yep... they went up because of the (now finishing gas projects) and Wellcamp Airport (now kinda on hold).aleks said:400k valuation in Toowoomba?Oh dear...
Not bad a for a town built inside a volcano crater!
When the crash comes knocking on Australia's door...
- Thread starter SpacePete
- Start date
Not bad a for a town built inside a volcano crater!
SilverDJ
Well-Known Member
RetardedMonkey said:
Yes, that will be the "bust", at the outlier of the bell curve. The average won't even be close to that when it goes bust.
People who think it will be worse and prices will plummet by 80-90% etc are the same who think fiat will be worthless and there will be bank bail-in's and the government will confiscate your metal
It's ridiculous.Every place (inc Sydney) has pockets of overpriced property types, and those that are reasonable current market.
Remember people were paying $2M+ for 3 level glass McCastles on 400sqm blocks of land in Sydney's "prestige estates" in the boring suburbs 10 years ago.
Or those idiot kids currently paying $800K for 2 bedroom apartments with no view in those new towers in the Sydney CBD. They will all get creamed.
Like I said, those that went crazy and paid top dollar for shiny fittings and someone else's reality renovation show makeover designer McCastle or trendy apartment will get burned, regardless of what city they live in, that sort of thing happens in every big city.
Those that bought an average house or investment place with good return and renovated themselves and didn't get caught in a bidding frenzy will likely do ok and will wonder what this "crash" is all about.
SilverDJ said:mmm....shiney! said:History begs to differ. Inflation destroys wealth.
You would have been ahead in cash since at least 1979:
http://www.supereasy.com.au/smimages/oct04sheet3.gif
Except that graph doesn't show the damage to the $ by the effect of inflation.
http://www.measuringworth.com/australiacompare/relativevalue.php
Not to mention FRB and the accompanying monetary inflation that drives up the price of goods because of excess liquidity. 
SilverDJ
Well-Known Member
TheEnd said:
i don't see Chinese investment "propping up" much. IIRC 75%+ of housing investment is local, so if the locals get spooked and start to panic, that's a majority nervous about buying. That means less crazy bidding at auctions, and even if all the Chinese are still buying, they won't pay more than they have to. Any crash or nervous sentiment leads to less demand to push prices, longer clearing times, more buying options, some panic sellers. Therefore prices should drop if the herd is spooked.
Remember after the last crazy boom 10 years ago, auctions quickly disappeared in Sydney, that wasn't the smart way to sell because no one was bidding. People started selling non-auction and sitting and waiting for the right buyer to come along. Then the latest boom happened and it was auction madness again. The same will happen again...
I am with you on this one TheEnd.
It is the reason for the boom that we are probably misunderstanding.
This is not some over baked local phenomenon. This is foreign capital trying to buy tangible assets while the money markets are free enough to allow such things to happen.
We may actually get an acceleration in prices before a fall.
With so many waiting for the inevitable, well, most people are usually wrong so we are in for interesting times.
It is the reason for the boom that we are probably misunderstanding.
This is not some over baked local phenomenon. This is foreign capital trying to buy tangible assets while the money markets are free enough to allow such things to happen.
We may actually get an acceleration in prices before a fall.
With so many waiting for the inevitable, well, most people are usually wrong so we are in for interesting times.
And not just clean foreign capital. The property market is a haven for money laundering because real estate agents are exempt from cash reporting laws (specifically, the Anti-Money Laundering and Counter-Terrorism Financing Act) and because high prices ensure large amounts of dirty money are simply one more drop in the ocean. As explained on the gov. AUSTRAC site:tolly_67 said:
It almost seems like the government specifically supports criminal activity to keep this cash flowing into the property market. THIS is the sort of thing you'd want to have a Royal Commission look at. One recent news article described the situation as "we have a system which is a virtual road-map for money launderers. "
sterling-nz
Well-Known Member
I thought this was an Aprils fools gag at first.
I would say that price in Sydney (much like Auckland) are well and truly in bizarro land.
He is a link for a "little" bit of property recently sold in Sydney.
http://www.stuff.co.nz/life-style/h.../Sydney-car-park-sells-for-132-000-at-auction
An extract:
The scramble for space in Sydney reached a new level on Saturday when a crowd of 60 gathered in the affluent bridge-side suburb of Kirribilli to battle for a 12 square metre plot of cement.
The auction of a nondescript car spot had some neighbours scratching their heads when it sold for A$120,000 (NZ$132,000) under the hammer.
Others were rubbing their hands together at the prospect they might be sitting on parking gold.
I would say that price in Sydney (much like Auckland) are well and truly in bizarro land.
He is a link for a "little" bit of property recently sold in Sydney.
http://www.stuff.co.nz/life-style/h.../Sydney-car-park-sells-for-132-000-at-auction
An extract:
The scramble for space in Sydney reached a new level on Saturday when a crowd of 60 gathered in the affluent bridge-side suburb of Kirribilli to battle for a 12 square metre plot of cement.
