freebo

Aus govt debt is way lower than the UK and others, but personal debt is every bit as bad, so which one affects the future prospects for house prices?

When looking at house price affordability countries are not compared with each other directly, rather the ratio of average wages to house prices in each country is compared. Aus is way worse than the UK in that comparison.

Also see - http://www.economist.com/node/173118...11841&fsrc=rss - UK 32% overvalued Aus 63% overvalued "the most expensive market we track".

Seneca21

The crash in the UK has helped these stats for them. No, I am not denying there is an affordability problem here. Aus house prices are mainly ridiculous and I won't buy here until they start to converge on the same reality that wages exist in (although I have wavered on this). I saw a house not so long ago - for sale - crappy 1960s interior, no aircon, no heating, crappy 1960s exterior, no charm, required total interior refit, tiny back garden overlooked by three storey social housing --------------$550,000. It wasn't worth $250,000.

The Angl-Saxon obsession with house prices has seriously damaged our culture, in my view. European countries have also has insane HPI but still their properties are generally nowhere near as mental as the Anglosphere's.

roaringmouse

Maybe you've missed the underlying reason for the "obsession with house prices" - which is actually an obsession to own a house. Which then goes further, with an obsession to own other houses (for investment).

A number of European countries (other than the UK) have much lower home-ownership, and more people renting. The rental regulations in UK (and Australia) are not geared towards long-term renters, they're geared towards the owners making money.

Houses shouldn't really be viewed as a financial investment, but rather a necessity to shelter people. Viewing property as financial investments has caused a lot of problems.

Seneca21

Of course. I find it is deeply instilled in me to own a property, but this is because I come from the Anglo-Saxon culture where people are not only disrespected if they rent, but also treated mostly like dogshit and likely to find themselves homeless when they are older - or - worse - on a British council estate.

Other European countries have a lot more social housing and this removes a lot of the greed that can rise up in places like the UK. For a long time I was against the Europe way of doing things but after having watched the corruption and greed grow to insane levels in the Anglosphere I am no longer so sure about my reservations and wonder if their way is better after all.

Even if we had insane housing bubbles and endemic "keeping up with the Joneses" at least we had strong civil liberties and individual rights protecting us from the state, but Blair/Bush took all that away so now we get the shitty end of both sticks.

BadgeIsBack

I'd like the Anglo model to continue but where people own a home that is within their means.

What happens in Europe when people retire? Do people rent smart houses? Or do people tend to rent low-end to mid-range houses? How do the demographics work?

I like to own a home because I see it as a life as well as a place to live. It's where I am bringing my children up, it has so many variables attached to it from land usage through to what I want to hang on the walls.

The second reason(s) are all financial - that my 'rent' falls in real terms - year by year, infact within 15 years - drastically, it allows me to get a very cheap loan, and then provides in retirement. It's a vehicle.

Sally Redux

Do they? Which specifically?

Your 2 sentiments seem to contradict eachother, anyway.

markbhx

At least if you own a house there will be an end to your payments and you can live rent/ mortgage free forever (in theory). And if your lucky you might make money on it if you sell. Basically you own something after 25 years of hard graft. 25 years of renting you've got nothing apart from a rich landlord.

Maybe they should limit number of houses an individual can buy.

Amazulu

Amd European social housing can be just as grim as many UK council estates.

Seneca21

I agree really - it's instilled in me - a man's home etc, but the way prices went up in % terms since mid 90s was shocking really. I saw the whole HPI thing as destructive, not positive, but apparently I was odds with the mainstream because when prices went down it was always reported as "gloomy news" etc. Not sure what they do on retirement - but they could always buy a house! I mean, I look at Euro prices every now and again and most countries a 5 bed house with top-notch interior in a good area is around the $350,000 AUD mark, so not cheap but better value than Anglo countries.

And do you ever really own anyway or it just a fiction? Look at the compulsory purchase leglisation - and that scary talk in NSW about letting CP happen for land development rather than social projects. They can take "your" land away from you no probs at all and give you a bargain basement price for it with impunity.

Sally Redux - not contradictory. British social housing is low-grade, whereas there are more tiers of it in most European countries and also rent control is better, more regulations etc.

Seneca21

Lik the banlieue - Clichy-sous-Bois etc. Sure.

BadgeIsBack

I was clear that you were talking about quality European housing and it was the way tiers worked I was asking about. I suppose you get different people chasing rentals in more desirable places..like buyers..

IndieG

It really depends - if people have saved money from renting and invested the difference (could even be property in other places), they could be better off?

I've been renting for 17 years (renting for a year in Melbourne), will probably rent for the next 4 years or more. I have absolutely no qualms renting, not whilst house prices are this ridiculous.

When I see this 2 bedroom house in my neighbourhood costing the buyer $1 million (plus taxes etc - so 1.1M) in May 2010, I know I have done the right thing renting and not buying It is beyond insane here!

freebo

What a steal - got the agents number?

In comparative terms renting is so cheap in Syd/Melb, we're putting heaps away in the bank every month, and interest rates are going up too

I like owning a house, have done so for 20 years, but I'll enjoy the company of my money for a while longer at these prices.

IndieG

There are plenty of them...lol. Here's another one that got sold last week for $1,095,000. Just what were they thinking when buying this house for 1.1M

BadgeIsBack

See where you are coming from and I do not envy anyone right now who owes more than about 200k on a mortgage and needs 2 incomes.

Timing is important, especially as some people pay a dollar+ in interest for every dollar in capital. The thing about property is time in the market and this applies to investors to. (Obviously some people who get in and then out at the insane time lose - unless they can keep it together. The people who kept it together in 1990-92 will now be glad they bought - and in the UK at the same time people were beaming some 15 years later when they used the equity to move to Australia.