Comments on: Australian Housing Market Most Unaffordable in the World http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/ An independent perspective on the Australian and global investment markets Sun, 08 Nov 2009 09:45:07 -0600 http://wordpress.org/?v=2.8 hourly 1 By: Eric http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-110012 Eric Fri, 23 Oct 2009 11:18:52 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-110012 There are several other situations of course that drive prices up, don't forget about the general lack of transparency in the Australian real estate market relative to the US. The fact that auctions are an outdated, ripoff method, intended to drive the price high onthe spot (and anyone who participates in one in order to buy an affordable house is foolish to say the least). Then on top of that, like here int he US, you get no mortgage interest tax deduction for your primary residence. What's up with that? There are several other situations of course that drive prices up, don't forget about the general lack of transparency in the Australian real estate market relative to the US. The fact that auctions are an outdated, ripoff method, intended to drive the price high onthe spot (and anyone who participates in one in order to buy an affordable house is foolish to say the least). Then on top of that, like here int he US, you get no mortgage interest tax deduction for your primary residence. What's up with that?

]]> By: Jonathan http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-30330 Jonathan Sun, 13 Jul 2008 02:36:42 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-30330 As a recent migrant from London, UK (been resident in Australia for the past 2 years) I never imagined that the cost of living here in Sydeny would surpass that of London! And believe me, it most definately has... house prices, rents, food, telecommunications, electronics, banking.. you pay over the odds for almost everything (exception is fuel - but thats rising too based on the global price). You're being hammered on all fronts. I would be interested to know the statistic on the number of immigrants vs the amount of housing being built every year or land being made available for housing? Where can we find the truthful figure? Surely people like me must be fueling the housing shortage? And yet I contribute to the Australian economy (I'm still employed and paid out of my London Office), its not like theres not enough land? Right? Its a joke! Surely the answer is better transport - not buses, but high speed trains to outter regions? The main issue is the bottleneck it takes to get from places as far out as Gosford to Sydney CBD (1.5 hours each way, or think of it as 2 additional work days wasted travelling to work and back each week). High speed trains! Come on - its 2008! But I fear that even if these did exist, that just like the telecoms and food, those businesses responsible for running/owning the service would merely treat their captive audience with contempt. Greater competition is needed in all areas of Australian economy, food, banking.. telecoms, etc. The Australian lifestyle that is so admired by the rest of the world is being eroded away - tis a shame! Now I know why so many Aussies work in London! They cant afford to live here! As a recent migrant from London, UK (been resident in Australia for the past 2 years) I never imagined that the cost of living here in Sydeny would surpass that of London! And believe me, it most definately has... house prices, rents, food, telecommunications, electronics, banking.. you pay over the odds for almost everything (exception is fuel - but thats rising too based on the global price). You're being hammered on all fronts.

I would be interested to know the statistic on the number of immigrants vs the amount of housing being built every year or land being made available for housing? Where can we find the truthful figure?

Surely people like me must be fueling the housing shortage? And yet I contribute to the Australian economy (I'm still employed and paid out of my London Office), its not like theres not enough land? Right? Its a joke!

Surely the answer is better transport - not buses, but high speed trains to outter regions? The main issue is the bottleneck it takes to get from places as far out as Gosford to Sydney CBD (1.5 hours each way, or think of it as 2 additional work days wasted travelling to work and back each week). High speed trains! Come on - its 2008!

But I fear that even if these did exist, that just like the telecoms and food, those businesses responsible for running/owning the service would merely treat their captive audience with contempt. Greater competition is needed in all areas of Australian economy, food, banking.. telecoms, etc.

The Australian lifestyle that is so admired by the rest of the world is being eroded away - tis a shame!

Now I know why so many Aussies work in London! They cant afford to live here!

