Society/Culture Australian Property Prices to Crash?

(Log in to remove this ad.)

Royal Flush

Norm Smith Medallist
Joined
Feb 14, 2008
Posts
6,149
Likes
4,228
Location
Brisbane
AFL Club
North Melbourne
Not asking for your name an address - you seem pretty confident in your views here - I'm just wondering why so.
My views just come from searching for views based on fact and numbers.
Numbers don't lie. Although I know they can be interpreted in different ways.


ideallogy does however provide a tainted view of fact.

Sent from my Pixel 3 XL using Tapatalk
 

JeanLucGoddard

Premiership Player
Joined
Aug 21, 2018
Posts
3,011
Likes
6,857
AFL Club
North Melbourne
My views just come from searching for views based on fact and numbers.
Numbers don't lie. Although I know they can be interpreted in different ways.


ideallogy does however provide a tainted view of fact.

Sent from my Pixel 3 XL using Tapatalk
OK, fair enough.

Why are you on here during business hours btw? You should be working harder imo.
 

(Log in to remove this ad.)

Bollox

Show Pony
Joined
Jun 29, 2006
Posts
14,418
Likes
6,278
Location
Nthn Beaches
AFL Club
Sydney
Other Teams
BBGFC and LRGC
It’s already worse in percentage terms than the early 90s
No it isnt. It isnt even close.
Statistics are not the way to look at these things. You cannot know nor understand what the market was like unless you were playing.
When it gets bad enough that you know you can throw in a 500K bid in for a place that previously sold for $800K just 2 yrs prior, and be a good chance....then you have an idea what it was truly like. When you have guys turning up to work saying they bought a place at an auction last night, when they were the only one to turn up then ran home to grab their chequebook...then u get an idea.
When things are bad it is not simply a matter of waiting for 10-15% less than a year ago...it is when people MUST sell and you have no idea if its a genuine private vendor or one of 10,000 mortgagee auctions this week.
When you hear people crying in an empty room because noone turned up to the auction...and i mean NOONE at all. Then u get an idea what a toxic market really looks like.
I'd guess 99% of those in here have no idea what a bad market is truly like. When unemployment rockets and everyone is shitscared of losing their job, when your mortgage is now up to 14% and the banks start knocking on tens of thousands of doors.

We had a spike. Except for those who purchased within a 12-18 mth period this pullback really isnt a concern unless it gets much worse. The only thing that has happened so far is some cream has been wiped off the top.
 

its free real estate

Norm Smith Medallist
Joined
Jul 30, 2018
Posts
5,023
Likes
6,062
AFL Club
Fremantle
I'd guess 99% of those in here have no idea what a bad market is truly like. When unemployment rockets and everyone is shitscared of losing their job, when your mortgage is now up to 14% and the banks start knocking on tens of thousands of doors.
These are different factors. Right now Australian property is undergoing its biggest reduction in 40 years, in a low interest rate, low unemployment environment. Imagine if the economy seized up like the 90s?
 

Scotland

Hall of Famer
Joined
May 5, 2006
Posts
46,472
Likes
47,689
AFL Club
West Coast
To be fair, the domain of the median income earner with no wealth (ie. the first home buyer) has never been a relatively decent area. Areas in Melbourne we consider decent now like Pascoe Vale, Coburg, Preston, Box Hill, Mulgrave etc. were the rougher parts of town 30 years ago, now they're only decent because they've gentrified and the original inhabitants have turned 60 or sold and moved out. Suburbs like Narre Warren, Sydenham, Point Cook and Caroline Springs will be seen as decent parts of town in 20 years or so purely because they'll have cleaned up and they'll be closer into the city and transport than the new alternatives. Those who bought there originally and kept the property will end up with a windfall and the cycle will continue.
It's a bit of a hierarchical shift. 30 years ago the proper wealthy lived in Toorak, and still do. High income earners bought in nice areas, average Joes in middle class areas and lower income earners in places like Broadmeadows. Nowadays places like Footscray and Yarraville that were unfashionable working class areas it costs you upward of $400k for a 1/2 bed apartment. Two bedroom weatherboard houses on small blocks are pushing $1m. That's not the realm of the median income earner, that's serious money.

But IMO the problem facing the first home buyer is the entry level, buy-in suburbs are getting further and further away from the geographical centre of Melbourne while the jobs (with the decline in manufacturing and rise in service sector positions) are actually moving to the CBD. In addition, the transport network isn't keeping pace with this shift. Living in Coburg 30 years ago wasn't too bad if you worked at the Ford plant in Broadmeadows, but that's not an option for most anymore and an increasing amount of people need to commute an hour to work from a place like Pakenham or Diamond Creek if they decide to buy a first house. And it's only going to get worse. People have always had to put up (and I think they're still willing to tolerate) high levels of crime, incohesive neighbourhoods, and shitty schools and health clinics in the entry level suburbs but the modern commute is totally screwing work/life balance which makes it extremely unattractive. I do not blame would-be first home buyers the least for not wanting to live in Pakenham and spend over an hour on trains to the CBD each day for the next five or so years, what an awfully shitty way to live that would be.
Excellent points. Perth as a city less than half the size of Melbourne by population has become a disaster of urban sprawl. People spend their lives stuck in traffic driving 30-40km each way to work because living closer in is just too expensive.
 

its free real estate

Norm Smith Medallist
Joined
Jul 30, 2018
Posts
5,023
Likes
6,062
AFL Club
Fremantle
Nowadays places like Footscray and Yarraville that were unfashionable working class areas it costs you upward of $400k for a 1/2 bed apartment. Two bedroom weatherboard houses on small blocks are pushing $1m. That's not the realm of the median income earner, that's serious money.
And those suburbs are still, by and large, dumps. It’s like Lakemba pushing a mill: no one who currently lives there could afford it, and no one who could afford would want to live there.
 

