Australia heading for a fall?
Sep 21st 2003 | 5:55 am
#1
Guest
Posts: n/a
Australia heading for a fall?
Hi all,
I don't want this post to come across as a "the sky is falling!" message,
but lately there's been some disconcerting news from Australia that has my
wife and me worried about our timing and prospects there.
Incidentally, despite the repeated posts here about how bad the IT job
market is, that's one area we're *not* worried about. I work in Information
Security, which may well be the only IT growth market. And growing with
every hacker, spammer and virus that's announced each week.
No, our main concern is the household debt level and the out-of-control
real estate market and what it will do to the economy and the people once
it collapses.
A few days ago, The Age announced that Australians were now the most
indebted people in the industrialized world. Living in the US, "credit card
nation" as it were, seeing how out of control it is here and how it's now
stifling the economic recover - only to read that we're not the worst, is
nothing short of frightening.
What happens when this finally implodes? We're wondering if our timing
couldn't be worse.
Apparently neither parties are taking serious measures to address the risk
- some half-hearted blather about addressing negative gearing, futzing
around with the GST, nothing more.
Now, we maintain a high level of scepticism on anything we read in the
media, so we'd like to get some impressions from those here who are already
in Australia and deal with the issues (buying a house in Melbourne or
Sydney anyone?) or who have some insight beyond the media talking heads.
How worried should we be?
Cheers
Mike
I don't want this post to come across as a "the sky is falling!" message,
but lately there's been some disconcerting news from Australia that has my
wife and me worried about our timing and prospects there.
Incidentally, despite the repeated posts here about how bad the IT job
market is, that's one area we're *not* worried about. I work in Information
Security, which may well be the only IT growth market. And growing with
every hacker, spammer and virus that's announced each week.
No, our main concern is the household debt level and the out-of-control
real estate market and what it will do to the economy and the people once
it collapses.
A few days ago, The Age announced that Australians were now the most
indebted people in the industrialized world. Living in the US, "credit card
nation" as it were, seeing how out of control it is here and how it's now
stifling the economic recover - only to read that we're not the worst, is
nothing short of frightening.
What happens when this finally implodes? We're wondering if our timing
couldn't be worse.
Apparently neither parties are taking serious measures to address the risk
- some half-hearted blather about addressing negative gearing, futzing
around with the GST, nothing more.
Now, we maintain a high level of scepticism on anything we read in the
media, so we'd like to get some impressions from those here who are already
in Australia and deal with the issues (buying a house in Melbourne or
Sydney anyone?) or who have some insight beyond the media talking heads.
How worried should we be?
Cheers
Mike
Sep 21st 2003 | 6:11 am
#2
Hello Sydney Oct 1
Joined: Sep 2003
Posts: 51
From: Dee Why, NSW, AUS
Exact same situation for me
Hi:
I'm moving in a week. But here's what I think. Affording your house is an exercise in managing your cash flow. Don't get too much house (2 BR may be as good as 3 BR when you start out).
I too am in Info-security in IT and have a secure job for me in AU.
The housing market is at the top of it's bubble so now would be a BAD time to enter the market. I expect it will fall in the next 12-24 months based on the news reports and increasing availabilty of rental units (a great deal of the boom is due to investor buying and those houses/units need rental income to manage the mortgage).
The housing market in Sydney reminds me of the NY, USA housing market in 1987-1993 period. Up till 1986 it was going gangbusters and then it 1987 it fell and kept falling till 1993. I think all told about 15-20% loss in that time period. I think the same is due for the Sydney market. It will fall and I think 10-15% if they're lucky over a 4-6 year period.
So manage your cash flow and keep saving for the house. Yes, it's painful to see the rental money as "lost" money but buying now would result in a different type of "lost" money. I think 3 years from now would be a good time to check out the house buying market again. It really depends also on how the world economy improves over that time period (hopefully it improves). As the world economy goes so do IT projects and as IT projects go so does increased cash flow for new business activities (as opposed to a survival type of cash flow right now in business).
Good luck
I'm moving in a week. But here's what I think. Affording your house is an exercise in managing your cash flow. Don't get too much house (2 BR may be as good as 3 BR when you start out).
I too am in Info-security in IT and have a secure job for me in AU.
The housing market is at the top of it's bubble so now would be a BAD time to enter the market. I expect it will fall in the next 12-24 months based on the news reports and increasing availabilty of rental units (a great deal of the boom is due to investor buying and those houses/units need rental income to manage the mortgage).
The housing market in Sydney reminds me of the NY, USA housing market in 1987-1993 period. Up till 1986 it was going gangbusters and then it 1987 it fell and kept falling till 1993. I think all told about 15-20% loss in that time period. I think the same is due for the Sydney market. It will fall and I think 10-15% if they're lucky over a 4-6 year period.
