After reading about rental crisises across the country, I have been wondering, where are the new immigrants living?
Are people building 400,000 new houses (100,000 and people are sharing?) a year?
If not, how has this happened? It's almost as if the government have just blindly accepted 400k new people and not thought about the impact that they will have on the existing property market or any other infrastructure. I know its a really simple way to 'grow' the economy, but surely they put some thought into it. Didn't they?
The most disappointing thing is that the new landlords and new homeowners are getting hammered with high interest rates, which wouldn't be anywhere near as bad if house prices were more reasonable. Why aren't they reasonable? Well it seems like it's the best way to 'get rich quick' and prices are being forced up by demand, and there is not enough supply.
I would hate to be in that demographic where I wanted to buy a house and knew that I had to get onto the same crazy treadmill and pay outrageous prices just because they would probably be worse next year.
Will this ever level out, or are high prices and low supply here to stay?
I wouldnt be sweating it yet, Wasnt that many years ago, no thanks Keating ya prick, I was paying 18% interest on an ex housing trust place in southern Adelaide
The 2021 Census reveals that 10.1 per cent (1,043,776 homes) of Australia's 10,318,997 private dwellings were unoccupied on the night of the Census.
Select to expand quoteMr Milk said..
The 2021 Census reveals that 10.1 per cent (1,043,776 homes) of Australia's 10,318,997 private dwellings were unoccupied on the night of the Census.
They were all at the pub?
Select to expand quoteMr Milk said..
The 2021 Census reveals that 10.1 per cent (1,043,776 homes) of Australia's 10,318,997 private dwellings were unoccupied on the night of the Census.
Sounds about right. There are a lot of holiday rentals around and that census was in the middle of the most draconian period of forced restrictions Australia has ever seen. Borders were closed, owners were bleeding money due to no tourists. People have short memories.
Select to expand quoteFormulaNova said..
After reading about rental crisises across the country, I have been wondering, where are the new immigrants living?
Are people building 400,000 new houses (100,000 and people are sharing?) a year?
If not, how has this happened? It's almost as if the government have just blindly accepted 400k new people and not thought about the impact that they will have on the existing property market or any other infrastructure. I know its a really simple way to 'grow' the economy, but surely they put some thought into it. Didn't they?
The most disappointing thing is that the new landlords and new homeowners are getting hammered with high interest rates, which wouldn't be anywhere near as bad if house prices were more reasonable. Why aren't they reasonable? Well it seems like it's the best way to 'get rich quick' and prices are being forced up by demand, and there is not enough supply.
I would hate to be in that demographic where I wanted to buy a house and knew that I had to get onto the same crazy treadmill and pay outrageous prices just because they would probably be worse next year.
Will this ever level out, or are high prices and low supply here to stay?
Governments are just not opening up land quickly enough. Zoning restrictions and opposition to high density housing in key areas that need it is also an issue. We reap what we sow. I see some politicians oppose and campaign against every high density inner city development peoposal and the next day complain because house costs are too high and we should have rent control.
Supply and demand governs everything. low supply means high prices. High prices incentivise investment in more supply. If governments restrict new supply though regulation then pricies stay high and supply remains low. Every market every time. Housing, fuel, energy, food....sustained high prices are the result of government policy forcing it to stay there. Every time.
Select to expand quotejksmurf said..Mr Milk said..
The 2021 Census reveals that 10.1 per cent (1,043,776 homes) of Australia's 10,318,997 private dwellings were unoccupied on the night of the Census.
They were all at the pub?
Probably sovereign citizens who wouldn't fill out the form
Select to expand quoteTonz said..
I wouldnt be sweating it yet, Wasnt that many years ago, no thanks Keating ya prick, I was paying 18% interest on an ex housing trust place in southern Adelaide
There was something in the news about that yesterday. BTW my parents were also one of the ones paying 17%... but the house cost them $70k I think.
The article yesterday was saying that the houses back in the late 80's, early 90's were around 4 times the average wage, and now they are 8 times the average wage. I think that shows you that its more unaffordable now and its not just the current generation whinging.
What the hey, here is the article anyway instead of me paraphrasing it:
www.news.com.au/entertainment/tv/morning-shows/kochie-smashes-baby-boomer-housing-myth/news-story/60ad99c43bdc36ec5bb287d8de71f95f
Select to expand quoteMr Milk said..
