Society/Culture Australian Property Prices to Crash?

Remove this Banner Ad

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
If you're just out of uni aren't you most likely going to want to live in Melbourne or Sydney (depending on industry)?

Neither of those cities are going to be affordable for a uni studeny to purchase a home in our lifetimes, they've grown in population by almost 100% since the 80's, and the government is committed to them nearly doubling again by the end of the century.

That's just the reality now - if you want to work and live in the big cities, you won't be able to buy a place straight out of uni.
Buying a place without an income needs the 'Bank of Mum & Dad' to stump up the deposit, before you go looking to live close to work in your first step onto the property ladder.
 

Herne Hill Hammer

Premium Platinum
Jun 22, 2008
23,229
19,416
Cowes
AFL Club
Geelong
There is an inconsistency in government policy.

A house is supposed to be a family's big chance to invest for the future.

But when the future comes, the oldies don't want to cash in that investment. That is where the younger generation could buy property: from retirees supporting themselves.
I don't think oldies would have ever looked upon the family home as an investment, not many anyway. It was a place to raise a family and a meeting place / safe haven for after they've all flown the coop. You die and hand it onto the kids to do with as they please.
 

VineySMASH

Cancelled
Sep 23, 2021
224
184
AFL Club
Melbourne
Buying a place without an income needs the 'Bank of Mum & Dad' to stump up the deposit, before you go looking to live close to work in your first step onto the property ladder.
That isn't an option for everyone - renting a place or even share houses are perfectly viable for anyone under 30-40 years old trying to climb the corporate ladder.
 

Log in to remove this ad.

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
I don't think oldies would have ever looked upon the family home as an investment, not many anyway. It was a place to raise a family and a meeting place / safe haven for after they've all flown the coop. You die and hand it onto the kids to do with as they please.
When your folks die often sparks a move to a better family home for the next generation as many baby boomers know. Its another piece in the jigsaw of looking to own your own home outright.
 

VineySMASH

Cancelled
Sep 23, 2021
224
184
AFL Club
Melbourne
When your folks die often sparks a move to a better family home for the next generation as many baby boomers know. Its another piece in the jigsaw of looking to own your own home outright.
This is how it worked for previous generations I agree. But I am skeptical about how long that will be the case, particularly if there are cuts to either the age pension eligiblity or medicare.

I know my grandfather was able to afford a farm, a city house and a holiday house on the coast along with two tractors and two cars on a single income and a defence force pension. I'm fairly sure those days are well and truly over unless you're a surgeon.
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
You have more after 40 years work than 20, 10, or 5. Whether its because you pay down the mortgage or simply pay rent, the ball is in your court .... getting on the property ladder is never easy the first time, nor the next time if you have fallen off that ladder for any reason. No matter whether the interest is under 5% or in double figures, the problem is the same.

Very good article in The Aus:
'The core of CBA’s concern is the likelihood of growth in housing credit outstripping the outlook for wages growth.'
no. its absolutely not.

People getting into the market now (2021) are taking on debt that is on average 13 times more than their income and this is growing rapidly, the average mortgage just jumped 200k in 12 months. (almost 30%).

1632471171310.png


20-30 years ago the average ratio of income to mortgage was like 1:3, even taking into account Β¬17% interest rates its nothing compared to the current first home buyer.

if you don't see the disparity between what boomers faced and what current first home buyers face than only god can help you.

Everyone in this thread knows knows deep down why the housing market is f’ed.......investors being allowed to use equity to purchase homes ahead of first home buyers, both Internationally and domestically. When you have the head of the fu**in CBA (the biggest lender of home loans in the country) publicly saying something needs to be done about the housing market, than you know something is seriously wrong.

Sit back in the cool light of day and ask yourself why governments (especially a liberal one, one that namely boomers vote in) + RBA, would not want housing prices to fall? How much do you think the combined property investment portfolios of the guys running the show is worth?

Its also funny how Mr Lowe (from the RBA) is so stuck on trying to achieve the goals of his RBA mandate, odd considering he hasn't achieved a salary increase in Australia in more than 5 years.
 
Last edited:

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
With getting older comes simply having done more work to accumulate, or as you call it 'get richer ':
These bastards worked for 40 years & are better off than me after 40 months. :rolleyes:

Are you fair dinkum ? Lets see:
'Rich get richer due to them having advantage purely based on age. This is how the housing market works in Australia. Housing it not seen as an essential need but rather an investment opportunity, it is fundamentally wrong.'

