Chinese money drives up house prices
Apr 6th 2010, 5:09 am
#91
Guest
Posts: n/a
Re: Chinese money drives up house prices
Recourse and non recourse loans, whatever. Fact is, Aus housing is now the most overpriced in the world.
Have a look at the comments on news.com and other news related websites on housing and related issues. The general Aussie public are now waking up to the fact how overpriced housing is. The Govt is realisng sentiment is changing, hence the new 'population minister' and inquiries into foreigners buying up housing. Once the herd turn, then it's all over for Aussie Real Estate.
Have a look at the comments on news.com and other news related websites on housing and related issues. The general Aussie public are now waking up to the fact how overpriced housing is. The Govt is realisng sentiment is changing, hence the new 'population minister' and inquiries into foreigners buying up housing. Once the herd turn, then it's all over for Aussie Real Estate.
The days of 4 bed houses near the water being the average First Home buyers home is ridiculous.
Aus housing may well be the most overpriced in the world, but why ?
Because most of the houses are in desirable locations ?
Because most are detached houses ?
If a person compares a UK terraced house to an Australian detached house, and complains that it is more expensive than the UK terrace, then .. well ... umm, Yes, it will be.
If people find houses expensive they may have to move about an hour out of the City.
eg: 3 bed average style house, 1 hour train from Sydney CBD
$299,000 (or 2.37 times average joint full time income)
It comes down to what people WANT to buy, and until people choose to pay less, they will pay more for the higher quality that they want..
Apr 6th 2010, 5:12 am
#92
Banned
Joined: Aug 2009
Posts: 2,733
Re: Chinese money drives up house prices
I disagree that it will be 'all over'. People will just have to start buying cheaper houses.
The days of 4 bed houses near the water being the average First Home buyers home is ridiculous.
Aus housing may well be the most overpriced in the world, but why ?
Because most of the houses are in desirable locations ?
Because most are detached houses ?
If a person compares a UK terraced house to an Australian detached house, and complains that it is more expensive than the UK terrace, then .. well ... umm, Yes, it will be.
If people find houses expensive they may have to move about an hour out of the City.
eg: 3 bed average style house, 1 hour train from Sydney CBD
$299,000 (or 2.37 times average joint full time income)
http://www.realestate.com.au/objects...1261104120.jpg
It comes down to what people WANT to buy, and until people choose to pay less, they will pay more for the higher quality that they want..
The days of 4 bed houses near the water being the average First Home buyers home is ridiculous.
Aus housing may well be the most overpriced in the world, but why ?
Because most of the houses are in desirable locations ?
Because most are detached houses ?
If a person compares a UK terraced house to an Australian detached house, and complains that it is more expensive than the UK terrace, then .. well ... umm, Yes, it will be.
If people find houses expensive they may have to move about an hour out of the City.
eg: 3 bed average style house, 1 hour train from Sydney CBD
$299,000 (or 2.37 times average joint full time income)
http://www.realestate.com.au/objects...1261104120.jpg
It comes down to what people WANT to buy, and until people choose to pay less, they will pay more for the higher quality that they want..
Apr 6th 2010, 5:13 am
#93
Guest
Posts: n/a
Re: Chinese money drives up house prices
It just doesn't seem to be a likely scenario though.
1992 average wage = $34,627 average First Home Mortgage = $74,303. A multiple of 2.15
2009 average wage = $70,039 average First Home Mortgage = $277,854. A multiple of 3.97
But, between 1992 and 2009 there are now more double incomes being used to buy property.
2009 average wage = $70,039 average First Home Mortgage = $277,854. A multiple of 3.97
But, between 1992 and 2009 there are now more double incomes being used to buy property.
Apr 6th 2010, 5:19 am
#95
Guest
Posts: n/a
Re: Chinese money drives up house prices
1 Hour west from Sydney, what you may call a commuter belt area.
A location with lower cost, but decent housing, and many people travel to Sydney CBD from there everyday to work. I used to to be one of them
The area is OK, not as good as by the water, hence I moved once I could afford it. But is was safe, child friendly, except for the neighbour... don't know what the Irish have against the British
If you are interested in buying something similar let me know... $420k would get you a 5 bed house with 2 bathrooms.