]]> By: bill http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-29700 bill Tue, 08 Jul 2008 22:15:15 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-29700 Our market here in Canada particular the west Alberta/BC has remained strong as our banks didnt give away silly money under terms to persons who could never ever pay it back. But we face similar affordability issues espcially Vancouver even tho like Oz we have ample space its all about "denisification" into the urban centers helping to drive prices round and round as always happens when a desired commodity is limited in availability. Its become like Hong Kong pre-China where the speculation and flip was what real estate was for and not raising a family and putting in roots. Who can afford to do that! One comment from here was the sizties generation could afford to leave home at 18 and a few years scraping.. buy a house. My kid at 21 is still here cause they sure cant pay rent AND save the down needed to get into the market. Even tho my ease of retirement is house based.... a correction is needed and HAS to come. Wtach for first time buyers staying out... thats the beginning of the bubble end. Our market here in Canada particular the west Alberta/BC has remained strong as our banks didnt give away silly money under terms to persons who could never ever pay it back. But we face similar affordability issues espcially Vancouver even tho like Oz we have ample space its all about "denisification" into the urban centers helping to drive prices round and round as always happens when a desired commodity is limited in availability. Its become like Hong Kong pre-China where the speculation and flip was what real estate was for and not raising a family and putting in roots.
Who can afford to do that!
One comment from here was the sizties generation could afford to leave home at 18 and a few years scraping.. buy a house. My kid at 21 is still here cause they sure cant pay rent AND save the down needed to get into the market.

Even tho my ease of retirement is house based.... a correction is needed and HAS to come. Wtach for first time buyers staying out... thats the beginning of the bubble end.

]]> By: grtrain http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-15434 grtrain Thu, 03 Apr 2008 20:19:21 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-15434 Unfortunately low interest rates allowed buyers to afford ridiculously overvalued prices. Compounding this, the false equity derived has been borrowed against for the second new car, plasma T.V. and overseas holidays thereby blowing consumer spending out of the water. Whilst painful the only option the Reserve Bank has is to raise interest rates (maybe by a further 2%). This will bring housing prices down to fairer value and reduce consumer spending by the use of phantom equity in the home. Unfortunately low interest rates allowed buyers to afford ridiculously overvalued prices. Compounding this, the false equity derived has been borrowed against for the second new car, plasma T.V. and overseas holidays thereby blowing consumer spending out of the water. Whilst painful the only option the Reserve Bank has is to raise interest rates (maybe by a further 2%). This will bring housing prices down to fairer value and reduce consumer spending by the use of phantom equity in the home.

]]> By: Avfah http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-14081 Avfah Fri, 28 Mar 2008 22:40:59 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-14081 I agree. Australian houses are amongst the most expensive in the world, and it is partially due to government policy. Even after a credit crunch, prices will return to even more unaffordable highs. What we need is a sustained political pressure to make better government policy. Help do something about housing affordability and visit http://www.australian-voters-for-affordable-housing.org for more details. I agree. Australian houses are amongst the most expensive in the world, and it is partially due to government policy. Even after a credit crunch, prices will return to even more unaffordable highs. What we need is a sustained political pressure to make better government policy. Help do something about housing affordability and visit http://www.australian-voters-for-affordable-housing.org for more details.

]]> By: billy http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-11457 billy Mon, 10 Mar 2008 12:46:32 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-11457 Of course their will be a housing price correction. As sure as night follows day. Of course rentals will go up, but so will interest rates. Of course wages will go up within the next 2 years,but then as wages go up the resource boom will peak and fall due to USofA and china ,india in fact worldwide recession. House prices should by then 2009-10 be (in NSW) back to the levels they were in early 2003. that is say 35%below what they are now. The trouble is that when that happens the rent returns will be back to at least 8.75-10% returns so the landlords will be out sniffing around again . Of course their will be a housing price correction.
As sure as night follows day.
Of course rentals will go up, but so will interest rates.
Of course wages will go up within the next 2 years,but then as wages go up the resource boom will peak and fall due to USofA and china ,india in fact worldwide recession.
House prices should by then 2009-10 be (in NSW) back to the levels they were in early 2003. that is say 35%below what they are now.