Plenty of us cant buy a place when we leave home, we go out & rent & work, work & rent, & save enough to get a deposit.
No different to the 10% + interest rates, just more of your repayment went in interest.
Imagine 13%, 17% ..... bloody lucky to have a housing loan at the moment, more money for the kids, wining & dining, a new car !! Covid.

You arent dinkum !!
What exactly "more" think you are doing than the current first home buyer? What makes you think you are doing "more" work than them.

You buying a housing at a cheaper rate because they were cheaper when you bought it does not constitute you working harder. It means you were just fortunate to be born at a time when houses were cheaper, and if you weren't a total dumbass you can use the equity you were fortunate to get to your advantage to accumulate wealth.
 

Nuggs Bunny

Premium Platinum
Oct 12, 2015
6,383
10,063
de_dust2
AFL Club
Essendon
Other Teams
Dallas Cowboys
What exactly "more" think you are doing than the current first home buyer? What makes you think you are doing "more" work than them.

You buying a housing at a cheaper rate because they were cheaper when you bought it does not constitute you working harder. It means you were just fortunate to be born at a time when houses were cheaper, and if you weren't a total dumbass you can use the equity you were fortunate to get to your advantage to accumulate wealth.
People don't like it when you remind them they're not special.

I bought a house because I'm super intelligent and hardworking and I chose to be shot out of my dad's balls in the early 90's, even though a lot of people these days waited until the late 90's to be conceived. I took a risk by being born when I was and I deserve the reward for all of my hard work and big brained intelligence.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
no. its absolutely not.

People getting into the market now (2021) are taking on debt that is on average 13 times more than their income and this is growing rapidly, the average mortgage just jumped 200k in 12 months. (almost 30%).

View attachment 1244900

20-30 years ago the average ratio of income to mortgage was like 1:3, even taking into account Β¬17% interest rates its nothing compared to the current first home buyer.

if you don't see the disparity between what boomers faced and what current first home buyers face than only god can help you.

Everyone in this thread knows knows deep down why the housing market is f’ed.......investors being allowed to use equity to purchase homes ahead of first home buyers, both Internationally and domestically. When you have the head of the fu**in CBA (the biggest lender of home loans in the country) publicly saying something needs to be done about the housing market, than you know something is seriously wrong.

Sit back in the cool light of day and ask yourself why governments (especially a liberal one, one that namely boomers vote in) + RBA, would not want housing prices to fall? How much do you think the combined property investment portfolios of the guys running the show is worth?

Its also funny how Mr Lowe (from the RBA) is so stuck on trying to achieve the goals of his RBA mandate, odd considering he hasn't achieved a salary increase in Australia in more than 5 years.
I'm not claiming the property market is not stuffed.
Understanding how we got there is a graph that suits your attempt to blame baby boomers for todays problems & you are dinkum.

That you blame the RBA for no wages growth suggests you are not as across the status quo that you believe you are.

Why Governments dont want house prices to fall has many factors, not the least of which is the effect of throwing people out on the street - its not as simple as the GFC that routed home owners in the US, as those going out the front door here are liable for their mortgages.
Sure blame the rich, good one & there a conga line of people who use that as an excuse to avoid self responsibility.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
What exactly "more" think you are doing than the current first home buyer? What makes you think you are doing "more" work than them.

You buying a housing at a cheaper rate because they were cheaper when you bought it does not constitute you working harder. It means you were just fortunate to be born at a time when houses were cheaper, and if you weren't a total dumbass you can use the equity you were fortunate to get to your advantage to accumulate wealth.
The idea someone working for 40 years, earning money for 40 years, has done more work than someone who has been working for 10 years, earning money for 10 years. Thats not got anything to do with working hard. Compre?
People working 6 day weeks do more paid work than someone working 4 day weeks - they end up with more money to spend, to save, to acquire or pee up against the wall.
It does not constitute working harder. Not Einstein stuff Hirdy even for a dum-ass, you'd wouldnt hear about it, dumbass.
What about equity, you were close but no cigar AGAIN.
 
Last edited:

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
This is how it worked for previous generations I agree. But I am skeptical about how long that will be the case, particularly if there are cuts to either the age pension eligiblity or medicare.

I know my grandfather was able to afford a farm, a city house and a holiday house on the coast along with two tractors and two cars on a single income and a defence force pension. I'm fairly sure those days are well and truly over unless you're a surgeon.
Follow where the money went after your grandfather departed this world & I'd reckon you would know the answers. Asset values have a relativity, a house, a holiday house, a pension - how many people got a feed.

