Aww come on mate you are putting all kinds of word into my mouth. I have not seen one fact from you and I have provided you with a bucketful of easily verifiable data.
What I am saying is that yes of course there are issues for folk on low incomes in cities like Sydney, and these need to be addressed.
However, what you are asking for is clearly too much, you want to be within 1/2 hr of the city. Well sorry mate but you will have to pay what other people pay to live there that is just a fact of life. There are many more people wanting to live within 1/2hr of the city than there was even a decade ago and the folk willing to pay for this luxury will get these homes not those who cry about the price. Try buying within 1/2hr of London, Paris, Tokyo, Rome, Madrid, Moscow, san Fransisco, New York etc etc they are all way more expensive than Sydney. Would you feel sorry for a British first home buyer who works in the centre of London if they whined like a baby that they could not afford to buy within 1/2 hr of the city, or would you laugh your socks off at the cheek and greed of them.
My uncle could have bought in Centennial park but there is no way I could afford to buy there and we are on much higher relative wages than he was on. If I had cried about that I would never have bought in daggy Coogee and I would have missed out on lotsa good price growth. This is the risk people will run if they are led to believe that there will be such a turmoil of unheard of before changes to the market that this new generation can suddenly get to buy the last generations homes.
In the US it was not young people who bought at the lowly crash time prices,it was rich cash buyers, who are now enjoying massive capital gains. Young people are always the most disadvantaged by such turmoil look at youth unemployment figures in those countries which have suffered so much from this GFC crisis. Why on earth would you wish that fate on our much more egalitarian Australia?
I do not know when it became so acceptable to whine like babies about the fact that the city has prospered beyond the reach of first home buyers to buy inner city property. However, when prices rise another 10% it will certainly become laughable again. Make your escape from the gloomer's camp before then if you have any sense. I have watched this whole thing play out a few times, the talk is always the same and those who hang on too long to the doom and gloom get left behind rapidly.
You are not listening.
How can you compare Perth with London, paris etc that is laughable?
Southern USA like Texus DID NOT have a property bubble or burst like other parts of the USA because of their liberal land policies. This is my point. You still have not answered why in a growing city like Houston you can get land for 60k while you are going on about Perth land being a bargain in 2010. Its not wages as they are only 10-20% less even though houses are arounf 50% the cost of here.
An average single earner in 2003 could by a house within 1/2 an hour of Perth now they cannot afford to even on the next suburb out (if they can its taking a much greater proportion of their income) it is therefore less affordable would you not agree?
Do you not even consider quality of life when you talk about affordability? According to your measures you can have zero quality of life but if you are meeting your payments it is affordable?
You have quoted somewhere about 20% of weekly household income to service a mortgage. Why use hosehold income and not single median wage? I would like to see the figures for those that have taken mortgages since the boom, they will be spending much more than 20% of their income on their mortgage?
Tell me Skamy, is it more affordable to pay 20% of your household income to service your motgage for 30 years or 25% of your weekly income for 20 years?
Affordability should be measured over the course of the loan not just weekly payments.
It's nice to be idealistic, but the question for people who want to buy now is do the goverments at all three levels of federal, state, and local have the will and fortitude to make radical changes that will create a housing crash that will hurt most of their constituents and threaten their own income streams or not, and my guess would be - probably not.
That's an accurate assessment. Not a palatable one. But accurate.
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
Yep that's a fair point of view and you ask fair questions.
here are my thoughts. You mentioned slow melt, so I'll assume that you read at Macrobusiness and are familiar with their "slow melt" theory. I agree with the theory, but I don't agree with what many seem to think it stands for.
Here is how Leith defined it just two days ago on the ABS House Price thread.
What he is saying is that the Real Price could fall over time even though the value in nominal terms may be rising. All we need to achieve that is house price growth that is less than the rate of inflation over a period of many years. Or we might see 1970"s rates of inflation over a few years. Either way the house price still grows from the current price. It doesn't mean a house price crash, although in an extreme case that would also achieve the same result. Neither a house price crash nor extreme rates of inflation are likely IMHO.
Most people will read Leiths words and think that it means a crash, and the crash is imminent - that's not my interpretation, and I don't believe it's Leiths as well, although clearly you would need to ask him directly on this point to clarify that. If we agree then you may be faced with a wait anywhere from 5 to 25 years. I would not put my life on hold that long to buy an asset which will still be priced higher in the future, I would make whatever sacrifices I needed to, to get what I wanted to achieve - but perhaps that's just me.
Further on that point, I have thought several times what I might do if I was looking to buy my first house at the moment. It would depend on where I lived. I can buy quite nice first homes in Brisbane for $350K and for most working couples that is manageable. If your at the higher end in Sydney then I don't know, perhaps I would buy in a currently undervalued area that might be outside Sydney and rent that out, whilst renting in a suburb that gives you access to the schools and other infrastructure that you need to be near.
Perhaps I would look to buy shares and give houses away completely, or maybe I would buy a couple of offices to rent out, or maybe a unit at Byron Bay, Hervey Bay, who knows where buying opportunities can be found.
Owning the home that you live in is not necessarily the goal, accumulating quality assets should be your primary focus. It's nice to live in a place of your own, but it's not always the best investment. Many smart property investors choose to rent their accomodation even though they could buy.
I feel for you, but analysing why we are where we are won't help unless you can see a reversal of fortune in the near future. Otherwise you need to make plans to counter what you see now as a problem. People the world over face greater difficulties than this every day, some overcome them, some don't.
Best of luck..
I'm in Perth. I fugured we were in a slow melt here since 2007 as prices were flat therefore better off saving. However if they have gone up 10% last year it worries me this will be all undone. Although I do not think this will sustain wth the boom ending here. I just dont want to have a family in a crap area.
I think it is unlikely we will see any kind of housing crash in Australia unless we see another boom first. With immigration being so high I can't see prices falling much in the major cities and long term I think property is a sure bet. You just need to look at the population growth charts to see that land is going to become more and more valuable around the cities. In the short to medium term I think there is still a risk of price falls or stagnation. A slowdown in China and a recession in Australia is a likely possibility and the Australian economy will be screwed with a mining bust.
Owning the home that you live in is not necessarily the goal, accumulating quality assets should be your primary focus. It's nice to live in a place of your own, but it's not always the best investment. Many smart property investors choose to rent their accomodation even though they could buy.
Yes. It's one of the really big problems I have with ramming the thought down people's throat that they have to buy. (As well as the fact I reckon they are overpriced as well.) Just too damn difficult to say what anyone else 'should' do. Thought went through my mind a while back to mention a very good mate of mine who all the bulls here would have historically regarded as a homeless 'loser'. He's been building a very innovative business. And is in the process of selling. But I didn't; As I reckoned if I mentioned the sale price (more money than any of us here are ever gunna accumulate on piddly little leveraged property investments) the bulls would have just rolled 'round on the floor guffawing ...
Hmmm the process of self entitlement can be manipulated ...from a struggling unfortunate to the wealthy that has it all. The affordability ethic.
The question is choice , is it too hard? Well yes for some but not all. We live in a convenient society that does promote self gratification..it does reinforce the concept of laziness. Our kids seem to be prompted to grow up perhaps too quickly.
What frightens me is the apathy, I have no doubts that some will wait like vultures for their gran/ parents to hurry up & die..such an easy way isn't it.
Yeah just think of yourself ..party on, travel, drugs, me, me me...wtf does budgeting mean? It just dosent seem right.
Just too hard ...you bastards.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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