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Rocket Salad

Housing Bubble thread.

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59 minutes ago, Rocket Salad said:

What happens when he wants a family? 40k won't go far.

 

4 minutes ago, Merv said:

Not much when you have a drug habit and sex life to maintain.

Having the family will put paid to the 2nd vice.

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He doesn't have a house. So there goes 20k/yr of his 40k.

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When I'm home, I notice how expensive shit is there - whether it be petrol or peas.

 Is that 40k before or after tax?? Back when I was the 'new' Parliament House, I left mid 1989 on $39,000. How can people be on $40k, almost 30 years later,  and live??

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12 hours ago, Ex-Hasbeen said:

Having the family will put paid to the 2nd vice.

Doesn't seem to have affected our deputy PM

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Currently doing the weekly open home circuit and getting a bit tired of agents justifying prices of shitholes based on the suburb median price... 

Are medians the best indicator of values or what else should we be considering? Any comebacks for these greasy high school drop outs when they make such claims?

 

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Guy behind me thought he would DIY selling his house since there seems to be a bit of demand for our suburb and limited supply. 

Whacked it on the local Facebook page and got what he was after ($1.5 mil)  in under a week. And while he agrees an agent might have got him a bit more  it would have been lost in fees anyway. 

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It's 100% legal to sell your own house. 

He was smart if all he wanted was 1.5. But he could have got 1.8 with a good agent. 

I sold my last place. Knew what I wanted. Got it in 3 days. Wasn't greedy. Just wanted sold and move on. 

I have a qualified agent so knew a bit more than most. Saved 30k. Which is what I might have got extra with an agent. 

Id never suggest people auction their own house. 

Pin actual fact, if you are in no rush to sell, done auction. Put.a Price on and wait. 

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19 hours ago, pieman said:

Currently doing the weekly open home circuit and getting a bit tired of agents justifying prices of shitholes based on the suburb median price... 

Are medians the best indicator of values or what else should we be considering? Any comebacks for these greasy high school drop outs when they make such claims?

 

After 4 maybe 5 years of looking, I'm FKing glad it's now over for us. We knew the market and made an offer we were confident in. 

We might have paid $8k more than we needed to, but over the period of the loan & the fact we now have our weekends back & no longer spend hours trolling the net is worth the money. I made about $8k selling all my Ironman gear off so I'm happy. 

When it came to our place we had a price range of offers between $379 & $399k. First offer we got an offer of $387 with out conditions & a $10k deposit paid the next day.  We took it a said thank you very much. 

Could we have got $399 I doubt it, we might have got $390ish if we waited. That would have meant more open inspection more worrying and more mortgage payments on house we won't be living in. 

I look a it this way $8k too much for the new house, $5k less on our place. Real Estate agent fees $10k = $22k 

$22k (+extra mortgage of course) we have got a new house that both my wife & I love, in an area we wanted. It ticks all the boxes for us, it suits our life style, closer to the city, public transport. There is only three of us so we got a smaller place. No swimming pool to run & solar panels etc. I will also be able to walk to work.  The money we save not pay $1300 electricity bills & driving to in from work. 

It was a no brainer. 

I also hated the snotty nose Real Estate agents & probably missed out on a few houses because I let my ego get the better of me. 

We also spent a lot of time trying to find an agent to sell this house. The worse guy came in to do an evaluation on our house. Seen all my bikes in the lounge room & started going off about cyclist not paying rego & using the roads....... Then he got upset when I asked him to leave. 

 

 

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I watched The Big Short last night. It was a bit hard to follow because I was drunk and maybe because I'm a bit dumb.

Anyway since it's a slow news day here is today's doom and gloom story on the housing bubble.

http://www.news.com.au/finance/economy/australian-economy/ten-myths-making-australians-complacent-about-looming-economic-armageddon/news-story/af3d79eda0006e0f7005295a3103ec87

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3 hours ago, Rocket Salad said:

I watched The Big Short last night. It was a bit hard to follow because I was drunk and maybe because I'm a bit dumb.

