Australia housing bubble

[Yellow_Festiva]

Originally Posted by Mulva

It's running here in Adelaide too, which sucks for me as have been planning to slightly upgrade over last 12 months but so far done nothing about it as what I make extra on selling here I pay extra plus-some on the next.

Like 12 months back my place worth roughly $450k and suitable places in area I'm looking to buy were roughly $550k...now my current is probably closer to $500k, but the suitables in that area are $630-650k

Perhaps buy something that needs work but good bones at the same price you sell your place?

If you are good with your hands or have the contacts you can bump up the value and create what you want with some elbow grease.

[Yellow_Festiva]

My place coming up for auction next week. Hopefully it gets caught up in the hype and gives me some play money for myself and the kids

[Polyal]

While I am happy people are making money on investments I still dont understand where it is coming from and what overall position we are in.

GovCo will always do what they can to keep the economy bubbling through the building sector but will it ever go pop? I feel like I have been "sure" it will for as long as I can remember. We see some small dips but quick recovery.

[Citroënbender]

I think some external agents continue to drive demand; we have policies that allow property sales to non-residents and a modest level of counterfeiting, too. Plus a sharp national rate of growth in some areas like aged care - typical staffing includes a high number of migrants.

[blueoval]

Originally Posted by Citroënbender

I think some external agents continue to drive demand; we have policies that allow property sales to non-residents and a modest level of counterfeiting, too. Plus a sharp national rate of growth in some areas like aged care - typical staffing includes a high number of migrants.

That is a major part of the inflation we are experiencing today in my opinion. The ability for wealthy international buyers to buy Australian properties sight unseen with the help of local agents is pricing your everyday mum and dads here out of the market.

[Polyal]

Originally Posted by blueoval

That is a major part of the inflation we are experiencing today in my opinion. The ability for wealthy international buyers to buy Australian properties sight unseen with the help of local agents is pricing your everyday mum and dads here out of the market.

Is there any stats on that? While I am sure it plays a part it would be good to know by how much.

Pretty sad if thats a major driving factor.

[FTE217]

External agents yer I'm sure is a factor but the locals are quite active as well.
The WFH adjustment I feel has contributed alot as well.
Many have decided they can move out of the burbs go up the coast or InterState for more affordable purchasing/living.
Ex Pats having come home is another.
Prior to the recent price rise's, just 2/3mths ago we were actively looking to buy a investment up the central coast.
We could have but already the the pricing was going ott.
One we were interested in Avoca the agent said it was listed for just a week.
Told me he's going back to the vendor recommending him to consider 3/4 offers above their expectations.
We had similar feeback elsewhere.
At the same time my son was looking to get in with his bride to be.
We went to many open days around inner west Sydney and north.
Heaps and heaps of normal looking aussies viewing to buy.
Can't believe what people are willing to pay right now.
Both of us are holding stations, sooner or later there will be a drop.
We can wait.

[blueoval]

Originally Posted by Polyal

Is there any stats on that? While I am sure it plays a part it would be good to know by how much.

Pretty sad if thats a major driving factor.

I have a few mates who are real estate agents who keep me in the loop. But nothing I have in terms of hard and fast national stats.

There is some people moving from the East Coast to buy up in SA because its cheaper and they can work from home, so there is that. But from the intel Im getting, a lot of it is international buyer driven.

[blueoval]

Originally Posted by FTE217

External agents yer I'm sure is a factor but the locals are quite active as well.
The WFH adjustment I feel has contributed alot as well.
Many have decided they can move out of the burbs go up the coast or InterState for more affordable purchasing/living.
Ex Pats having come home is another.
Prior to the recent price rise's, just 2/3mths ago we were actively looking to buy a investment up the central coast.
We could have but already the the pricing was going ott.
One we were interested in Avoca the agent said it was listed for just a week.
Told me he's going back to the vendor recommending him to consider 3/4 offers above their expectations.
We had similar feeback elsewhere.
At the same time my son was looking to get in with his bride to be.
We went to many open days around inner west Sydney and north.
Heaps and heaps of normal looking aussies viewing to buy.
Can't believe what people are willing to pay right now.
Both of us are holding stations, sooner or later there will be a drop.
We can wait.

This is exactly it. The bubble WILL burst, just a matter of when. It will come down to what side of it you are on.

I can confirm that the offers over asking price is true here in SA. I have friends who are looking to buy in Middleton/Goolwa areas of SA and have had to offer more than asking to be considered, but were priced out by desperate buyers who were willing to offer more on top. Great if you are looking to sell to go smaller or retire, bad if you are trying to get a toe in on the market.

[Citroënbender]

I am absolutely in favour of reciprocal laws for property ownership, including the devising of some tests for funds holding property. The outcry if it were proposed, would be impressive.

As to WFH, I believe it is muchly on the way out. In Sydney the various office people I engage with are typically on 40% office time at present, edging towards 60% soon. The goal seems to be - among the decision makers for these things, who obviously missed keeping an eye on their peons - a full return soon as everyone else is going that way.