So manage your cash flow and keep saving for the house. Yes, it's painful to see the rental money as "lost" money but buying now would result in a different type of "lost" money. I think 3 years from now would be a good time to check out the house buying market again. It really depends also on how the world economy improves over that time period (hopefully it improves). As the world economy goes so do IT projects and as IT projects go so does increased cash flow for new business activities (as opposed to a survival type of cash flow right now in business).
Good luck
Sep 21st 2003 | 6:26 am
#3
Guest
Posts: n/a
Re: Australia heading for a fall?
Nothing wrong with being concerned about your future BUT as I see it a lot
of what is written about the real estate market here is emotive and takes
into account the massive amounts of "inner city" high rise investor units
that have been built in recent years, my advice and that of many others is
to steer clear of these as an investment vehicle. These units are seen and
judged as part of the overall market but in my opinion give a false
impression of the market. Surely the average 3 and 4 bed home in good areas
across the country has seen good rises but as to the market will collapsing
I can only say .IT NEVER HAS IN THE PAST and I have no reason to believe it
will in the future, the market may "correct and deflate a little" as for the
debt many people are our there buying into the investment market when maybe
they should be more conservative. For the average person buying a nice home
in a nice location for their future to live in I doubt there will be any
major effect. The country is economically sound, low inflation,
unemployment now at a 13 year low, as the Prime Minister said recently, he
has not had one person complain to him about the value of their home rising.
All I can say is yes be wary but as you say scepticism about isolated media
reports is what I have too, as they can often be seen as one persons view
and as we all know there are plenty of people out there with an opposing
view, me being one of them.
Regards
Rob
"Michael Hoffman" <[email protected]> wrote in message
news:[email protected]...
> Hi all,
> I don't want this post to come across as a "the sky is falling!" message,
> but lately there's been some disconcerting news from Australia that has my
> wife and me worried about our timing and prospects there.
> Incidentally, despite the repeated posts here about how bad the IT job
> market is, that's one area we're *not* worried about. I work in
Information
> Security, which may well be the only IT growth market. And growing with
> every hacker, spammer and virus that's announced each week.
> No, our main concern is the household debt level and the out-of-control
> real estate market and what it will do to the economy and the people once
> it collapses.
> A few days ago, The Age announced that Australians were now the most
> indebted people in the industrialized world. Living in the US, "credit
card
> nation" as it were, seeing how out of control it is here and how it's now
> stifling the economic recover - only to read that we're not the worst, is
> nothing short of frightening.
> What happens when this finally implodes? We're wondering if our timing
> couldn't be worse.
> Apparently neither parties are taking serious measures to address the risk
> - some half-hearted blather about addressing negative gearing, futzing
> around with the GST, nothing more.
> Now, we maintain a high level of scepticism on anything we read in the
> media, so we'd like to get some impressions from those here who are
already
> in Australia and deal with the issues (buying a house in Melbourne or
> Sydney anyone?) or who have some insight beyond the media talking heads.
> How worried should we be?
> Cheers
> Mike
of what is written about the real estate market here is emotive and takes
into account the massive amounts of "inner city" high rise investor units
that have been built in recent years, my advice and that of many others is
to steer clear of these as an investment vehicle. These units are seen and
judged as part of the overall market but in my opinion give a false
impression of the market. Surely the average 3 and 4 bed home in good areas
across the country has seen good rises but as to the market will collapsing
I can only say .IT NEVER HAS IN THE PAST and I have no reason to believe it
will in the future, the market may "correct and deflate a little" as for the
debt many people are our there buying into the investment market when maybe
they should be more conservative. For the average person buying a nice home
in a nice location for their future to live in I doubt there will be any
major effect. The country is economically sound, low inflation,
unemployment now at a 13 year low, as the Prime Minister said recently, he
has not had one person complain to him about the value of their home rising.
All I can say is yes be wary but as you say scepticism about isolated media
reports is what I have too, as they can often be seen as one persons view
and as we all know there are plenty of people out there with an opposing
view, me being one of them.
Regards
Rob
"Michael Hoffman" <[email protected]> wrote in message
news:[email protected]...
> Hi all,
> I don't want this post to come across as a "the sky is falling!" message,
> but lately there's been some disconcerting news from Australia that has my
> wife and me worried about our timing and prospects there.
> Incidentally, despite the repeated posts here about how bad the IT job
> market is, that's one area we're *not* worried about. I work in
Information
> Security, which may well be the only IT growth market. And growing with
> every hacker, spammer and virus that's announced each week.
