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Guest gratom

Property Bubble in Australia

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Guest gratom

Not sure if this is the correct forum---but has anyone[Lukeskywalker??] seen the Sydney Morning Herald article in their World section on the Australian housing bubble.Frightening--read and inwardly digest.This is a reputable writer and newspaper.

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Guest gratom

Soory;I'm a complete beginner at this computer lark--suggest try google for sydney herald and then hunt it out.Forecast is a crash.

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Guest gratom

I'm in Uk and saw the terrible effects of the last here.In Ireland which has seen a massive boom,based on emigration etc ;a fried tell me that housing in some areas has fallen by as much as 40%.Less in better areas more in some city areas,Prices are still falling;albeit not as fast.

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Guest gratom

The aforementioned article can be found in todays[12th Feb] Sydney Morning Herald,is headed Waiting for the bubble to burst;and is written by Bernard Lagan.The figures all come from reputable sources.

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Guest sh7t man no way
Not sure if this is the correct forum---but has anyone[Lukeskywalker??] seen the Sydney Morning Herald article in their World section on the Australian housing bubble.Frightening--read and inwardly digest.This is a reputable writer and newspaper.

thank you gratom for this very interesting,and relevant thread (well spotted) if anybody could get the link up id be grateful-- it worries me,and im sure a lot of people on here just how much the price of housing has risen in Australia in the last 3-5 years,and if it turns out to give some optimism to people, id class that as very good news--we could all do with a bit of that:wubclub:

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House prices in Australia will crash at some point given the huge amount of debt the average Aussie has, Australians have more debt now than the USA, the fhog put 1% of the population into the housing market which was done with interest rates at an emergency setting of 3% it wont take to long for Inflation to push interest rates up from were they are today at 3.75% (at 5%"Average interest rate" that will be a 67% increase on the emergency 3%). Couple this with banks having the government guarantee lifted at the end of March, the landscape for more credit in Australia is set to take a dramatic change. Hopefully the Henry tax review will do something with Negative gearing, but i doubt this very much as it would be to politically damaging given the up coming election. Who knows in another 2 years average house prices in OZ may be $1mill plus are the average price could be $200k my guess is the latter and the sooner it happens the better for everybody!:biggrin:

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Guest sh7t man no way
here it is

 

Stressed out: waiting for the bubble to burst

 

im from ireland, and use to live in perth, cant believe how much houses have risen in Perth, 9 X average wage is crazy. will lose loads here if i can sell.

 

cheers caz

thanks caz--thats a very interesting read--if its founded to be whats really happening in the future, i feel for those caught in the capitalist nightmare of financial control (house prices)--but glad for people who just want a dream they can afford--thank you for your help in allowing me to read the article :wubclub:

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Guest iselinger

Another pundit trying to fill column inches and make a name for himself!

 

If he is right then he will be able to dine out on it for months but if he is wrong it will get buried and he wont put it in his portfolio.

 

The only people who gain from the type of scaremongering are the Journos. Australia's economy is one of the strongest in the world and judging by all the people who want to come here (see most of the other posts on this forum) there will continue to be a significant shortage of housing.

 

I am moving back to the UK in three months and cant believe the (still) exorbitant price of housing compared with Sydney. If anything needs to halve its the UK!!!!!

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i dont think it will burst,houses may go down in price as people just wont buy when the prices become more than rediculious. australia has a small percentage of unemployed and while they are working they will pay their mortgage.the world economny is on the way up,isee no reason for australias to be on the way down.queensland just signed a coal deal with china for sixty billion usd,china just agreed to a forty percent rise in iron ore prices,the government debt is minimal, 15% of gdp compared to gb's of 90%.i admit personal debt is high, but if all are working and managing the debt ,ican not see the problem.our banks never bought into the sub prime rip offs so are also in a good position to lend.im only a brickie so take this as you will. in the 70's interrest rates were 18% and iflation was high but every body was still working and paying thier mortgages house prices never dropped and we all survived comfortably. all those so called defaulters on thier mortgages still have to live someware so they will have to rent back thier own house.or live in a cardboard box.there is still a big housing shortage in oz.