Bollox

Show Pony
Joined
Jun 29, 2006
Posts
14,418
Likes
6,278
Location
Nthn Beaches
AFL Club
Sydney
Other Teams
BBGFC and LRGC
These are different factors. Right now Australian property is undergoing its biggest reduction in 40 years, in a low interest rate, low unemployment environment. Imagine if the economy seized up like the 90s?
I just told you it isnt. Why ? Because it isnt.
If you want to say you are nostradamus or make doomsday predictions that is something else entirely.

It has not even become "bad" yet. The reason is that the economy is running ok. Sedate pullbacks like this are a good thing.
 

Royal Flush

Norm Smith Medallist
Joined
Feb 14, 2008
Posts
6,149
Likes
4,228
Location
Brisbane
AFL Club
North Melbourne
Yarraville is a lot like Lakemba...15km from Sydney cbd
6km from Melbourne CBD

"those suburbs are still, by and large, dumps"


Sent from my Pixel 3 XL using Tapatalk
 
Last edited:

Espe

Club Legend
Joined
Dec 16, 2010
Posts
1,268
Likes
1,488
Location
Melbourne
AFL Club
Essendon
Other Teams
Liverpool
Don't worry about me I started 15 years ago.
Worked hard too

Sent from my Pixel 3 XL using Tapatalk
Yeah must of been hard. What was your first property? 200k?

Must of been tough, glad you stopped whining though. These younger folk just dont understand all it takes is a bit of work to afford a $600k shitbox now.
 

Royal Flush

Norm Smith Medallist
Joined
Feb 14, 2008
Posts
6,149
Likes
4,228
Location
Brisbane
AFL Club
North Melbourne
Yeah must of been hard. What was your first property? 200k?

Must of been tough, glad you stopped whining though. These younger folk just dont understand all it takes is a bit of work to afford a $600k shitbox now.
It's always tough.

People struggled to buy a house in 1980 for 25k earning $250 a week
What's your point.

Yea I can still buy a house for under $200k. If I wanted to.



Sent from my Pixel 3 XL using Tapatalk
 

King Elvis

Hall of Famer
Joined
Aug 13, 2006
Posts
45,239
Likes
35,285
Location
SA
AFL Club
Adelaide
These are different factors. Right now Australian property is undergoing its biggest reduction in 40 years, in a low interest rate, low unemployment environment. Imagine if the economy seized up like the 90s?
Low interest rates don't matter if the banks won't loan money.
 

Espe

Club Legend
Joined
Dec 16, 2010
Posts
1,268
Likes
1,488
Location
Melbourne
AFL Club
Essendon
Other Teams
Liverpool
It's always tough.

People struggled to buy a house in 1980 for 25k earning $250 a week
What's your point.

Yea I can still buy a house for under $200k. If I wanted to.



Sent from my Pixel 3 XL using Tapatalk
So you're saying it's equally tough now as it was in 1980, so therefore the income to price ratio has remained the same, even when adjusting for interest rate differentiation?

Are you sure about that. Do you want a lifeline? Let's go with 50/50?

A: Yes
N: No
 

Royal Flush

Norm Smith Medallist
Joined
Feb 14, 2008
Posts
6,149
Likes
4,228
Location
Brisbane
AFL Club
North Melbourne
So you're saying it's equally tough now as it was in 1980, so therefore the income to price ratio has remained the same, even when adjusting for interest rate differentiation?

Are you sure about that. Do you want a lifeline? Let's go with 50/50?

A: Yes
N: No
Not at all
I know youd like to simplify that purely based on income to price ratio.
There are numerous other factors to consider.

One of the points in that post you conveniently ignored is that you can still buy a house for 200k

Sent from my Pixel 3 XL using Tapatalk
 

Jibroni

All Australian
Joined
Jun 14, 2017
Posts
718
Likes
633
Location
Adelaide
AFL Club
Melbourne
Other Teams
Liverpool, AC Milan, North Adelaide
So you're saying it's equally tough now as it was in 1980, so therefore the income to price ratio has remained the same, even when adjusting for interest rate differentiation?

Are you sure about that. Do you want a lifeline? Let's go with 50/50?

A: Yes
N: No
Interests rates were approx. 15% during the 80's and the average wage around $400 per week. Not everyone could even buy a house for $80k - in Adelaide suburbia.

Main issue today is that we spend more in entertainment and luxuries than necessary, specifically living within our means.
 

Scotland

Hall of Famer
Joined
May 5, 2006
Posts
46,472
Likes
47,689
AFL Club
West Coast
Why do these comparisons always come back to 'not everyone'?

If you find the point in the last 100 years where the ratio between median house price and median income was at its lowest, I'll find you someone who couldn't afford to buy a house then.

https://mccrindle.com.au/insights/blog/40-years-of-change-1975-to-today/

Four decades ago Sydney had the highest house cost, averaging $28,000 while today it exceeds $850,000. So while earnings have gone up, by almost tenfold, house prices have gone up by more than thirtyfold in that same period of time.
Repayments on an $680,000 loan (assuming you can find a $170,000 20% deposit) with a low low interest rate of 3.5% would be about $3000 a month, or $36k per year - which is nearly 2/3 of the net salary of your median $72k income earner. Sure that person could afford to move out to Mt Druitt or something (where the median is still high and the average person living there earns much less than the median wage) but where does that leave the below median/average income earners? People seem to think it's fine if everyone gets shunted down a rung on the pecking order.
 
Top Bottom