> No, our main concern is the household debt level and the out-of-control
> real estate market and what it will do to the economy and the people once
> it collapses.
> A few days ago, The Age announced that Australians were now the most
> indebted people in the industrialized world. Living in the US, "credit
card
> nation" as it were, seeing how out of control it is here and how it's now
> stifling the economic recover - only to read that we're not the worst, is
> nothing short of frightening.
> What happens when this finally implodes? We're wondering if our timing
> couldn't be worse.
> Apparently neither parties are taking serious measures to address the risk
> - some half-hearted blather about addressing negative gearing, futzing
> around with the GST, nothing more.
> Now, we maintain a high level of scepticism on anything we read in the
> media, so we'd like to get some impressions from those here who are
already
> in Australia and deal with the issues (buying a house in Melbourne or
> Sydney anyone?) or who have some insight beyond the media talking heads.
> How worried should we be?
> Cheers
> Mike
Sep 21st 2003 | 6:47 am
#4
Guest
Posts: n/a
Re: Australia heading for a fall?
"nullabore" <[email protected]> wrote in
news:[email protected]:
> Nothing wrong with being concerned about your future BUT as I see it a
> lot of what is written about the real estate market here is emotive
> and takes into account the massive amounts of "inner city" high rise
> investor units that have been built in recent years, my advice and
> that of many others is to steer clear of these as an investment
> vehicle. These units are seen and judged as part of the overall
> market but in my opinion give a false impression of the market.
> Surely the average 3 and 4 bed home in good areas across the country
> has seen good rises but as to the market will collapsing I can only
> say .IT NEVER HAS IN THE PAST and I have no reason to believe it will
> in the future, the market may "correct and deflate a little" as for
> the debt many people are our there buying into the investment market
> when maybe they should be more conservative. For the average person
> buying a nice home in a nice location for their future to live in I
> doubt there will be any major effect. The country is economically
> sound, low inflation, unemployment now at a 13 year low, as the Prime
> Minister said recently, he has not had one person complain to him
> about the value of their home rising. All I can say is yes be wary but
> as you say scepticism about isolated media reports is what I have too,
> as they can often be seen as one persons view and as we all know there
> are plenty of people out there with an opposing view, me being one of
> them.
Excellent response, Rob, thanks.
I wasn't aware that those investment black holes, called high rise
apartments are actually counted in the overall picture. Saw plenty of them
in the Melbourne CBD and such.
In addition there is much ado about the "young first time buyers being
priced out of the market" etc. I suppose that once we baby boomers throw
our houses on the markets, because our creaking joints need to be taken
care of in assisted living facilities, then those younguns will get their
chance.
Mike
news:[email protected]:
> Nothing wrong with being concerned about your future BUT as I see it a
> lot of what is written about the real estate market here is emotive
> and takes into account the massive amounts of "inner city" high rise
> investor units that have been built in recent years, my advice and
> that of many others is to steer clear of these as an investment
> vehicle. These units are seen and judged as part of the overall
> market but in my opinion give a false impression of the market.
> Surely the average 3 and 4 bed home in good areas across the country
> has seen good rises but as to the market will collapsing I can only
> say .IT NEVER HAS IN THE PAST and I have no reason to believe it will
> in the future, the market may "correct and deflate a little" as for
> the debt many people are our there buying into the investment market
> when maybe they should be more conservative. For the average person
> buying a nice home in a nice location for their future to live in I
> doubt there will be any major effect. The country is economically
> sound, low inflation, unemployment now at a 13 year low, as the Prime
> Minister said recently, he has not had one person complain to him
> about the value of their home rising. All I can say is yes be wary but
> as you say scepticism about isolated media reports is what I have too,
> as they can often be seen as one persons view and as we all know there
> are plenty of people out there with an opposing view, me being one of
> them.
Excellent response, Rob, thanks.
I wasn't aware that those investment black holes, called high rise
apartments are actually counted in the overall picture. Saw plenty of them
in the Melbourne CBD and such.
In addition there is much ado about the "young first time buyers being
priced out of the market" etc. I suppose that once we baby boomers throw
our houses on the markets, because our creaking joints need to be taken
care of in assisted living facilities, then those younguns will get their
chance.
Mike
Sep 21st 2003 | 7:30 am
#5
Guest
Posts: n/a
Re: Australia heading for a fall?
>On Mon, 22 Sep 2003 04:26:30 +1000, "nullabore" <[email protected]> wrote:
>Nothing wrong with being concerned about your future BUT as I see it a lot
>of what is written about the real estate market here is emotive and takes
>into account the massive amounts of "inner city" high rise investor units
>that have been built in recent years, my advice and that of many others is
>to steer clear of these as an investment vehicle. These units are seen and
>judged as part of the overall market but in my opinion give a false
>impression of the market.
