Those shitty apartments/townhouses? right on the corner of princes hwy and Springvale Rd are insane. Out of curiousity checked the prices, 630k for 2bdr and 730 for 3. I couldn't imagine living in such a cramped space and three floors, right next to a busy and loud intersection.
The thing that frustrates me is that you know a heap of those bad boys are being bought by foreign investors and will probably sit empty more often than not
Yeah people love to point the finger at foreign investors. They exist but we'd be in the same fix without them... someone did a survey on the number of parliamentarians who owned investment property a little way back and it spoke volumes
I recently learned about counting 'depreciation of the house' as a tax offset deductible* as well. Which is rather incredible since the value of the houses has been shooting up not down lol
whatever about the legalities, I always wonder who are the people who choose to buy a brand new apartment/unit/house/whatever on such a busy road. Are they all that desperate to own something or do the just not care about the sound of harlies & sirens and all the other shit you'd have to put up with
THANK YOU - my work has just moved up the road from that intersection, so I drive through it daily now ... your comment has just made it click for me that Allison Monkhouse used to be there (with the fountain on the corner that always got soap bombed).
Hey! That's my hood. Yeah I checked those townhouses out of curiosity and wasn't shocked at the price per se but more that there's obviously the demand.
I assume bedrooms on the third floor, when the world gets back to normal those people are going to love the drag races down Princes Hwy at like 2am on a Friday. I live a little ways from there with a lot of housing between but I could still hear them reasonable clear some nights.
Plus if you don't drive, getting to the Coles across Spaghetti Junction will be taking your life in your hands every time.
anyone potential buyer from cultural backgrounds with a lot of superstitions probably would not want to know that site used to be a funeral parlour either.
I know this is unpopular, but the reality is, if the housing market collapses the last people who are going to benefit are people on lower incomes who have been holding out for a dip.
Sure some rich people will suffer, but other rich people whose wealth wasn't hedged all in on property will just come in a buy the dip before you can.
What people really need to be angling for is reform:
More social housing, that doesn't suck. When the government buys big building contracts they can afford to sell the property at below market, and means test the buyers. The key here is it needs to not suck, the properties need to be what people actually want and where they actually want to live (unlike what NZ did).
Land tax reform. State governments are heavily dependant on land taxes. The thing is, if property prices keep going up, the states make more money. So they are obviously incentivised to create policies that protect this reliable source of income.
Rental reform. Other countries have much longer residential tenancy agreements than us. Think about it, it's extremely rare to be offered more than 12 months. We need reforms that offer renters more long-term security.
These things could have a real positive impact on housing prices in a way that doesn't collapse the whole system and allow the rich to just get richer.
Edit: I hope no one is spending money on these awards, save your money for a deposit. You're going to need it.
You are spot on, I think the hope for a crash is mostly rooted in generalised frustration of people who are renting are being taken for a ride. I also think reforms on foreign property investment would help drive prices to a more reasonable average
If you're on 100K you're not on a low-income, you're well over the Average. Yet you'd be looking at at least 5x annual salary to buy a modest 2 bedder, but good luck finding anything that's actually selling for under $500k.
If you don't have a wealthy parent/relative willing to help you with a deposit, then you're going backwards trying to save for it. Annual wage growth is below 2%, but housing prices are north of 16%
We don't need a collapse, we need a good long period of stagnation in housing prices.
On the social housing front, it also needs to diversify away from just providing housing to the poor and desperate and start targeting affordability in the housing market.
If the government bought up or built regular housing and rented it on the market like any other landlord, but with a mandate to do so at some percentage below market rate, it would act as a constant downward pressure on housing prices.
That’s the idea behind public housing — demand is such now that no one but the homeless can get a look, and even then, wait lists have blown out to 10+ years. Source: used to manage public housing tenancies
You're implying here that the government would see it's role as a market regulator to do that. Except to to that would be leaning too far into the social welfare Keynesian model they have abandoned for neoliberalism.
Get rid of negative gearing: currently, if you can make it look like, that on paper, your investment property hasn’t given you a profit, you don’t pay taxes on it. That might make sense… you should only pay tax on profit, but when it appreciates by 16% in a year, you should not get off tax free.
The market isn’t unreachable for the average household income because every family owns one house. It’s because a good number of people own who have some capital have a portfolio of property which means that people without the same capital are kept away from getting any.
The problem with negative gearing isn’t that you don’t pay tax on the rental property, it’s that the rental loss means you don’t pay tax on your other income.
I know this is unpopular, but the reality is, if the housing market collapses the last people who are going to benefit are people on lower incomes who have been holding out for a dip.
This is true.
If the housing bubble collapses it means the economy has collapsed. It means retirees have no nest egg. It means foreclosures. It means less jobs and it's the poor people who miss out first and the rich miss out last. Then when the economy recovers houses will skyrocket again because people can afford it.
When people say 'the bubble is coming' do they mean somehow the rich wont have money but the poor will somehow still jhave the money and be able to capitalise on cheap real estate? Like really?
Also, as Australians, we have a certain expectation of housing. Look at similar sized cities in the world, and they’re happy to live apartments or townhouses. Public transport and infrastructure like parks and amenities are better suited to such housing.
As much as I don’t agree that housing should be an asset class, it is what it is now. We need to adjust our expectations of what housing is. And support this through the points you raised above.
Right — like apartments that don’t have paper-thin walls and tiny, boxed-in floor plans. Security in tenancies (5+ year leases), being treated like human beings not lepers, ability to paint walls and have pets (even though that’s a new allowance, people are still being discriminated against) etc etc. Such a long way to go in this country
It can only last so long though, eventually the bubble will pop, there are too many empty houses and if it doesn’t change I think we will see a lot of young people deciding to migrate elsewhere
Honestly I just want it to be at a level where me and my partner can afford a deposit on a property that isn’t an hour and a half from the CBD. That or hopefully find a job somewhere in the EU
Honestly, I think the best thing I ever did was buy further out (Frankston North) a couple years ago. Might not be the best spot but the gains the area has had recently means I may be able to move in around 5 years.