The thing is that if everyone wants Quality, they will pay for it. If they can't afford quality they need to drop their expectations to something more reasonable, until they can.
A location with lower cost, but decent housing, and many people travel to Sydney CBD from there everyday to work. I used to to be one of them
The area is OK, not as good as by the water, hence I moved once I could afford it. But is was safe, child friendly, except for the neighbour... don't know what the Irish have against the British
If you are interested in buying something similar let me know... $420k would get you a 5 bed house with 2 bathrooms.
The thing is that if everyone wants Quality, they will pay for it. If they can't afford quality they need to drop their expectations to something more reasonable, until they can.
Apr 6th 2010, 5:24 am
#96
Guest
Posts: n/a
Re: Chinese money drives up house prices
See how todays 4.25% compares to the past...
17.50 23-Jan-1990
17.00 15-Feb-1990
15.50 4-Apr-1990
14.00 2-Aug-1990
13.00 15-Oct-1990
12.00 18-Dec-1990
11.50 4-Apr-1991
10.50 16-May-1991
9.50 3-Sep-1991
8.50 6-Nov-1991
7.50 8-Jan-1992
6.50 6-May-1992
5.75 8-Jul-1992
5.25 23-Mar-1993
4.75 30-Jul-1993
5.50 17-Aug-1994
6.50 24-Oct-1994
7.50 14-Dec-1994
7.00 31-Jul-1996
6.50 6-Nov-1996
6.00 11-Dec-1996
5.50 23-May-1997
5.00 30-Jul-1997
4.75 2-Dec-1998
5.00 3-Nov-1999
5.50 2-Feb-2000
5.75 5-Apr-2000
6.00 3-May-2000
6.25 2-Aug-2000
5.75 7-Feb-2001
5.50 7-Mar-2001
5.00 4-Apr-2001
4.75 5-Sep-2001
4.50 3-Oct-2001
4.25 5-Dec-2001
4.50 8-May-2002
4.75 5-Jun-2002
5.00 5-Nov-2003
5.25 3-Dec-2003
5.50 2-Mar-2005
5.75 3-May-2006
6.00 2-Aug-2006
6.25 8-Nov-2006
6.50 8-Aug-2007
6.75 7-Nov-2007
7.00 6-Feb-2008
7.25 5-Mar-2008
7.00 3-Sep-2008
6.00 8-Oct-2008
5.25 5-Nov-2008
4.25 3-Dec-2008
17.00 15-Feb-1990
15.50 4-Apr-1990
14.00 2-Aug-1990
13.00 15-Oct-1990
12.00 18-Dec-1990
11.50 4-Apr-1991
10.50 16-May-1991
9.50 3-Sep-1991
8.50 6-Nov-1991
7.50 8-Jan-1992
6.50 6-May-1992
5.75 8-Jul-1992
5.25 23-Mar-1993
4.75 30-Jul-1993
5.50 17-Aug-1994
6.50 24-Oct-1994
7.50 14-Dec-1994
7.00 31-Jul-1996
6.50 6-Nov-1996
6.00 11-Dec-1996
5.50 23-May-1997
5.00 30-Jul-1997
4.75 2-Dec-1998
5.00 3-Nov-1999
5.50 2-Feb-2000
5.75 5-Apr-2000
6.00 3-May-2000
6.25 2-Aug-2000
5.75 7-Feb-2001
5.50 7-Mar-2001
5.00 4-Apr-2001
4.75 5-Sep-2001
4.50 3-Oct-2001
4.25 5-Dec-2001
4.50 8-May-2002
4.75 5-Jun-2002
5.00 5-Nov-2003
5.25 3-Dec-2003
5.50 2-Mar-2005
5.75 3-May-2006
6.00 2-Aug-2006
6.25 8-Nov-2006
6.50 8-Aug-2007
6.75 7-Nov-2007
7.00 6-Feb-2008
7.25 5-Mar-2008
7.00 3-Sep-2008
6.00 8-Oct-2008
5.25 5-Nov-2008
4.25 3-Dec-2008
Apr 6th 2010, 5:26 am
#97
Banned
Joined: Aug 2009
Posts: 2,733
Re: Chinese money drives up house prices
What is the name of this suburb?