The 2021 Census reveals that 10.1 per cent (1,043,776 homes) of Australia's 10,318,997 private dwellings were unoccupied on the night of the Census.
I wonder if they were in places people want to live or in the back of Bourke or further where there is not as much demand on housing?
Where they were would make a big difference to whether they were significant or not.
I actually own two really run-down crappy houses in the country that were unoccupied on census night. It doesn't mean that they really affected rental supply though.
Select to expand quoteMr Milk said..jksmurf said..Mr Milk said..
The 2021 Census reveals that 10.1 per cent (1,043,776 homes) of Australia's 10,318,997 private dwellings were unoccupied on the night of the Census.
They were all at the pub?
Probably sovereign citizens who wouldn't fill out the form
Was the dole linked to whether they filled in these forms?
Select to expand quoteFormulaNova said..
I actually own two really run-down crappy houses in the country that were unoccupied on census night. It doesn't mean that they really affected rental supply though.
Yep, plenty of people with a holiday house down the coast that is unoccupied and will never be rented to someone looking for a place to live in the city.
I think a lot of the new immigrants just squeeze into existing places. When my wife was a teacher in a primary school in south-western Sydney, it wasn't unusual for entire families from the school to rent a room in a unit, so a 2-bedroom unit could house 3 families - one family in each bedroom, and another in the living room.
Can't comment on the status, nationality, nor accurate number of residents, but I am aware of a 3x1 dwelling in suburban Perth with at least 8 uber style vehicles parked outside and down the street. There appears to be quite the squeeze going on.
The average house has also changed since the 80s and 90s. So has the work ethic of those building them.
My first house was in Dianella Perth and was $52k, I was earning $15k as a mechanic(1984), but the house was an aspestos house with 2 bedrooms and an outside toilet and laundry. On the up side it was on a quarter acre block, but so was everything else.
When I sold it 5 years later I think I got $58k, I probably spent $5k getting it looking a bit better. Surprisingly it's still there.
In those days houses were completed in 3 months, now it's more like a year. Council fees were pretty basic and so were plan requirements.
Now everything is over the top to pay the seat polishers.
I could go on...
First house in 1981 $37k, sold 7 years later $98k, purchased $128k now worth $1.2m. The numbers in the news are paper article are very close.
Select to expand quoteHarrow said..
Yep, plenty of people with a holiday house down the coast that is unoccupied and will never be rented to someone looking for a place to live in the city.
I think a lot of the new immigrants just squeeze into existing places. When my wife was a teacher in a primary school in south-western Sydney, it wasn't unusual for entire families from the school to rent a room in a unit, so a 2-bedroom unit could house 3 families - one family in each bedroom, and another in the living room.
It is a bit of a worry though. 'We' are already facing ridiculous housing prices AND we are getting 400,000 to 500,000 new people each year. Clearly those people are not going back to where they came from, so they will be living somewhere and even if they are sharing there is a limit on how many can fit into one place.
Supposedly we already have rental crisis conditions around the country so landlords are putting up rents (because they can). If we had enough supply then rents couldn't go up as there would be alternatives.
When I was a kid the housing commission would build a lot of houses and create new estates. Now they seem to have gone to an outsourcing model where they subsidise private rentals instead. In NSW they are exempt from a lot (all?) planning rules and can build lots of things without as much oversight.
Is this where some of it has fallen apart? We have no increased supply from the housing commissions around the country and they have taken the easy approach instead?
It continues to surprise/annoy me that young people seem to think the problem is with them not saving enough for their house, when in reality the situation is broken and the government should be doing a better job. How do you get a government to change things though when they get voted out for trying to fix it and a lot of people are getting richer from house prices going up?
Select to expand quotekk said..
In those days houses were completed in 3 months, now it's more like a year. Council fees were pretty basic and so were plan requirements.
Is this because the way they build a house has changed now? I think most building companies setup the build to fit in with their resources, so there can be lots of time when nothing gets done because those trades are working elsewhere. If this is the case, is this because prices for trades or materials have gone up so they need to control costs by using the same people everywhere?