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any house price crash would surely lead to a recession. people stop spending when they realise they're not as wealthy as they thought they were . i've just got my visa , is it a case of out of the frying pan and into the fire ? or should we just ignore the doomongers as australia has massive mineral resources and and a massive queue of skilled workers , many with reasonable personal wealth to take into the country and continue buying quite reasonably priced housing , even though the current value of the pound creates a different impression

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Guest guest30038
Australians have more debt now than the USA, :biggrin:

 

The latest data on the news last night confirms that, and credit card debt has actually increased in the last quarter depsite all the scaremongering. Surprisngly, despite the rise in personal debt, there has been a 15% increase on folk paying it off sooner, so lessons are being learned and does this indicate that those 15% actually have more brass available, despite using plastic? Is plastic not neccessarily debt but just a convenient alternative to cash?

 

kev

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The latest data on the news last night confirms that, and credit card debt has actually increased in the last quarter depsite all the scaremongering. Surprisngly, despite the rise in personal debt, there has been a 15% increase on folk paying it off sooner, so lessons are being learned and does this indicate that those 15% actually have more brass available, despite using plastic? Is plastic not neccessarily debt but just a convenient alternative to cash?

 

kev

The reality of the situation is hard to decifer given the constant media bombardment of how well Australia is travelling and how it beat the recession by avoiding 2 negative quarters, all the stimulus moneys and government incentives only delayed the inevitable deleveraging which will come in time as the banks in Australia are going to feel under more pressure as the debt levels carried by most Australians are now at a point were they cant take on any more (are close to it). Credit card use is being used by many Australians for the basics (food), as for paying the credit card off sooner I do wonder about that one! The main concern I have is the amount of Morgage debt which has been taken on after so much deleveraging elsewhere in the world the only reason it has not happened here yet is due to government polices encouraging aussies to keep on borrowing its as simple as that, once they finally hit the point of no return (banks wont lend) then it will all come crashing down fast IMO.:biggrin:

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Guest proud2beaussie

Ok,in order to ensure correct attribution and keep the PIO server happy I have edited the previously posted article from the SMH .

The fall of Stuy Town is a warning for local home owners, writes Bernard Lagan in New York.

THE brackish towers of Stuy Town's 11,000 apartments, sentries along Manhattan's East River for more than 60 years, are far off but the tremors from their astonishing transition to the world's biggest property investment failure are reaching the world over - including the worried scholars of Australia's soaring property market.

The bullish argue that a property slump on the scale of America's devastation couldn't happen here. Today's Australian property prices, they say, are buoyed by the housing demands churned by high immigration, a scarcity of new developments and a barrelling economy.

Yet on Wednesday one of the unpalatable and less obvious side-effects of Australia's inflating house prices - now deemed by the Economist magazine to be overvalued by 50 per cent - became clearer.

Read more of it at Stressed out: waiting for the bubble to burst

 

The very scary figure elsewhere in the article is this:

By this year's end, some 270,000 Australian households will be in severe mortgage stress.

that is very bad news for Australia and the Australian economy,let's hope things level out before then.

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Guest Durathor

What struck me was the revelation that median house prices in Melbourne appear to be over $500,000 now, which is higher than the UK.

I have a house in central London and frequently house prices here are comparable and often higher .

 

Now, I like the beach, but with the very best will in the world Melbourne isn't London. I have just come back from London, which without any shadow of a doubt is the finest city in the world. It is now 2 hours from Paris, 1 1/2 hours flight from Barcelona, Geneva and Berlin. You can ski in the Alps, lunch in Lyon, sunbathe in Cannes and worship in Rome. London's landscape includes the finest landmarks on earth, the richest museums (all free) and theatre at a third of the price of Melbourne.