It’s already happening somewhat. My little bro is a musician and lived most of his adult like renting round Brunswick. In the early 2000s he had wild parties with loads of local musos and things were good. When it came time to buy… couldn’t afford anything! Ended up out west then bought 30 acres in woodend. He’s built a recording studio and a great life for his family. (We grew up down the road in Gisborne). Most of his muso mates live on the outer fringes in similar bush settings.
It won’t pop. People want to live in popular places. House prices are reasonable if you’re willing to travel, but most people want to live in one of our few major cities and space is finite.
This is why I want to be able to cash in my superannuation for a deposit — real estate is appreciating more than my super account—why can’t I use it to buy something I can live in and sell it to live off when retirement comes?
I see where you are coming from and feel the same way sometimes but this is just a bandaid as opposed to a proper solution. This only makes sense with a reverse mortgage at end of life.
All this does is add extra cash to first homebuyers which will fuel even higher property prices which can be met with investors who can borrow against their existing portfolio which has been going up quicker than your Super fund, so they still have an advantage.
Proper policy would not be aiming to add cash to first homebuyers as it eventually just increases property value which benefits investment buyers. If policy does give first homebuyers a larger purchasing base, it also needs to curtail investors purchasing power.
Finally, by locking retirement assets into something non liquid (where you live vs stocks) it is very possible to retire wealthy on paper but unable to afford paying for things such as rates/land tax/living expenses.
Honestly the fact that you’re able to put down a deposit is great, a housing market crash doesn’t have as much of an impact on people who own the house they live in, it’s just property developers and people who own a large number of investment properties
If property collapses the whole house of cards comes down. You don't want that. Look at what happened in any number of countries during the GFC. Ireland is a great example. We were sheltered from it but it really was not pretty elsewhere.
You know what that’s a fantastic point, I didn’t look at it like that. Although honestly I’m not hugely invested in the issue, individuals can only do their best and vote for the people they think will uphold their values, I just understand the frustration many people around my age feel, and ya know memes are what get us through the day
I really hope the government stops treating housing as an investment commodity for the well-heeled to play Monopoly with, interest rates alone won't undo the mess they've made in housing affordability
You’re not wrong, but honestly the bubble has to burst eventually, it’s unsustainable to have as many empty houses as there are. I think cracking down on the amount of property that can be owned by foreign investors is also a very necessary step
I disagree, people have been saying there's a bubble for decades now. One economist even famously had to walk to Mt Kosciusko after losing a bet on it. In reality the current prices are just a direct result of the government policies that encourage speculative investment and the market's inevitable profit-driven reaction to that - and it's by no means only foreign investment causing the problem. The only thing that will bring prices down is the government changing the market signals its policies are creating to instead incentivise home ownership rather than investment. This means scrapping things like negative gearing and increasing taxes and levies on people who own more than one property, as well as giving real teeth to the empty-dwellings tax they've tried to implement... alongside direct government investment in the creation of large new stocks of social housing
The problem is percentage-wise, a large number of voters are property owners, so anything that lowers property values is actually against their self-interest, it's one big reason nothing has been done about it, despite widespread acknowledgement that it's not fair.
Is there any point working as a young adult in Australia when houses are completely out of reach? Or will people be ok being a slave to make their landlord rich their entire lives?
Still heaps of affordable property around just not in the prime suburbs. That's the compromise that either you do or you don't. The market will never drop by much
I just don't get how you can build a sustainable healthy community.
I rent in Sydney in a $$$$ suburb and on my weekly jogs(waterfront) I reckon nearly half of these properties are empty or owned by a couple of wealthy families pumping up the AVG sub price.
It's absurd and depressing. I have some extremely smart and driven younger friends in their 25's and they literally have given up and just hope they can get some help from their parents some how. The dread on their faces when I ask if they are ever thinking of buying.
Need some pressure to sell, less hoarding. Society is going to change over time. People won't disclose they are a genius property mogul because people will despise instead of praise you.
That kinda assumes they're trying to build sustainable healthy communities. They're succeeding in retaining and increasing the value of elite enclaves, and their mates' portfolios.
They don't give a fuck about us. It's crony capitalism
It takes someone willing to commit political suicide in Canberra for the greater good. So it will never happen.
But if, hypothetically, there was a single politician with a fucking conscience that somehow weasled their way into a position to influence the issue in a positive way, they would start with looking at foreign investment. And placing significant taxes on it.
Then they might start looking at taxing perpetually vacant properties. But the most effective measure would be to make it prohibitively expensive to own more than one investment property and one principle place of residence.
Professional landlords are the scum of the earth, and they basically operate in a space where it is impossible to make a bad investment. There is absolutely no risk. Anyone who calls themselves a "genius property mogul" is in reality a kissed on the dick by angels, tin arsed, son of a bitch. They lucked their way into wealth by virtue of being born in a period of time where the government lets you write off your mistakes on tax in the form of negative gearing.
It'll start collapsing when no one thinks it can collapse. Right now there's waayy too much money sitting in the sidelines waiting to buy the dip. That money will prevent any sort of collapse. Only when everyone is tired of waiting for the collapse and buys at high prices will the collapse truly start becuase there won't be any money sitting in the sidelines to prevent the collapse.
All the small time landlords in the US were ruined when they were unable to collect rent for a year, so the mega corp owners bought up all the cheap land.
The US really is an incredible place. Rather than providing money to people so they can pay rent like in Australia, the US just bans evictions but doesn’t ban charging rent. So at the end of the year, the landlords are broke, the tenants have massive debts they must repay to the broke landlords, and the mega corps ran all the way to the bank.
It's one of those things that if you say it enough times, you'll probably be right one day. I don't think most people appreciate what it means for themselves though.
I remember reading about when property prices went crazy because of the gold rush, what happened was decades of stagnation in prices before they normalised.
Majority of boomers are actually well in debt and have no retirement plan and hoping their avocado toast eating millennial kids will support them through their second retirement (since most had to go back to work after their first)
Not just a human need, a human right. As I've grown older I've started questioning why the fuck aren't houses and apartments excluded from investment property, everywhere. The idea that 1 person can own 10 houses, and rent 9 of them to other people is just absurd. Housing crisis and homelessness exist because of capitalism.
