Swedish property bubble vs Australian house prices; Sweden looking at option of forcing households to amortize their mortgages to prevent debt loads rising
It's all well and good to quote areas where you can find cheap properties out in the sticks. Unfortunately, unless you're thinking of retiring, there isn't much to draw anyone away from the cities in Australia.
You can say the same about the cheap places in Sweden, and in the UK. Where the houses are cheap the pay and the opportunities are poor. There is no measurement of prices internationally that supports the argument that Sweden has lower priced property that Australia.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
You can say the same about the cheap places in Sweden, and in the UK. Where the houses are cheap the pay and the opportunities are poor. There is no measurement of prices internationally that supports the argument that Sweden has lower priced property that Australia.
The stats you are referring to are simply incorrect, misleading or straight out lies.
What more proof do you need? I can show you a list of units that sold in Stockholm vs Sydney in the high, mid and lower range with the exact price per square meter if that helps?
I have absolutely no incentive to make this up. If for whatever reason you think I have some agenda or Im just lying for the hell of it then why don't you just go and ask any Swedish person and I can absolutely guarantee you that they will find it ludicrous to even consider that Australian and Swedish house prices are similar. Or even in the same ball park. And on top of that the interest rates are half, so even if prices in Sweden would double the costs would still be considerably lower.
Or just log on to the Swedish version of domain and check for yourself; (you can use the automatic translation on your browser) www.hemnet.se
The OP just said he was earning 150k - do you have any idea how many people earn that sort of money? It's a solid middle class professional wage - you'd need to move into upper management to get better - and yet in australia any house you could afford to buy in an urban area you would probably want to be wearing Kevlar when you walked out the front door - either that or go for the million dollar+ property, chain yourself to a 30 year mortgage and hope for the best.
Finding it difficult to buy on a $150K salary is only true for Sydney and that is because Sydney has a lot of people on very much higher wages than that.
In Perth you can buy a lovely home on that money. I am sure that money would also go a long way in Wollongong or the Central coast - that is not as far out as European FHBs have to go if they work in London or Paris.
People in the UK don't expect to be able to afford anything in London on that kind of money, and in Stockholm it would be even harder than Sydney to get a decent place on that income. Stockholm has a price/income of 11.5 compared to Sydney which is running at under 9 at the moment.
A mortgage is only hard for the first few years, young people move up salary brackets quite quickly so it is just a bit of the dramatics all this talk of chained to a mortgage. The truth is that the mortgage cuts the chain that ties you to ever increasing rents and being forced to move further and further out for the same rent. Most people can easily pay down a mortgage in less than 30 years then it is FREEDOM all the way to the bank.
You have created a big nightmare narrative about having a mortgage but you should speak to people about long term rental, that really is a nightmare.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
People in the UK don't expect to be able to afford anything in London on that kind of money, and in Stockholm it would be even harder than Sydney to get a decent place on that income. Stockholm has a price/income of 11.5 compared to Sydney which is running at under 9 at the moment.
Thats simply bullshit. I was there three weeks ago. I looked at several units in Stockholm which i am happy to link to if you want to see them. I can afford a very good property in the best area of Stockholm City for less than half of what it would cost me in an average part of Sydney.
Again, your numbers are incorrect.
skamy
9 Sep 2013, 01:14 AM
You have created a big nightmare narrative about having a mortgage but you should speak to people about long term rental, that really is a nightmare.
I have not created a nightmare narrative about anything and I completely agree with you that in the long run its always better to own, hands down. Mortgage costs come down, rents go up. Its simple mathematics.
But thats a different conversation. What we are discussing here is the fact that if Sweden is in a bonafide bubble based on debt levels and affordability then we are in an even more dangerous position here. Again, I have no reason to wish for falling house prices, in fact it would probably send my business broke. But that doesn't mean I don't think its a huge risk of happening. What I wish for and what I expect are in this case two entirely different things.
skamy
9 Sep 2013, 01:14 AM
Finding it difficult to buy on a $150K salary is only true for Sydney and that is because Sydney has a lot of people on very much higher wages than that.
In Perth you can buy a lovely home on that money. I am sure that money would also go a long way in Wollongong or the Central coast - that is not as far out as European FHBs have to go if they work in London or Paris.
