... if you want to afford a house.
www.news.com.au/finance/business/house-prices-still-booming-led-by-sydney/news-story/a229d4b0c785a7cc7ddc51c89226dfef
I mean seriously avg Sydney property price is up $118,000 this year to $812,000.
Even if they halved in value they'd still be 100% too expensive.
Yet you're pay is probably down.
www.payscale.com/research/AU/Location=Sydney-New-South-Wales/Salary
i think its good.
it will get australians looking elsewhere other than the stale old bricks n mortar for investment.
also keep in mind the value of the housing market on the tail end of a boom can tend to recede in value.
Contact petermac33.
He's confidently predicted 27 of the last two property slumps so he will be able to tell you when the next one is due. 
Or if you're in a rush, I can do it for you.
The standard prediction is, is we are in for a huge slump in everything, starting in October,. Property, share market,.. blood in the streets, people jumping out of windows, etc etc.
He will actually be right one day, but who knows when.
Certainly not macpweet33. 
(Oh I'm sorry macpweet,.. Dont be sad, we still all love you. 
)
I hate to agree with PMac, but it has to stop somewhere. Who can afford these types of prices?
I think everyone thinks that it will just keep going, but I don't understand how that can happen unless everyone keeps ignoring reality.
A median price of over $800k is crazy! Plus, it really doesn't benefit the homeowner because they can never get the value out of this as they still need to buy another house if they sell theirs. Something is seriously wrong with this property market.
Are the dollars coming in from overseas or is it local people getting crazy 'investing'?
Select to expand quoteFormulaNova said..
I hate to agree with PMac, but it has to stop somewhere. Who can afford these types of prices?
I think everyone thinks that it will just keep going, but I don't understand how that can happen unless everyone keeps ignoring reality.
A median price of over $800k is crazy! Plus, it really doesn't benefit the homeowner because they can never get the value out of this as they still need to buy another house if they sell theirs. Something is seriously wrong with this property market.
Are the dollars coming in from overseas or is it local people getting crazy 'investing'?
i can't believe people still think property doesnt lose value but they do *face palm
Select to expand quotesaltiest1 said..FormulaNova said..
I hate to agree with PMac, but it has to stop somewhere. Who can afford these types of prices?
I think everyone thinks that it will just keep going, but I don't understand how that can happen unless everyone keeps ignoring reality.
A median price of over $800k is crazy! Plus, it really doesn't benefit the homeowner because they can never get the value out of this as they still need to buy another house if they sell theirs. Something is seriously wrong with this property market.
Are the dollars coming in from overseas or is it local people getting crazy 'investing'?
i can't believe people still think property doesnt lose value but they do *face palm
Edit: I just re-read what you said, and I agree.
I don't know what sums people do to work out what they can buy, but I think there is an element of 'get rich quick' thoughts involved.
There are stories of self managed super funds going broke because they borrow more than the property is worth based on the rental returns, and the people that own the fund can't contribute enough to offset the losses. So the fund goes bankrupt and takes the initial super contributions with it too.
So, how long do you think property values can get going up and still be justified?
Tonight on the ABC news Alan Khohler reported that it costs the tax payer around $4 billion a year to pay for negative gearing. However it has a payoff of around $200 billion of increased property prices according to Credit Swiss. Alan said that wasn't a bad return on investment.
Yeah Australia is an expensive place to live. Its not just property prices. The main reason its expensive is the utility prices. When we first moved to Sydney our water bill was about $110 a quarter. Seven years later its $170 a quarter. Is our water suddenly sparkling and the sewerage sweet smelling? I checked out some old electricity bills from 10 years ago. Electricity was 12 cents a kilowatt hour. Today they are over 25 cents a kilowatt hour. Has coal suddenly become more expensive? When we first moved to Sydney our council rates were $800 a year. Now they are over $1200 a year. Does the council suddenly provide better service?
Its pretty clear the government and their companies are trying to wring out every single dollar out of the citizen/consumer, they can get. Its a real rip off when the same authority, the government, is the same authority who decides whether price rises are warranted.
If we keep going down this track of taxation by another name it will get to the point that the people will demand a levelling of charges otherwise there will be demands for reform and competition. On the other hand its pretty clear improved technology will allow people to side step and avoid the rip offs that make Australia one of the most expensive places to live in the world. Australians are dying due to the rip offs happening here.
Moby, how did they justify the increased property prices as a benefit? It only really helps if you are selling to someone else and don't need to live in the house. All good and well if we are selling up to another country and moving elsewhere, but in reality it just pushes up the cost of labour here, as everyone needs to pay silly number mortgages or rent.