There are certainly a different part of the market. However, if
over-supply does bring about a crash, it would spill over into the
market for houses to some extent (as some buyers/renters are
flexible).
> Surely the average 3 and 4 bed home in good areas
>across the country has seen good rises but as to the market will collapsing
>I can only say .IT NEVER HAS IN THE PAST and I have no reason to believe it
>will in the future, the market may "correct and deflate a little"
Property prices in real-terms have dropped significantly in Australia
at times in the past. It was just less noticeable as Australia at the
time had high domestic retail price inflation (in other words, the
price of a house may have stayed static while other prices rose
10-15%).
>as for the
>debt many people are our there buying into the investment market when maybe
>they should be more conservative.
What can turn a 'correction' into a crash is when property starts
coming onto the market in distress sales, eg if investment property
units need to be sold as they cannot earn enough rent. That can lead
to expectations of future price increase going into reverse, and a
downward spiral.
Like what happened in southern England in the early 1990s.
>For the average person buying a nice home
>in a nice location for their future to live in I doubt there will be any
>major effect. The country is economically sound, low inflation,
>unemployment now at a 13 year low, as the Prime Minister said recently, he
>has not had one person complain to him about the value of their home rising.
Those who don't own property might not be so happy.
In any case, there is little or nothing a government can do to stop an
asset price bubble once it has taken hold. Stamp duty is one of the
things people complain about - if it was removed today it would ust
instantly cause a further jump in property prices. The time to fix
stamp duty will be during the downturn when a palliative will be badly
needed.
>All I can say is yes be wary but as you say scepticism about isolated media
>reports is what I have too, as they can often be seen as one persons view
>and as we all know there are plenty of people out there with an opposing
>view, me being one of them.
The Reserve Bank's concern about this very subject has been well
documented.
Jeremy
This is not intended to be legal advice in any jurisdiction
>Nothing wrong with being concerned about your future BUT as I see it a lot
>of what is written about the real estate market here is emotive and takes
>into account the massive amounts of "inner city" high rise investor units
>that have been built in recent years, my advice and that of many others is
>to steer clear of these as an investment vehicle. These units are seen and
>judged as part of the overall market but in my opinion give a false
>impression of the market.
There are certainly a different part of the market. However, if
over-supply does bring about a crash, it would spill over into the
market for houses to some extent (as some buyers/renters are
flexible).
> Surely the average 3 and 4 bed home in good areas
>across the country has seen good rises but as to the market will collapsing
>I can only say .IT NEVER HAS IN THE PAST and I have no reason to believe it
>will in the future, the market may "correct and deflate a little"
Property prices in real-terms have dropped significantly in Australia
at times in the past. It was just less noticeable as Australia at the
time had high domestic retail price inflation (in other words, the
price of a house may have stayed static while other prices rose
10-15%).
>as for the
>debt many people are our there buying into the investment market when maybe
>they should be more conservative.
What can turn a 'correction' into a crash is when property starts
coming onto the market in distress sales, eg if investment property
units need to be sold as they cannot earn enough rent. That can lead
to expectations of future price increase going into reverse, and a
downward spiral.
Like what happened in southern England in the early 1990s.
>For the average person buying a nice home
>in a nice location for their future to live in I doubt there will be any
>major effect. The country is economically sound, low inflation,
>unemployment now at a 13 year low, as the Prime Minister said recently, he
>has not had one person complain to him about the value of their home rising.
Those who don't own property might not be so happy.
In any case, there is little or nothing a government can do to stop an
asset price bubble once it has taken hold. Stamp duty is one of the
things people complain about - if it was removed today it would ust
instantly cause a further jump in property prices. The time to fix
stamp duty will be during the downturn when a palliative will be badly
needed.
>All I can say is yes be wary but as you say scepticism about isolated media
>reports is what I have too, as they can often be seen as one persons view
>and as we all know there are plenty of people out there with an opposing
>view, me being one of them.
The Reserve Bank's concern about this very subject has been well
documented.
Jeremy
This is not intended to be legal advice in any jurisdiction
Sep 21st 2003 | 1:26 pm
#6
Guest
Posts: n/a
Re: Australia heading for a fall?
"JAJ" <[email protected]> wrote in message
news:[email protected]...
> >On Mon, 22 Sep 2003 04:26:30 +1000, "nullabore"
<[email protected]> wrote:
> >Nothing wrong with being concerned about your future BUT as I see it a
lot
> >of what is written about the real estate market here is emotive and takes
> >into account the massive amounts of "inner city" high rise investor units
> >that have been built in recent years, my advice and that of many others
is
> >to steer clear of these as an investment vehicle. These units are seen
and
> >judged as part of the overall market but in my opinion give a false
> >impression of the market.