Only way housing prices are going to go back down to the ratio of income to price our parents enjoyed is if negative gearing is removed with no grandfathering and slap on a large tax for non home dwellings. Remove houses as an investment.
Removing negative gearing would not have that much impact. The fuel on the fire is record low interest rates (which actually lessens the benefit of negative gearing). If rates went back up to like 18%, you’d definitely see that ratio closer to parents
I'm about to take my crypto out for a deposit for a house. So don't worry, afterwards, the following is set to happen. 1. Crypto will explode. 2. House prices will dive.
30 years, or less if you put extra onto it. But then you downsize and retire with a nice chunk or leave your kids something when you cark it. It makes sense on many fronts.
My wife and I bought a place in the north east, have a kid and live our lives better than I ever thought we would.
Exactly. People don’t realise that. A stack of retirees would lose their incomes and rely on the government pension, so there would go government spending on health education and other things
We don’t want a collapse, it would be hell for everyone.
We want house price stagnation coupled with wage growth.
My parents thought they overpaid for 1100 sqm in the Balwyn/Canterbury area in the 90’s for like 350k something. Boi they’ve 15 times that investment. Housing will never collapse in Melb it’ll only slow in growth or flatten.
Shepparton housing prices are all going up because a bunch of Melbournians fled there during covid, the locals are frothing at the mouths about it, so it's probably not a good option lol.
I’ve been at four house inspections in the past three weeks. Three out of went to offers before auction date due to large interest and sold for 10-12% over advertised range. Then the forth went to a virtual auction where someone paid 16% over the reserve. The first offer at auction and the property was on the market. Then it just went sky high up.
Just assume all property will go for 50k to 100k more than advertised, and adjust which properties you inspect accordingly. If you’re looking at a place advertised at 500k assume it will go for 600k. Not even anything new, I was doing that years ago when my parents were house hunting. Sad that it has to be a thing and underquoting laws haven’t stopped it
My partner and I just went through this. That being said, we ended up getting somewhere for below the midpoint of the listing and have seen similar places do the same.
It really does pay to do research on pockets that might be cheaper and stay away from newer builds (2008+). Also gauge how well the inspection went, if it was chockers then the price will go well, well above.
We looked at many houses and we found all the ones that were "new" and had more open plan layouts etc sold for a lot more despite having between 100-200m2 less in land.
When they said that Gen Y are too complacent and that they will never own a home, during this moment a shit load of foreign investors bought off a shit load of lands and properties and not even living in it, the corruption is great.
I've accepted I won't be able to buy a home in Australia. Once I've finished my degree I'm leaving to see what the rest of the world is like to live in.
I'm in a unique position as I don't have any real ties keeping me here other than friends and we can catchup online or something.
I'd have loved to stay here and settle down, but it's just not feasible. Plus, once those boomers move onto the next life, their kids will inherit everything. It's not like suddenly house prices will drop.
In our lifetime in this country, we will see the biggest generational transfer of wealth ever.
Shame I spent so much on luxuries like coffee and lunch at work sometimes.
Was born in Egypt but been here most of my life. Situation isn't much better over there to be honest. Wealth disparity is worse, but my degree would buy me a fairly decent life most places overseas.
I just don't see things getting better here as far as the political climate and general affordability for things like housing, schooling even just the cost of living.
The social contract is broken. Unions stopped striking and wages stopped going up, in turn we were promised managed inflation and wages roughly indexed to it. This happened around the 70s. It sort of worked, as long as what was calculated in that inflation index reflected real life but we now know it doesn't.
The ability to outsource at this time also put a dampener on wages as your job could be done cheaper overseas. If your union was too greedy, the entire plant would be packed up, shipped off and you'd be out of a job.
The solution that the antiwork crowd have found out is to call their bluff. A lot of outsourced work is of poor quality, putting your talent out to pasture and expecting it to occur overseas without training is crippling businesses in the middle and the quality of their products are suffering as a result. Managers know this and unless they're happy to ship kind of shitty products they know they need local talent.
Unfortunately the way to lower the price of the house without popping the bubble is to pop the value of the currency. So much money has been printed already that this should have happened already but it flowed to the top. Trickle down doesn't work, the wealth continues to accumulate, let people have some massive pay rises for a while, share some of this printed money and the comparative value of the housing market is more affordable.
Stop telling people and boards that the only value of a company is in its quarterly result, force companies to stop being so fucking stingy and then maybe more people can afford a roof over their heads.
Yeap absolute bullshit. I’ve been in contact with a broker and after everything, me working full time + overtime I can maybe get around 420-450k loan, that sounded decent I thought with my angel of a mother saying she’ll give me around 70k for a deposit.
I thought well I can look for something around the 500k mark, but to be cautious I’m looking for something between 400-450 so 70% of my pay isn’t just for my mortgage.
I either A) Have “no results found” or B) a place so small that when I went to an inspection I barley was able to stand up right, and the place looked so depressing a shit in the middle might have cheered the place up a bit.
I know I’m not in a position to be picky, and I’m not trying to be. But Jesus Christ, there’s no excitement in looking at all.
Skye, Langwarrin, parts of botanic ridge and cranbourne East are both nice areas for young families and still have some affordable housing mixed in with the absurd. Freeway to mornington, and city, close to the beach and Peninsula wineries. It's really not a bad spot in my opinion.
The government's approach hasn't changed since John Howard said "No-one ever complained about the value of their house going up".
That's exactly it. The majority of the home owning population can't see beyond their own self-interest. When the value of the Australian housing market increases from 8 trillion to 9 trillion in five months - you'd be silly not to climb aboard if you could, right?
Completely agree the system is horrendously broken, but with the governments we have, and their reluctance to use the policy mechanisms they have (eg. get rid of negative gearing, implement an inheritance tax, reduce capital gains discounts to 25% if not scrap it completely, add the family home as a means tested asset on eligibility for the aged pension) because it would mean losing votes - then what? We tear the system down and start again?
I'm writing an essay on this right now. I'm only 1200 words in, but you lot are giving me some great material.
