Society/Culture Australian Property Prices to Crash?

[Kwality]

Im fixed for 3 years. Rise away. who cares

Did that myself when interest rates dropped to single digits after paying 17% on my home loan.

Here is one view from today:
Interest rates will rise but don’t panic! - Switzer Daily

'Here’s the thinking: record low interest rates and a big budget deficit goes with big economic growth; this goes with rising employment and falling unemployment; and it goes with FOMO — the fear of missing out — which goes with lots of homebuyers at auctions and home sales; then it goes with rising house prices, which goes with the RBA saying “enough is enough, so it’s time to raise interest rates to slow things down.”

I think if the RBA starts to worry about house prices rising too fast, it will get the Australian Prudential Regulatory Authority (APRA) to tell the banks to turn off the supply of easy-to-get loans, which would slow the housing market down.

My best guess is that you have two years of not having to worry about interest rate rises. But I wouldn’t bet on three!'

 

[Pessimistic]

I guess my rather pathetic super fund is the cashflow for my retirement in a few years time, but the property will do the heavy lifting beyond the first decade

I think I predicted $10m standard houses in blue chip suburbs in 15-20yrs Tell me I’m wrong?

 

[Cuzz09]

Did that myself when interest rates dropped to single digits after paying 17% on my home loan.

Here is one view from today:
Interest rates will rise but don’t panic! - Switzer Daily

'Here’s the thinking: record low interest rates and a big budget deficit goes with big economic growth; this goes with rising employment and falling unemployment; and it goes with FOMO — the fear of missing out — which goes with lots of homebuyers at auctions and home sales; then it goes with rising house prices, which goes with the RBA saying “enough is enough, so it’s time to raise interest rates to slow things down.”

I think if the RBA starts to worry about house prices rising too fast, it will get the Australian Prudential Regulatory Authority (APRA) to tell the banks to turn off the supply of easy-to-get loans, which would slow the housing market down.

My best guess is that you have two years of not having to worry about interest rate rises. But I wouldn’t bet on three!'

Im happy to fix again in 3 years at a higher rate. Hopefully not crazy high but 3 or 4% meh

 

[HirdsTheWord]

I guess my rather pathetic super fund is the cashflow for my retirement in a few years time, but the property will do the heavy lifting beyond the first decade

I think I predicted $10m standard houses in blue chip suburbs in 15-20yrs Tell me I’m wrong?

i'm not sure what you define as blue chip but we aren't far off that figure now.

based on the current trend in 20 years a house 20km from the CBD will cost you $10m

 

[HirdsTheWord]

Im happy to fix again in 3 years at a higher rate. Hopefully not crazy high but 3 or 4% meh

really depends what your current loan is.

3 or 4% a nothing mortgage isn't the issue. on a 1,000,000 mortgage though, which is probably not far off the average in Sydney is for new home buyers.

 

[Cuzz09]

yeah nowhere near that.

 

[Drummond]

Don’t know how much more I got in me.

Was between myself and another couple, offered $36k over max, and just missed out.

Pretty disheartening.

 

[darcytiger]

Don’t know how much more I got in me.

Was between myself and another couple, offered $36k over max, and just missed out.

Pretty disheartening.

It sucks, $36k over your max or the max price bracket advertised? I’m sure you know by now but you can chuck those quoted figures in the bin.

I bought my place in December last year, was advertised at 630-690 I think. Ended up paying 740. My “guide” was looking at ‘Sold’ on realestate.com in the surrounding area. The price I paid was right in the mix with those.

PS: not trying to come across as a know it all, I hated all the armchair experts when I was looking (about 10 months of inspections and 6 missed auctions, 4 missed private sales). Keep your chin up!

 

[Bombermania]

Don’t know how much more I got in me.

Was between myself and another couple, offered $36k over max, and just missed out.

Pretty disheartening.

Instead of going to an auction try to suss out what the buyer wants and some agents will give you a price range then make an offer at the top of that range before telling the agent you wont be at the auction because you are away for the weekend.

it might not work but it removes the stress of the auction environment and it sends a message to the agent that you know what you want and wont play their game and it gives you greater control over what you spend.

 

[hamohawk1]

It sucks, $36k over your max or the max price bracket advertised? I’m sure you know by now but you can chuck those quoted figures in the bin.

I bought my place in December last year, was advertised at 630-690 I think. Ended up paying 740. My “guide” was looking at ‘Sold’ on realestate.com in the surrounding area. The price I paid was right in the mix with those.