My folks home was divided 3 ways & my mortgage got the benefit, & my 2 kids will get the benefit of that. Mind you the folks home was a 2 br home, built after Dad got back from Europe after WW2 & it was built in the late 40s, in the sticks on a gravel road, no driveway or garage, not a problem because they didnt own a car. No service pension, a war service loan though.
 

VineySMASH

Cancelled
Sep 23, 2021
224
184
AFL Club
Melbourne
Follow where the money went after your grandfather departed this world & I'd reckon you would know the answers. Asset values have a relativity, a house, a holiday house, a pension - how many people got a feed.

My folks home was divided 3 ways & my mortgage got the benefit & my 2 kids will get the benefit of that. Mind you the folks home was a 2 br home, built after Dad got back from Europe after WW2 & it was built in the late 40s, in the sticks on a gravel road, no driveway or garage, not a problem because they didnt own a car. No service pension, a war service loan though.
My comment was more about income and the value of a dollar thesedays, rather than asset value.

It was a very different era and I hope I'm not sounding like a boomer, but I just think people need to recognise how much Australia has changed - Melbourne isn't a 3 million person city anymore, its a 6 million person city, and it will very soon be a 10 million person city.

If you're going to live in Melbourne as a young person straight after uni, be prepared to rent or live in share houses for many years. In fact, you may never be able to buy a 3 or 4 bedroom house on a decent block in Melbourne - just as you probably couldn't afford to buy something like that in London.

If you want more space you're eitehr going to have to live at the absolute fringes of the city, or move to a regional area. COVID has probably sped this up a bit, but even the regions will be unaffordable soon.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
My comment was more about income and the value of a dollar thesedays, rather than asset value.

It was a very different era and I hope I'm not sounding like a boomer, but I just think people need to recognise how much Australia has changed - Melbourne isn't a 3 million person city anymore, its a 6 million person city, and it will very soon be a 10 million person city.

If you're going to live in Melbourne as a young person straight after uni, be prepared to rent or live in share houses for many years. In fact, you may never be able to buy a 3 or 4 bedroom house on a decent block in Melbourne - just as you probably couldn't afford to buy something like that in London.

If you want more space you're eitehr going to have to live at the absolute fringes of the city, or move to a regional area. COVID has probably sped this up a bit, but even the regions will be unaffordable soon.
I understand your point, well made.

As an early baby boomer (b 1948),I saw inflation take off in the late 60s, flowing through to the Hawke initiative, the wage accord. House payments going up when your wage wasnt meant you curtailed your life style. Saving a deposit wasnt easy, even when we had 2 incomes.
The thing about baby boomers is their folks houses were assets that were inflated & this money flowed thru to the boomer generation as their parent passed away. Where that money was directed to baby boomer housing, that money will see current generations & make the inner suburbs even more expensive.

Add to that superannuation, that was something you needed to find from your pay, now that 10% is compulsorily taken from the pay packet & not reflected in take home pay. The employer pays it, but the employee doesnt see it.
 

(Log in to remove this ad.)

fishardansin

Brownlow Medallist
Apr 6, 2008
16,215
11,489
coburg
AFL Club
Essendon
Other Teams
Australian cricket team
It would be nice to see the government invest to increase their share of the property market to over 50% and then provide means-tested rent.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
It would be nice to see the government invest to increase their share of the property market to over 50% and then provide means-tested rent.
The governments are selling off any asset they think will get a dollar, see VicRoads.
They are taking 10% of wages to squirrel away for you, what % of the pay do you want for rent?
 

Frank Grimes

Premiership Player
May 8, 2007
3,859
7,139
between two bowling alley
AFL Club
Richmond
Melbourne isn't a 3 million person city anymore, its a 6 million person city, and it will very soon be a 10 million person city.
While I think there is structural reasons from government policy and particularly the banking system why house prices have got out of control, I think you make a fair point here to keep in mind of comparing the past to now.

Put simply it needs to be taken in consideration there would be less demand for land 10km out of the CBD in a city with 3 million people than there would be with 6 million people for example.
 

VineySMASH

Cancelled
Sep 23, 2021
224
184
AFL Club
Melbourne
While I think there is structural reasons from government policy and particularly the banking system why house prices have got out of control, I think you make a fair point here to keep in mind of comparing the past to now.

Put simply it needs to be taken in consideration there would be less demand for land 10km out of the CBD in a city with 3 million people than there would be with 6 million people for example.
Yeah and I don't want to be condescending toward young people either - it is undoubtedly tougher.
 