[FTE217]

Originally Posted by blueoval

This is exactly it. The bubble WILL burst, just a matter of when. It will come down to what side of it you are on.

I can confirm that the offers over asking price is true here in SA. I have friends who are looking to buy in Middleton/Goolwa areas of SA and have had to offer more than asking to be considered, but were priced out by desperate buyers who were willing to offer more on top. Great if you are looking to sell to go smaller or retire, bad if you are trying to get a toe in on the market.

yes son and soon to be wife being first home buyers in that real challenging stage like many.
They are saving their butts off but what they have now is not enough to prices right now.
They are very fortunate compared to many for they are living in our granny flat at a fair rental price.
They talked to us recently about staying another year or 2 depending whats to become.
It will burst but having said that I have waited for that to occur since the GFC way way back.....

Yes WFH has been flipping back for some/many but it did help setting the current precedent.

[Polyal]

Originally Posted by blueoval

I have a few mates who are real estate agents who keep me in the loop. But nothing I have in terms of hard and fast national stats.

There is some people moving from the East Coast to buy up in SA because its cheaper and they can work from home, so there is that. But from the intel Im getting, a lot of it is international buyer driven.

Disappointing if GovCo dont have some kind of further tax on international investors. Id assume in most cases there is no intention of living in Australia so its purely investment which could be better spent on things to improve standard of living, other economic activity etc...not detracting and making it harder for citizens to get in...

[T3rminator]

Originally Posted by blueoval

This is exactly it. The bubble WILL burst, just a matter of when. It will come down to what side of it you are on.

I've learnt not to try guess the timing. Look at history, there is a common pattern. Preceding a crash is usually irrational exuberance. Look out for the media, editorials and articles justifying the rise, and with prediction of further rise on a daily basis. Listen to the mums and dads on the streets where they think they can't lose. That's the red flag for me.

Word in our organisation is that interest rates could start to turn in the US in the next couple of years, that could also be a butterfly effect.

Originally Posted by Polyal

Disappointing if GovCo dont have some kind of further tax on international investors.

What is the foreign investment capital gains tax these days? I thought it was pretty hefty, close to 50%? It would be interesting to get some stats on number of foreign ownership on residential housing under $1.5m. I reckon it will be smaller than most people think. Lots of hoops they have to jump to get in the market, I think it needs to be approved by the Feds too. International investors seem to be taking the multi million dollar mansions, way out of reach of us plebs anyway.

Gotta say the current rise is surprising. I think its a combination of cheap credit and savings from the restrictions. By that I don't mean one person saving, its probably family pooled e.g. mums and dads saving, and providing a loan to their kids, who have also been saving. Just my theory.

[hayseed]

Originally Posted by blueoval

This is exactly it. The bubble WILL burst, just a matter of when..

I have My Doubts about that.. There's far too Much Vested Interest by Govco, Banks & developers in keeping their Ponzi scheme going..

Price may (or will) ease at some point But I can't see them Crashing.! But I have been wrong before..

[Yellow_Festiva]

Originally Posted by Polyal

While I am happy people are making money on investments I still dont understand where it is coming from and what overall position we are in.

Yes, where is the money coming from?

When you hear of auctions going XX% ABOVE reserve then you would assume the reserve is fair market value.

There was a house recently in Sydney that went $1,000,000 above the reserve.

Now, lets assume the bank gave a valuation of the reserve, that means the buyers would have had to stump up that overpayment themselves on top of the deposit.

Very deep pockets indeed.

I know of one recent sale where a buyer needed to pull out because the bank wouldn't bridge the gap between offer and market value.

I'm looking at buying, and have attended several open houses.

Sales agents are still up to their shonky old tricks of blatantly falsely advertising what they are selling. I wish there was a governing body you could report them to that would actually take action.

I'm looking at buying one place that has a listed price and another that is going to auction. I'm curious to see how overheated the market is with the auction as the house is a total disaster and should go for land value.

[Yellow_Festiva]

Originally Posted by hayseed

I have My Doubts about that.. There's far too Much Vested Interest by Govco, Banks & developers in keeping their Ponzi scheme going..

Price may (or will) ease at some point But I can't see them Crashing.! But I have been wrong before..

I tend to agree. We came out of Covid on top of the world and the predicted disaster predicted after the ending of Covid government support never came.

We can't go anywhere any time soon, the money people would have spent on OS holidays is being saved and used elsewhere.

[zilo]

Keep getting phone calls asking if i want to sell my rock in tassie.
Up to 6 times what I paid for it 7 years ago at the moment.

[John 13]

Originally Posted by Polyal

While I am happy people are making money on investments I still dont understand where it is coming from and what overall position we are in.

GovCo will always do what they can to keep the economy bubbling through the building sector but will it ever go pop? I feel like I have been "sure" it will for as long as I can remember. We see some small dips but quick recovery.

