iamthecreaturefromuranus

"Ever" is a long long time.

Australia has got very expensive in relation to the UK. How its done compared to the rest of the world is probably a great deal more hit and miss.
Will that price differential with the UK ever 'correct' itself? To be honest I can't see it happening anytime soon.

bcworld

The question of whether or not it's viable seems to come down entirely to home ownership though. If people were open to the idea of taking advantage of relatively low rents, suddenly it may become viable again.

iamthecreaturefromuranus

Like many Brits, looking at it from the UK, I would have seen renting as pouring money down a, very expensive, drain. Different market when you get here.

Geordie George

But even the home ownership thing is something that people don't really consider properly. At the moment we're renting in Sydney's inner west and own (well, have a mortgage!) on a property in the UK. At some point, it would be nice to buy here. But Sydney's inner west has a price tag above our spending limit. One option we're considering is buying in another area here and continuing to rent ourselves. Buy where you can afford, live where you want to live.

Family of 3

We're moving from Singapore shortly. I expect food, cars, utililities, housing, medical, schooling to be substantially cheaper than here.

I'll let you know if it turns oout to be the case in a couple of months!

Steve2009

Also the US and the rest of Europe. I can't see how Australia will continue to be so uncompetitive.
I don't see the point of this.

moneypenny20

Makes sense to me. You have property ownership, paid for with rental income and you live where you want to as it's generally cheaper to rent in a good area than buy. In many places, especially Sydney, it's very common to be totally priced out of buying in the ideal area for your lifestyle.

HelenTD

A lot of Australians make use of negative gearing, so I can see sense in what Geordie George is doing. I don't see the point of buying a property to live in, if the only areas you can afford are not ones where you want to live. You've got to make the best out of a difficult situation.

Steve2009

The property will not likely be paid for by rent unless it's in a niche outpost. It makes no sense to me. It's gambling on capital appreciation on a property in a place where you personally don't want to live but expect others to want to.

bcworld

You mean the rent wont cover the mortgage?

No it won't, but as has been said the 'system' is set up to minimise the effects of that. An investment property might leave you out of pocket by as little as $5k a year by the time your tax return is completed.

The rent on the house in the area you want to live in + the $5k you spend running your other place is likely still much less than the mortgage would be on the place you are renting.

Steve2009

And the net benefit is that you're subsidising your tenants? It's some kind of false economy safety net like having a savings account while paying off massive debt.

TKline

Sydney house prices will correct to normal levels, it's just a matter of time. Every property bubble eventually bursts and despite what people say it's not different in Australia. The UK, Ireland, USA, Japan, Spain all had property bubbles that eventually burst. A lot of people think Australia is different but it is certainly not.

This is a quite a funny video that highlights the level of delusion and fanaticism that exists in Australia..... worth a watch.



Also this article talks about the global property bubble and how it is bursting in most places around the world. Australia will be one of the next cabs of the rank in the worldwide property crash, so to speak.....

Worldwide property crash article.

Both the video and the article are worthy of serious consideration if you're even thinking about buying a house in Australia!

House prices in Australia are in a massive bubble which WILL burst.

iamthecreaturefromuranus

..or possible deflate... or possibly stagnate?

freebo

I love the generous landlords of Sydney, renting out their property so cheaply (in comparison to the current market price) and allowing me to bank the savings, at nice high interest rates until I feel the time is right to buy, which I expect to do at some point.

The only sad part is some of my taxes are spent subsidising a portion of their losses via neg gearing.

Of course owning a house is nicer, I've owned property during the UK boom and was lucky to sell near the top of the market, but I feel the boom in Aus is now either over or close to being. Certainly now is not the time to buy into the Sydney housing market IMHO, and by the looks of things I'm not alone.

sue1964

12 years ago we came out and exchange rate was good,No crime hardly on the news.Houses cheap and cost of living way cheaper.
Some parts turning into places like the UK which is a great shame if you know what I mean.
Still have a good life & nice house and thankfully a job.