> There are certainly a different part of the market. However, if
> over-supply does bring about a crash, it would spill over into the
> market for houses to some extent (as some buyers/renters are
> flexible).
> (No arguement from me there)
> > Surely the average 3 and 4 bed home in good areas
> >across the country has seen good rises but as to the market will
collapsing
> >I can only say .IT NEVER HAS IN THE PAST and I have no reason to believe
it
> >will in the future, the market may "correct and deflate a little"
> Property prices in real-terms have dropped significantly in Australia
> at times in the past. It was just less noticeable as Australia at the
> time had high domestic retail price inflation (in other words, the
> price of a house may have stayed static while other prices rose
> 10-15%).
> (But the point I am making is that there has never been a crash in the
residential property market in Australia and I concede there may be a
correction or a relative deflation )
> >as for the
> >debt many people are our there buying into the investment market when
maybe
> >they should be more conservative.
> What can turn a 'correction' into a crash is when property starts
> coming onto the market in distress sales, eg if investment property
> units need to be sold as they cannot earn enough rent. That can lead
> to expectations of future price increase going into reverse, and a
> downward spiral.
>(it is well documnetated by the Reserve Bank that many households have been
encouraged to use the available capital in their home to use to purchase
investment properties but I do not think this alone will result in the
average 3/4 bed well positioned "home" devaluating too much if at all.
> Like what happened in southern England in the early 1990s.
> >For the average person buying a nice home
> >in a nice location for their future to live in I doubt there will be any
> >major effect. The country is economically sound, low inflation,
> >unemployment now at a 13 year low, as the Prime Minister said recently,
he
> >has not had one person complain to him about the value of their home
rising.
> Those who don't own property might not be so happy.
> In any case, there is little or nothing a government can do to stop an
> asset price bubble once it has taken hold. Stamp duty is one of the
> things people complain about - if it was removed today it would ust
> instantly cause a further jump in property prices. The time to fix
> stamp duty will be during the downturn when a palliative will be badly
> needed.
> (trouble there is of course at a time when the States have never had so
much money "all GST proceeds now go to the States" and the States seem loath
to give way on the Stamp Duty tax.)
> >All I can say is yes be wary but as you say scepticism about isolated
media
> >reports is what I have too, as they can often be seen as one persons view
> >and as we all know there are plenty of people out there with an opposing
> >view, me being one of them.
> The Reserve Bank's concern about this very subject has been well
> documented.
> (but let us not allow hysteria over the bursting of the property market to
rule our lives completely, keep it in perspective is my advice.)
(Rob)
> Jeremy
> This is not intended to be legal advice in any jurisdiction
news:[email protected]...
> >On Mon, 22 Sep 2003 04:26:30 +1000, "nullabore"
<[email protected]> wrote:
> >Nothing wrong with being concerned about your future BUT as I see it a
lot
> >of what is written about the real estate market here is emotive and takes
> >into account the massive amounts of "inner city" high rise investor units
> >that have been built in recent years, my advice and that of many others
is
> >to steer clear of these as an investment vehicle. These units are seen
and
> >judged as part of the overall market but in my opinion give a false
> >impression of the market.
> There are certainly a different part of the market. However, if
> over-supply does bring about a crash, it would spill over into the
> market for houses to some extent (as some buyers/renters are
> flexible).
> (No arguement from me there)
> > Surely the average 3 and 4 bed home in good areas
> >across the country has seen good rises but as to the market will
collapsing
> >I can only say .IT NEVER HAS IN THE PAST and I have no reason to believe
it
> >will in the future, the market may "correct and deflate a little"
> Property prices in real-terms have dropped significantly in Australia
> at times in the past. It was just less noticeable as Australia at the
> time had high domestic retail price inflation (in other words, the
> price of a house may have stayed static while other prices rose
> 10-15%).
> (But the point I am making is that there has never been a crash in the
residential property market in Australia and I concede there may be a
correction or a relative deflation )
> >as for the
> >debt many people are our there buying into the investment market when
maybe
> >they should be more conservative.
> What can turn a 'correction' into a crash is when property starts
> coming onto the market in distress sales, eg if investment property
> units need to be sold as they cannot earn enough rent. That can lead
> to expectations of future price increase going into reverse, and a
> downward spiral.
>(it is well documnetated by the Reserve Bank that many households have been
encouraged to use the available capital in their home to use to purchase
investment properties but I do not think this alone will result in the
average 3/4 bed well positioned "home" devaluating too much if at all.
> Like what happened in southern England in the early 1990s.
> >For the average person buying a nice home
> >in a nice location for their future to live in I doubt there will be any
> >major effect. The country is economically sound, low inflation,
> >unemployment now at a 13 year low, as the Prime Minister said recently,
he
> >has not had one person complain to him about the value of their home
rising.
> Those who don't own property might not be so happy.
> In any case, there is little or nothing a government can do to stop an
> asset price bubble once it has taken hold. Stamp duty is one of the
> things people complain about - if it was removed today it would ust
> instantly cause a further jump in property prices. The time to fix
> stamp duty will be during the downturn when a palliative will be badly
> needed.
> (trouble there is of course at a time when the States have never had so
much money "all GST proceeds now go to the States" and the States seem loath
to give way on the Stamp Duty tax.)
> >All I can say is yes be wary but as you say scepticism about isolated
media
> >reports is what I have too, as they can often be seen as one persons view
> >and as we all know there are plenty of people out there with an opposing
> >view, me being one of them.
> The Reserve Bank's concern about this very subject has been well
> documented.
> (but let us not allow hysteria over the bursting of the property market to
rule our lives completely, keep it in perspective is my advice.)
(Rob)
> Jeremy
> This is not intended to be legal advice in any jurisdiction
Sep 21st 2003 | 4:08 pm
#7
Guest
Posts: n/a
Re: Australia heading for a fall?
amaslam <member14867@british_expats.com> wrote in
news:[email protected]:
> So manage your cash flow and keep saving for the house. Yes, it's
> painful to see the rental money as "lost" money but buying now would
> result in a different type of "lost" money. I think 3 years from now
> would be a good time to check out the house buying market again. It
> really depends also on how the world economy improves over that time
> period (hopefully it improves). As the world economy goes so do IT
> projects and as IT projects go so does increased cash flow for new
> business activities (as opposed to a survival type of cash flow right
> now in business).
Our challenge will be to hope to maintain our equity in our home here in
the US, so that we can make a nice large down-payment. At the same time, we
hope the market drops in Australia. A bit schizophrenic, I know.
Mike
news:[email protected]:
> So manage your cash flow and keep saving for the house. Yes, it's
> painful to see the rental money as "lost" money but buying now would
> result in a different type of "lost" money. I think 3 years from now
> would be a good time to check out the house buying market again. It
> really depends also on how the world economy improves over that time
> period (hopefully it improves). As the world economy goes so do IT
> projects and as IT projects go so does increased cash flow for new
> business activities (as opposed to a survival type of cash flow right
> now in business).
Our challenge will be to hope to maintain our equity in our home here in
the US, so that we can make a nice large down-payment. At the same time, we
hope the market drops in Australia. A bit schizophrenic, I know.
Mike
Sep 21st 2003 | 4:14 pm
#8
Guest
Posts: n/a
Re: Australia heading for a fall?
"nullabore" <[email protected]> wrote in
news:[email protected]:
>> >For the average person buying a nice home
>> >in a nice location for their future to live in I doubt there will be
>> >any major effect. The country is economically sound, low inflation,
>> >unemployment now at a 13 year low, as the Prime Minister said
>> >recently,
> he
>> >has not had one person complain to him about the value of their home
> rising.
If there is one thing that boggles the mind of my wife and I, it is why the
Australian government doesn't implement tax laws that encourage ownership
of a primary residence, as opposed to a second home as a tax write-off?
Being able to deduct your mortgage interest on your primary residence, as
is done here, would encourage home ownership (the Great Australian Dream,
which is the same as the Great American Dream), instead of this negative
gearing strangeness that only helps those with money to invest and leads to
landlord/renter class division.
Mike
news:[email protected]:
>> >For the average person buying a nice home
>> >in a nice location for their future to live in I doubt there will be
>> >any major effect. The country is economically sound, low inflation,
>> >unemployment now at a 13 year low, as the Prime Minister said
>> >recently,
> he
>> >has not had one person complain to him about the value of their home
> rising.
If there is one thing that boggles the mind of my wife and I, it is why the
Australian government doesn't implement tax laws that encourage ownership
of a primary residence, as opposed to a second home as a tax write-off?
Being able to deduct your mortgage interest on your primary residence, as
is done here, would encourage home ownership (the Great Australian Dream,
which is the same as the Great American Dream), instead of this negative
gearing strangeness that only helps those with money to invest and leads to
landlord/renter class division.
Mike
Sep 22nd 2003 | 6:41 am
#9
Guest
Posts: n/a
Re: Australia heading for a fall?
Current owner occupied home ownership here is running in the order or
78%....no Australian government is likely to introduce a tax benefit that
allows tax deductions for the primary residence, I can't complain, if you
buy and sell wisely without greed negative gearing works well for investment
properties.
"Michael Hoffman" <[email protected]> wrote in message
news:[email protected]...
> "nullabore" <[email protected]> wrote in
> news:[email protected]:
> >> >For the average person buying a nice home
> >> >in a nice location for their future to live in I doubt there will be
> >> >any major effect. The country is economically sound, low inflation,
> >> >unemployment now at a 13 year low, as the Prime Minister said
> >> >recently,
> > he
> >> >has not had one person complain to him about the value of their home
> > rising.
> If there is one thing that boggles the mind of my wife and I, it is why
the
> Australian government doesn't implement tax laws that encourage ownership
> of a primary residence, as opposed to a second home as a tax write-off?
> Being able to deduct your mortgage interest on your primary residence, as
> is done here, would encourage home ownership (the Great Australian Dream,
> which is the same as the Great American Dream), instead of this negative
> gearing strangeness that only helps those with money to invest and leads
to
> landlord/renter class division.
> Mike
78%....no Australian government is likely to introduce a tax benefit that
allows tax deductions for the primary residence, I can't complain, if you
buy and sell wisely without greed negative gearing works well for investment
properties.
"Michael Hoffman" <[email protected]> wrote in message
news:[email protected]...
> "nullabore" <[email protected]> wrote in
> news:[email protected]:
> >> >For the average person buying a nice home
> >> >in a nice location for their future to live in I doubt there will be
> >> >any major effect. The country is economically sound, low inflation,
> >> >unemployment now at a 13 year low, as the Prime Minister said
> >> >recently,
> > he
> >> >has not had one person complain to him about the value of their home
> > rising.
> If there is one thing that boggles the mind of my wife and I, it is why
the
> Australian government doesn't implement tax laws that encourage ownership
> of a primary residence, as opposed to a second home as a tax write-off?
> Being able to deduct your mortgage interest on your primary residence, as
> is done here, would encourage home ownership (the Great Australian Dream,
> which is the same as the Great American Dream), instead of this negative
> gearing strangeness that only helps those with money to invest and leads
to
> landlord/renter class division.
> Mike
Sep 22nd 2003 | 9:47 pm
#10
Guest
Posts: n/a
Re: Australia heading for a fall?
At least the weather will still be great...and I guess we could just all
bugger of to the beach... :-)
Johnno
"Michael Hoffman" <[email protected]> wrote in message
news:[email protected]...
> Hi all,
> I don't want this post to come across as a "the sky is falling!" message,
> but lately there's been some disconcerting news from Australia that has my
> wife and me worried about our timing and prospects there.
> Incidentally, despite the repeated posts here about how bad the IT job
> market is, that's one area we're *not* worried about. I work in
Information
> Security, which may well be the only IT growth market. And growing with
> every hacker, spammer and virus that's announced each week.
> No, our main concern is the household debt level and the out-of-control
> real estate market and what it will do to the economy and the people once
> it collapses.
> A few days ago, The Age announced that Australians were now the most
> indebted people in the industrialized world. Living in the US, "credit
card
> nation" as it were, seeing how out of control it is here and how it's now
> stifling the economic recover - only to read that we're not the worst, is
> nothing short of frightening.
> What happens when this finally implodes? We're wondering if our timing
> couldn't be worse.
> Apparently neither parties are taking serious measures to address the risk
> - some half-hearted blather about addressing negative gearing, futzing
> around with the GST, nothing more.
> Now, we maintain a high level of scepticism on anything we read in the
> media, so we'd like to get some impressions from those here who are
already
> in Australia and deal with the issues (buying a house in Melbourne or
> Sydney anyone?) or who have some insight beyond the media talking heads.
> How worried should we be?
> Cheers
> Mike
bugger of to the beach... :-)
Johnno
"Michael Hoffman" <[email protected]> wrote in message
news:[email protected]...
> Hi all,
> I don't want this post to come across as a "the sky is falling!" message,
> but lately there's been some disconcerting news from Australia that has my
> wife and me worried about our timing and prospects there.
> Incidentally, despite the repeated posts here about how bad the IT job
> market is, that's one area we're *not* worried about. I work in
Information
> Security, which may well be the only IT growth market. And growing with
> every hacker, spammer and virus that's announced each week.
> No, our main concern is the household debt level and the out-of-control
> real estate market and what it will do to the economy and the people once
> it collapses.
> A few days ago, The Age announced that Australians were now the most
> indebted people in the industrialized world. Living in the US, "credit
card
> nation" as it were, seeing how out of control it is here and how it's now
> stifling the economic recover - only to read that we're not the worst, is
> nothing short of frightening.
> What happens when this finally implodes? We're wondering if our timing
> couldn't be worse.
> Apparently neither parties are taking serious measures to address the risk
> - some half-hearted blather about addressing negative gearing, futzing
> around with the GST, nothing more.
> Now, we maintain a high level of scepticism on anything we read in the
> media, so we'd like to get some impressions from those here who are
already
> in Australia and deal with the issues (buying a house in Melbourne or
> Sydney anyone?) or who have some insight beyond the media talking heads.
> How worried should we be?
> Cheers
> Mike
Sep 23rd 2003 | 2:23 pm
#11
Forum Regular
Joined: Jan 2003
Posts: 238
From: Melbourne
We arrived in Melbourne two months ago and are currently looking to buy. At this stage we are concentrating on getting to know the market and may buy in about 6 months to a year from now.
My first impression is that property in Melbourne is overpriced (based on equivalent salaries) and the quality of the housing stock tends to be poor to average. Sure you can buy a huge house for $400 -$500k in some areas but you won't want to live there. A decent 3 or 4 bed property in Bayside will cost anything from $700k to $1m+. Hoopefully things will change as more house come onto the market in summer.
Property developers are ruining it by sub-deviding plots and building 3 houses where once just one stood.
The auction system seems to fuel the rise in prices and the Real Estate agents are the worst in the world!!!
My first impression is that property in Melbourne is overpriced (based on equivalent salaries) and the quality of the housing stock tends to be poor to average. Sure you can buy a huge house for $400 -$500k in some areas but you won't want to live there. A decent 3 or 4 bed property in Bayside will cost anything from $700k to $1m+. Hoopefully things will change as more house come onto the market in summer.
Property developers are ruining it by sub-deviding plots and building 3 houses where once just one stood.
The auction system seems to fuel the rise in prices and the Real Estate agents are the worst in the world!!!
Sep 23rd 2003 | 3:16 pm
#12
Guest
Posts: n/a
Re: Australia heading for a fall?
"Johnny Boy" <[email protected]> wrote in
news:[email protected]:
> At least the weather will still be great...and I guess we could just
> all bugger of to the beach... :-)
<waves swim trunks> righto! last one in's a rotten egg!
Mike
news:[email protected]:
> At least the weather will still be great...and I guess we could just
> all bugger of to the beach... :-)
<waves swim trunks> righto! last one in's a rotten egg!
Mike
Sep 23rd 2003 | 3:18 pm
#13
Guest
Posts: n/a
Re: Australia heading for a fall?
NJFOZ <member8310@british_expats.com> wrote in
news:[email protected]:
> The auction system seems to fuel the rise in prices and the Real Estate
> agents are the worst in the world!!!
I didn't even address that one. We found the same thing when we went on our
scouting visit to Melbourne last December.
We did find that there are a few agencies that *only* deal in sales and not
auctions. We spoke with some of them, but haven't looked at them any close
yet.
Good luck!
Mike
news:[email protected]:
> The auction system seems to fuel the rise in prices and the Real Estate
> agents are the worst in the world!!!
I didn't even address that one. We found the same thing when we went on our
scouting visit to Melbourne last December.
We did find that there are a few agencies that *only* deal in sales and not
auctions. We spoke with some of them, but haven't looked at them any close
yet.
Good luck!
Mike
Sep 23rd 2003 | 11:59 pm
#14
Guest
Posts: n/a
Re: Australia heading for a fall?
I wouldn't count on 'great weather' for most of the year in Melbourne
Jeremy
>On 24 Sep 2003 03:16:14 GMT, Michael Hoffman <[email protected]> wrote:
>"Johnny Boy" <[email protected]> wrote in
>news:[email protected]:
>> At least the weather will still be great...and I guess we could just
>> all bugger of to the beach... :-)
><waves swim trunks> righto! last one in's a rotten egg!
>Mike
This is not intended to be legal advice in any jurisdiction
Jeremy
>On 24 Sep 2003 03:16:14 GMT, Michael Hoffman <[email protected]> wrote:
>"Johnny Boy" <[email protected]> wrote in
>news:[email protected]:
>> At least the weather will still be great...and I guess we could just
>> all bugger of to the beach... :-)
><waves swim trunks> righto! last one in's a rotten egg!
>Mike
This is not intended to be legal advice in any jurisdiction
Sep 24th 2003 | 1:04 am
#15
Forum Regular
Joined: Jan 2003
Posts: 45
From: Upton upon severn,UK
house prices in Oz are still very cheap when compared to the UK-surely the number of Wedged up immigrants such as us(I'm an immigrant-not too wedged up though) are only going to fuel the rise in house prices.
