Housing market 2021

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Lyyynnnchy said:
We’ll occupy the 40 sqm rooftop office given there’s only 2 of us with the other owners being silent partners and having other larger businesses to concentrate on

Would love to go right through to completion especially with the interest we’ve had from prospective tenants simply going off the PR and the net zero carbon ambition. We’ve had interest from hotel groups without a DA and interest from other developers subject to DA at a far greater price than what we paid so a sale could be tempting but Given it’s our first we’d love to see it through to the end

We’re steering well clear of apartment developments in Melbourne. The one we’re close to exchanging on is a townhouse development with circa 200 sqm townhouses and decent sized outdoor area. It’s a local owner occupier market suiting both downsizers and wealthy young families so very little reliance (and even demand) from China in this area
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Who is the architect? Nice looking building. I’m in engineering construction but we don’t do much in resi as the margins are tight.
 
Jello_B said:
Who is the architect? Nice looking building. I’m in engineering construction but we don’t do much in resi as the margins are tight.
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Architect is Grimshaw. We’ve used them previously on 210-220 George St when we were working with a Chinese developer and found them to be really good to work with

They have generally worked on larger buildings but have received such a great response to the building both externally and internally from their own employees (if only Council thought the same) that they’ve opened a new division to concentrate on boutique developments
 
Lyyynnnchy said:
Architect is Grimshaw. We’ve used them previously on 210-220 George St when we were working with a Chinese developer and found them to be really good to work with

They have generally worked on larger buildings but have received such a great response to the building both externally and internally from their own employees (if only Council thought the same) that they’ve opened a new division to concentrate on boutique developments
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Yer they’re a tier one architect and I know them well. Bit surprised they would work on a project of that size.
 

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Lyyynnnchy said:
I’ve started up a development company with a colleague of mine and we recently purchased our first development site, a commercial office development site in Surry Hills. Not entirely housing related however the company will look to have about 75% of its developments being resi

Website is here for anyone interested - www.clifton.com.au

This is what we’re proposing, hopefully the prospective tenants agree it’s a higher quality development than what is generally available in Surry Hills
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We’re about to reach acceptance on a townhouse development in Melbourne. I’ll give details once we exchange contracts

Feel free to ask any questions about development in general! I’ll give my view on the housing market a bit later
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this actually looks pretty slick.
 
Ordovician said:
It is reassuring to hear that wealthy young families can still afford to buy 20 square townhouses. 😂

I presume they are 100m2 footprints two stories with 3 Br upstairs, fully detached with at least 3 on the block. We rented something similar backing on to a linear park in a most salubrious area, the second wife crap box next door was 900 m2, last year while we were renovating. If you have to live somewhere else it was quite nice although the rents were pushing 4k pcm, and there market value today would be about 2 million or a bit over. If that block was developed today you pay at least 3-4 million for the land so that does not leave a huge profit margin after the build costs of +3 million for 3 units. Plus your time and hassle dealing with various nuffs.

Anyway great to have yas back!

You have been sorely missed on the speculative markets thread.
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7 month old child now! Unfortunately all my disposable income is going in to Clifton these days
 
Ordovician said:
It is reassuring to hear that wealthy young families can still afford to buy 20 square townhouses. 😂

I presume they are 100m2 footprints two stories with 3 Br upstairs, fully detached with at least 3 on the block. We rented something similar backing on to a linear park in a most salubrious area, the second wife crap box next door was 900 m2, last year while we were renovating. If you have to live somewhere else it was quite nice although the rents were pushing 4k pcm, and there market value today would be about 2 million or a bit over. If that block was developed today you pay at least 3-4 million for the land so that does not leave a huge profit margin after the build costs of +3 million for 3 units. Plus your time and hassle dealing with various nuffs.

Anyway great to have yas back!

You have been sorely missed on the speculative markets thread.
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Ill divulge more info in 2.5 weeks

We’ll be going back in to revise the planning permit so will do a full run through from purchase, through planning, tender, build, sales etc
 
Lyyynnnchy said:
I think so too!

