Society/Culture Australian Property Prices to Crash?

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HPKS

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That blog doesn't show any data on home ownership? Also the "data" is a guy on Reddit who mistook average wage for median wage.

I'm not arguing that housing affordability is not an issue. It clearly is. Dwelling prices in particular.
It’s a massive issue that will effect younger generations into retirement. House prices have exploded since the mid nineties, wage growth is not keeping pace with the cost of living so it doesn’t take a genius to figure out home ownership is completely out of reach for a lot of people and will effect retirement which in turn effects the cost to government budgets. And it appears it’s not going to get better it’s going to get worse. Like I said for some who don’t have a house it will be cheaper to walk into retirement & straight into aged care. For me it’s not an issue but for whenever I have grand children it will be.


so your reckon theory is a load of cods wallop as shown by the data.
 

HPKS

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But often homes are signed over to aged care “charities” to cover expenses at end of life. It can’t be an investment for retirement and a legacy for your kids.
Bit off topic but don’t start me on the not for profit charities bs. I worked for two years in the funding side of an aged care facility. Charity my ass
 

HirdyLannister

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But often homes are signed over to aged care “charities” to cover expenses at end of life. It can’t be an investment for retirement and a legacy for your kids.
Some might do that but alot don't.

My olds will refuse age care I know I'll be caring for them which I rather than seeing how those places are run.
 

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Frank Grimes

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If 1 out of every 3 homes is owned by an Investor than of course population issues increases exaggerated issues, because housing is already tied up by inRemove investors from the Market and it frees up the supply required for these population increases, it also allows renters who cant afford to buy the opportunity to become home owners due to cheaper prices.
People correctly point out that rents won't be affected by investors pulling out of the market because the house will be to sold the a renter who has become home owner. However, the same would apply going the other way because the supply and demand isn't affected.

This is because it is a zero sums game.
If the investment property is going to be sold as a principal residence:
- The demand in the rental market would go down buy one person, however the supply in the rental market is also less one house.
- Supply on the first home buyers market would increase by 1. The demand in the buying a house due to the renter becoming a home buyer would go also go up by 1.

The main reason for high prices imo is the availability of cheap credit (how much banks are willing to loan).
 
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HPKS

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Some might do that but alot don't.

My olds will refuse age care I know I'll be caring for them which I rather than seeing how those places are run.
A lot say this but in the long run don’t have a choice. If they’re non ambulant or have dementia or incontinent which from my experience is becoming more and more prevalent most people are just not able to do this as dementia requires non stop care for safety reasons and non ambulant residents require 2 hourly repositioning because if you don’t pressure area problems become horrendous or if they’re incontinent & unable to look after their own personal care they’ll require you to change them and attend to their personal hygiene needs at any time of the day. Which also means if they’re incontinent they’ll require a toileting schedule. Literally one fall in the garden can & does regularly lead to mobility issues. You’ll basically be giving up full time work for all of this. There’s a lot who can’t stop working or do and go onto a carers pension which eats into government budgets. I’ve admitted a lot into care in this type of scenerio. And when it happens it’s a frightening experience for the elderly. I admire you for wanting to look after your loved ones at home & I truly hope it works out but I’ve seen a lot of broken down family members in their 50’s admitting Mum or dad to care and after reducing their income to care for Mum or dad are unable to help out their children financially. anyway all the best with it for you & I hope it works for you 👍
 

HPKS

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People correctly point out that rents won't be affected by investors pulling out of the market because the house will go to sold the a renter who has become home owner. However, the same would apply going the other way because the supply and demand isn't affected.

This is because it is a zero sums game.
If the investment property is going to be sold as a principal residence:
- The demand in the rental market would go down buy one person, however the supply in the rental market is also less one person.
- Supply on the first home buyers market would increase by 1. The demand in the buying a house from the renter becoming a home buyer would go also go up by 1.

The main reason for high prices imo is the availability of cheap credit (how much banks are willing to loan).
Cheap credit is part of the issue imo. One other is state governments collect a lot of money from government fees so the higher the price the more revenue they obtain. Here’s a calculator for you to compare the differences


So for revenue reasons why would governments lower house prices? What do they have to gain?
 