 

I really love living here in Oz. I like the people, the attitude and the lifestyle. But to be so far from civilisation and different cultures, to live in such a flat and uninspiring urban landscape and reduce my travelling options there must be a trade-off, usually financial.

 

There is something deeply wrong at the heart of Australia's fiscal life at the moment.

 

Housing is more expensive than the UK. Everything from clothes to food is 30 - 40% more expensive than the UK. In some cases (Mama Mia is $130 dollars entry fee compared to $45 in London's remarkable West End) it is astonishing(A brand new Wii game for my son was $50 compared to $99 here).

 

Everything is going up in price constantly here in an already shoddy retail environment.

 

Australia is, frankly, becoming uncompetitive.

 

I am beginning to have to reconsider my options and whether I want to bring my money and skills here. If my financial well being is better served in London, then that's where I shall live. The beach is only an hour away and $50 flights are commonplace. Unlike the $400 interstate flights here.

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What struck me was the revelation that median house prices in Melbourne appear to be over $500,000 now, which is higher than the UK.

I have a house in central London and frequently house prices here are comparable and often higher .

 

Now, I like the beach, but with the very best will in the world Melbourne isn't London. I have just come back from London, which without any shadow of a doubt is the finest city in the world. It is now 2 hours from Paris, 1 1/2 hours flight from Barcelona, Geneva and Berlin. You can ski in the Alps, lunch in Lyon, sunbathe in Cannes and worship in Rome. London's landscape includes the finest landmarks on earth, the richest museums (all free) and theatre at a third of the price of Melbourne.

 

I really love living here in Oz. I like the people, the attitude and the lifestyle. But to be so far from civilisation and different cultures, to live in such a flat and uninspiring urban landscape and reduce my travelling options there must be a trade-off, usually financial.

 

There is something deeply wrong at the heart of Australia's fiscal life at the moment.

 

Housing is more expensive than the UK. Everything from clothes to food is 30 - 40% more expensive than the UK. In some cases (Mama Mia is $130 dollars entry fee compared to $45 in London's remarkable West End) it is astonishing(A brand new Wii game for my son was $50 compared to $99 here).

 

Everything is going up in price constantly here in an already shoddy retail environment.

 

Australia is, frankly, becoming uncompetitive.

 

I am beginning to have to reconsider my options and whether I want to bring my money and skills here. If my financial well being is better served in London, then that's where I shall live. The beach is only an hour away and $50 flights are commonplace. Unlike the $400 interstate flights here.

Fabulous post, I agree with every point you have made. Its quite simple really Australia has now developed into an overheated and inflated economy (victim of its own success) and with this comes a whole heap of trouble down the track. I have come to the conclusion that it would now be cheaper to buy a house where I am from in the Uk than to stay in Melbourne hence leaving in March. I just hope that people who move out here are fully aware of the Housing situation and do plenty of research before entering this last great PONZI SCHEME.:biggrin:

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The latest data on the news last night confirms that, and credit card debt has actually increased in the last quarter depsite all the scaremongering. Surprisngly, despite the rise in personal debt, there has been a 15% increase on folk paying it off sooner, so lessons are being learned and does this indicate that those 15% actually have more brass available, despite using plastic? Is plastic not neccessarily debt but just a convenient alternative to cash?

 

kev

 

 

Floating On A Raft Of Credit Cards:

 

 

 

A survey conducted by

 

Dun and Bradstreet in January has come up with the shocking but not unexpected finding that 40 percent of Australian “consumers” are resorting to credit cards to “stay afloat”. By “staying afloat”, they are talking about using credit to purchase necessities like groceries. Among 18 to 34 year-old Aussies, the reliance on credit cards today is worse than it was at the height of the crisis in late 2008/early 2009. Undaunted, these same Aussies do not intend to let a little thing like the paycheck running out before the end of the week or month deter them from “consuming. The survey found that almost half (46 percent) of them intend to use their credit card(s) for a “significant purchase” in the months ahead. These young Aussies are watching their government hound older Aussies to stay in the workforce to “preserve” their pensions. They don’t seem to be able to connect the dots at all.