PS: not trying to come across as a know it all, I hated all the armchair experts when I was looking (about 10 months of inspections and 6 missed auctions, 4 missed private sales). Keep your chin up!

Fighting a losing battle at the moment. Some people (rightly or wrongly) have no real limit and will essentially outbid anything you put forward.

Like to think this won't last forever, who knows.

 

[Royal Flush]

The market is crazy.
I don't think agents are tactically suggesting a lower market value as a technique to get a better price .

They use the data available to them.

It's the buyers desperation that is causing this.

It's combination of covid, banks leaniancy on lending and migration patterns within australia.

Im putting my investment on the market only because the market is willing to pay crazy overs.

50% increase on my investment from 2016.

I'll wait until it's sold, but if someone wants to pay over, the agents range, that would not be a reflection on the agent, but the market.




On Pixel 4a (5G) using BigFooty.com mobile app

 

[Deliverance]

The market is crazy.
I don't think agents are tactically suggesting a lower market value as a technique to get a better price .

They use the data available to them.

It's the buyers desperation that is causing this.

It's combination of covid, banks leaniancy on lending and migration patterns within australia.

Im putting my investment on the market only because the market is willing to pay crazy overs.

50% increase on my investment from 2016.

I'll wait until it's sold, but if someone wants to pay over, the agents range, that would not be a reflection on the agent, but the market.




On Pixel 4a (5G) using BigFooty.com mobile app

Absolutely they are and have been for decades. But agree with most if what you've said.

 

[HirdsTheWord]

The market is crazy.
I don't think agents are tactically suggesting a lower market value as a technique to get a better price .

They use the data available to them.

It's the buyers desperation that is causing this.

It's combination of covid, banks leaniancy on lending and migration patterns within australia.

Im putting my investment on the market only because the market is willing to pay crazy overs.

50% increase on my investment from 2016.

I'll wait until it's sold, but if someone wants to pay over, the agents range, that would not be a reflection on the agent, but the market.




On Pixel 4a (5G) using BigFooty.com mobile app

You are absolutely dreaming if you think Agents don't knowingly list under what they know is the market price, specifically more so when its an Auction.

There is a reason there was a law introduced to prevent it, the problem is its absolutely un policeable, and agents just say well that's what the owner wanted to list it at.

All you literally have to do is go onto domain + realestate.com and see what similar properties are selling for in the areas you are looking, agents can do this too, but they choose not too.

 

[HirdsTheWord]

Don’t know how much more I got in me.

Was between myself and another couple, offered $36k over max, and just missed out.

Pretty disheartening.

absolutely sucks man but you just have to stay in the hunt.

let other people over extend themselves.

All its going to take is for interest prices to go up and a lot of people will be in trouble.

 

[HirdsTheWord]

Fighting a losing battle at the moment. Some people (rightly or wrongly) have no real limit and will essentially outbid anything you put forward.

Like to think this won't last forever, who knows.

There is also ALOT of people who are not borrowing responsibly and over extending themselves financially, banking on the fact interest rates will remain low.

All its going to take is a shake up of interest rates to unsettle ALOT of people.

 

[Royal Flush]

You are absolutely dreaming if you think Agents don't knowingly list under what they know is the market price, specifically more so when its an Auction.

There is a reason there was a law introduced to prevent it, the problem is its absolutely un policeable, and agents just say well that's what the owner wanted to list it at.

All you literally have to do is go onto domain + realestate.com and see what similar properties are selling for in the areas you are looking, agents can do this too, but they choose not too.

Theyve got all their data which gives them their price range.
ATM People are putting in offers way above market value.
My property has a range on real estate .com.
But the market is desperate and will pay over that.
Many factors leading to this point in time, which can be discussed.
But, the best an agent could do, is do a comparative with sales in the area.

Nobody can predict an over-valued price offer.

I hope you are right, because my agent has promised a price range that is 60% more then what i paid 6 years ago.
Which is 40% more then the valuation range on real estate.com

 

[HirdsTheWord]

Theyve got all their data which gives them their price range.
ATM People are putting in offers way above market value.
My property has a range on real estate .com.
But the market is desperate and will pay over that.
Many factors leading to this point in time, which can be discussed.
But, the best an agent could do, is do a comparative with sales in the area.

Nobody can predict an over-valued price offer.

I hope you are right, because my agent has promised a price range that is 60% more then what i paid 6 years ago.
Which is 40% more then the valuation range on real estate.com

Yes they have the data of what's sold in areas of similar property type, they don't use it.

