Housing bubble in Australia
#1
Forum Regular
Thread Starter
Joined: Nov 2008
Posts: 95
Housing bubble in Australia
Is the housing bubble about to burst in Australia?
The houses are hugely overpriced.
The houses are hugely overpriced.
#2
Forum Regular
Joined: Jan 2008
Posts: 165
Re: Housing bubble in Australia
Hope so before we give up and go back home!
#4
BE Enthusiast
Joined: Sep 2008
Location: newbury
Posts: 943
Re: Housing bubble in Australia
I cant see it bursting anytime soon.
#5
Forum Regular
Joined: Feb 2006
Posts: 159
Re: Housing bubble in Australia
why does there have to be a bubble. Supply and demand are the governing sides and there is plenty of both. Loads of 'affordable housing' and loads of expensive stuff, with plenty of people in both ends of the scale. IMO if people think things are over priced they are wanting what they probably can't afford. There are equally as many out there who can afford it though which creates the demand.
I'm not aiming to antagonize, just to say that people rarely look behind themselves, nearly always above aiming for 'more, bigger and better'. Asides from the very first step on the ladder nearly everyone on here can 'afford' property, but they most likely decide they'd prefer one that is more 'desirable' which in tern probably makes it 'unaffordable and over priced' to their individual circumstances.
I'm not aiming to antagonize, just to say that people rarely look behind themselves, nearly always above aiming for 'more, bigger and better'. Asides from the very first step on the ladder nearly everyone on here can 'afford' property, but they most likely decide they'd prefer one that is more 'desirable' which in tern probably makes it 'unaffordable and over priced' to their individual circumstances.
#9
Forum Regular
Joined: Jun 2006
Posts: 200
Re: Housing bubble in Australia
I think the housing bubble and people being technically able to afford a house are two different things. As noted above, there are houses in australia that most people can afford.
However, when prices in most capital cities here are overtaking new york and london, there is naturally going to be a feeling that they are not worth what they are priced. The supply and demand arguement makes sense, but there was plenty of demand 7 years ago when prices were cheap.
In my opinion, prices will have to come back at some point quite considerably. Who knows when this will happen though.
However, when prices in most capital cities here are overtaking new york and london, there is naturally going to be a feeling that they are not worth what they are priced. The supply and demand arguement makes sense, but there was plenty of demand 7 years ago when prices were cheap.
In my opinion, prices will have to come back at some point quite considerably. Who knows when this will happen though.
#10
Re: Housing bubble in Australia
I've lost count of the "housing bubble" predictions on this forum. They stretch back several years.
Australia continues to buck the trend in spite of the predictions by spruikers and doomsayers alike. I don't think we'll see a crash; it's more likely to be a typical market adjustment.
Australia continues to buck the trend in spite of the predictions by spruikers and doomsayers alike. I don't think we'll see a crash; it's more likely to be a typical market adjustment.
#11
Forum Regular
Joined: Dec 2009
Location: Fernmount NSW
Posts: 80
Re: Housing bubble in Australia
Thats the exact reasons bubbles occur, if you thought that a bubble was forming would you seriously consider buying into the market and further inflate the average price? Id hope not, people never believe bubbles are forming, they just contribute.
Supply and demand is not the only driver of house prices, negative gearing has a huge impact on house prices, interest rates also have a massive effect. The average house price world wide is approximately 5 times average income, this has been a reasonable yardstick for decades where ever you are in the world, in Australia the average income is approx $50,000 p.a. but the average house price in Sydney has just passed $600,000, Perth $500,000, hardly 5 times average income. At the end of December 2009 Australians owed more than the nations GDP, just over 100 per cent national debt, round about 56000 dollars for every man, woman and child. That is not to say i think the bubble, if there is one is about to burst, but it is a touch worrying dont you think?
Bob
Supply and demand is not the only driver of house prices, negative gearing has a huge impact on house prices, interest rates also have a massive effect. The average house price world wide is approximately 5 times average income, this has been a reasonable yardstick for decades where ever you are in the world, in Australia the average income is approx $50,000 p.a. but the average house price in Sydney has just passed $600,000, Perth $500,000, hardly 5 times average income. At the end of December 2009 Australians owed more than the nations GDP, just over 100 per cent national debt, round about 56000 dollars for every man, woman and child. That is not to say i think the bubble, if there is one is about to burst, but it is a touch worrying dont you think?
Bob
#13
Devil's Advocate
Joined: Feb 2008
Location: Mandurah
Posts: 2,269
Re: Housing bubble in Australia
As others have said there's no evidence of a market crash in the near future - why would there be? There was another article in the West Australian last week with stats indicating growth and shortage of properties for sale hence sellers market. Admittedly quotes were from REIWA which always talk the market up.
#14
Banned
Joined: May 2007
Location: Sydney
Posts: 564
Re: Housing bubble in Australia
Thats the exact reasons bubbles occur, if you thought that a bubble was forming would you seriously consider buying into the market and further inflate the average price? Id hope not, people never believe bubbles are forming, they just contribute.
Supply and demand is not the only driver of house prices, negative gearing has a huge impact on house prices, interest rates also have a massive effect. The average house price world wide is approximately 5 times average income, this has been a reasonable yardstick for decades where ever you are in the world, in Australia the average income is approx $50,000 p.a. but the average house price in Sydney has just passed $600,000, Perth $500,000, hardly 5 times average income. At the end of December 2009 Australians owed more than the nations GDP, just over 100 per cent national debt, round about 56000 dollars for every man, woman and child. That is not to say i think the bubble, if there is one is about to burst, but it is a touch worrying dont you think?
Bob
Supply and demand is not the only driver of house prices, negative gearing has a huge impact on house prices, interest rates also have a massive effect. The average house price world wide is approximately 5 times average income, this has been a reasonable yardstick for decades where ever you are in the world, in Australia the average income is approx $50,000 p.a. but the average house price in Sydney has just passed $600,000, Perth $500,000, hardly 5 times average income. At the end of December 2009 Australians owed more than the nations GDP, just over 100 per cent national debt, round about 56000 dollars for every man, woman and child. That is not to say i think the bubble, if there is one is about to burst, but it is a touch worrying dont you think?
Bob
#15
Guest
Posts: n/a
Re: Housing bubble in Australia
At the end of December 2009 Australians owed more than the nations GDP, just over 100 per cent national debt, round about 56000 dollars for every man, woman and child. That is not to say i think the bubble, if there is one is about to burst, but it is a touch worrying dont you think?
Bob
Bob
- NT $275,700 equal to 4.12 times Male income of $66,877
- NSW $283,300 equal to 4.09 times Male income of $69,253
- QLD $270,800 equal to 4.07 times Male income of $66,518
- VIC $249,000 equal to 3.72 times Male income of $66,970
- WA $282,800 equal to 3.48 times Male income of $81,276
- SA $214,800 equal to 3.40 times Male income of $63,096
- ACT 261,900 equal to 3.35 times Male income of $78,124
- TAS $191,700 equal to 3.20 times Male income of $59,872
The average New Australian Home Mortgage in April 2009 was $344,429
With the new figures just available, this has increased to $349,604 in Jan 2010 for the all Australia figure.
There is good debt and bad debt. How much of that average $56,000 is good debt ? for Long term Investments etc, and how much is bad debt, for holidays, TV's etc.