bathroom and 1 car space for a family of 6. These days you build 350sqm, 5 bedrooms, 3 bathrooms & 3 car spaces, for a family of 3. You just never know who's going to buy your house after you get sick of cleaning it all.

 

At least if you were overseas, you could get someone in to clean it for you. :)

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Ex-Hasbeen    3,802

So, what did you put on your oversized city fringe block, EX? :)

I'm as bad as the rest, but it is only 4 bed, 2 bath & 2 car. :) And it's the 4th house we've had, not a first.

 

Though it is smaller than a lot of the houses there. Some of them are over 500sqm.

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Alex Simmons    518

I'm less concerned about market price fluctuations than I am about the stupidly high transactional costs involved in selling/buying. Those are some bad taxes and act as quite a disincentive to sell.

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TryTriB4Forty    640

Comparing the boom here with what happened in the UK (boom-to-bust), is that it seems lending is still under control in Australia. In the UK mortgages were being offered well above people's means, so people were buying dream house++. Interest rates changed, loads of defaulters, housing crash.

 

 

 

I certainly don't think that household debt in Australia is anywhere near under control. A lot of economists have commented that it is the level of personal debt in Australia that is a real threat to the economy in the medium term.

 

The government (particularly in the lead up to the election) where harping on about 'Australias debt' and the 'national credit card' - but realisitically government debt is well udner control - its private/household debt that is the potential problem..

 

Houshold debt is somehting like 140% of GDP .... I think most advanced countries are like 75%.... Australians have accumulated LOTS AND LOTS of personal debt, and a big part of that would be the loans requierd to get into the housing market in the capital cities.

 

This figure is a couple of years old, but you ge the picture:

 

 

Keen-Aust-debt-to-GDP1.png

 

 

Here is our personal debt against the rest of the advanced world:

 

Barclays2.JPG

 

Some reading:

 

 

http://www.smh.com.au/business/the-economy/australian-households-awash-with-debt-barclays-20150316-1lzyz4.html

 

 

https://au.finance.yahoo.com/news/australian-households-have-largest-debts-in-the-world-053528607.html

 

 

 

I know this is not exactly evidence, but anecdontally a lot of my friends will be in super hot water if there are any shocks that impact on their ability to pay their mortgage...

 

I'm in my late 30's and lots of friends have got into the housing market in the last couple of years. many of them have done so with teh assistance of big mortgages (just to get 'onto the ladder'). They are essentially maxed out. They were able to do this on the back of big pay packets in mining and infrastrcuture etc.

 

Problem is, they are currently in pretty much as good a situation as it gets - super low interest rates, strong economy and decent pay packets over the last few years.

 

Problem will come if:

 

  • Loss of income ... already seeing lots of job losses in resources so this is a possibility for some of them.
  • Interest rate rise - well, in the short term its prob not going anywhere but its not like it can get much lower really ... so eventually it will have to go up.
  • Some other economic shock? who knows.

 

It won't take much for lots of people to be in deep trouble (in my view) especially if they are mortgaged to the hilt just to get into the market....

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oldschool69    116

It is hard to fathom the prices these days.we had a house at the top of our street last week 4 bed reno fibro shitter done up go for just over $1.6m

I really worry about my kids getting a start when their older so hence ive just built a big house ,forward thinking they are going to be here for a while .

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TryTriB4Forty    640

So an hour after I posted my thoughts on Australias level of household debt this was published on SMH:

 

"RBA way of pushing up house prices, household debt"

 

http://www.smh.com.au/business/the-economy/rba-wary-of-pushing-up-property-prices-household-debt-20150610-ghkjrz.html

 

Interesting that the Abbott government have been prmoting household spending as a way of driving the economy (remember Hockeys comments about "not letting santa down" and "go out and spend" and "have a go" ...?)