Deliverance

Brownlow Medallist
Jun 19, 2011
15,443
24,607
MCG
AFL Club
Hawthorn
While I think there is structural reasons from government policy and particularly the banking system why house prices have got out of control, I think you make a fair point here to keep in mind of comparing the past to now.

Put simply it needs to be taken in consideration there would be less demand for land 10km out of the CBD in a city with 3 million people than there would be with 6 million people for example.
Doesn't help that half of Melbourne properties are rentals. Drains a lot of the supply.
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
The idea someone working for 40 years, earning money for 40 years, has done more work than someone who has been working for 10 years, earning money for 10 years. Thats not got anything to do with working hard. Compre?
People working 6 day weeks do more paid work than someone working 4 day weeks - they end up with more money to spend, to save, to acquire or pee up against the wall.
It does not constitute working darker. Not Einstein stuff Hirdy even for a dum-ass, you'd wouldnt hear about it, dumbass.
What about equity, you were close but no cigar AGAIN.
Did you buy your first house at 60 years of age mate? No. you didn't buy your first house after 40 years of work you pillock. That is the Point.

Jesus Christ. Just log out.
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
I'm not claiming the property market is not stuffed.
Understanding how we got there is a graph that suits your attempt to blame baby boomers for todays problems & you are dinkum.

That you blame the RBA for no wages growth suggests you are not as across the status quo that you believe you are.

Why Governments dont want house prices to fall has many factors, not the least of which is the effect of throwing people out on the street - its not as simple as the GFC that routed home owners in the US, as those going out the front door here are liable for their mortgages.
Sure blame the rich, good one & there a conga line of people who use that as an excuse to avoid self responsibility.
Wage growth is a key mandate of the RBA.........so, yes they should be blamed for not achieving it, for 5+ years.

You are way out of your depth in this discussion mate.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
Did you buy your first house at 60 years of age mate? No. you didn't buy your first house after 40 years of work you pillock. That is the Point.

Jesus Christ. Just log out.
You'd do better to acknowledge your own inability to read the written word. At least you understand now.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
Wage growth is a key mandate of the RBA.........so, yes they should be blamed for not achieving it, for 5+ years.

You are way out of your depth in this discussion mate.
The RBA does not set wages, as well you know.
It does not set compulsory superannuation rates as well you know.

You are also well aware that wage costs for employers have continued to rise* but its is in the on costs, such as Super, & public holidays ....

* I dont dispute wages need to increase, nor that inflation rates have a twin edge to them & the current generation is on the wrong end of that effect.
 

Ned_Flanders

Premium Platinum
Aug 22, 2009
70,725
129,532
AFL Club
Richmond
Other Teams
76'ers
Wage growth is a key mandate of the RBA.........so, yes they should be blamed for not achieving it, for 5+ years.

You are way out of your depth in this discussion mate.
No it's not. The RBA has three objectives:

A) the stability of the currency of Australia;

B)the maintenance of full employment in Australia; and

C) the economic prosperity and welfare of the people of Australia.

Long ago the RBA got on board with the view that economic stability is the best way to achieve these goals, and low inflation is a key to that. Wage growth is only good if it isn't inflationary (above acceptable levels)

Most of our wage growth in the 90s was due to productivity gains - awesome because that isn't inflationary. The issue is productivity gains have plateaued, which is why wage growth has stagnated.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
From the Weekend Australian:
'Something very unusual is happening at the very top of the property sector – the head of the nation’s biggest mortgage lender wants the government to step in and cool the market.
Matt Comyn, the chief executive of Commonwealth Bank, is openly calling for moves to cool the same market in which the bank makes most of its money … what on earth is happening?

It’s a measure of just how stretched the gap between the real world and the residential property market has become that Comyn is doing this.

What he fears is crucial to understanding where house prices are likely to go from here for homeowners and investors alike.

It’s also highly relevant in getting a picture of how banking stocks may perform in the months ahead.

There are two issues here.
The first is the prospect of a further upward swing in residential prices once lockdowns fade away across the metropolitan capitals. That would mean an upswing on top of the 20 per cent that is already clocked up over the last year.

The second is the extraordinary situation where no single government agency has explicit responsibility for house prices – even though we are in what is surely the most unlikely house price boom in a century.'

Come on down those needing someone to blame, Hirdstheword


 

Remove this Banner Ad

Remove this Banner Ad