I suspect so. I have watched a house near me going through the build process and most of the time there is no one there and then there is a burst of activity and then nothing again. What could have been done in a few months has so far taken 18 months and I am guessing it will take another 6 months.
There is over 600,000 international students. Over the pandemics many went home and since most would be returning.
This would be a massive part of the rental crisis.
(Btw a crisis is an earthquake, not when people have to pay more for rent)
Select to expand quotebjw said..
There is over 600,000 international students. Over the pandemics many went home and since most would be returning.
This would be a massive part of the rental crisis.
(Btw a crisis is an earthquake, not when people have to pay more for rent)
So why wasn't there a rental crisis before Covid? If these are just returning students, then it should be almost a zero-sum game.
A crisis is a crisis if it affects you. If you can't get a rental place that you can afford or if your landlord kicks you out because they can get $100 more a week from someone else, it is a crisis. In normal times its hard for a landlord to increase prices dramatically, but when there are no alternatives for a renter then they can raise it a lot.
www.news.com.au/national/politics/cant-keep-up-west-sydney-mayor-fears-for-states-future-amid-population-boom/news-story/7a6a2a40f5e90bca41f8b0669ba867c3
It sounds like most people agree that its a problem of supply. It seems there is a disconnect between the people allocating so many places for people coming in and the people creating new housing.
Select to expand quoteFormulaNova said..
So why wasn't there a rental crisis before Covid?
Maybe the rental crisis applies only to popular rural areas and suburbs. I don't know for sure but I reckon you can rent places easily in sh1t holes, like Docklands.
This property made the news today:
www.smh.com.au/property/news/first-home-buyer-pays-2-6-million-for-marrickville-house-20230328-p5cvts.html
First home buyer won it at auction for $2,800,000. Scary !
Looking at the sales history on domain: www.domain.com.au/property-profile/19-south-street-marrickville-nsw-2204
1985: $65k
2006: $585k
2023: $2.8M
Here is the plot. The real estate industry may did to start quoting currency in the logarithmic scale soon 
Select to expand quotejn1 said..
This property made the news today:
www.smh.com.au/property/news/first-home-buyer-pays-2-6-million-for-marrickville-house-20230328-p5cvts.html
First home buyer won it at auction for $2,800,000. Scary !
Looking at the sales history on domain: www.domain.com.au/property-profile/19-south-street-marrickville-nsw-2204
1985: $65k
2006: $585k
2023: $2.8M
Here is the plot. The real estate industry may did to start quoting currency in the logarithmic scale soon
That's pretty consistent growth. Averaged 11% p.a. for the first rise and 9.6% p.a. for the second.
Select to expand quoteFormulaNova said..
There was something in the news about that yesterday. BTW my parents were also one of the ones paying 17%... but the house cost them $70k I think.
The article yesterday was saying that the houses back in the late 80's, early 90's were around 4 times the average wage, and now they are 8 times the average wage. I think that shows you that its more unaffordable now and its not just the current generation whinging.
What the hey, here is the article anyway instead of me paraphrasing it:
www.news.com.au/entertainment/tv/morning-shows/kochie-smashes-baby-boomer-housing-myth/news-story/60ad99c43bdc36ec5bb287d8de71f95f
Maybe Koshi needs to re-visit his numbers ?
Given that most people buy via a mortage the price is not really the issue, the repayments are. And an increase in loan amount needs to be seen against a decrease in interest rate.
If the cost of an average house has doubled in real terms (4x to 8x salary) but interest rates have gone from 17% to 5% then (assuming 30 year term) :
Monthly repayment on $70k at 17% = $ 998 per month of ($70,000 / 4 times salary / 12 months) = $1,458 monthly salary = 68%
Monthly repayment on double $140k (8 x $17500) but at 5% = $752 per month on $1,458 = 52%
On my maths, if the principal doubles and the term stays the same then then the interest rate to give a comparable repayment to 17% would be around 7.6%.
Most places seem to be offering fixed rate 5 year home loans for less than 7.6%.
Select to expand quoteCarantoc said..
Maybe Koshi needs to re-visit his numbers ?
Given that most people buy via a mortage the price is not really the issue, the repayments are. And an increase in loan amount needs to be seen against a decrease in interest rate.