Anyway since it's a slow news day here is today's doom and gloom story on the housing bubble.

http://www.news.com.au/finance/economy/australian-economy/ten-myths-making-australians-complacent-about-looming-economic-armageddon/news-story/af3d79eda0006e0f7005295a3103ec87

The book is better and scarily easier to understand.  

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I'm not so sure about the Qld bubble. I sold my joint for 8XX 4 years ago in Red Hill. Checking the market, prices are 680-880 and a bunch of auctions. Mine was  a 3 and 2 with 2 LUG on 10.5 perches. It's about the same now. Flat is a better descriptor.

 

I have a few agents that I get offers from still and places like West end are getting 25% discounts on release as unsold .

 

It's not so much a bubble but an oversupply I'm certain areas. Everything else is pretty ordinary. Considering interest, a cash account would see you with more money.

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It’s been 11 months I think since we sold our joint and it just sold again last week ( getting divorced) is the word on the street.

any way almost 200k less I’ve been told definitely slowed a bit wouldn’t say burst though 

another 10 years probably be worth 800 more 😂😂

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I asked it years ago. What do people consider the bubble burst?

75% drop?

50% drop?

10% drop?

for me a bubble bursting is 50? Drop in prices. 

At the moment it’s not even 5%. It’s called a correction. 

What I am finding more interesting is the lack of people in cafes and restaurants compared to what it used to be. Places that were always busy or packed are now 50% empty. No reservations needed anymore. Etc...  

people are certainly overcommitted financially and are saving cash 

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18 minutes ago, Peter said:

What I am finding more interesting is the lack of people in cafes and restaurants compared to what it used to be. Places that were always busy or packed are now 50% empty. No reservations needed anymore. Etc...  

people are certainly overcommitted financially and are saving cash

Just wait till interest rates go up. They'll be spruiking outside the cafes just to sell coffee. The avocado industry will collapse.

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On 29/05/2018 at 3:42 AM, Mike Honcho said:

I'm not so sure about the Qld bubble. I sold my joint for 8XX 4 years ago in Red Hill. Checking the market, prices are 680-880 and a bunch of auctions. Mine was  a 3 and 2 with 2 LUG on 10.5 perches. It's about the same now. Flat is a better descriptor.

 

I have a few agents that I get offers from still and places like West end are getting 25% discounts on release as unsold .

 

It's not so much a bubble but an oversupply I'm certain areas. Everything else is pretty ordinary. Considering interest, a cash account would see you with more money.

Brisbane has definitely been flat and so it needed to be after the crazy price increases previously. (you didnt mention when you bought yours or what for?). Brisbane prices are flat or small increases but Sydney has fallen for the first time in ages but still nowhere near bubble as Peter says..

As you mentioned, unit oversupply in Brisbane is a massive issue and developers will be struggling to make much on them as there is so much choice there. I wouldnt want to have an older unit that I was wanting to sell as you can buy new for a similar price (plus get first home owners grants if you are a virgin buyer)

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Id be happy for Sydney to fall a bit more. 

Where we would like to be is currently about $3-400 k difference in value from where we are, so if it all slides back a bit proportionately that difference should close and it may be more achievable.  

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11 minutes ago, roxii said:

Id be happy for Sydney to fall a bit more. 

Where we would like to be is currently about $3-400 k difference in value from where we are, so if it all slides back a bit proportionately that difference should close and it may be more achievable.  

Were'nt you trying to convince the family to move to Qld a while back?

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20 minutes ago, KieranR said:

Were'nt you trying to convince the family to move to Qld a while back?

Yeah, about that. 

Appatently if I go I will only need a studio apartment. 😮

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27 minutes ago, Rocket Salad said:

Stop believing the newspapers. Do your wn research. 

And answer my question. What percent do you believe said the bubble has burst?

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If you think it’s 5% then you are finally right after 4 years. The bubble has burst. 

If you think 50% then you’ll be waiting a long time. 

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On 30/05/2018 at 7:38 AM, Ex-Hasbeen said:

 The avocado industry will collapse.