John Howards 'housing led recovery'. Some of us remember that .

[Citroënbender]

There is no recovery, we are collectively being gently bent over a barrel as the shackles subtly tighten. Conditioning is underway to accept higher prices for accommodation, lifetime debt.

One outcome I’m still expecting, is governments who’ve allowed multiple developments under one title (eg granny flats, mansion houses) will be bullied/forced into allowing the creation of some new title forms that allow independent possession and leveraging of these. It will formalise and inflate another market.

[FTE217]

Originally Posted by Yellow_Festiva

Yes, where is the money coming from?

When you hear of auctions going XX% ABOVE reserve then you would assume the reserve is fair market value.

There was a house recently in Sydney that went $1,000,000 above the reserve.

Now, lets assume the bank gave a valuation of the reserve, that means the buyers would have had to stump up that overpayment themselves on top of the deposit.

Very deep pockets indeed.

I know of one recent sale where a buyer needed to pull out because the bank wouldn't bridge the gap between offer and market value.

I'm looking at buying, and have attended several open houses.

Sales agents are still up to their shonky old tricks of blatantly falsely advertising what they are selling. I wish there was a governing body you could report them to that would actually take action.

I'm looking at buying one place that has a listed price and another that is going to auction. I'm curious to see how overheated the market is with the auction as the house is a total disaster and should go for land value.

any update on your selling and hunting to buy ?

[Yellow_Festiva]

Originally Posted by FTE217

any update on your selling and hunting to buy ?

Yes, sold for just under $2.1 mil, happy with that as the reserve was $2 mil.

Looked at several places, got an auction this Saturday and putting an offer on another place as soon as some checks come back clear.

[GO FURTHER]

Interesting article...

Why home prices are skyrocketing around the world, causing buyers to panic

https://7news.com.au/business/

Are any of you guys worried about what this will do to younger generations? To your kids? Your kids' kids? Your friends' kids?

[Yellow_Festiva]

Originally Posted by leesa

Are any of you guys worried about what this will do to younger generations? To your kids? Your kids' kids? Your friends' kids?

Of course, but like my parents helped me get a foot in the market I'll be doing the same for my kids.

Sent from my SM-G973F using Tapatalk

[Citroënbender]

Originally Posted by leesa

Are any of you guys worried about what this will do to younger generations? To your kids? Your kids' kids? Your friends' kids?

It sometimes keeps me awake, to be honest.

[lumen8]

Originally Posted by leesa

Are any of you guys worried about what this will do to younger generations? To your kids? Your kids' kids? Your friends' kids?

Kind of ironic given our population density is so low... a lot of the country has very few people, a lot of farmland still reasonably close to cities etc and the cost per sq meter is pennies on the pound versus anything zoned residential.

Unlike Europe for example where things are quite tight in most places.

We should have cheaper land prices, but govts/banks/councils wouldnt make as much money out of rezoning/opening up more land because prices would fall. Am I being simplistic in my thinking here?

Protect the banks at all costs, I think its in a 1920's hansard somewhere.. not much has changed since then.

[lra]

Originally Posted by leesa

Are any of you guys worried about what this will do to younger generations? To your kids? Your kids' kids? Your friends' kids?

Nope. 'Cos when I die, they will be inheriting a million dollar house.

[roKWiz]

Originally Posted by lumen8

Kind of ironic given our population density is so low... a lot of the country has very few people, a lot of farmland still reasonably close to cities etc and the cost per sq meter is pennies on the pound versus anything zoned residential.

Unlike Europe for example where things are quite tight in most places.

We should have cheaper land prices, but govts/banks/councils wouldnt make as much money out of rezoning/opening up more land because prices would fall. Am I being simplistic in my thinking here?

Protect the banks at all costs, I think its in a 1920's hansard somewhere.. not much has changed since then.

Yes, agree to a point but away from the coast we need lots of water and infrastructure to support all these new hideous housing estates.
We also need what little quality farming land left to produce food for our country and not keep importing crap.
Some people are very lucky to have prosperous parents who can help them in every stage in life.

[Yellow_Festiva]

Originally Posted by Yellow_Festiva

Yes, sold for just under $2.1 mil, happy with that as the reserve was $2 mil.

Looked at several places, got an auction this Saturday and putting an offer on another place as soon as some checks come back clear.

Didn't bother with that auction - the vendor refused to agree to several conditions so not worth the gamble.

Glad I didn't. Agent said interest and price expectations were in the range of $650-$700k (land value) and it went for $871k...

Just a few months prior the same type of house on the same street with the same land and nicely renovated went for $890k...

Put in my offer yesterday on a large but dated Penthouse apartment with 4 car garage. May need to be a little more generous if I'm to nab something prior to auction.

See what happens.

[Citroënbender]

How’s the health of it’s strata scheme?

Two auctions within 150m of me yesterday, didn’t go to either.