Hopefully we get Council over the line
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I work in property development too working within the new Pyrmont place masterplan.

City of Sydney are a disaster.
 
Can someone please explain how this is possible. The hurdles I had to jump through for a second property with more than enough equity, low interest rates, positive rental property, very good income under 80%lvr, and still the bank limited my borrowing.by 50k. Now my equity is significantly more, but at least with the banks they wont lend me more



www.news.com.au

Uni student buys six houses making $6/hr

A Sydney man who saved up for his first home by working at KFC for $6 an hour has gone on to amass a portfolio of six properties worth over $1 million.
www.news.com.au www.news.com.au
 

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RobbieGray17 said:
Can someone please explain how this is possible. The hurdles I had to jump through for a second property with more than enough equity, low interest rates, positive rental property, very good income under 80%lvr, and still the bank limited my borrowing.by 50k. Now my equity is significantly more, but at least with the banks they wont lend me more



www.news.com.au

Uni student buys six houses making $6/hr

A Sydney man who saved up for his first home by working at KFC for $6 an hour has gone on to amass a portfolio of six properties worth over $1 million.
www.news.com.au www.news.com.au
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Probably a family member as guarantor
 
RobbieGray17 said:
Can someone please explain how this is possible. The hurdles I had to jump through for a second property with more than enough equity, low interest rates, positive rental property, very good income under 80%lvr, and still the bank limited my borrowing.by 50k. Now my equity is significantly more, but at least with the banks they wont lend me more



www.news.com.au

Uni student buys six houses making $6/hr

A Sydney man who saved up for his first home by working at KFC for $6 an hour has gone on to amass a portfolio of six properties worth over $1 million.
www.news.com.au www.news.com.au
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articles like this never tell the full story. They make it out like these kids made this amazing property portfolio on his own off a s**t wage.

They never mention the behind the scenes help they have had whether its cash from family or guarantors etc.
 
Rates are about to be going up and the housing market is soon going to topple over.

us fed predicts up to four rate rises this year.

rba will drag its heals but our banks borrow from overseas so will have to put rates up. And the aud will soon fall sharply if the rba does drag it heels which will soon force the rba to put up rates as well.

4 rate rises would increase interest payments nearly 50 percent. This is not looking good.
 
Seeds said:
Rates are about to be going up and the housing market is soon going to topple over.

us fed predicts up to four rate rises this year.

rba will drag its heals but our banks borrow from overseas so will have to put rates up. And the aud will soon fall sharply if the rba does drag it heels which will soon force the rba to put up rates as well.

4 rate rises would increase interest payments nearly 50 percent. This is not looking good.
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Most loans add 2% to cover but knowing australians their actual living expenses are higher than than estimates.

I think people will tighten spending. I dont think the first 4 hikes will be an issue it will be rhe ones after that. 2023-2024.

People buying houses this year could owe more than its value
 
Seeds said:
Rates are about to be going up and the housing market is soon going to topple over.

us fed predicts up to four rate rises this year.

rba will drag its heals but our banks borrow from overseas so will have to put rates up. And the aud will soon fall sharply if the rba does drag it heels which will soon force the rba to put up rates as well.

4 rate rises would increase interest payments nearly 50 percent. This is not looking good.
Click to expand...
RobbieGray17 said:
Most loans add 2% to cover but knowing australians their actual living expenses are higher than than estimates.

I think people will tighten spending. I dont think the first 4 hikes will be an issue it will be rhe ones after that. 2023-2024.

People buying houses this year could owe more than its value
Click to expand...