And here I am about to plant half an acre of avocados this Spring, will have to settle with the 25% increase in prices in our area since we bought 8 months ago (at least in large land blocks with houses established).  Loving all the talk of Melbourne's second airport going in half an hour away, keep it going.

Not sure oversupply is such a thing, houses are going up, going for sale and selling pretty quick here with lots of them accepting a commute back to Cranbourne or Dandenong.  Plenty of people screaming out for rentals that just don't exist.  

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Sick of our kids getting dicked around in rental properties in Sydney (the eldest just moved into a new share place in July. At interview she asked the leaseholders did they intend to stay there for a while as she did not want to move again soon.  They said they were renewing the lease in Jan 2019, so she moved in.  Last night 2 of them - the 2 ****en 2 lawyers of course - said they are moving out in 3 weeks and had been planning to move since March the lying @#$%s).  She is pretty upset as is the 4th tenant who is the other leaseholder (thankfully our eldest is not on the lease).

Anyhow, we are pondering buying a property with our kids (2 bed 1 bath apt $600K or less), we'd put down the deposit (say $100K), they take out the loan, we pay a little of the loan to help them out, one lives there and pays half the remainder of the loan, the other room is rented & our other girl gets the rent money to help pay her half remainder of the loan.

So we'd have maybe 30% equity in it and they'd each have 35% equity.  Eventually of course they get it all when we cash in our chips

Things to ponder:

As first home buyers they'd get the stamp duty exemption yes?

As first home buyers they'd get the $10K first homebuyer grant yes?

Prices are dropping so maybe just wait a bit and learn about the market before jumping?

Any other pitfalls I'm missing?

 

 

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1 hour ago, ComfortablyNumb said:

Prices are dropping so maybe just wait a bit and learn about the market before jumping?

Any other pitfalls I'm missing?

My call would be to wait. There are plenty of people out there who have seriously overextended themselves on their credit and if people are suffering from "mortgage stress" now then imagine what it'll be like if interest rates go up another percent or 2 and house prices drop another 5%.  It will become a buyers market.

Was recently looking into getting another investment property but had to bail out at the last minute due to getting my finance denied (being made redundant tends to make financial institutions reluctant to lend out money :( ).  In the end it seems that was a good thing because the same property is now on the market at $30K less. 

AJ

Edited by -- AJ --

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1 hour ago, ComfortablyNumb said:

Sick of our kids getting dicked around in rental properties in Sydney (the eldest just moved into a new share place in July. At interview she asked the leaseholders did they intend to stay there for a while as she did not want to move again soon.  They said they were renewing the lease in Jan 2019, so she moved in.  Last night 2 of them - the 2 ****en 2 lawyers of course - said they are moving out in 3 weeks and had been planning to move since March the lying @#$%s).  She is pretty upset as is the 4th tenant who is the other leaseholder (thankfully our eldest is not on the lease).

Anyhow, we are pondering buying a property with our kids (2 bed 1 bath apt $600K or less), we'd put down the deposit (say $100K), they take out the loan, we pay a little of the loan to help them out, one lives there and pays half the remainder of the loan, the other room is rented & our other girl gets the rent money to help pay her half remainder of the loan.

So we'd have maybe 30% equity in it and they'd each have 35% equity.  Eventually of course they get it all when we cash in our chips

Things to ponder:

As first home buyers they'd get the stamp duty exemption yes?

As first home buyers they'd get the $10K first homebuyer grant yes?

Prices are dropping so maybe just wait a bit and learn about the market before jumping?

Any other pitfalls I'm missing?

 

 

If it's the same as Queensland then they'd only get 50% share of the fhog and the concession because the daughter using it as a rental wouldn't qualify..

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1 hour ago, -- AJ -- said:

My call would be to wait. There are plenty of people out there who have seriously overextended themselves on their credit and if people are suffering from "mortgage stress" now then imagine what it'll be like if interest rates go up another percent or 2 and house prices drop another 5%.  It will become a buyers market.