Rates are an interesting thing. The councils argue for an increase in the % they can charge PLUS they get a natural increase from the valuations going up. So they are getting two bites of the cherry. What difference does the rise in value of a house make to someone if they don't plan to sell it and want to live there? They get to pay for a perceived increase in value that they may never capitalise.
Sydney Water must be interesting. They were paying for some interesting bills that came from people subject to ICAC hearings, so you wonder what other waste exists in there.
The increases in power prices appear to be a way of driving up the value of electricity assets so that they can be sold off as they are perceived as higher value.
I think it's totally insane... that median includes places you'd never want to go let alone live. Around where I live and it ain't nice the avg is $1,246,000.
You could sell up, retire, buy a viable business and kite/windsurf everyday.
Stupid doom sayers, gold and silver have done diddly... without a doubt real estate and stocks have been the best investment vehicles in the past 5 years.
Australia is a rip off... I was in Switzerland recently and fruit and veg (excellent btw) was cheaper than here, and the Swiss get paid a lot more... real estate is 1/2 the price... but going out for dinner's pretty expensive, and parking.
www.payscale.com/research/CH/Country=Switzerland/Salary
www.payscale.com/research/AU/Country=Australia/Salary
Farken Govt wankers and baby boomers treating property like it is a way to get rich.
Cannot believe there is BIG tax advantages to having an investment property. Why not on investment shares or investing in a company, or investing in silver? All it has done is fk it up for the average Joe.
Even worse the know-all finance advice and real estate pricks who say "just buy anything to get in the market and you will make some $$$ and show a repayment history over a few years and then you can sell it and borrow for a house."
All that did was lose me $100K (plus) over 6yrs cos I bought at the peak - and now I can't sell it.
Told recently by a dude on a surf trip to South Africa they got a meal for 4 ppl - with drinks - at a decent joint for $40AUD.
Beachside houses near epic spots - and not remote, and not small houses - for $200K.
We are being taken for a ride, it is disgusting that the luckiest most resource rich awesome country is making it harder and harder for the middle class to exist.
More than anything else the prices can be attributed to a deep seeded Australian desire to own your own home.
more people in the market
more willing to sacrifice luxuries to own their own home means prices increase
its not unaffordable because people are paying these prices and theses are averages.
^^ it is unaffordable when the percentage of income required to purchase an average house goes up every year. The percentage required has doubled since our parents' time.
The oldies say we can't afford it cos we have to have a big house and 2 cars and a home cinema with flash AV gear and blah blah. Rubbish. Houses are simply a damn sight harder to buy now. Most of the damage in the last 10yrs due to a mining boom that benefits a very small minority of the population.
WA problem - the population of WA increases every 48 hrs the same as the population of Tasmania does in a YEAR. Largely caused by mining boom. Add that to Govt tax breaks etc and you can see why normal ppl like me can't get a house 
Select to expand quoteMobydisc said..
The main reason its expensive is the utility prices.
You better rethink that one.
Seven years later its $170 a quarter for water When we first moved to Sydney our council rates were $800 a year. Now they are over $1200 a year.
Its pretty clear the government and their companies are trying to wring out every single dollar out of the citizen/consumer, they can get. Its a real rip off when the same authority, the government, is the same authority who decides whether price rises are warranted.
Currently in Bundaberg where the median house price is $280,000, I am paying over $3,000 per annum in council rates which includes water, sewerage, fire levy and garbage collection.
You are in Sydney with a median house price of $800,000 and paying $1,880 per annum for rates, water and sewerage. Think your self lucky.
^^^ Avg house here about $250k, rates about $1500! If the house was worth $800k I'd be happy to pay that.
Select to expand quoteMark _australia said..
Farken Govt wankers and baby boomers treating property like it is a way to get rich.
Cannot believe there is BIG tax advantages to having an investment property. Why not on investment shares or investing in a company, or investing in silver? All it has done is fk it up for the average Joe.
negative gearing is there for shares as well. its just not as well known. Biggest hassle is that margin calls can really bite hard although the same can apply to property, especially when more than 1 property is financed by the same bank (cros-collateraliised).
Fuelled by greed and we all know 'greed is good' !!!
as the population grows from births and imports a need will be there to rent.
buy a caravan and go bush, iv been cruising around on the road lately and iv seen a few Mobil homes
with the tradesman trailer on the back.
Ready to live and work anywhere on the cheap.
no kidding a talked to a guy who is looking at buying a house in a remote town for $20,000.
He mentioned a few others too, wow so they are a bit rough and about 700 Km's from the sea.
the rates where he lives now is $347!!!
We joked that the council did't want any complaints so kept it down at the point of hey what do you expect For that much?
Crunch time one will come one day when the boomers buy a caravan and go nomad.