Rates are undoubtedly going to go up at some stage but Australia is not seeing wage growth like the US and Uk is

Also, in Australia only circa 30% of the 80 odd items that contribute to CPI is actually seeing any growth, petrol and groceries being the major contributors. Less pressure to raise rates when major contributors to inflation consists of house hold expenses. This goes some way to capping inflation or if not capping, then at least easing any pressure inflation is putting on the RBa

There’s far less pressure on the RBA compared to the Fed

And while the banks like to cry poor over the cost of offshore debt, in the early 2000s it only made up 10% of total funding. It’s now up to 20% however if the banks need to there’s enough local money to drop it back down to 10%
 
Lyyynnnchy said:
Rates are undoubtedly going to go up at some stage but Australia is not seeing wage growth like the US and Uk is

Also, in Australia only circa 30% of the 80 odd items that contribute to CPI is actually seeing any growth, petrol and groceries being the major contributors. Less pressure to raise rates when major contributors to inflation consists of house hold expenses. This goes some way to capping inflation or if not capping, then at least easing any pressure inflation is putting on the RBa

There’s far less pressure on the RBA compared to the Fed

And while the banks like to cry poor over the cost of offshore debt, in the early 2000s it only made up 10% of total funding. It’s now up to 20% however if the banks need to there’s enough local money to drop it back down to 10%
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Regardless of pressure the State/Federal, RBA and Phillip Lowe are completely out of touch, something should have been done to curb inflation as soon as the first 1/4 of 2021 results were in when housing prices record growth - Everyone has known about growing inflation for well over a year you cannot have Housing grow at 30% in a year and not see this coming. They all did nothing. June came and went. they all did nothing, they still have done nothing.

Now we have the largest debt to income ratio in this history of this country with next to zero wage growth and inflation knocking on our door if not about to bust through it.

Phillip Lowe will go down as one of if not the most useless RBA heads of all time. Under his watch;

  • Next to Zero Wage growth even with next to 0.0 interest rates.
  • Record Housing Prices
  • Highest Debt to income Ratios in the history of the country with Interests rates now being forced to go up.
  • Highest Levels of inflation in almost 20 years.

He has done nothing except oversee an incoming disaster, and many people will undoubtedly pay the toll for it.

This is what happens when both the RBA, State and federal Governments have ZERO long term planning for housing and as it would seem inflation.
 
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Seeds said:
Rates are about to be going up and the housing market is soon going to topple over.

us fed predicts up to four rate rises this year.

rba will drag its heals but our banks borrow from overseas so will have to put rates up. And the aud will soon fall sharply if the rba does drag it heels which will soon force the rba to put up rates as well.

4 rate rises would increase interest payments nearly 50 percent. This is not looking good.
Click to expand...
Is there any data on how many people have to sell in distress because of being unable to afford these mortgage? I feel like it wouldn't be a huge amount. Selling your house would be an absolute last resort and most people would just go without in other areas of their life in order to keep their house which would be the single most important thing to them.
 
A bank might be able to run an algorithm over the entities that hold accounts with them. Stripping the identity information to create some averages measuring totals in, totals out, average retained, even the sort of things money spent on.

Then it's just a matter of adding some bias by declaring certain things essential spending and others non essential.

You'll get an average of how much capacity is in the economy to have more money extracted and how many entities are below the scope to handle increased interest.

Then you add some more bias by assuming that some of the essential spending will be shed to continue feeding the mortgage.
 
Golden_6 said:
Is there any data on how many people have to sell in distress because of being unable to afford these mortgage? I feel like it wouldn't be a huge amount. Selling your house would be an absolute last resort and most people would just go without in other areas of their life in order to keep their house which would be the single most important thing to them.
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you are pretty much spot on. People just prioritise mortage payments. What we will see when interests rates go up isn't necessarily a crash of any magnitude but consumer spending will go down which is not good for the wider economy.
 
RobbieGray17 said:
Most loans add 2% to cover but knowing australians their actual living expenses are higher than than estimates.

I think people will tighten spending. I dont think the first 4 hikes will be an issue it will be rhe ones after that. 2023-2024.

People buying houses this year could owe more than its value
Click to expand...
Do we actually know that? Just cos banks say thats so doesnt make it so.

and its the investors who are leveraged with multiple mortgages that will be the first to go.

in the past 4 rate rises was nothing. It increased rates from 7 to 8 percent. A one seventh increase in interest payments. But now a 4 rate rise increases rates from 2-3 percent. A 50 percent increase in interest payments. Thats an equivalent to rates increasing from 7 to 10.5 percent in the past. its enormous.
 
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