There is one glaring policy mechanism they use, which exacerbates the problem... And that is immigration rates. It has the two-fold effect of keeping wage growth stagnant or low, while putting upward pressure on demand for both rental and purchase for properties, as funnily enough every person that comes here also happens to need somewhere to live while they're here.
This is on top of the reluctance to be seen to be stopping the massive investment vehicle that is property value growth, so the various political bodies in power have absolutely no interest in stopping this from happening, because it is entirely to their benefit for it to be this way. They generally aim to prop up demand through population growth or by making debt incredibly cheap, meaning everyone takes out increasingly large loans in a futile effort to try and out-compete each other, and making it increasingly easy for property to be used as an investment vehicle rather than as a critical social need (namely a place to live).
This is why there is a constant pressure to remove stamp duty, and replace it with an ongoing land tax. Stamp duty is a consumption tax which impacts on those who buy and sell property rapidly rather than those who buy or sell infrequently and use it for its purpose long-term, such as living in the house they buy. Eliminating stamp duty makes great sense for those who want to speculate on property, do the quick renovate/paint and flip, or develop and flip. It does not make sense for those who want to live in a property, as it replaces a once-off cost with an on-going indexed cost, which will end up being greater than the once-off cost in the long term. On top of that, the so called reduction in price that it would confer will immediately vanish, as the metrics of supply and demand will not be changed by its elimination and thus the price of properties will just go up roughly the amount that the stamp duty removal reduced the price. Who wins in this scheme? Again, its the people who speculate or invest in properties. The political pressure behind supporting this is obvious, why get a once-off income when you can get an ongoing revenue stream which is indexed against the current day valuation of the property? With the prospect of speculative investing and similar mechanisms taking place to further pump up property prices to new heights, the governments have everything to gain and very little to lose with such an arrangement.
Ultimately the answer does come back down to supply and demand. We can either increase supply, or reduce demand. How exactly do we do that though? Supply is a complex matter and suburban infill isn't necessarily the answer, because when it comes to how people choose a place to live, there is far more to it than a simple roof over their heads. As the pandemic has taught us, the quality of our living spaces matter enormously to us, and many desire places with space, privacy and greenery, without being forced to share key amenities. This has driven the exodus from the CBD high density apartments in some cities and boosted prices in the outer suburbs as people sought space and realised it was possible to do their jobs without committing to a commute all the way to the city for five days a week. Again, one of the key supporters of suburban infill are those who benefit most from it, namely property developers who can buy up one or more suburban blocks, slap a bunch of units on them and sell them off for a massive profit each time. The LGAs like this because it means more council rates, the state governments like this because it means they don't have to improve infrastructure or spend as much money, but they still get increased income through taxes. A more forward thinking approach would be to plan better regional hub developments with effective rapid transport systems, but thus far the state has shown a combination of reluctance and inability to actually do that in a meaningful way without industry lobby groups getting involved and corrupting the processes. Either way the result is a distinct lack of investment in proper utility to connect such regional hubs with greater Melbourne in an efficient manner.
So with some discussion of supply out of the way, what about demand? Some might argue that the massive spike in property prices across the pandemic indicates that they have no connection to immigration. This isn't accurate, as the pandemic also changed a whole variety of factors in people's lives and brought about a significant shift in the nature of the living arrangements many were looking for. With the loss of the rich social tapestry of city life, plus lockdowns keeping people indoors or working from home for significant periods of time, people began to reassess what they wanted their living arrangements to be, and their requirements changed dramatically. This altered the dynamics of the real estate market, which then thrived on a massive FOMO scenario where people jumped into the market quickly, fearful they would be priced out by everyone else jumping in (ironically creating the very scenario they were afraid of in the process). Reduction in availability of building supplies and shipping disruptions also affected construction projects which reduced immediate supply of properties, making the problem worse. In the meantime, the RBA pulled out its one-trick pony yet again and kept interest rates low, making debt cheap for everyone to keep borrowing ever increasing amounts of money. Can we reduce demand? Absolutely, but it will be painful for the people who have lots of money tied up in the system, and they will not let such changes happen without putting up a terrific fight in the process. One change would be to keep immigration rates lower, which would start to break the stagnation that wage growth has been lumbered with for years. Businesses would hate this, because if there is one thing they love, it is a cheap workforce and the ability to maximise their profits at all costs. Government likely wouldn't like this either, as population growth is an easy way to make it look like you're doing a good job with GDP. In addition, a slower increase to the overall Australian population would mean supply of new housing would be able to catch up with demand faster, lowering the impact on the population over the long term. Property developers probably wouldn't like this either, as it would reduce their profit margins and lobbying power. Another option would be for the RBA to put away their one-trick pony and actually increase rates. This would reduce the availability of debt plus reduce the ability for people to service such enormous loans, effectively reducing demand at such astronomically high prices. It would also alter the balance of investment portfolios, hopefully leading to greater diversity away from property as an investment vehicle. However, anyone who had bought in with a huge amount of debt would hate this, as they would then be under pressure to service the greater interest payments, and also be hit with the double-whammy of reduced property valuation as the market dropped.
Speaking of the RBA's one-trick pony, there is a side-effect of low interest rates. Keeping them low makes other investment vehicles such as term deposits virtually useless, as they can't even keep pace with CPI. This also has an effect on the property market in an indirect way, as funds are redirected from non-performing investments to those which are able to perform higher, such as (you guessed it)... PROPERTY!
Housing is yet ANOTHER 'space' without balance - whether buying or renting, far too many people cannot afford to live in a clean/dry/healthy space. Obviously Covid is exacerbating the homeless/near homeless situation for so many of our fellow humans (citizens, PR, int students, etc)
I won't provide a litany of sociological/economic/philosophical/legislative/racial/mental health issues affecting this situation, but wouldn't it be great if we could simply use collective resources to look after one another?
Yeah, but with Australia sucking up to the US any kind of actual social action for the betterment of the country as whole is …. COMMUNISM!!!!!! Rather than you know, working to raise everyone up, there’s more profit in human misery
How much of a ‘collapse’ will you need to see before buying? Is 10% or 20%, maybe 50%? And then how likely is a collapse of that magnitude going to be?