I'm not talking about your estimated range..........these are NEVER accurate, I'm talking about like for like properties in the same area that have actually SOLD.

If you think agents don't play this game sorry, but you are naïve.

You can easily predict what a property will sell for when you look at what similar properties have sold for in the same area, in the recent time. Its seriously not rocket science.

There will always be the crazy few properties that go to stupid prices because 2 bidders seriously want it, but agents rarely list is correctly to begin with, which inflates the gains so it looks like some crazy over the top purchase.

 

[Royal Flush]

Yes they have the data of what's sold in areas of similar property type, they don't use it.

I'm not talking about your estimated range..........these are NEVER accurate, I'm talking about like for like properties in the same area that have actually SOLD.

If you think agents don't play this game sorry, but you are naïve.

You can easily predict what a property will sell for when you look at what similar properties have sold for in the same area, in the recent time. Its seriously not rocket science.

There will always be the crazy few properties that go to stupid prices because 2 bidders seriously want it, but agents rarely list is correctly to begin with, which inflates the gains so it looks like some crazy over the top purchase.

I really dont know what you're talking about.

 

[Kwality]

You are absolutely dreaming if you think Agents don't knowingly list under what they know is the market price, specifically more so when its an Auction.

There is a reason there was a law introduced to prevent it, the problem is its absolutely un policeable, and agents just say well that's what the owner wanted to list it at.

All you literally have to do is go onto domain + realestate.com and see what similar properties are selling for in the areas you are looking, agents can do this too, but they choose not too.

Better to look at recent sales of comparable properties in the same area. Whether a buyer or seller, its a fair guide.

 

[hamohawk1]

Just listening to the radio, and apparently the arbitrary metric for 'responsible lending' is around 6 x the individual income (median income iirc is around 65k). If this was the case most Australians could afford nothing more than a 1 bed apartment 5-20km from the city or a house in the middle of nowhere.

This does not correlate with the average house, or unit price.

Madness.

 

[Nuggs Bunny]

Just listening to the radio, and apparently the arbitrary metric for 'responsible lending' is around 6 x the individual income (median income iirc is around 65k). If this was the case most Australians could afford nothing more than a 1 bed apartment 5-20km from the city or a house in the middle of nowhere.

This does not correlate with the average house, or unit price.

Madness.

Most homes are bought with two incomes, 2*6*65k is $780k.

Most home buyers work full time, the median full time wage is $89,000. 2*6*89k is $1.1 million.

 

[Simon_Nesbit]

Just listening to the radio, and apparently the arbitrary metric for 'responsible lending' is around 6 x the individual income (median income iirc is around 65k). If this was the case most Australians could afford nothing more than a 1 bed apartment 5-20km from the city or a house in the middle of nowhere.

This does not correlate with the average house, or unit price.

Madness.

Which is why not many single people are buying houses!

A young couple, no kids, both working full time in entry level qualified jobs (say 120kpa combined income). This will comfortably get to a $700k borrowing which with 100k savings that will get you to a 750k house. That's a whole lot of house for a first home-buyer with minimal savings, and repayments of $650pw shouldn't be a stretch - certainly not a lot more than equivalent rental.

LIVE AT HOME. AS LONG AS YOU CAN. SAVE. Buy as cheap as you can, and ALWAYS commit as much to permanent savings as you can.

 

[Jimmy_the_Gent]

That's a spicy market.

 

[HirdsTheWord]

Just listening to the radio, and apparently the arbitrary metric for 'responsible lending' is around 6 x the individual income (median income iirc is around 65k). If this was the case most Australians could afford nothing more than a 1 bed apartment 5-20km from the city or a house in the middle of nowhere.

This does not correlate with the average house, or unit price.

Madness.

well yeah if your single your going to struggle.

Most people buy with their partner.

 

[Lach72]

Which is why not many single people are buying houses!

A young couple, no kids, both working full time in entry level qualified jobs (say 120kpa combined income). This will comfortably get to a $700k borrowing which with 100k savings that will get you to a 750k house. That's a whole lot of house for a first home-buyer with minimal savings, and repayments of $650pw shouldn't be a stretch - certainly not a lot more than equivalent rental.

LIVE AT HOME. AS LONG AS YOU CAN. SAVE. Buy as cheap as you can, and ALWAYS commit as much to permanent savings as you can.

Don't get sick, lose your job, get pregnant, have a reduction in pay or have interest rates move upwards or you're ****ed.

Interest rates hit 5%? oops it's now $870 a week