 

However, the RBA are saying its the household budget that can least afford additional spending:

 

 

"....of all the three broad sectors – households, government and corporations – it is households that probably have the least scope to expand their balance sheets to drive spending"

 

 

Interesting now that the head of the Reserve Bank appears to be not just hinting, but coming out and saying that perhaps the government should do exactly what Rudd did and stimulate the economy (i assume this means using debt to pay for it?)

 

Comments such as:

 

"RBA governor Glenn Stevens told an Economic Society of Australia lunch that more infrastructure spending might go some way to addressing Australia's sub-trend growth rates."

 

and

 

"Mr Stevens suggested the Federal government could step in with a more ambitious long-term national infrastructure program, financed and managed jointly by the public and private sectors. This would address slack business demand outside mining while enhancing productivity and lifting business and consumer confidence, he said."

 

 

Although I'm pretty sure BOTP doesn't have anything to worry about - its not as though the Abbott government has listened to any type of expert advice or knowledge for any other decision, so I'm sure they are simply going to ignore this as well ...

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We live in a different world to you poor ole capital city folk.

 

$560K got a brand new MBA award winner with 4/2/2 on 1000m2 18mths ago (no debt needed). We rattle around in it, except on Uni hols when the girls come home, but 4/2/2 is good here for future saleability. I reckon it's lost value since we bought and will for a while (8 new housing estates being developed in a city of 25,000). Just aiming to get our money back in 10yrs, that'll do. They reckon the long-term growth on RE here is about 5.2%pa, so a bonus if we get that, in the meantime a nice relaxing and warm house to live in - the new building standards esp re insulation are amazing (need it here with -7 or worse mornings).

 

Agree with Alex, the transaction costs on property are ridiculous. As far as property for investment, better make sure you get good capital gain (which prob means capital cities are the only place worth looking) and even then, it is hard to beat a good industry super fund for set and forget ease and performance.

 

Don't get me started on real estate agents. Here, the collusion, game playing and BSing are a real eye opener - the funny thing being most of them aren't smart enough to remember the story they told you 3 weeks ago. The good news is they no longer have the monopoly on sale price info, with several websites now listing recent sales prices. We really put this to good use this time around.

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roxii    4,003

Doing some price comparisons I'm thinking about moving Transitions HQ to Noosa and escaping the cold.

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BarryBevan    592

Soon this thread will slip down the pages. I have a feeling it will bumped back up within 2 years with a lot of...."we seen it coming but did nothing"

will there be a massive adjustment of housing supply

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FatPom    2,217

Doing some price comparisons I'm thinking about moving Transitions HQ to Noosa and escaping the cold.

 

 

How are the lottery laws in Qld?

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ironpo    2,764

Doing some price comparisons I'm thinking about moving Transitions HQ to Noosa and escaping the cold.

Me too

Noosaville though

Just need to find another $1mil

Cheers

IVP

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ironpo    2,764

Block of land at the new Cronulla estate is 2.5 mill if you want beach views.

Best I get a better job

Lol

Cheers

Ivp

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Alex Simmons    518

One day I might move north, but still in NSW. Where do people like?

 

I like good hassle free cycling, variety of rides, good Internet, good local services. Don't like typical outer suburbia landscape/McMansion style homes.

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TryTriB4Forty    640

One day I might move north, but still in NSW. Where do people like?

 

I like good hassle free cycling, variety of rides, good Internet, good local services. Don't like typical outer suburbia landscape/McMansion style homes.

 

I actually reckon Port Macquarie would be a good place to live.

 

Big enough to have all the servies you want (big hospital, schools, jobs, etc).

 

Diverse enough to have a mix of housing types (units, acreage, McMansions...)

 

Busy enough to have some decent restaurants/cafes

 

Good outdoor lifestyle - decent riding and some nice runs/coastal walks - probably helped by having more cyclist/fit people getting around so people are used to seeing thema and infrastructure is improving.

 

That would be my pick - although I reckon in 20 years from now it will be so over-run with retirees you might go mad!

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