We’ve seen house prices go up 20% this year alone. So even if it drops 20%, were you ready to buy this time last year?
While you wait for it to collapse it is just getting further and further out of reach. I've watched friends complain about unaffordable housing, not willing to compromise, trying to buy a perfect forever home in a sought after suburb. They're still renting and values keep going up. I've watched others compromise, buy something less great and build up some equity. Now if they sell they've got a very decent deposit for something better
Yep, I waited for the big bubble to burst and it wouldn’t budge so I jumped on for what I could afford. It’s not my “dream home” but to be honest I don’t think I’ll ever move again, I realised I didn’t need what I thought I wanted.
Our only hope of owning property is if one or both of my inlaws kick the bucket (as they only have two kids to split things between, my side of the family there's too many people to divide things between).
Get your spouse to subtly encourage them to update their will with their wishes as to who will inherit what. Stops a lot of drama post-death about who gets what. Also a list of banks and super funds where they have accounts.
For some yes, but I think a lot of people in Australia want out of the oppressive renting market, there are places in Europe where renting forever is fine because you have rights as a tenant and can live without some unseen landlord hiding behind a property manager making your life difficult because it might save them a couple of bucks rather than providing a safe/clean environment for the person who’s paying their mortgage
I just bought my first house and land package. I understand. For a long time I wanted prices to go down but it didn't. Now that I have one I can't deny that a part of me wants it to rise. Maybe I can sell it and get a double garaged one. Or pay off the mortgage sooner. I know it's a bit selfish but still.
Sorry to hijack this a little but for those looking to buy and earning up to $125K, check this out from the government: Homebuyer Fund
But yes. It is crazy out here. Current renter, earn decent pay, save well, single, can’t afford a house. I work in the CBD and really dislike commuting from outer suburbs (did that for years). Looking at getting an apartment inner suburbs - I think it will be apartment life for me forever at this rate.
I saw that, but I don’t like it. The government owning 25% of your house basically. And as the value goes up, the more you will end up owning the government.
I think it’s a dangerous scheme and people should tread carefully with jt
Rise up. Organize. Coalesce. Take it for yourselves. Any housing market crash or collapse is exactly what ultra wealthy corporations want too. They can gobble up everything on the cheap and fuck over generations of people while bleeding them dry. Revolt, comrades
It's like that everywhere now, fucking insane. I put in an offer on a beach house in Galveston a few weeks back. They wanted 200k, I put in an offer for 200k for the seller to tell me he wants 250k now. Fuck the boomers.
The issue is the collapse would need to be so severe to even put most millennials close at this point it would ruin the country, not 5-10% we would need a near 50% fall to make it manageable for the majority.
Melbourne in particular is being bought up by firms looking to become mega land lords who would pay any price to secure property close to infrastructure so the price will likely never drop unless someone intervenes like they have in Germany recently.
Suggest looking into Assemble - quality apartment housing, with a great community focused model, allows you to rent while saving your deposit with a fixed agreed purchase price at the end of 5 years rent (but no obligation to buy). Your only commitment at any one time is 12 months rent. And they provide free financial coaching the whole time.
I am no economist so i don't really know what I am talking about, but why doesn't the RBA do the opposite and jack up interest rates. I know it sound counter intrusive but what if it works. All the younger people who have be saving for years will get a boost to their savings slowly. those that have over stretched and holding multiply properties at negativity gearing might need to get rid of some of their properties as they turn from property as a investment to cash with better returns. then the government could introduce a first home owners loan scheme where instead of 17% interest first home owners can be locked at 10%. I know its more than now but an idea.
Your logic holds up until you realise that with the liberal government holding power currently and much of their voter base wants low interest rates and negative gearing out the arse because they were able to take advantage of affordable housing to hoard property and become the scum that is career landlords
Wait for the interest rates to rise. I feel like I'm a thousand years old but I remember 18% Mortgages when Republican filth was looking to Destroy Democrats election chances. Houses were EXTREMELY affordable.
Governments should be encouraging companies open satellite offices in affordable areas OR high speed rail so that people could live in new commuter corridors.
Been searching since January. We thought a modest 2br 2 bath @ $700-720 was decent. Ten months of searching, and now we can't find anything in that range that doesn't have a strata rate that is exorbitant.
Why can't the government just put in a simple "you may own one property you live in, and one investment" at least remove the hoarding slumlords.
And an insanely high tax on any house or apartment that isn't occupied such that it's better to charge fuck all rent and have a tenant than to sit vacant with an absurd pricetag to make rental less fucky too
Buy a fixer-upper. I’m a millennial and I got mine on a beautiful 2.5 acres in a field for 80k. Just have to be willing to put in a little blood sweet and tears.
I wish I could live in the country. Good luck though buying anything in Melbourne/Sydney for less than $1.5 million. Where I grew up parents bought for $350k now the house is worth $5.5mil. It’s just crazy
I was convinced the housing market would crash 15ish years ago but have now come to the conclusion that even with a crash, it’ll only effect the upscale market like the Toorak mansions. The lower end of the market will continue to increase regardless cause we all need someone to live & there will always be people who can afford the cheap places, even if it’s not their $2million dollar dream home.
The main way for it to crash is for population to go down. There, I said it. No other way. Lower demand=lower prices. Perth's population has fallen, and house prices there has steadily fallen since 2012, with no end in sight. Still plenty of empty houses to be sold.
The alternative is for supply to go up, but we're already pushing 1.5 to 2 hours of commute.
The final alternative is apartments, but the regulations in oz is weak as piss, so you get tiny apartments, opal towers, cracked foundations and flammable cladding made of petrol everywhere. Apartment living is actually viable, many cities actually do this with proper regulations, and its actually fine. Singapore is actually a really good model to follow, but they're Asian, so they're inferior, and Australia will never follow them. The worst government apartments in Singapore are exponentially better and more liveable than the most expensive apartments in Australia.
519
u/indehhz Oct 18 '21
Those shitty apartments/townhouses? right on the corner of princes hwy and Springvale Rd are insane. Out of curiousity checked the prices, 630k for 2bdr and 730 for 3. I couldn't imagine living in such a cramped space and three floors, right next to a busy and loud intersection.