Madas

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I am a little annoyed we didn’t do the major work years ago. We just put it off again and again. Would have been a great investment.
No better time than the present they always say ( although at the present you probably couldn’t get anyone to do it anyway )
 

Madas

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I am a client side PM in commercial construction.

There is absolutely no way in this earth that I would sign a contract with a Rise and Fall clause in a contract. There would be way too many builders & subbies who would take the piss out of it.
I’ve been there
Was a commercial and mining construction manager PM over the years on and off but got out around 2012 when our opposition companies were going in at 0% margin and trying to make some money on variations just to keep their offices open , I believe it hasn’t changed a lot since then , still pretty cutthroat from what I hear with developers demanding cheaper build costs to increase their profit margins .
Went back to building houses and small commercial ( not so many back stabbers and ladder climbers either in the residential game which is nice )

I agree in principle that the rise and fall clause is dangerous, but in the current situation it is unfair and unethical that builders on fixed price contracts are having to wear these price rises .
It wouldn’t be unreasonable to have a reasonable price differential clause within a contract ( say +15 % ) and as long as you can genuinely prove that these price rises were out of your control you should be able to claim the difference.
Remember we are still building houses we signed up around August - October last year before anyone had any clue of the sh*t that was about to hit the fan .
 

Madas

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People correctly point out that rents won't be affected by investors pulling out of the market because the house will be to sold the a renter who has become home owner. However, the same would apply going the other way because the supply and demand isn't affected.

This is because it is a zero sums game.
If the investment property is going to be sold as a principal residence:
- The demand in the rental market would go down buy one person, however the supply in the rental market is also less one house.
- Supply on the first home buyers market would increase by 1. The demand in the buying a house due to the renter becoming a home buyer would go also go up by 1.

The main reason for high prices imo is the availability of cheap credit (how much banks are willing to loan).
I agree
And I also can’t disagree that investors haven’t contributed to the problem of housing affordability.


So I haven’t delved into it deeply but I think a big question no one on here is really addressing is :
“ is there an actual need for rental houses ?”
I touched on it before and there absolutely surely has to be .
Example 1 - student leaves home , no credit history, no income . How they gonna buy a house ?
Here’s a link to home ownership around the world .


At 65% we are about on par with similar economies to our own such as UK , USA , Sweden .
I have no idea if those economies have government incentives for investment ( remember negative gearing applies to share trading also )

So why not provide incentives to mums and dads to invest in property with the hope that capital growth will assist them in retirement. That was the idea behind it from its inception I believe?
Therefore assisting the government in the future in having less people in government housing and retirement homes .

it’s a broadband rule meaning anyone can take advantage off these schemes

I don’t know the answer here
It’s like everything in this world , “you look after one group you piss off another “
No ones ever entirely happy and that’s just bloody life .
 

Gigantic

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If the government were serious about creating affordable housing, they'd copy the one tried and true model and that's the one Singapore designed


 
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Madas

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If the government were serious about creating affordable housing, they'd copy the one tried and true model and that's the one Singapore designed


Yeh nah sorry

Very clever model and the forced saving scheme is the kind of discipline most people in Western countries need but who the hell wants to live in a flat ?!
And can you see those “ flats “ popping up in regional towns where housing affordability is nearly as bad as cities ?

How about removing GST on housing for first home buyers ONLY?

IMHO The introduction of GST added 20% to housing costs overnight when it was introduced and this has compounded ever since .
 

Gigantic

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Yeh nah sorry

Very clever model and the forced saving scheme is the kind of discipline most people in Western countries need but who the hell wants to live in a flat ?!
And can you see those “ flats “ popping up in regional towns where housing affordability is nearly as bad as cities ?

How about removing GST on housing for first home buyers ONLY?

