Housing Affordability and Housing Bubble
 

Just thought I should share this...

I was considering buying our first home this year (2008) but when the financial crisis materialized and I did some more in-dept research, I backed out and opted to move my plans to 2009. Looks like I'm not the only one who thinks this is not the best time to buy a property:

http://bubblepedia.net.au/tiki-index.php


For those considering buying their first home or investing, I strongly suggest reading this wiki. I don't suggest one should take what this people say at face-value, but just consider them...

Here's an excerpt from the home page :

"It's a crazy idea to buy a house in Australia at the current prices. "

They sure do make some good points. Personally, having done my own indepent research, I'm more inclined to take their side....

Re: Housing Affordability and Housing Bubble
 

Where do they get their figures? It costs a lot more in many areas of Sydney to rent- we are paying $720 pw for a 3 bed unrenovated house on a busy road and with a train line opposite. If we bought we would be paying similar but for a house that wasn't on a busy road, and we would be allowed to hang pictures on the walls, get heating in, fix the gutters and leaks etc..... All our money is doing is lining the pockets of the landlord and agents.

Re: Housing Affordability and Housing Bubble
 

I'd be very wary of blindly following the advice of a site that has a single agenda and very clearly only tries to steer people in one direction. Find some information that at least gives a balanced opinion.

Prices have come down considerably in some parts of Oz, and with interest rates heading towards all time lows, it's only a matter of time before the curve starts going the other way. In our area prices have flattened over the last 2 months.

We're paying a lot less than what we were paying on rent and there's nothing like being in your own home. :)

Re: Housing Affordability and Housing Bubble
 

I read the bit about attacking the newspaper who said property prices have dropped 45%.

They have only taken the headline there and ignored the rest of the article. At least one postcode had has a 45% drop, but another has had a 45% increase, and I think it averaged out at about 1.8% movement.

Take everything with a pinch of salt, or even a couple of cups of salt :)

Re: Housing Affordability and Housing Bubble
 

Good on you for sharing this.:thumbup:


I am a fan of
[url]http://www.globalhousepricecrash.com[url]

which has a lot more than just house price hearsay, if you fancy some eye-opening discussions on economics/ finance in general.

FWIW I'm not buying until at least 2010 either unless it's evens between paying rent or a mortgage, and WA has a hell of a long way to fall yet ($1million-plus house that you could rent for $600 per week, anyone?):rofl:

Re: Housing Affordability and Housing Bubble
 

Most overvalued property prices in the world. I read at an emigrate to oz expo that brisbane average house prices are on a par with outer London now. in a country with p1ss poor wages you do the math. SOmething has to give.

Re: Housing Affordability and Housing Bubble
 

Exactly the type of misinformation that you'll find on the sites mentioned above (which have been around for many years by the way). And as ABCDiamond stated, read them with a HUGE pinch of salt.

The median house price in Brisbane in October 2008 was $473,500. I'd be enlightened if you could point out all the detached 4x2's in greater London selling for a mere $205k.

Re: Housing Affordability and Housing Bubble
 

I'm in agreement with Angelico in that I won't be buying an Aussie house for a while. BUT I am basing my 'hunch', (and that's all it is ) that prices will fall based on what has happened in the UK not on these websites. I'm not for a minute doubting Angelico's intentions as I know she is a genuine poster, but these house price websites do attract some nutters and some of them have posted here in the past. They have an agenda, (ie they want a cheaper house) and set out to propagate rumour and panic in order to create house price drops.

Personally I would very happy if prices stabilised - no big drops and no big rises. That would allow wages a chance to catch up with prices without creating negative equity problems for people or overheated markets. I'm sure that won't happen though, the market is never stable.:blink:

Re: Housing Affordability and Housing Bubble
 

:[/QUOTE]

Unless you are rich, you don't get a lot for your new build here do you ??????

hmm

Re: Housing Affordability and Housing Bubble
 

Some inaccuracies in your comment:

Property Prices:

Greater London
Average Cost for a Detached House : £778,868 ( almost $2 million)
http://news.bbc.co.uk/2/shared/spl/h...l/county37.stm

Brisbane
Average Cost for a Detached House $473,500 (one third the price of greater London)


Wages:
February 2008 Average Weekly Earnings Australia & UK comparison

Australia.
Average Full-time adult total earnings $61,022
Source: http://www.abs.gov.au/ausstats/[email protected]/mf/6302.0

UK
UK Average Wage comparison being £23,700 (= $54,510)
http://news.bbc.co.uk/1/hi/business/7252504.stm



More salt needed... ;)

Re: Housing Affordability and Housing Bubble
 

That is not the average London wage though.

....and he did say OUTER London...not greater London.

$473000 would not buy you much at all in many parts of Brisbane and certainly not round here.

G

Re: Housing Affordability and Housing Bubble
 

Or the banks - assuming one pays interest on a mortgage!

Re: Housing Affordability and Housing Bubble
 

True, but only a portion of your repayment will go towards the interest while the rest reduces your debt and ultimately increases your equity over a period of time.

100% of your rent on the other hand will disappear into a black hole never to be seen again.

Re: Housing Affordability and Housing Bubble
 

I see. So I should compare Outer Brisbane to Outer London then.
5 bed detached houses with pool near me, (under 1 hr commute to CBD) for about $460,000, near the water.
What Outer London location gives that for about £200,000 ?

He did say "a country with p1ss poor wages" so I compared the Country.

Now, if you wish to compare London wages, they should be compared to the wages in the Capital city of Australia, shouldn't they ?

Re: Housing Affordability and Housing Bubble
 

you can't compare Brisbane's house prices with London prices.If you are moving to Brisbane from London,just to live in a detached you would be disappointed.The USA is the only comparable market,before the USA crash australian houses were overpriced compared to the USA market.Size per ratio American developers built homes on larger plots than in Aus.The only genneral exemptions were places of high density,inner city living .Out in the suburbs on new land releases 1000 square mertre plots are far more common than here in Aus,even though Aus has more land avaliable.2009 will be the year when prices "sink or swim" .I predict WA will bear the brunt of job loses and suffer the worst price drops:cool: