Australian Houses overvalued by 30%

[willrocks]

A progressive income tax often means a person on $200K doesn't take home a lot more than a person on $100K. If it keeps going this way we'll all be earning the average wage regardless of the stated salary.

Someone on $200,000 p.a. (gross) will pay $63,550 in tax and take home $136,450.

Someone on $100,000 p.a. (gross) will pay $24,950 in tax and take home $75,050.

The difference is $61,400

The difference alone is more than the median full time wage, so no, the person on $200k does take home significantly more than the one on $100k - an entire extra salary's worth, plus change.

Super? Levies? FTB? Medicare? ... etc.

Someone on 200K with two kids will pay $4000 in Medicare levy (or equivalent in private health care).

On 100K with two kids they will receive $7,472 in FTB.

There's a difference of $11,472 without getting into super.

 

[BiGs]

Housing in Australia has been in a sustained overvalued state for decades. What makes you think that will change? There is solid fundamental reasoning for it. Sure we might see a dip or a prolonged flatline, or both. But 70%? Get real. Housing shortage is in full swing, take advantage of our growing homeless population and buy an investment house!! lol

Nah but I too am holding off on another planned investment house. The market is full right now and everything I bid/offer on seams to be going 20-30k over asking/list price. You shouldn't buy in this kind of market, but you never know how long it will last. Several years in the nineties. So DYOR aye.

 

[justin007]

I really think all these statements using averages are BS.

I earn more than double the wage figure and my first house cost less than half the average, 3 years ago.

I have no problem at all servicing several mortgages.

If you earn 60k a year you shouldn't be living the high life and buying 600k houses...

Pull your head out of your arse. I was making the point that houses are overpriced and tossed some figures around to show why.

Like a rat up a drainpipe, you couldn't wait to declare your income and your asset base. Use some of your money to go back to school and get an education. Perhaps then you'll learn the art of discourse.

Wow, you come across as pretty bloody "average" Sammy.

My intention was not to big note, nor trigger such an aggressive response.
But you know what, I'm stoked with what I've achieved at 27 while people like you told me it can't be done, it's overpriced, it's to risky, you're stupid etc. etc.

Your reluctance to let it go speaks volumes and everybody is watching

 

[Big A.D.]

A progressive income tax often means a person on $200K doesn't take home a lot more than a person on $100K. If it keeps going this way we'll all be earning the average wage regardless of the stated salary.

Someone on $200,000 p.a. (gross) will pay $63,550 in tax and take home $136,450.

Someone on $100,000 p.a. (gross) will pay $24,950 in tax and take home $75,050.

The difference is $61,400

The difference alone is more than the median full time wage, so no, the person on $200k does take home significantly more than the one on $100k - an entire extra salary's worth, plus change.

Super? Levies? FTB? Medicare? ... etc.

Someone on 200K with two kids will pay $4000 in Medicare levy (or equivalent in private health care).

On 100K with two kids they will receive $7,472 in FTB.

There's a difference of $11,472 without getting into super.

...which is still less than the national mean income i.e. any given person with a job.

Dunno why you said "without even getting into super" since superannuation benefits higher income earners to a much greater extent than lower income earners.

But hey, if you're in a position to turn down a $200k/year job because that extra $60k isn't worth the effort then good for you.

 

[leo25]

Housing shortage

I laugh every time i hear this in the media :lol: There is going to be a massive over supply of apartments in Sydney by next year, well unless they start importing more Chinese people faster. (though this is probably what will happen)

But back to average wage, i think Australia wide it's closer to 50k.
Does anyone know how they calculate the average here? Do they clip the top and bottom 10% to get a more accurate representation.

 

[dozerz]

did anyone else read this as australian horses? cane to check if it was lunars or the stock variety.

 

[Kael]

Dont get me wrong, I am v good earner but after Super ann and tax I lose 53.08%. thats not including medicare etc.

 

[libertadiac]

Housing shortage

I laugh every time i hear this in the media :lol: There is going to be a massive over supply of apartments in Sydney by next year, well unless they start importing more Chinese people faster. (though this is probably what will happen)

But back to average wage, i think Australia wide it's closer to 50k.
.

Around Alexandria/ Rosebery/Botany there is massive oversupply due to massive development 5 years back of tiny units in huge blocks that resemble Housing Commission but sell for $550,000 for a tiny 2 bedroom with step sized balcony.
Wages, highest in ACT - around $85000 ) quelle surprise). But, if you add in woman and part time/ fulltime " casual" average 50,000.

 

[libertadiac]

More like 70%.

Yes, as a percentage of yearly income, totally over the limit.

I think the average wage is $60,000 p.a. The average house is $600,000. With interest, that is about 1.8 million over 30 years. If the standard mortgage should not be over a third of salary, that's 90 years to replay the loan. Two wage earners takes 45 years. No wonder they're extending the retirement age.

Sammy , that is from the 70's - most mortgages are 60 + % of salary since 90's.
My mother was horrified that her childhood "slum" house in Newtown, in original condition, sold for nearly 900,000 last year. Then again, a house my father bought in Paddington in 1948 for 275 pounds recently sold for $2.1 million. That would have been a pretty good ROI.

 

[leo25]

Housing shortage

I laugh every time i hear this in the media :lol: There is going to be a massive over supply of apartments in Sydney by next year, well unless they start importing more Chinese people faster. (though this is probably what will happen)

But back to average wage, i think Australia wide it's closer to 50k.
.

Around Alexandria/ Rosebery/Botany there is massive oversupply due to massive development 5 years back of tiny units in huge blocks that resemble Housing Commission but sell for $550,000 for a tiny 2 bedroom with step sized balcony.
Wages, highest in ACT - around $85000 ) quelle surprise). But, if you add in woman and part time/ fulltime " casual" average 50,000.

Yep but you missed the most dense areas, Waterloo & Zetland. and replace $550,000 with 700,000 for a 2 bedroom, it's a joke. The whole area will be a dump in 5-10 years. Though the Chinese seem to love it, they look at the area with such pride and amazement.

 

[trew]

a person on $200K doesn't take home a lot more than a person on $100K.

You have got to be kidding

Yeah I've heard the stories of people on $200K saying they can't make ends meet :lol:

 

[libertadiac]

I laugh every time i hear this in the media :lol: There is going to be a massive over supply of apartments in Sydney by next year, well unless they start importing more Chinese people faster. (though this is probably what will happen)

But back to average wage, i think Australia wide it's closer to 50k.
.

Around Alexandria/ Rosebery/Botany there is massive oversupply due to massive development 5 years back of tiny units in huge blocks that resemble Housing Commission but sell for $550,000 for a tiny 2 bedroom with step sized balcony.
Wages, highest in ACT - around $85000 ) quelle surprise). But, if you add in woman and part time/ fulltime " casual" average 50,000.

Yep but you missed the most dense areas, Waterloo & Zetland. and replace $550,000 with 700,000 for a 2 bedroom, it's a joke. The whole area will be a dump in 5-10 years. Though the Chinese seem to love it, they look at the area with such pride and amazement.

Well, not to be petty but Waterloo/ Zetland are around Alexandria and Rosebery - in fact it's impossible to find the actual boundaries on a map.
Having worked in "Rosebery" for past 2 years, which was under Beaconsfield on the map, but 2 streets from both Zetland and Alexandria, I know the area well.
The ones in Waterloo/ Zetland are mainly built in the past 2 years and are larger and more attractive, with lower vacancies and quicker sales. And yes, more expensive.

 

[leo25]

Waterloo/ Zetland are around Alexandria and Rosebery - in fact it's impossible to find the actual boundaries on a map.

Seems very clearly defined to me with a quick Google search.
https://www.google.com.au/?gws_rd=ssl#q=zetland+nsw+map or www.google.com.au/maps/place/Zetland+NSW+2017
https://www.google.com.au/?gws_rd=ssl#q=waterloo+nsw+map or www.google.com.au/maps/place/Waterloo+NSW+2017

The ones in Waterloo/ Zetland are mainly built in the past 2 years

You're correct about Zetland, but the large buildings have been going up over the past 10 years in waterloo. I know this very well since I've lived in some.

 

[Lunardragon]

Heard that Alexandria slowly transforming the industrial areas into residential because the premium price of land on surrounding it. Is that true?

 

[willrocks]

Someone on $200,000 p.a. (gross) will pay $63,550 in tax and take home $136,450.

Someone on $100,000 p.a. (gross) will pay $24,950 in tax and take home $75,050.

The difference is $61,400

The difference alone is more than the median full time wage, so no, the person on $200k does take home significantly more than the one on $100k - an entire extra salary's worth, plus change.

Super? Levies? FTB? Medicare? ... etc.

Someone on 200K with two kids will pay $4000 in Medicare levy (or equivalent in private health care).

On 100K with two kids they will receive $7,472 in FTB.

There's a difference of $11,472 without getting into super.

...which is still less than the national mean income i.e. any given person with a job.

Dunno why you said "without even getting into super" since superannuation benefits higher income earners to a much greater extent than lower income earners.

But hey, if you're in a position to turn down a $200k/year job because that extra $60k isn't worth the effort then good for you.

I mentioned super because the way government is going they'll be raiding my super well before I ever reach retirement.

You mean the extra ~$45K after you deduct super and Medicare levy $4K, and miss out on $7.4K in family tax 'benefit'. Not to mention $200K jobs usually require that you live in/near an expensive city.

 

[leo25]

Heard that Alexandria slowly transforming the industrial areas into residential because the premium price of land on surrounding it. Is that true?

Yea i see some stuff happening there, but it's still mainly industrial area. I'm sure it will ramp up once Zetland and Waterloo are fully developed, which will be in the not to distant future (providing the crash has held of that long).

All i know is in 5-10 years you don't want to be living here, i plan to move out in 2.

 

[Big A.D.]

I mentioned super because the way government is going they'll be raiding my super well before I ever reach retirement.

Well, if and when they do you can come back and bitch about it, but until then someone on $200k is significantly better off than someone on $100k.

You mean the extra ~$45K after you deduct super and Medicare levy $4K, and miss out on $7.4K in family tax 'benefit'. Not to mention $200K jobs usually require that you live in/near an expensive city.

Look, I'm not saying that being an adult with a full time job is always easy and that some choices in life aren't difficult, but I just find it a bit difficult to feel sorry for people earning two hundred grand a year.

If you have the capacity to earn that sort of money, you're doing very, very well for yourself. If you are getting that, you're in the top 5% of income earners in the country. Australia overall earns enough to be in the world's 1% for incomes. Only the typical Norwegian earns a little bit more than the typical Australian.

Again, everyone has their own problems, but if you're on $200k a year and money is one of them, you're doing something wrong.

 

[trew]

Again, everyone has their own problems, but if you're on $200k a year and money is one of them, you're doing something wrong.

+1

$200K after tax is pretty close to double $100K after tax ($134K vs $73K)
Medicare levy can be avoided with a hospital only cover that can cost $1K
Family benefits get eroded with income tests so can be neglible even at $100K

As for living in an expensive city - you don't bloody well have to live in the expensive areas of an expensive city

 

[JulieW]

Can someone explain what this means:

miss out on $7.4K in family tax 'benefit'.

Is it the old 'dependents' on your tax return?

 

[willrocks]

Can someone explain what this means:

miss out on $7.4K in family tax 'benefit'.

Is it the old 'dependents' on your tax return?

In my hypothetical example. The person on $100K with two kids receives $7400 in family tax benefit. While a person with two kids on $200K does not receive any family tax benefit.

http://www.familytaxbenefitcalculator.com.au/