I know rates in Sydney are low compared to rates in rural and regional areas. I bought my first house in 1994 for $90K. The rates on this place was about $1500 a year. This was in regional Australia. I have a house on the Central Coast of NSW and its probably worth 3/4 of my flat in Sydney but council rates are half more expensive. What I am saying is prices like council rates increase faster than incomes rise and is unsustainable.
Formula, its about a return on investment. Alan Kohler was just commenting that it costs around $4 billion a year for negative gearing. However it has a return of over $200 billion. He wasn't saying that is good or bad because it all depends on whether one has multiple properties or not. In any case the place I bought a few years ago with the plan of negative gearing is now positively geared because of rising rents and lower interest rates. I'd imagine there would be tens of thousands of investment properties in similar situations.
Select to expand quoteMobydisc said..
I know rates in Sydney are low compared to rates in rural and regional areas. I bought my first house in 1994 for $90K. The rates on this place was about $1500 a year. This was in regional Australia. I have a house on the Central Coast of NSW and its probably worth 3/4 of my flat in Sydney but council rates are half more expensive. What I am saying is prices like council rates increase faster than incomes rise and is unsustainable.
Formula, its about a return on investment. Alan Kohler was just commenting that it costs around $4 billion a year for negative gearing. However it has a return of over $200 billion. He wasn't saying that is good or bad because it all depends on whether one has multiple properties or not. In any case the place I bought a few years ago with the plan of negative gearing is now positively geared because of rising rents and lower interest rates. I'd imagine there would be tens of thousands of investment properties in similar situations.
Moby, you have mentioned your example of a positively geared place before. Is this the place where you built a flat as part of the house and rented that out too? If so, this is an unusual situation. I am skeptical when people 'find' a positively geared place, even after a few years.
I think the number of places bought in the last few years that are positively geared are few and far between. Prices are just too high and rents don't go anywhere enough to pay the mortgage and the other costs.
Select to expand quotecisco said..Mobydisc said..
The main reason its expensive is the utility prices.
You better rethink that one.
Seven years later its $170 a quarter for water When we first moved to Sydney our council rates were $800 a year. Now they are over $1200 a year.
Its pretty clear the government and their companies are trying to wring out every single dollar out of the citizen/consumer, they can get. Its a real rip off when the same authority, the government, is the same authority who decides whether price rises are warranted.
Currently in Bundaberg where the median house price is $280,000, I am paying over $3,000 per annum in council rates which includes water, sewerage, fire levy and garbage collection.
You are in Sydney with a median house price of $800,000 and paying $1,880 per annum for rates, water and sewerage. Think your self lucky.
Why are you guys quoting the 'average' or median prices instead of what your house is worth when quoting the cost for rates and water. It makes no sense.
Rates are not set on the average.
Select to expand quoteSailhack said..
^^^ Avg house here about $250k, rates about $1500! If the house was worth $800k I'd be happy to pay that.
In the part of Sydney I live in, rates of $1500 a year will be for a house of about $600k value, not $800k. I am not looking forward to seeing the next valuation and rates notice where the value has gone up because of (a handful of) crazy people paying crazy prices.
Happy to pay? No way, are you people nuts? Services or the quality of services have not gone up, only the perceived value of the house, and this means nothing at all unless I can sell it and go live somewhere cheaper.
Should you be paying more because your house has increased in value or because the local council is doing a better job? Here, they have been campaigning for rate increases while at the same time property values, and thus ratable values, have been going up anyway.
We all know that being given money for nothing does not promote efficiency.
Been on the piss since 6pm yesterday and I can still agree with formula on this one and I am struggling to see the screen. You makey no sense Lofty.
Housing market is stupid. I brought a house 10 years ago for 135k 4bed, 2 bath, pool, rumpus in center of springwood QLD , slapped some paint on a few walls changed a double sliding mirrored closet to a door to the en-suit and made 90k in 12 months. That same house is now for sale for 473k. They tiled the pool and repainted the roof. I thought housing over super back then, not any more...
Agree Australia is an overpriced oblivious Country with monkeys running the place only we pay the monkeys instead of feeding them peanuts, which the majority deserve.
Select to expand quoteFormulaNova said..
Moby, you have mentioned your example of a positively geared place before. Is this the place where you built a flat as part of the house and rented that out too? If so, this is an unusual situation. I am skeptical when people 'find' a positively geared place, even after a few years.
I think the number of places bought in the last few years that are positively geared are few and far between. Prices are just too high and rents don't go anywhere enough to pay the mortgage and the other costs.
