Pearl&Wal

That's fair enough ABC, you obviously know your subject.

A few weeks ago it was 'The Sunshine Coast housing market is being flooded with new properties DESPITE the Global Economic Crisis''. For despite read beacuse of.

It's the way it always sounds like it's been written by an REIQ spokesperson that amuses me more than anything else.

xpmedia

Good point; this example says it all, prices won't drop as long as people have the money and the need to buy properties.

In the suburb where I live, prices of 2-3br apartments have already risen 5-10% in the past year.

Tooterelli

That's right. I forgot IT'S DIFFERENT HERE

stevemich

Sadly the reality is that, for me, an average house in our area that may have previously been 2 times what I could afford is now "only" 1.8 times more than I could afford...

so no real difference

asprilla

Believe what you want to believe.

But the hard fact is, if someone wants to buy a house, they have to save and work hard for it.

ozzieeagle

How do you explain the seemingly in concrete fact, that Units and Apartments have gone up right around the Country, over the past "supposedly in recession" quarter ?

They definitely have in Melbourne.

Maybe they will go down next Quarter. However whilst I see queues of people at Auctions at every Apartment I've seen for sale, I doubt it. The Job market will have to take a massive hit to burst the Melbourne Apartment and Unit bubble.

There is a 4 pct per annum population growth in Melbourne, and thats still being maintained. The rental market vacancy rate in inner Melbourne is still running at less than 2pct.

The top end of Town definitely has been affected to the tune of 10pct or more. However thats all that seems to have been affected so far. I guess they are the people that have been burnt the most by the stock market crash.

The reason it could be different here Toot, is the Aussie banks still have plenty of money to Lend... apparently.

bourbon-biscuit

See, I can't help but to see a few holes in your 'hard fact' and to take some offence at your slightly judgemental tone.

asprilla

Come on then, where are the holes in the statement that you need to work hard and save for a house?

bourbon-biscuit

Because plenty can and do work hard and save (if they can) but still can't buy a house in the current climate and your hard fact implied that hard work and saving alone are the answer.

ozzieeagle

Plenty of houses in the outer suburbs at the average first home owners price of $350,000, The "average" income in Aus is supposedly over 65,000 Aud now. The Repayments @ 6.5 pct on a 300,000 over 30 years loan at present are 1,900 per month.

If the Primary family income earner earns the average wage, and the partner earn 1/3rd of that amount the income should be around 87,000 dollars, which would give close to a take home wage of around 5,500 dollars per month. I would imagine most "working families" (cough) would be on a higher income than that.

I've got no Idea why the Aussie Banks seem so flush with funds, they are unlikely to stop lending. It's only a major and massive hit to the Job market that will break this foundation of the housing market. Maybe that will happen, then watch the major infrastructure magic wand come out.

The icing on the cake is 170,000 migrants per year intake.

asprilla

sorry I didn't mean to imply that those who can't currently afford a house, are not hard workers or savers.

But ozzieeagle has beaten me to it... if people really want to get on the housing ladder, and one person is prepared to earn an average wage with the other person earning a little bit more part time, then there really is nothing stopping people jumping in and buying a first home, in my opinion.

The real problem is, many people want their first home to be a 30min commute from work, with 4beds and a double garage (and maybe a toyota landcruiser thrown in for free).

Buying a cheap, slightly run-down house in the suburbs for $300 to $350k, then doing it up a little and moving to a better place in 5 or 10yrs, and maybe even moving again in another 10yrs, appears not to be an option. People prefer to carry on renting in more expensive areas and say "I can't afford to buy a place".


edit - in my first post I said that if someone wants to buy a house, they need to save and work hard for it. I should have said, if someone wants to buy their ideal house, they need to save, work hard, and make a few compromises along the way.

jad n rich

I bet Podgy Ruddles ( jeez hes getting fat isnt he ) will introduce bonus mortage/rent payments for those who get laid off, hes already waived waiting times for the dole. I bet mortage relief payments will be on the cards....

Main worry for australia is the taxpayer is going to have to pay back all these payments and bonus handouts. A point the public/media dont seem to have picked up on yet

The last stimulus didnt work, so hey lets borrow another 42 billion, right ho ruddo

IvanM

My situation does not reflect what you are saying. I am one person earning well over average wage looking after 2 kids with high medical needs and a dedicated mum attending to them.

The fact that rents in desirable areas are more affordable than a mortgage repayment on a turd hole in a drug infested dump is further indication of the unsustainability of house prices. The low rental vacancies talked of in the press are not reflected on the ground where I am hence further evidence that house prices need to fall to give sustainable rental returns.

The US and UK experiences of negative equity scare the crap out of existing home owners.

bourbon-biscuit

Yes, I see where you're coming from but that scenario is much harder when you're trying to graft it onto a non-standard family. For example, I had my first child young and so although we are now at a 'family age' where most people are in late thirties/early forties (one kid is 11, the other 6) we are here just in our 30s with only one professional income and still needing to get one of us through university BUT we have a nearly high school kid so her high school needs get thrown into the mix. I'm surprised that the average wage is $60K+ in Australia as nurses need to be qualified many years to earn that and certainly my husband does not. Our mortgage potential is under $200K and we'd be in a seriously shitty hole for that. If we had $350K we'd buy as we could buy in the cheap streets of the medium suburbs round here for that, easy.

So that's just one example of a non-standard family (in terms of life narrative), there's another one there V V V and just a few posts earlier. I'm not renting anythign posh- we're practically garden-less and although it has four bedrooms, three are very small and the living area is all communal and small too, so the footprint is a modest 130sqm ish. But it is in a reasonable suburb, zoned for decent schools- I'm not prepared to move KuriKuri or the ass end of Cessnock or worse. Home ownership doesn't mean that much to me I guess

That's what else seriously puts me off being a first tiem buyer at the moment- it's all very well putting your cash into somewhere you love and taking the market rough with the smootyh but the thought of being mortgaged to the hilt in a hole somewhere and then the market bottoms out scares me more than never owning, tbh.

We've done our adult lives topsy-turvey adn will be DINKs in our 40s so will have to suck up large mortgage payments to catch up then I guess.

NKSK version 2

There is something wrong here.
Take us as an example.

We will have at best 100000 GBP from a UK house sale. This is after 13 years - so we aren't FHBs.

So this equates to a deposit of about $200K. Second step homes in Perth are supposedly about $470K - this is about what we're looking at (and some of these are advertised as FHB houses)

So, this means that we will need a mortgage of at least $270K.

At today's historically low rates that means repayments of $400 per week over 25 years.

So that means that I'll be paying $400 a week for the next 25 years (I'll be 65 when it finishes). We're on over $100K household income. Rates might drop a bit more but this is about as cheap as it's going to get - and we have to add in all the taxes for the year.

I don't think that it's as cheap as you might think. And don't forget that this is for an average house in a pretty average suburb about 20kms from the CBD for a family that has been on the housing market for a long time, with a decent family income and a big deposit.
Prices still have a long way to go down - at least in Perth.