Last edited by Lord_Farquar; Apr 6th 2010 at 5:38 am.
Apr 6th 2010, 5:42 am
#98
Guest
Posts: n/a
Re: Chinese money drives up house prices
St Clair
Population 20,000
80% Home Owners
16% renters
Erskine Park
Population 7,000
81% Home Owners
18% renters
Population 20,000
80% Home Owners
16% renters
St Clair is a relatively recent residential area. St Clair is bounded by the Western Motorway in the north, Erskine Park Road in the east, the suburb of Erskine Park in the south and Mamre Road in the west. St Clair is the name given to the estate developed in the 1970s.
6,064 detached houses
36 semi detached houses
12 flats
http://profile.id.com.au/Default.asp...=310&type=enum
6,064 detached houses
36 semi detached houses
12 flats
http://profile.id.com.au/Default.asp...=310&type=enum
Population 7,000
81% Home Owners
18% renters
Erskine Park is a relatively recent residential area, with industrial land usage in the south. Erskine Park is bounded by the Western Motorway in the north, Ropes Creek in the east, the water supply pipeline in the south and Mamre Road, the suburb of St Clair and Erskine Park Road in the west. Erskine Park is named after James Erskine who received an original land grant.
http://profile.id.com.au/Default.asp...=170&type=enum
http://profile.id.com.au/Default.asp...=170&type=enum
Apr 6th 2010, 6:03 am
#100
Guest
Posts: n/a
Re: Chinese money drives up house prices
That's about how long it took me every day, when I did it.
Just checked the train times now: so, between 51 mins and 62 mins
1 8:07am 9:00am 53mins
2 7:54am 8:56am 1hr 2mins
3 7:45am 8:42am 57mins
4 7:36am 8:27am 51mins
5 7:23am 8:24am 1hr 1min
Just checked the train times now: so, between 51 mins and 62 mins
1 8:07am 9:00am 53mins
2 7:54am 8:56am 1hr 2mins
3 7:45am 8:42am 57mins
4 7:36am 8:27am 51mins
5 7:23am 8:24am 1hr 1min
Apr 6th 2010, 6:04 am
#101
And YOU'RE paying for it!
Joined: May 2007
Location: kipper tie?
Posts: 2,328
Re: Chinese money drives up house prices
1) The dramatic rise in housing prices are exacerbated by the Rudd Government's policy change on foreign investment.
2) Previously you were only able to buy off-the-plan if you were a foreigner, ie not an Australian citizen or PR.
3) Last year's legislative change meant that anyone is able to buy established property, PR or not.
2) Previously you were only able to buy off-the-plan if you were a foreigner, ie not an Australian citizen or PR.
3) Last year's legislative change meant that anyone is able to buy established property, PR or not.
2) and 3) are factually incorrect. FIRB guidelines are linked to above.
Aus housing is now the most overpriced in the world.
Last edited by lapin_windstar; Apr 6th 2010 at 6:06 am.
Apr 6th 2010, 6:21 am
#102
BE Enthusiast
Joined: Nov 2009
Location: Dullsville
Posts: 672
Re: Chinese money drives up house prices
Demographia, The IMF, The Economist for starters, based on rents and income.
http://en.wikipedia.org/wiki/Austral...ability_Survey
http://www.economist.com/displayStor...ry_id=15213157
BUT, the vested interests of the Real Estate Industry, Mortgage Lenders, Developers all say that it's never been a better time to buy. The Economist, IMF and Demographia don't have an agenda. Choose who you believe.
In 2003, the IMF gave a prescience warning that “housing bubbles in Australia, England, Ireland and the United States” would “burst”. [9] The IMF again warned in 2009 that Australian house prices were overinflated by between 5 and 15 percent.[10] Since that warning, prices have climbed another "10 per cent" in 2009 according to reports.[11]
As of February 2010, Australia has thus far proven to be the only exception to the 'bursting property bubble phenonema'. However, as in the case of the bursting of the Japanese asset price bubble (land and share market), deflation starts gradually, but once started, has a momentum all its own.