IMHO The introduction of GST added 20% to housing costs overnight when it was introduced and this has compounded ever since .
Copy was probably the wrong word to use. It would be smart to adopt components of the Singapore model. We couldn't put up large flats like that within the current infrastructure and makeup of our residential areas.
IMHO The introduction of GST added 20% to housing costs overnight when it was introduced and this has compounded ever since .
GST isn't payable on property purchases of existing dwellings. How many home buyers are actually paying GST?
 

Madas

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Copy was probably the wrong word to use. It would be smart to adopt components of the Singapore model. We couldn't put up large flats like that within the current infrastructure and makeup of our residential areas.

GST isn't payable on property purchases of existing dwellings. How many home buyers are actually paying GST?
Agree
I came away thinking the same thing , Singapore is a very smart , well run place but you can’t help but feel for the population holed up in those towers ( only been there once so no expert)

Sorry should have been clearer, I was referencing the cost of new housing and what has contributed to how expensive it has become and I believe GST is/ was a factor.
 

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Gigantic

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Agree
I came away thinking the same thing , Singapore is a very smart , well run place but you can’t help but feel for the population holed up in those towers ( only been there once so no expert)

Sorry should have been clearer, I was referencing the cost of new housing and what has contributed to how expensive it has become and I believe GST is/ was a factor.
I think there's a difference between the Singapore style towers vs Hong Kong style towers which are actually literally just concrete boxes of towers all facing into each other.

There's a reason Singapore usually ranks quite well in liveability rankings.

Imagine not being on the brink of mortgage stress, only needing to put aside less than 20% of your take-home income on housing, and the rest you can spend on essentially what ever you want. I'm sure part of it is cultural and living in towers probably won't cut it for many Australians though.

I found public amenities and infrastructure very well maintained and even very nice in Singapore. Yes, there's compromises, as you won't have a big backyard and you won't have a deck or your own pool. But props to Singapore, they've alleviated a huge social problem and struck a pretty good balance (from the outside looking in).
 

Scotland

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I am a little annoyed we didn’t do the major work years ago. We just put it off again and again. Would have been a great investment.
I put off work last year because everyone was renovating last year.

Great strategy, really paying off now.🤦‍♂️
 

Madas

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I think there's a difference between the Singapore style towers vs Hong Kong style towers which are actually literally just concrete boxes of towers all facing into each other.

There's a reason Singapore usually ranks quite well in liveability rankings.

Imagine not being on the brink of mortgage stress, only needing to put aside less than 20% of your take-home income on housing, and the rest you can spend on essentially what ever you want. I'm sure part of it is cultural and living in towers probably won't cut it for many Australians though.

I found public amenities and infrastructure very well maintained and even very nice in Singapore. Yes, there's compromises, as you won't have a big backyard and you won't have a deck or your own pool. But props to Singapore, they've alleviated a huge social problem and struck a pretty good balance (from the outside looking in).
I must say , I’m not a city person , lived in the country my whole life but have traveled fairly extensively around the world , but Singapore was probably the one city I actually liked ; friendly happy people , clean , felt safe , well ordered , affordable, beautiful in its architecture , parklands and retention of heritage buildings and precincts .
Looking forward to going back during a stop over when we can travel again .
Totally opposite vibe to Hong Kong , couldn’t wait to get out of there !
 

FRUMPY

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Doing work for a client whose mum has passed away. She lived in a shitty little rundown house in Thornbury - you wouldnt let your dog live there thats how bad it was. Sold earlier in the year for $1.2m - all due to location.... 🤣 🤦‍♂️
 

HirdsTheWord

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Here’s what’s wrong with the world


Idiot
There is nothing wrong with capitalism.

The issues with the Housing market are all Government related.

- Zero Long Term Planning for Housing Affordability (Government)
- Giving people with existing Wealth Tax Benefits over people who dont (Government)
- Dog sh*t infrastructure for areas where housing is being Built (Government)
 
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HirdsTheWord

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I think there's a difference between the Singapore style towers vs Hong Kong style towers which are actually literally just concrete boxes of towers all facing into each other.

There's a reason Singapore usually ranks quite well in liveability rankings.