If the cost of an average house has doubled in real terms (4x to 8x salary) but interest rates have gone from 17% to 5% then (assuming 30 year term) :
Monthly repayment on $70k at 17% = $ 998 per month of ($70,000 / 4 times salary / 12 months) = $1,458 monthly salary = 68%
Monthly repayment on double $140k (8 x $17500) but at 5% = $752 per month on $1,458 = 52%
On my maths, if the principal doubles and the term stays the same then then the interest rate to give a comparable repayment to 17% would be around 7.6%.
Most places seem to be offering fixed rate 5 year home loans for less than 7.6%.
I did similar math but my first house cost three times my income and my last was ten times so I worked on that. Currently paying less than 6% but that still leaves me overall 20% worse off than paying 20% on the much smaller loan.
Select to expand quotepsychojoe said..
I did similar math but my first house cost three times my income and my last was ten times so I worked on that. Currently paying less than 6% but that still leaves me overall 20% worse off than paying 20% on the much smaller loan.
Would you have been able / considered buying your 'last house' when you bought your 'first house' ?
Last house I bought would have been unimaginable when I was looking for my first.
When I was looking at buying my first nobody would have lent me more than three or four times my annual income to buy a property. Banks now happily lend eight times. 10x seems crazy.
Pretty sure if I could have got 8 times income borrowing power at 3% interest on a mortgage, then I'd have bought a property significantly more expensive than I did when all I could get was 3 times income at +10%.
Select to expand quoteWould you have been able / considered buying your 'last house' when you bought your 'first house' ?
Ha! The thought of teenage me buying a 5x3 on river is pretty.
Select to expand quotepsychojoe said..Carantoc said..
Maybe Koshi needs to re-visit his numbers ?
Given that most people buy via a mortage the price is not really the issue, the repayments are. And an increase in loan amount needs to be seen against a decrease in interest rate.
If the cost of an average house has doubled in real terms (4x to 8x salary) but interest rates have gone from 17% to 5% then (assuming 30 year term) :
Monthly repayment on $70k at 17% = $ 998 per month of ($70,000 / 4 times salary / 12 months) = $1,458 monthly salary = 68%
Monthly repayment on double $140k (8 x $17500) but at 5% = $752 per month on $1,458 = 52%
On my maths, if the principal doubles and the term stays the same then then the interest rate to give a comparable repayment to 17% would be around 7.6%.
Most places seem to be offering fixed rate 5 year home loans for less than 7.6%.
I did similar math but my first house cost three times my income and my last was ten times so I worked on that. Currently paying less than 6% but that still leaves me overall 20% worse off than paying 20% on the much smaller loan.
It's good that you quote Carantoc. It's the only chance I get to read what he has written.
How long were people paying 17% for back in the 80s? My recollection was that my father refinanced down to something much more manageable. I think the 17% rate was just for a year or two and coincided with the recession times.
I am sure it would have been a struggle for a lot of people at that time, but I don't think it was for the total duration of the loan either. Then again, I wouldn't be assuming 5% would be normal either.
I would be expecting higher rates to be 'normal', but it becomes a problem when 'the market' thinks that rates are going to stay low so they will pay higher prices. If you think they are going to go up, you may be a bit more modest in what you buy but still have to pay a higher price because the market is optimistic.
Select to expand quoteFormulaNova said..
It's good that you quote Carantoc. It's the only chance I get to read what he has written.
FN, just scroll up.
If what I have written is hidden behind the green fuzzy bit at the bottom of your screen, just scroll up to read all the wit and wisdom.
Select to expand quoteFormulaNova said..
How long were people paying 17% for back in the 80s? My recollection ...
The dip below 5% for three years has been much shorter than the peak above 10% which lasted for 20 years.
www.orangefinance.net.au/historical-interest-rates/
Maybe you are looking through some rose-coloured glasses ? Have you considered this may be exaggerating the green screen issue ?
marketingaccesspass.com/pink-and-green-mixed-what-color-does-pink-and-green-make/
Simply put.The answer is gray or brown.
Select to expand quotemyscreenname said..
Ahh, thanks for the reminder!
I get a bit worried that I am missing some pearls of wisdom sometimes, but I usually find that I was mistaken. TBH if I find his posts too negative and too annoying, why shouldn't I filter them out? It makes sense for everyone especially Carantoc.
