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Old Nov 29th 2010, 12:56 am   #16
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Default Re: The Great Australian Property Swindle

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Originally Posted by Coppock View Post
Finally some sense

On another note, the US economy is still struggling and buying property in the states could provide some fantastic opportunities. I've seen lovely 3/4 bed villas in florida on realtor.com for as little as £50k... I'm sure a good buy would bring an investor a 50% if not higher return over the next 10 years as the economy there begins to pick up.

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Be very, very careful about buying property here in the USA as an investment. I suggest you read this to get some idea of the minefield it is.
http://www.rickotton.com/blog/?p=119
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Old Nov 29th 2010, 1:44 am   #17
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Anybody buying a house for 7 times their salary is a *****ing idiot. If you can't afford something, you shouldn't have it irrespective of how much money a bank is willing to lend you.
There are many inferences that could be made from the statistics. It seems obvious to me that persons on average incomes should stay out of the market.
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If the Oz property bubble pops then it can be a good thing - there could be a lot of bargains going around, and people who don't want to lose out on a sale will just have to stay put until the market picks up again.
I'm not sure that to risk wearing a short to medium term loss so that you can have chance at a long term gain is the best policy.
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Old Nov 29th 2010, 1:47 am   #18
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I feel that in a couple of years house prices will have fallen by upto 50% of their curent value.

90% by Easter.
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Old Nov 29th 2010, 2:25 am   #19
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Anybody buying a house for 7 times their salary is a *****ing idiot. If you can't afford something, you shouldn't have it irrespective of how much money a bank is willing to lend you.
Well that's the point though. They don't. A young first home owner lucky enough to be on the average salary with no savings does not buy the average house. They can't afford it and nor should they be able to. The article insinuates that they should be able to, like their parents were. This is wrong.
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Old Nov 29th 2010, 3:17 am   #20
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Default Re: The Great Australian Property Swindle

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Originally Posted by Sally Redux View Post
This has already happened where I live in the USA on 2007 prices.
Totally. I know someone whose house in northern CA was worth $4 million a few years ago and is now worth $2.5 million. Just. Like. That.

The same will happen in Australia, sooner or later.
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Old Nov 29th 2010, 3:27 am   #21
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Well that's the point though. They don't. A young first home owner lucky enough to be on the average salary with no savings does not buy the average house. They can't afford it and nor should they be able to. The article insinuates that they should be able to, like their parents were. This is wrong.
Why is that?
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Old Nov 29th 2010, 3:31 am   #22
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Why is that?
This is why I don't like the "average" stats. What is an average couple, for a start?

The only way to do it is to look at your wages and look at the cost of housing where you need to live. You can then make an informed opinion about whether housing is affordable or not. Where I live a basic house with renovation and updating required starts at half a million, which I suspect is way above the reach of most young people, and a lot of middle aged people too.
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Old Nov 29th 2010, 3:37 am   #23
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The only way to do it is to look at your wages and look at the cost of housing where you need to live. You can then make an informed opinion about whether housing is affordable or not.
The only way to do it is not to do it at all.

It is what it is.
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Old Nov 29th 2010, 3:52 am   #24
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Default Re: The Great Australian Property Swindle

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Originally Posted by lumpommer View Post
Interesting, but depressing read.

http://www.dailyreckoning.com.au/rep...ty-swindle.pdf

The bubble is starting to burst.

Not everywhere it's not!

http://www.gladstoneinvestmentproper...om.au/news.htm
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Old Nov 29th 2010, 3:53 am   #25
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Leaving aside the averages, why should they not be able to have similar buying power to their parents?
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Old Nov 29th 2010, 4:02 am   #26
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Default Re: The Great Australian Property Swindle

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Leaving aside the averages, why should they not be able to have similar buying power to their parents?
At least when compared to when their parents were in their 20s. Seems to me that back in the 1960s/1970s a ratio of 3.5 of one wage was more than enough to get a mortgage on a starter house. Today a ratio of 3.5 of two wages is often not enough to get a mortgage on a starter house.

It makes a big difference. In fact the severely unaffordable house prices in the West are being exploited by countries like China to undercut in manufacturing. It is literally destroying the fabric of our entire culture.
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Old Nov 29th 2010, 4:21 am   #27
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Why is that?
Because you would expect someone starting in the housing market to maybe just scrape into entry level if their salary is average. Average houses, being in the middle of the range, would be bought by people who have already built up equity.
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Old Nov 29th 2010, 4:24 am   #28
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Because you would expect someone starting in the housing market to be able to afford entry level. Average houses, being in the middle of the range, would be bought by people who have already built up equity.
How is this a generational difference though? My question was purely with regard to the apparent implied generational difference. Or did you mean that this was never the case? I'd also point out that workers don't start out on average wages, they start on entry level wages.

Last edited by Steve2009; Nov 29th 2010 at 4:26 am.
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Old Nov 29th 2010, 4:24 am   #29
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At least when compared to when their parents were in their 20s. Seems to me that back in the 1960s/1970s a ratio of 3.5 of one wage was more than enough to get a mortgage on a starter house. Today a ratio of 3.5 of two wages is often not enough to get a mortgage on a starter house.

It makes a big difference. In fact the severely unaffordable house prices in the West are being exploited by countries like China to undercut in manufacturing. It is literally destroying the fabric of our entire culture.
Is that not simply because now two people in a couple often work whereas in 60/70's they didn't?
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Old Nov 29th 2010, 4:25 am   #30
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How is this a generational difference though? My question was purely with regard to the apparent implied generational difference.
I was answering your first question. One at a time
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