Imagine not being on the brink of mortgage stress, only needing to put aside less than 20% of your take-home income on housing, and the rest you can spend on essentially what ever you want. I'm sure part of it is cultural and living in towers probably won't cut it for many Australians though.

I found public amenities and infrastructure very well maintained and even very nice in Singapore. Yes, there's compromises, as you won't have a big backyard and you won't have a deck or your own pool. But props to Singapore, they've alleviated a huge social problem and struck a pretty good balance (from the outside looking in).
If Australia's infrastructure was anything like Singapore's then it would be a different discussion.
 

HirdsTheWord

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But eventually, those in retirement now will die and either they'll pass on their wealth and/or home(s) to their kids/grandkids or market equilibrium will sort itself out. If those in their 20s, 30s or 40s now will have trouble owning a home by retirement, then what about all those who come after them? Are we saying no one will own a home?

The trends for home ownership of age demographics near or in retirement isn't actually gloomy. In fact, I reckon we'll continue to see the positive upward trend in the coming census results.
ummmm what the hell statistics are you reading?

There is a drop in in home ownership over ALL age groups, including those nearing retirement. The biggest % drop is in younger people aged 30-34 of of which over 50 years its dropped almost 14% and its getting lower, not increasing.

26% of properties in this country are owned by a private Investor, that is 1 in every 4 homes. yet people somehow still think the reason housing is expensive is because of supply rofl.

yet again another statistic that shows there's too much god damn housing investment in this country. And if by the shear fact home ownership keeps dropping then Investor % will keep increasing.


What a country we live in. If you have existing wealth and have equity then no problems, here is a Tax break to buy another house as an investment to get more wealth and equity.

If you are a first time home buyer, than go fu** yourself. you get nothing except an enormous mortgage, if you are lucky enough to outbid the investor.

Wealth Inequality 101.

If there was ever a need for a Royal Commission than this is it. Wealthy Politicians looking after Wealthy Voters as well as their own investments.
 
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Madas

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ummmm what the hell statistics are you reading?

There is a drop in in home ownership over ALL age groups, including those nearing retirement. The biggest % drop is in younger people aged 30-34 of of which over 50 years its dropped almost 14% and its getting lower, not increasing.

26% of properties in this country are owned by a private Investor, that is 1 in every 4 homes. yet people somehow still think the reason housing is expensive is because of supply rofl.

yet again another statistic that shows there's too much god damn housing investment in this country. And if by the shear fact home ownership keeps dropping then Investor % will keep increasing.


What a country we live in. If you have existing wealth and have equity then no problems, here is a Tax break to buy another house as an investment to get more wealth and equity.

If you are a first time home buyer, than go fu** yourself. you get nothing except an enormous mortgage, if you are lucky enough to outbid the investor.

Wealth Inequality 101.

If there was ever a need for a Royal Commission than this is it. Wealthy Politicians looking after Wealthy Voters as well as their own investments.
Yet you say Capitalism is fine ?
I provide an example where someone (in this case a celebrity) outbids others by about 15% driving the house price up by nearly $1,000,000 and you are ok with it ?
Yet on the other hand you are adamant that we need to remove investors from the market?

Having a hard time getting a read on your actual solutions to the problem?

I think the government does include infrastructure in its planning it just gets blocked at every level until everyone has got their piece of the pie ( ever watched Utopia ?)

So I’m a property investor and in true capitalist form I am hoping my properties increase in value over my lifetime so I have sufficient funds to retire with , meanwhile providing affordable rental accommodation for people who require it ( haven’t put our rent up in about 4 years and kept the same happy tenants 🤞)

Is it ok that I’m capitalist but not ok that I’m an investor? I’m confused?!

Your solutions whereby the government provides affordable housing is in fact sound more socialist than capitalist.
A balance of both would be ideal IMO but where does the government get that kind of money ?

Their current capitalist model incentivising investors to build more housing satisfies this demand .

Perhaps what we are both saying is that investment incentives are ok for new housing but should not extend to buying existing properties?
 
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