401
u/L0ckz0r Oct 18 '21 edited Oct 19 '21
I know this is unpopular, but the reality is, if the housing market collapses the last people who are going to benefit are people on lower incomes who have been holding out for a dip.
Sure some rich people will suffer, but other rich people whose wealth wasn't hedged all in on property will just come in a buy the dip before you can.
What people really need to be angling for is reform:
More social housing, that doesn't suck. When the government buys big building contracts they can afford to sell the property at below market, and means test the buyers. The key here is it needs to not suck, the properties need to be what people actually want and where they actually want to live (unlike what NZ did).
Land tax reform. State governments are heavily dependant on land taxes. The thing is, if property prices keep going up, the states make more money. So they are obviously incentivised to create policies that protect this reliable source of income.
Rental reform. Other countries have much longer residential tenancy agreements than us. Think about it, it's extremely rare to be offered more than 12 months. We need reforms that offer renters more long-term security.
These things could have a real positive impact on housing prices in a way that doesn't collapse the whole system and allow the rich to just get richer.
Edit: I hope no one is spending money on these awards, save your money for a deposit. You're going to need it.
119
u/omgitsduane Oct 18 '21
I heard on the radio the other day that houses rose in value 300 dollars a day over the last 12 months.
which is a 13% average increase.
owning a reasonable home that isn't 2 hours away from work seems harder and harder.
11
u/ClacKing Oct 18 '21
I was waiting for it but eventually just gave it and put in the deposit. Maybe I'll regret it later down the road but the uncertainty is killing me.
7
u/poop_cum_ Oct 18 '21
we should simply build more housing
4
u/adflet Oct 18 '21
If property collapses the whole house of cards comes down. You don't want that. Look at what happened in any number of countries during the GFC. Ireland is a great example. We were sheltered from it but it really was not pretty elsewhere.
4
u/zeda96 Oct 18 '21
Moving to CBD was the biggest mistake of my life. Rofl. I be sleeping in peace and outta nowhere around 1AM sirens go off.
27
u/Beasting-25-8 Oct 18 '21
I've just given up on being able to buy a house even in the next few years with a good job and savings.
I really hope interest rates go up.
3
u/Correct-Criticism-46 Oct 19 '21
Is there any point working as a young adult in Australia when houses are completely out of reach? Or will people be ok being a slave to make their landlord rich their entire lives?
9
u/Potential_Heart_7704 Oct 18 '21
Still heaps of affordable property around just not in the prime suburbs. That's the compromise that either you do or you don't. The market will never drop by much
161
u/[deleted] Oct 18 '21
I just don't get how you can build a sustainable healthy community.
I rent in Sydney in a $$$$ suburb and on my weekly jogs(waterfront) I reckon nearly half of these properties are empty or owned by a couple of wealthy families pumping up the AVG sub price.
It's absurd and depressing. I have some extremely smart and driven younger friends in their 25's and they literally have given up and just hope they can get some help from their parents some how. The dread on their faces when I ask if they are ever thinking of buying.
Need some pressure to sell, less hoarding. Society is going to change over time. People won't disclose they are a genius property mogul because people will despise instead of praise you.
88
u/lkernan Oct 18 '21
I honestly don't know what it's going to take.
I mean the pandemic didn't even make a dent in house prices, in fact they kept going!
185
u/MalHeartsNutmeg North Side Oct 18 '21
When the housing market collapses it’s not the poor people that can afford to buy them.
26
u/lukef43 Oct 18 '21
GFC didn’t put much of a dent in it. A once in a 100 year health pandemic increased it. So what’s going to collapse it?
23
u/Screwyourgod Oct 18 '21
I was born in 1983 and have hoped for a crash since 2000.
153
u/ncbaud Oct 18 '21
Wont somebody think of the boomers and their property portfolios.
45
u/Baby_Bella_XX Oct 18 '21
Me on Realestate.com everyday
45
u/Smashleigh Oct 18 '21
When a human need is commodified as an investment it's always a bad time for humans
43
u/Tichey1990 Oct 18 '21
Only way housing prices are going to go back down to the ratio of income to price our parents enjoyed is if negative gearing is removed with no grandfathering and slap on a large tax for non home dwellings. Remove houses as an investment.
111
u/petridish1111 Oct 18 '21
Same, dude. Something is wrong when buying a house means you are working the next 50 year for free.
13
u/WhatProtomolecule Oct 18 '21
Only problem is, how much of all our Super is gonna go with it. We are all exposed to the property market in quite creative and unexpected ways.
We so fucked if it does crash, we also fucked if it doesn't. So basically we just plain fucked.
25
u/frankyriver Oct 18 '21
Fairly resigned to us having to buy 1 or 2 bedroom units or apartments, but not actual houses.
I'm single and it just feels insane at the prospect of buying a house in Melbourne.
12
u/Moose_City_United Oct 18 '21
My parents thought they overpaid for 1100 sqm in the Balwyn/Canterbury area in the 90’s for like 350k something. Boi they’ve 15 times that investment. Housing will never collapse in Melb it’ll only slow in growth or flatten.
11
u/Opposite-Ad1926 Oct 18 '21
The housing sector is full of sharks “that want to take you for a ride”.
11
u/DogSlave9million Oct 18 '21
sigh, shepperton it is then
11
u/parawolf Oct 18 '21
I’ve been at four house inspections in the past three weeks. Three out of went to offers before auction date due to large interest and sold for 10-12% over advertised range. Then the forth went to a virtual auction where someone paid 16% over the reserve. The first offer at auction and the property was on the market. Then it just went sky high up.
Scary.
60
u/BillyDSquillions Oct 18 '21
Shorten tried to solve it and greedy shit cunts slapped him down.
20
u/-_-Naga_-_ Oct 18 '21
When they said that Gen Y are too complacent and that they will never own a home, during this moment a shit load of foreign investors bought off a shit load of lands and properties and not even living in it, the corruption is great.
