paddy234

True, thankfully the boom this time in WA isn't driven by mining and housing hasn't got out of control with prices now leveling off. The rising Cost of living and interest rates may even drop prices. The crazy thing is though I was just having a browse not long ago at house and land packages around Rolleston and North Canterbury in New Zealand and they are anywhere from $880,000-$1,000,000. Here in Perth for the same package you could get it between $480,000-$550,000. Looking at mortgage calculators and what the repayments would be how are ordinary people paying this? Who on earth is building? Who can afford $800-$900 a week on a mortgage before rates and insurance? I don't get it. Just 3 years ago they were half the price. Interest rates are back up again. I'm trying to get a full picture because it doesn't make sense.

Justcol

People afford a 800k house probably because they've sold for a similar price elsewhere and have topped up their current lending. Very few would be in a position to buy in that price range as a 1st timer.
It's just a progression...simple

brits1

Agree with you, we started off with what we could afford both here in the UK (first time around) and in Perth,WA and on both occasions we “worked” our way up the property ladder to what we eventually suited us ie the house size we needed and in a suburb we like etc although 3 (could be 4 but one couple never let on lol) friends we new won the actual lottery and jumped straight “to the top” and a further friend did the same but this was because their parents had passed away and left them a good inheritance.

paddy234

I get that none will be first time buyers which means first time buyers essentially won't be building anymore as they are now priced out of the market. The thing is these house and land packages are only affordable to people already cashed up however they are basic spec. $900,000 for the bare minimum which an existing homeowner knows they are getting the bottom of the line yet after being cashed up and already having owned a home they would likely be looking for more. I'm curious to see how far it will crash when it finally does pop as the whole thing is wrong. The materials going into these house and land packages are budget. They were $450,000 just 4 years ago. They were meant for first time buyers using their kiwisaver. Existing home owners with a little more equity could of expected alot more

Moses2013

I was watching a programme yesterday and the situation seems to be even worse in Germany (According to a study, the number of 30 to 44-year-olds who can afford their own home has halved in the last ten years. Only one in twenty will be able to afford their own property. I suppose a lot of us so called Expats don't see the the true picture and are OK with moving around. When you consider that the majority of people don't move abroad and stay in the same place they grew up in, the situation is extreme. Especially in countries that always had a low home ownership rate, these people now have to leave and the life they know is gone. They also talked about the challenges in other countries and how the homeless rate in Australia is increasing. Covid made people who can work from home move to smaller towns near the coast and the people who work in the hospitality sector now can't afford to live there anymore. Byron Bay is also an example what is happening. https://www.theguardian.com/australi...s-of-byron-bay

paddy234

Home ownership has always been lower than 50% in Germany, there are a number of reasons for this but having a social welfare program that can sustain you when you retire is obviously a main factor. In Australia and New Zealand being mortgage free is almost essential In order to guarantee a stable retirement unless one has equity built up elsewhere. What the government gives simply isn't enough. It will need to increase substantially in the future if current trends continue.

I agree with you about the working from home thing however this may or may not be temporary which may take the heat off of the outer city market.

Moses2013

A social welfare system is good to have, but in the case of Germany the low home ownership rate means pensioner poverty is also increasing. When you only get €800 a month and have to spend all of that on rent, even with support very little is left as a pensioner. I suppose in other countries such as the US, you need to be mortgage free to be able to afford healthcare costs when you get older. I don't see work from home disappearing any time soon and it's the easiest way to reduce our carbon footprint.