Yes its the place where we renovated a flat underneath. I'm not sure if its that unusual. If we rented out the flat we lived in now, it would be positively geared. Mortgage interest rates are really low now with something like 5 years fixed at less than 5%. Rents are still high but perhaps they have dropped off a bit from a couple of years ago.
Select to expand quoteyoungbull said..
Been on the piss since 6pm yesterday and I can still agree with formula on this one and I am struggling to see the screen. You makey no sense Lofty.
Housing market is stupid. I brought a house 10 years ago for 135k 4bed, 2 bath, pool, rumpus in center of springwood QLD , slapped some paint on a few walls changed a double sliding mirrored closet to a door to the en-suit and made 90k in 12 months. That same house is now for sale for 473k. They tiled the pool and repainted the roof. I thought housing over super back then, not any more...
Agree Australia is an overpriced oblivious Country with monkeys running the place only we pay the monkeys instead of feeding them peanuts, which the majority deserve.
Quite eloquent given your current situation
Select to expand quoteMobydisc said..FormulaNova said..
Moby, you have mentioned your example of a positively geared place before. Is this the place where you built a flat as part of the house and rented that out too? If so, this is an unusual situation. I am skeptical when people 'find' a positively geared place, even after a few years.
I think the number of places bought in the last few years that are positively geared are few and far between. Prices are just too high and rents don't go anywhere enough to pay the mortgage and the other costs.
Yes its the place where we renovated a flat underneath. I'm not sure if its that unusual. If we rented out the flat we lived in now, it would be positively geared. Mortgage interest rates are really low now with something like 5 years fixed at less than 5%. Rents are still high but perhaps they have dropped off a bit from a couple of years ago.
I think the place with a flat underneath is not typical. Its one of those things where if places were positively geared, people wouldn't be selling them. I think your examples are not normal.
I have a friend that thinks 'property' is wonderful and always sees the positives and never the negatives. I think its a good long term investment, but not a get rich quick scheme. He sees the rent but ignores the other costs, and never gets a true picture of what it may cost.
As an example, I bought a place about 8 years ago, and only now is the rent getting to the point where it is close to the mortgage costs, as you say because interest rates are low. When you add in rates, water, and land tax, it is still running at a loss. I remember when interest rates were higher, and they were only 2% higher, yet the mortgage was way more than the rent the house can get.
Inflation is starting to creep into the market. It will be interesting when interest rates start to rise.
Just got back from the UK.
Everything there except fuel was cheaper... I bought 3 18x440ml cartons of Stella from a supermarket for the equivalent of $38!
THREE CARTONS!!! I can't buy a carton of any beer for that here.
Select to expand quoterod_bunny said..
Just got back from the UK.
Everything there except fuel was cheaper... I bought 3 18x440ml cartons of Stella from a supermarket for the equivalent of $38!
THREE CARTONS!!! I can't buy a carton of any beer for that here.
Is Aldi in WA? They sell some pretty ordinary Vietnamese beer for about $22 a carton. Full strength in slightly smaller cans, 345ml I think. Though its full strength it doesn't have much of a taste and I would not buy it again. Aldi sells some NZ beer for around $30 a carton. Its a bit better.
Yeah somehow Australia has turned into an expensive country to live in. There are a whole bunch of factors. Too much regulation. Too many taxes. Too many people in jobs that are essentially not productive but adding to the cost of everything. The excuse is usually Australia is too far away and the market is too small. However most sellers will sell something at the best price possible. So if people are willing to pay $45 for a carton of beer then that's what it will sell for.
In regards to real estate investment. I personally think its a really big risk to buy real estate, especially in today's market. Who knows what will happen in the future? I don't think anyone really does and there are some real risks that could put a lot of people out of work. These risks are already in play, witness the news Telstra will have more of it technical work done in Pakistan and India. That puts out of work a lot of people who probably are highly skilled but cannot compete with highly skilled people from India who can do alright on something like $20K a year.
Select to expand quoteFormulaNova said..
I hate to agree with PMac, but it has to stop somewhere. Who can afford these types of prices?
I think everyone thinks that it will just keep going, but I don't understand how that can happen unless everyone keeps ignoring reality.
A median price of over $800k is crazy! Plus, it really doesn't benefit the homeowner because they can never get the value out of this as they still need to buy another house if they sell theirs. Something is seriously wrong with this property market.
Are the dollars coming in from overseas or is it local people getting crazy 'investing'?
The standard remedy is for five years of high inflation coupled with high interest rates.
It solves everything.
High interest rates stop house prices going up because few can afford to pay the interest on the loans.
High inflation means high wage rises so at the end, an 800k house is again affordable.
But best of all, high inflation makes the huge government debt worth a bag of pee nuts, so no longer the problem it is today.
Stand by for an inflation rate rate of 15%pa.