The trouble is that when that happens the rent returns will be back to at least 8.75-10% returns so the landlords will be out sniffing around again .

]]> By: lolz http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-6468 lolz Thu, 31 Jan 2008 00:08:23 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-6468 Australians oughtn't complain. According to this study it is apparent that the U.S. has the most unaffordable housing market if you exclude the areas most Americans refuse to live in (the south, Texas, and rural Midwest). Housing prices in the Notheast, eastern seabord, and California dominate the "unaffordable" list. If you move to Los Angeles and expect to buy a house within a 45 minute each way commute to the Westside's offices, you will be looking at houses in the 1-2,000,000 range. In that study the median Los Angeles homeowner pays ****87%**** of his income towards his mortgage. If I had better information on how Americans could get high-paying jobs in and move to Australia, I would move there in a second. Australians oughtn't complain. According to this study it is apparent that the U.S. has the most unaffordable housing market if you exclude the areas most Americans refuse to live in (the south, Texas, and rural Midwest). Housing prices in the Notheast, eastern seabord, and California dominate the "unaffordable" list. If you move to Los Angeles and expect to buy a house within a 45 minute each way commute to the Westside's offices, you will be looking at houses in the 1-2,000,000 range. In that study the median Los Angeles homeowner pays ****87%**** of his income towards his mortgage. If I had better information on how Americans could get high-paying jobs in and move to Australia, I would move there in a second.

]]> By: Dom http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-6402 Dom Mon, 28 Jan 2008 21:38:13 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-6402 If Kevin Rudd really wanted to leave his mark on Australian political life he would phase out neg gearing over 3-5 years....it is a rort and people are taking the piss...Pollies come and go but who really is remembered as doing something gutsy that helped alot of people? In the 70's - average wage $10,000 - average home $30,000. That was affordable. You might have even bought a small beach house for you and the kids for summertime. Yes there are rich people in Australia - but there always have been and always will be - however most people's standard of living is dropping everyday -re: cost of everything! That is why the kids can't afford to leave home - they have no chance! Read recently where homes in melbourne now more expensive than new york city??? Hellooooooo? What the f*@k! If Kevin Rudd really wanted to leave his mark on Australian political life he would phase out neg gearing over 3-5 years....it is a rort and people are taking the piss...Pollies come and go but who really is remembered as doing something gutsy that helped alot of people?

In the 70's - average wage $10,000 - average home $30,000.
That was affordable. You might have even bought a small beach house for you and the kids for summertime.

Yes there are rich people in Australia - but there always have been and always will be - however most people's standard of living is dropping everyday -re: cost of everything!

That is why the kids can't afford to leave home - they have no chance!

Read recently where homes in melbourne now more expensive than new york city??? Hellooooooo? What the f*@k!

]]> By: Billy Bob http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-6397 Billy Bob Mon, 28 Jan 2008 03:31:29 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-6397 I think house prices in Australia will crash soon because: * Housing affordability is at record lows in Australia http://www.demographia.com/dhi.pdf * Interest rates have risen significantly and are about to rise again http://www.news.com.au/business/money/stor...ml?from=mostpop * Easy credit is drying up http://www.lendingcentral.com.au/SiteConte...88/Default.aspx * Petrol prices are heading up http://blogs.domain.com.au/2008/01/home_ow..._been_ki_1.html * Rental yields are low relative to house prices making property investment riskier http://www.moneymanager.com.au/cgi-bin/com...8390222703.html * The market sentiment is turning as locals look overseas and realize house prices worldwide have started dropping (UK,NZ,Ireland - not just the US) http://nz.news.yahoo.com/080116/3/3m21.html http://www.guardian.co.uk/money/2007/nov/3...es.houseprices1 http://www.rte.ie/news/2008/0121/housing.html?rss * World financial markets are unsettled http://www.marketwatch.com/news/story/unse...3BA8D2596074%7D * Baby boomers are about to start retiring and will slow down purchasing investment properties and will start withdrawing equity http://blogs.wsj.com/developments/2008/01/...housing-market/ * Peak debt is being reached in terms of how much debt new entrants to the market can service based on current incomes http://www.smh.com.au/news/australian-capi...3351260524.html * Every previous housing boom has been followed by a bust and this has been the biggest boom ever http://www.anz.com/nz/about/media/library/pf/pf20070521.pdf (see table at top of page 8) * Australians have one of the highest levels of personal debt relative to income in the world http://www.abc.net.au/worldtoday/content/2007/s2055693.htm One last thought to ponder: If there is such a shortage of houses then where does everyone live now? I think house prices in Australia will crash soon because:

* Housing affordability is at record lows in Australia
http://www.demographia.com/dhi.pdf
* Interest rates have risen significantly and are about to rise again
http://www.news.com.au/business/money/stor...ml?from=mostpop
* Easy credit is drying up
http://www.lendingcentral.com.au/SiteConte...88/Default.aspx
* Petrol prices are heading up
http://blogs.domain.com.au/2008/01/home_ow..._been_ki_1.html
* Rental yields are low relative to house prices making property investment riskier
http://www.moneymanager.com.au/cgi-bin/com...8390222703.html
* The market sentiment is turning as locals look overseas and realize house prices worldwide have started dropping (UK,NZ,Ireland - not just the US)
http://nz.news.yahoo.com/080116/3/3m21.html
http://www.guardian.co.uk/money/2007/nov/3...es.houseprices1
http://www.rte.ie/news/2008/0121/housing.html?rss
* World financial markets are unsettled
http://www.marketwatch.com/news/story/unse...3BA8D2596074%7D
* Baby boomers are about to start retiring and will slow down purchasing investment properties and will start withdrawing equity
http://blogs.wsj.com/developments/2008/01/...housing-market/
* Peak debt is being reached in terms of how much debt new entrants to the market can service based on current incomes
http://www.smh.com.au/news/australian-capi...3351260524.html
* Every previous housing boom has been followed by a bust and this has been the biggest boom ever
http://www.anz.com/nz/about/media/library/pf/pf20070521.pdf (see table at top of page 8)
* Australians have one of the highest levels of personal debt relative to income in the world
http://www.abc.net.au/worldtoday/content/2007/s2055693.htm

One last thought to ponder:
If there is such a shortage of houses then where does everyone live now?

]]> By: Proff Christopher http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/comment-page-1/#comment-6386 Proff Christopher Sun, 27 Jan 2008 02:36:15 +0000 http://www.dailyreckoning.com.au/australian-housing-market-4/2008/01/21/#comment-6386 What everyone seems to be forgetting is that all these baby boomers who are currently asset rich in property are nearing retirement. Most will be holding on to aquired property to supplement income in retirement through rent. This means that demand for rentals will remain tight and if investors are in no hurry to sell, the market will not crash. What is probable is some stabilization short term, and all those gen x's and y's who are whinging about affordability will inherit all this property as the baby boomers begin to pass. Then they will be subdiving houses like there's no tommorrow , making heaps of money and wondering what the next generation is worried about. Dont pannick people we are a far wealthier nation than we have ever been, even with record mortage repayments we still manage to create record levels of spending. There are alot of people in this country with stacks of money. What everyone seems to be forgetting is that all these baby boomers who are currently asset rich in property are nearing retirement. Most will be holding on to aquired property to supplement income in retirement through rent. This means that demand for rentals will remain tight and if investors are in no hurry to sell, the market will not crash. What is probable is some stabilization short term, and all those gen x's and y's who are whinging about affordability will inherit all this property as the baby boomers begin to pass. Then they will be subdiving houses like there's no tommorrow , making heaps of money and wondering what the next generation is worried about. Dont pannick people we are a far wealthier nation than we have ever been, even with record mortage repayments we still manage to create record levels of spending. There are alot of people in this country with stacks of money.

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