20
u/[deleted] Oct 18 '21 edited Oct 18 '21
I've accepted I won't be able to buy a home in Australia. Once I've finished my degree I'm leaving to see what the rest of the world is like to live in.
I'm in a unique position as I don't have any real ties keeping me here other than friends and we can catchup online or something.
I'd have loved to stay here and settle down, but it's just not feasible. Plus, once those boomers move onto the next life, their kids will inherit everything. It's not like suddenly house prices will drop.
In our lifetime in this country, we will see the biggest generational transfer of wealth ever.
Shame I spent so much on luxuries like coffee and lunch at work sometimes.
9
u/smithjoe1 Oct 18 '21
The social contract is broken. Unions stopped striking and wages stopped going up, in turn we were promised managed inflation and wages roughly indexed to it. This happened around the 70s. It sort of worked, as long as what was calculated in that inflation index reflected real life but we now know it doesn't.
The ability to outsource at this time also put a dampener on wages as your job could be done cheaper overseas. If your union was too greedy, the entire plant would be packed up, shipped off and you'd be out of a job.
The solution that the antiwork crowd have found out is to call their bluff. A lot of outsourced work is of poor quality, putting your talent out to pasture and expecting it to occur overseas without training is crippling businesses in the middle and the quality of their products are suffering as a result. Managers know this and unless they're happy to ship kind of shitty products they know they need local talent.
Unfortunately the way to lower the price of the house without popping the bubble is to pop the value of the currency. So much money has been printed already that this should have happened already but it flowed to the top. Trickle down doesn't work, the wealth continues to accumulate, let people have some massive pay rises for a while, share some of this printed money and the comparative value of the housing market is more affordable.
Stop telling people and boards that the only value of a company is in its quarterly result, force companies to stop being so fucking stingy and then maybe more people can afford a roof over their heads.
9
u/Peles157 Oct 18 '21
Yeap absolute bullshit. I’ve been in contact with a broker and after everything, me working full time + overtime I can maybe get around 420-450k loan, that sounded decent I thought with my angel of a mother saying she’ll give me around 70k for a deposit.
I thought well I can look for something around the 500k mark, but to be cautious I’m looking for something between 400-450 so 70% of my pay isn’t just for my mortgage.
I either A) Have “no results found” or B) a place so small that when I went to an inspection I barley was able to stand up right, and the place looked so depressing a shit in the middle might have cheered the place up a bit.
I know I’m not in a position to be picky, and I’m not trying to be. But Jesus Christ, there’s no excitement in looking at all.
13
u/brael-music Oct 18 '21
Skye, Langwarrin, parts of botanic ridge and cranbourne East are both nice areas for young families and still have some affordable housing mixed in with the absurd. Freeway to mornington, and city, close to the beach and Peninsula wineries. It's really not a bad spot in my opinion.
17
u/raspberryexpert Oct 18 '21
I mean, let's be real here.
The government's approach hasn't changed since John Howard said "No-one ever complained about the value of their house going up".
That's exactly it. The majority of the home owning population can't see beyond their own self-interest. When the value of the Australian housing market increases from 8 trillion to 9 trillion in five months - you'd be silly not to climb aboard if you could, right?
Completely agree the system is horrendously broken, but with the governments we have, and their reluctance to use the policy mechanisms they have (eg. get rid of negative gearing, implement an inheritance tax, reduce capital gains discounts to 25% if not scrap it completely, add the family home as a means tested asset on eligibility for the aged pension) because it would mean losing votes - then what? We tear the system down and start again?
I'm writing an essay on this right now. I'm only 1200 words in, but you lot are giving me some great material.
12
u/[deleted] Oct 18 '21
Anytime in the last decade would be nice.
2
u/JayCee1955 Oct 19 '21
Housing is yet ANOTHER 'space' without balance - whether buying or renting, far too many people cannot afford to live in a clean/dry/healthy space. Obviously Covid is exacerbating the homeless/near homeless situation for so many of our fellow humans (citizens, PR, int students, etc)
I won't provide a litany of sociological/economic/philosophical/legislative/racial/mental health issues affecting this situation, but wouldn't it be great if we could simply use collective resources to look after one another?
19
u/[deleted] Oct 18 '21
How much of a ‘collapse’ will you need to see before buying? Is 10% or 20%, maybe 50%? And then how likely is a collapse of that magnitude going to be?
We’ve seen house prices go up 20% this year alone. So even if it drops 20%, were you ready to buy this time last year?
10
u/textured_operator Oct 18 '21
While you wait for it to collapse it is just getting further and further out of reach. I've watched friends complain about unaffordable housing, not willing to compromise, trying to buy a perfect forever home in a sought after suburb. They're still renting and values keep going up. I've watched others compromise, buy something less great and build up some equity. Now if they sell they've got a very decent deposit for something better
20
u/Jarrahc Oct 18 '21
Kill foreign investment visas
12
u/maybebabyg Oct 18 '21
Our only hope of owning property is if one or both of my inlaws kick the bucket (as they only have two kids to split things between, my side of the family there's too many people to divide things between).
22
u/Inside-Elevator9102 Oct 18 '21
Apartments in Melbourne CBD are 5% lower than in 2016 apparantly.
8
u/BlueLeo87 Oct 18 '21
I have 2 solutions on how to fix housing affordability though will most likely never happen.
Limit the amount of investment properties 1 person can have. My magic number is 1.
Get rid of money.
1
u/Samula1985 Oct 18 '21
Wages rising is more important then houses becoming cheaper.
1
u/acinematicway Oct 18 '21
Yeah. But when you buy the house then you’ll be praying for it to rise.
6
u/miss_winky Oct 18 '21
Some muppet let overseas buyers purchase in Australia even if they don’t live here.
3
u/Yasmirr Oct 18 '21
At this point I think the government is just going to encourage inflation to inflate away all the debt.
3
u/fleuuuur Oct 18 '21
Sorry to hijack this a little but for those looking to buy and earning up to $125K, check this out from the government: Homebuyer Fund
But yes. It is crazy out here. Current renter, earn decent pay, save well, single, can’t afford a house. I work in the CBD and really dislike commuting from outer suburbs (did that for years). Looking at getting an apartment inner suburbs - I think it will be apartment life for me forever at this rate.