The auction of a nondescript car spot had some neighbours scratching their heads when it sold for A$120,000 (NZ$132,000) under the hammer.
Others were rubbing their hands together at the prospect they might be sitting on parking gold.
"by paying rent your just paying off someone else's mortgage for them"
vs
"by paying an aussie mortgage you're just pouring $ into inflated bank profits"
vs
"by paying an aussie mortgage you're just pouring $ into inflated bank profits"
You gotta have a roof over your head in the same way you gotta eat food... its non-negotiable.
Renting vs buying is like deciding whether you get better value buying milk & vegies from the shop vs owing your own own vegie patch & cow.
I'm not being flippant either... at some point it may well be more cost effective to set up a vegie patch in your back yard. You just have to do the maths for yourself for your situation.
Renting vs buying is like deciding whether you get better value buying milk & vegies from the shop vs owing your own own vegie patch & cow.
I'm not being flippant either... at some point it may well be more cost effective to set up a vegie patch in your back yard. You just have to do the maths for yourself for your situation.
Nothing wrong with renting. Australians are highly focused on property ownership (the great Aussie dream), however this is not always the case in other countries. I would argue the higher the dwelling prices, the more attractive renting becomes. From my observation, rents in Sydney have not been moving much for the last couple years too - I have seen rents drop around my area actually - so surely it's good news for renters. Renters can decide to invest their savings into other vehicles than RE - especially given how expensive it is. I think for some reason we Aussies are fixated on property ownership, but it does not have to be: there is nothing wrong with renting and if you are a good tenant, the landlord will be more than happy to keep in you the place as long as you need to or until she needs to move back in or sell. You benefit from the flexibility of being able to easily move with your job or within the catchment zone for your kids schools and all without having to pay for maintenance, strata, insurance, water etc. If the neighbours are loud, annoying or undergoing building works next door, you can move. If it is discovered the building has some defaults that needs expensive corrective works, dollars are not coming out of your pocket either and if you don't feel comfortable you can find another place. You do not commit yourself for a 30 years mortgage too and don't need to worry about what interest rates are doing.
So, sure it's awesome to have your own place and be able to paint it the way you like and make holes in the walls where you want, but there is nothing wrong with renting, it comes with its advantages and you can invest your money in other vehicles whether PMs, shares, or hell even an investment property which allows you to have the debt fully deductible.
So, sure it's awesome to have your own place and be able to paint it the way you like and make holes in the walls where you want, but there is nothing wrong with renting, it comes with its advantages and you can invest your money in other vehicles whether PMs, shares, or hell even an investment property which allows you to have the debt fully deductible.
Clawhammer said:
Just my 2c here..
There are alternatives to housing consumption. You could share house on the cheap or live in a caravan or other alternate dwelling such as a sailboat for next to nothing. Housing costs are quite negotiable based on your desired level of comfort. Small house / large house / where you choose to live etc.
Everyone should have some sort of garden food source available to them where possible.
I was listening to ABC News Radio's "Japan in Focus" today.. the story doesn't seem to be up yet
http://www.abc.net.au/newsradio/programs/japaninfocus/
The reporter recounted how Japanese house prices in Tokyo, Yokohama & Osaka are just 4 times the median wage. What's more, outside of these major centres houses prices are rock bottom, there's heaps unoccupied and are beginning to deteriorate.
Since the 90's Japan and Japanese wages began to decline. The owners can't sell because no one has the money to buy them at the $ needed to clear the mortgage... so they fall into disrepair.
Is this what our crash will look like?
http://www.abc.net.au/newsradio/programs/japaninfocus/
The reporter recounted how Japanese house prices in Tokyo, Yokohama & Osaka are just 4 times the median wage. What's more, outside of these major centres houses prices are rock bottom, there's heaps unoccupied and are beginning to deteriorate.
Since the 90's Japan and Japanese wages began to decline. The owners can't sell because no one has the money to buy them at the $ needed to clear the mortgage... so they fall into disrepair.
Is this what our crash will look like?
col0016 said:
Yes, relying on foreigners wanting to launder dirty money is a much better plan than the Irish had in relying on legitimate foreign investment!
Who knows, maybe Chinese cash will keep flooding in regardless, but you also have to consider:
a) Is that "hot money" just riding the trend up? How would a 20%/30%/40% crash in values affect foreign demand? Even if the desire to diversify outside of China is still there, why not go somewhere else where there isn't a crash occurring instead?
b) Is Australia going to be that politically stable if there is a serious crash or one looks likely to occur? Okay, so it's not like there would be a civil war or anything but if you move your RMB to AUD, is there a chance it could be confiscated via a bail-in?
c) Even given the (real) risk that you'll lose money due to confiscation by the Chinese government, how does that compare to the (also real) risk that you'll lose money investing in Australian real estate?
I don't know, but there are a lot of parallels between the assumptions we make here and the ones that prevailed in Ireland prior to their crash.
"It's different here", right?