Was recently looking into getting another investment property but had to bail out at the last minute due to getting my finance denied (being made redundant tends to make financial institutions reluctant to lend out money :( ).  In the end it seems that was a good thing because the same property is now on the market at $30K less. 

AJ

Cheers AJ

1 hour ago, pieman said:

If it's the same as Queensland then they'd only get 50% share of the fhog and the concession because the daughter using it as a rental wouldn't qualify..

Good point, I think you are right on that one.  Hopefully she still gets the stamp duty exemption as that is the bigger saving.

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Lots more mortgage stress to come .... during the good times, people blow cash like it's going out of fashion and extend on mortgages, cards and generally living beyond their means. Australia has one of the highest rates of personal indebtedness on the planet and this will come home to roost very soon.

There will be a significant correction in this in the next 6 - 12 months.

Also, and I agree with his point on this, ScoMo's talk about not abolishing negative gearing is a smart move (sadly for those trying to buy their first property) as so many of the Super / Investment funds have invested in negatively geared property that the abolition of NG would cause a flood of properties onto the market, a subsequent crash in value and also impact Super / Investment funds.

Damned if they do, damned if they don't!

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16 hours ago, Rimmer said:

 Australia has one of the highest rates of personal indebtedness on the planet and this will come home to roost very soon.

Debt free :D...unlike our poor kids who have HECS debts.

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6 minutes ago, ComfortablyNumb said:

Debt free :D...unlike our poor kids who have HECS debts.

Me too but the Mrs is booking a holiday that may change all that. :sadwalk:

In the end everyone that predicts a housing bubble crash will be right.............................................eventually. 

 

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well this is depressing,  we've just bought a house :lol:

We were looking for a while, thought we had one back in early June but the survey report wasn't good at all and there had been major works done with no certs, so we walked away after trying to negotiate the problems.

Almost went for a rental again to be close to Flipper's school. In the end Mrs FP said she could deal with a longer school run, so we went for a place in one of the little surrounding villages about 2 miles out of town and have 3 bed with a garage and double driveway for £90k less than we would have a got a little dog box with no parking. closer to the school (which is closer to the station for London commuters also).

The best thing is the minimal mortgage we will need.  I could move some stuff around and reduce the mortgage significantly now but if Brexit ends up in a no deal, the sinking pound and exchange rate might blow that advantage away. If push came to shove I can all but pay it out if need be.

Grand plan is to pay off in 4yrs, then if we return to Oz,  we can rent it out without needing to re-mortgage from overseas, which is a nightmare for expats.

We made one offer, based on our ability to move fast (pre approved and no chain and the seller has no chain). R/E asked us to up our offer or we would lose the house. We said no, our offer stands, take it or leave it.

They took it. 😎 Houses in my area are not dropping in price but are not really selling either but there is also a lack of stock in the sub £600k market.

I think folks here are just hanging on to what they have until Brexit shakes out.

Edited by FatPom
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I just bought a townhouse tonight. 

720k. 

Renting for $650. 

Positive geared. 

The market will stall for 18 months and then take off. There has been no crash in Melbourne. Just a stall. 

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5 minutes ago, Cottoneyes said:

What's this 'if' crap?

I agree totally.  As I've said before, I do not regret coming but I do think we've stayed too long. Should have returned before Flipper started school and before the £ collapse. However, we are where we are and now the priority is setting up a home of our own and paying that sucker off.

Absolute drop dead return date for me is before she starts high school but many more years and my ability to earn good money will be diminishing. need to shore up assets here and there.

Need to start slamming pension hard now as well. the longer I'm here, the more I feel the need to return but needs to be done in a methodical way (hopefully with a transfer).

We like our life here but I can't imagine it's where we will grow old(er).

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On 20/09/2018 at 2:30 PM, Merv said:

RS would be knocking the top off one over this

Ya recon?

I've got a Noosa mortgage and a mc job. If things go South I'll hurt.

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On 20/09/2018 at 6:13 PM, FatPom said:

well this is depressing,  we've just bought a house :lol:

We were looking for a while, thought we had one back in early June but the survey report wasn't good at all and there had been major works done with no certs, so we walked away after trying to negotiate the problems.