Yes thats true. I have friends that earn $600K or more per year but that is rather unusual. The problem with comparing Wollongong or the Central coast with the outer suburbs of London or Paris is that its not a realistic commuting alternative.
The problem is, a lot of Australia is totally centralised, most of the jobs available are in the cities. Almost all of the entertainment is there too.
In the UK for instance, you can ride a mountain bike across most of the country inside of a week. Judging from google maps, it looks like you could do the same in Sweden.
Add to this, employers in Europe are more open to teleworking, or working from home than employers in Australia.
Living in the sticks in Australia is very different from living in the sticks in many places in Europe.
I moved from a little dying town in NSW to Melbourne to find work. Now that I'm here, it's difficult to move out to the country again, especially to break into the tight little communities, that, while crying about losing population, aren't willing to do anything to attract people other than tourists. They expect people to pay a premium for it too.
Investors have bid up houses across the country, tiny little towns are turning into retirement villages without any amenities, while their councils are hoping for an influx of youth that will never happen.
Just for interest. Our government is arguing about paid parental leave in Australia. Parents in Sweden get 480 days paid leave at birth and 60 days for each parent each year to look after their sick children, I'd love to see that costed in Australia.
Edit
I have to say, about the ever increasing rent Skamy is talking about. I've been living in inner city Melbourne in a rental that has been less than $150 a week for about 5 years now, not once has it increased.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
The stats you are referring to are simply incorrect, misleading or straight out lies.
What more proof do you need? I can show you a list of units that sold in Stockholm vs Sydney in the high, mid and lower range with the exact price per square meter if that helps?
I have absolutely no incentive to make this up. If for whatever reason you think I have some agenda or Im just lying for the hell of it then why don't you just go and ask any Swedish person and I can absolutely guarantee you that they will find it ludicrous to even consider that Australian and Swedish house prices are similar. Or even in the same ball park. And on top of that the interest rates are half, so even if prices in Sweden would double the costs would still be considerably lower.
Or just log on to the Swedish version of domain and check for yourself; (you can use the automatic translation on your browser) www.hemnet.se
We can all find expensive houses and cheap houses- it is a silly way to compare , you need to look at price to incomes and price to rents from respected sources and on both these measures I have shown you data that Stockholm is more expensive than Sydney.
It is just a fantasy that Australian prices are high relative to other countries they are not.
IMHO it is a massive long shot to wait for a price drop in Sydney, look at the market there it is going crazy, confidence is back and houses are selling at prices last seen 3 to 6 years ago.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Finding it difficult to buy on a $150K salary is only true for Sydney and that is because Sydney has a lot of people on very much higher wages than that.
Codswallop - 150k is still a decent salary in sydney, way more than the average. It's only deluded fools like Pig Iron and yourself that have absolutely no understanding of the value of labour that would say something as moronic as that.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
They seem desperate to convince us that Australia is a great place, the scary thing is, with the majority of Australians owning their own homes and expecting to be able to retire on the resale value, they really are desperate to keep things the way they are.
Property prices and rents always go up, except when they don't.
It requires ever increasing population and incomes to support the ever increasing prices mantra to work.
Unfortunately, with the wind down of mining construction, our incomes seem to be on the decline.
Our birth rates are lower than replacement rates, despite insane policy to try to increase this.
So they desperately need increasing immigration to keep their immovable illiquid retirement nest eggs valuable for when they want to cash in.
To hell with anyone else, that's what they're going to get.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
i could buy a house outright in quite afew other nice countries
Exactly.... That deposit money would buy u ocean views in great area in variety of places in Europe ...
I'm currently in Portugal checking out some potential places for holiday home / renting ... Head through Spain if I get the chance .. great affordable lifestyle on offer, with no need to get a 30 year mortgage ..
After rises of last couple of months I won't be putting my money in Australian residential market for several years.. Better spent elsewhere ( in multiple global locations for price of one perth home )
You are comparing regional Australia with a 40 minute commute to the second biggest city in Sweden. If we are talking regional Sweden, you can buy a house for less than $50K where I grew up, and thats only 1.5 hours outside of the second biggest city.
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