As of February 2010, Australia has thus far proven to be the only exception to the 'bursting property bubble phenonema'. However, as in the case of the bursting of the Japanese asset price bubble (land and share market), deflation starts gradually, but once started, has a momentum all its own.
Overvalued by 25% - IMF report
In April 2008 the International Monetary Fund (IMF) argued that Australia’s property market was the fourth most overvalued in the world, being close to 25% higher than could be explained by changes in underlying fundamentals. [21] Other analysts argued that the rise in property prices was explained by peculiarities of the tax system. The 2004 report 'First Home Ownership' [22] recommended, inter alia, a tax review. Australia's Future Tax System Review is currently addressing this and other issues. [23]
In April 2008 the International Monetary Fund (IMF) argued that Australia’s property market was the fourth most overvalued in the world, being close to 25% higher than could be explained by changes in underlying fundamentals. [21] Other analysts argued that the rise in property prices was explained by peculiarities of the tax system. The 2004 report 'First Home Ownership' [22] recommended, inter alia, a tax review. Australia's Future Tax System Review is currently addressing this and other issues. [23]
For all the panic last year, asset values never quite reached the lows that marked other bear-market bottoms, and now the rally has made several markets look pricey again. In the American housing market, where the crisis started, homes are priced at around fair value on the basis of rental yields, but they are overvalued by almost 30% in Britain and by 50% in Australia, Hong Kong and Spain.
BUT, the vested interests of the Real Estate Industry, Mortgage Lenders, Developers all say that it's never been a better time to buy. The Economist, IMF and Demographia don't have an agenda. Choose who you believe.
Apr 6th 2010, 6:22 am
#103
Banned
Joined: Aug 2009
Posts: 2,733
Re: Chinese money drives up house prices
There is no railway station at St Clair or Erskine Park. Which railway station did you go from?
Apr 6th 2010, 6:42 am
#104
Lost in BE Cyberspace
Joined: Mar 2003
Posts: 9,397
Re: Chinese money drives up house prices
ABC Diamond:
>>Aus housing may well be the most overpriced in the world, but why ?<<
I don't think there's much doubt about that, whichever way you cut it. A large part of the overpricing problem is caused by the tax breaks for negative gearing - that brings people into the market for "investment", under the usually correct impression that they will make a tidy capital gain and forget about the income. For many people on relatively small incomes that is gambling, not investment - and the gambling mentality is something that Australians share with the Chinese.
The huge elephant in the room is what happens when the bubble bursts: in the US the banks have to take the hit in extremis but it's also the case here if there *is* a bubble-burst and property comes right off. The banks may take over the asset - but if the prices are falling fast the assets can be worth a lot less than their book value.
Our previous rental exemplified this - and that was not even in a particularly depressed market. The landlord/developer didn't keep up his loan repayments and the investment company took over the properties (six of them, all new.) That was four years ago and several are still unsold even at a fraction of the mortgage cost.
Apart from "investment" purchases at the end of the day houses can't cost more than lenders will give, and I ca see a big correction at some stage. Mind you I've been saying this for some time (!) but I am sure as I can be that it's getting more precarious.
>>Aus housing may well be the most overpriced in the world, but why ?<<
I don't think there's much doubt about that, whichever way you cut it. A large part of the overpricing problem is caused by the tax breaks for negative gearing - that brings people into the market for "investment", under the usually correct impression that they will make a tidy capital gain and forget about the income. For many people on relatively small incomes that is gambling, not investment - and the gambling mentality is something that Australians share with the Chinese.
The huge elephant in the room is what happens when the bubble bursts: in the US the banks have to take the hit in extremis but it's also the case here if there *is* a bubble-burst and property comes right off. The banks may take over the asset - but if the prices are falling fast the assets can be worth a lot less than their book value.
Our previous rental exemplified this - and that was not even in a particularly depressed market. The landlord/developer didn't keep up his loan repayments and the investment company took over the properties (six of them, all new.) That was four years ago and several are still unsold even at a fraction of the mortgage cost.
Apart from "investment" purchases at the end of the day houses can't cost more than lenders will give, and I ca see a big correction at some stage. Mind you I've been saying this for some time (!) but I am sure as I can be that it's getting more precarious.