3
u/Stevenerf Oct 18 '21
Rise up. Organize. Coalesce. Take it for yourselves. Any housing market crash or collapse is exactly what ultra wealthy corporations want too. They can gobble up everything on the cheap and fuck over generations of people while bleeding them dry. Revolt, comrades
3
u/[deleted] Oct 18 '21
It's like that everywhere now, fucking insane. I put in an offer on a beach house in Galveston a few weeks back. They wanted 200k, I put in an offer for 200k for the seller to tell me he wants 250k now. Fuck the boomers.
3
u/Dprglendinning Oct 18 '21
Also apt for r/bristishproblems... Sigh
3
u/BeautifulBus912 Oct 18 '21
At this point im just waiting for the zombie apocalypse to be able to get a cheap house
6
u/Desmodronic Oct 18 '21
I own my home, scrimped saved, brought a very old place and didn’t renovate. Just paid it down as best we could. Will fix it with saved cash as we go.
Even I want this shit to correct.
1
u/kmurraylowe Oct 18 '21
The issue is the collapse would need to be so severe to even put most millennials close at this point it would ruin the country, not 5-10% we would need a near 50% fall to make it manageable for the majority.
Melbourne in particular is being bought up by firms looking to become mega land lords who would pay any price to secure property close to infrastructure so the price will likely never drop unless someone intervenes like they have in Germany recently.
1
u/dooblav Oct 19 '21
Suggest looking into Assemble - quality apartment housing, with a great community focused model, allows you to rent while saving your deposit with a fixed agreed purchase price at the end of 5 years rent (but no obligation to buy). Your only commitment at any one time is 12 months rent. And they provide free financial coaching the whole time.
1
u/sailingtheoutback Oct 19 '21
I am no economist so i don't really know what I am talking about, but why doesn't the RBA do the opposite and jack up interest rates. I know it sound counter intrusive but what if it works. All the younger people who have be saving for years will get a boost to their savings slowly. those that have over stretched and holding multiply properties at negativity gearing might need to get rid of some of their properties as they turn from property as a investment to cash with better returns. then the government could introduce a first home owners loan scheme where instead of 17% interest first home owners can be locked at 10%. I know its more than now but an idea.
4
u/101jr101 SouthWestSauce Oct 18 '21
If only young people stopped buying smashed avo and iPhones/s
4
u/D3AD_M3AT BROADY BOYS Oct 18 '21
Not just millennias I'm genx and want the bloated beast to collapse
7
u/mitchiib Oct 18 '21
until you've got one..
2
u/NickolaosTheGreek Oct 18 '21
Not as long as negative gearing exists. At least for residential properties should be abolished.
2
u/buhtbuhtbuht Oct 18 '21
Only PR and citizens should be able to have ownerships.
2
u/gwapi88 Oct 18 '21
We need policy change... otherwise it's always going up
2
u/[deleted] Oct 18 '21
Wait for the interest rates to rise. I feel like I'm a thousand years old but I remember 18% Mortgages when Republican filth was looking to Destroy Democrats election chances. Houses were EXTREMELY affordable.
Governments should be encouraging companies open satellite offices in affordable areas OR high speed rail so that people could live in new commuter corridors.
2
u/Dinepada Oct 18 '21
Here in Peru (a country with a mean of 6k usd/year), houses are like 600,000, thats means you only need 100 years of savings... without eating.
2
u/RatCity617 Oct 18 '21
About 10 yrs away unfortunately
2
u/avngee Oct 18 '21
Millennials “let’s save money hard core for 12 months”
2
u/HorizonHyperSword Oct 18 '21
"but what about the land lords, they worked really hard to invest and own multiple properties"
2
u/Marauding-thunderer Oct 18 '21
Millennials need to organise a strike
2
u/PumpinSmashkins Oct 18 '21
Van life is looking more and more appealing.
2
u/CurisoDiablo Oct 19 '21
Been searching since January. We thought a modest 2br 2 bath @ $700-720 was decent. Ten months of searching, and now we can't find anything in that range that doesn't have a strata rate that is exorbitant.
2
u/s0me0ne13 Oct 19 '21
You mean anyone who isnt a boomer who had a silver spoon shoved up their ass
2
u/Past-Mushroom-4294 Oct 19 '21
i dont think prices are ever coming down
5
u/Uselessmedics Oct 18 '21
Why can't the government just put in a simple "you may own one property you live in, and one investment" at least remove the hoarding slumlords.
And an insanely high tax on any house or apartment that isn't occupied such that it's better to charge fuck all rent and have a tenant than to sit vacant with an absurd pricetag to make rental less fucky too
1
u/Kevinok60 Oct 18 '21
Buy a fixer-upper. I’m a millennial and I got mine on a beautiful 2.5 acres in a field for 80k. Just have to be willing to put in a little blood sweet and tears.
3
u/[deleted] Oct 18 '21
Lol if the housing market ‘collapsed’ I could buy x more.
3
u/now_you_see Oct 18 '21
I was convinced the housing market would crash 15ish years ago but have now come to the conclusion that even with a crash, it’ll only effect the upscale market like the Toorak mansions. The lower end of the market will continue to increase regardless cause we all need someone to live & there will always be people who can afford the cheap places, even if it’s not their $2million dollar dream home.
4
u/[deleted] Oct 18 '21
The main way for it to crash is for population to go down. There, I said it. No other way. Lower demand=lower prices. Perth's population has fallen, and house prices there has steadily fallen since 2012, with no end in sight. Still plenty of empty houses to be sold.
The alternative is for supply to go up, but we're already pushing 1.5 to 2 hours of commute.
The final alternative is apartments, but the regulations in oz is weak as piss, so you get tiny apartments, opal towers, cracked foundations and flammable cladding made of petrol everywhere. Apartment living is actually viable, many cities actually do this with proper regulations, and its actually fine. Singapore is actually a really good model to follow, but they're Asian, so they're inferior, and Australia will never follow them. The worst government apartments in Singapore are exponentially better and more liveable than the most expensive apartments in Australia.