... 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

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. )

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

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.

invest in silver

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.

^^ 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

^^^ Avg house here about $250k, rates about $1500! If the house was worth $800k I'd be happy to pay that.

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.

FlySurfer said..
... 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

You're not looking hard enough or looking with toilet tube rolls over your eyes.

Loftywinds said..

FlySurfer said..
... 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

You're not looking hard enough or looking with toilet tube rolls over your eyes.

What does that mean?

Sailhack 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.

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.

Mobydisc 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.

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.

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'?

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.