Almost went for a rental again to be close to Flipper's school. In the end Mrs FP said she could deal with a longer school run, so we went for a place in one of the little surrounding villages about 2 miles out of town and have 3 bed with a garage and double driveway for £90k less than we would have a got a little dog box with no parking. closer to the school (which is closer to the station for London commuters also).

The best thing is the minimal mortgage we will need.  I could move some stuff around and reduce the mortgage significantly now but if Brexit ends up in a no deal, the sinking pound and exchange rate might blow that advantage away. If push came to shove I can all but pay it out if need be.

Grand plan is to pay off in 4yrs, then if we return to Oz,  we can rent it out without needing to re-mortgage from overseas, which is a nightmare for expats.

We made one offer, based on our ability to move fast (pre approved and no chain and the seller has no chain). R/E asked us to up our offer or we would lose the house. We said no, our offer stands, take it or leave it.

They took it. 😎 Houses in my area are not dropping in price but are not really selling either but there is also a lack of stock in the sub £600k market.

I think folks here are just hanging on to what they have until Brexit shakes out.

Do you pay stamp duty in Pommy-land Ian?

We nearly bought there is the early 90's, could have got a small house (probs 2 bed) for £54K if I recall.

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Oh, daughters rental crisis and my need to buy in Syd temporarily averted.  The lawyers have gone, but replaced themselves with a journo and a nurse, hand our daughters rent drops $20/week....cos the lawyers had been bending them over....who'd have thought it eh?

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5 minutes ago, ComfortablyNumb said:

Oh, daughters rental crisis and my need to buy in Syd temporarily averted.  The lawyers have gone, but replaced themselves with a journo and a nurse, hand our daughters rent drops $20/week....cos the lawyers had been bending them over....who'd have thought it eh?

Thats good news CN

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4 hours ago, Surfer said:

Thats good news CN

Yeah, she gets paid a pittance in the publishing industry, so an extra $20/week is a big deal to her.  And her current location in North Sydney is very easy & cheap for getting to work.

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6 hours ago, ComfortablyNumb said:

Do you pay stamp duty in Pommy-land Ian?

We nearly bought there is the early 90's, could have got a small house (probs 2 bed) for £54K if I recall.

Yeah we pay stamp duty ( 50% discount for first time buyers) I think it kicks in after £300k.

We don’t pay the lender’s insurance for deposits under 20% like you do in Oz, however, good luck getting a mortgage if you have less than 20%!

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6 hours ago, ComfortablyNumb said:

Do you pay stamp duty in Pommy-land Ian?

We nearly bought there is the early 90's, could have got a small house (probs 2 bed) for £54K if I recall.

In terms of R/E, saying a £54k house in the UK is like saying ‘ I can buy a big house cheaply in Oz’ without considering where/how you will earn an income and how much that income will be.

There are massive differences between cities and a huge north/south divide. Most Aussies equate London with the whole of the UK but the differences are huge. For example, I live in Winchester which outside of London/Sandbanks and Beaconsfield is the most expensive city in the UK but I work in Newbury, 50kmscaway, where my house would be at £90k less.

Even closer to Winchester is Basingstoke, which is bigger, has more jobs, closer to London on train and the equivalent house price would be close to 40% less.

UK is is small but very complex when it comes to this stuff.

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10 minutes ago, FatPom said:

In terms of R/E, saying a £54k house in the UK is like saying ‘ I can buy a big house cheaply in Oz’ without considering where/how you will earn an income and how much that income will be.

There are massive differences between cities and a huge north/south divide. Most Aussies equate London with the whole of the UK but the differences are huge. For example, I live in Winchester which outside of London/Sandbanks and Beaconsfield is the most expensive city in the UK but I work in Newbury, 50kmscaway, where my house would be at £90k less.

Even closer to Winchester is Basingstoke, which is bigger, has more jobs, closer to London on train and the equivalent house price would be close to 40% less.

UK is is small but very complex when it comes to this stuff.

Harpenden, up near St Albans was where we were going to buy.

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