 

 

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Guest SO,DIZZY

I think fundamentaly the biggest problem in Australia is that pay here is shocking in some sectors and is not at all in line with the cost of living, a lot of people who move to Australia take a pay cut, and are not prepared for the high cost of living and find it difficult to budget and adjust there spending habbits for quite a while.. you do realy have to think twice here before you treat yourself or do things that at home you dont have to think too much about ie.. take the kidds to the cinema, this is something we used to do every couple of weeks at home but it will be every couple of months here.. . and filling my trolley at the supermarket with whatever i want is a thing of the past i realy do have to take prices in to account much more and i was always a bargain shopper to start off with...

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What struck me was the revelation that median house prices in Melbourne appear to be over $500,000 now, which is higher than the UK.

I have a house in central London and frequently house prices here are comparable and often higher .

 

Now, I like the beach, but with the very best will in the world Melbourne isn't London. I have just come back from London, which without any shadow of a doubt is the finest city in the world. It is now 2 hours from Paris, 1 1/2 hours flight from Barcelona, Geneva and Berlin. You can ski in the Alps, lunch in Lyon, sunbathe in Cannes and worship in Rome. London's landscape includes the finest landmarks on earth, the richest museums (all free) and theatre at a third of the price of Melbourne.

 

I really love living here in Oz. I like the people, the attitude and the lifestyle. But to be so far from civilisation and different cultures, to live in such a flat and uninspiring urban landscape and reduce my travelling options there must be a trade-off, usually financial.

 

There is something deeply wrong at the heart of Australia's fiscal life at the moment.

 

Housing is more expensive than the UK. Everything from clothes to food is 30 - 40% more expensive than the UK. In some cases (Mama Mia is $130 dollars entry fee compared to $45 in London's remarkable West End) it is astonishing(A brand new Wii game for my son was $50 compared to $99 here).

 

Had a look at the Prince of Wales for Mamma Mia and a random choice which was a Saturday in March Matinee 63.80 pounds, and for the evening, 53.90 pounds. Hardly anywhere near 45 dollars!

Regards WII games bought one for my grandson brand new Ashes Cricket 2009 $45.

I am beginning to wonder where you shop!


"640K ought to be enough for anybody." Bill Gates 1981

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Guest Durathor
What struck me was the revelation that median house prices in Melbourne appear to be over $500,000 now, which is higher than the UK.

I have a house in central London and frequently house prices here are comparable and often higher .

 

Now, I like the beach, but with the very best will in the world Melbourne isn't London. I have just come back from London, which without any shadow of a doubt is the finest city in the world. It is now 2 hours from Paris, 1 1/2 hours flight from Barcelona, Geneva and Berlin. You can ski in the Alps, lunch in Lyon, sunbathe in Cannes and worship in Rome. London's landscape includes the finest landmarks on earth, the richest museums (all free) and theatre at a third of the price of Melbourne.

 

I really love living here in Oz. I like the people, the attitude and the lifestyle. But to be so far from civilisation and different cultures, to live in such a flat and uninspiring urban landscape and reduce my travelling options there must be a trade-off, usually financial.

 

There is something deeply wrong at the heart of Australia's fiscal life at the moment.

 

Housing is more expensive than the UK. Everything from clothes to food is 30 - 40% more expensive than the UK. In some cases (Mama Mia is $130 dollars entry fee compared to $45 in London's remarkable West End) it is astonishing(A brand new Wii game for my son was $50 compared to $99 here).

 

Had a look at the Prince of Wales for Mamma Mia and a random choice which was a Saturday in March Matinee 63.80 pounds, and for the evening, 53.90 pounds. Hardly anywhere near 45 dollars!

Regards WII games bought one for my grandson brand new Ashes Cricket 2009 $45.

I am beginning to wonder where you shop!

 

 

here are the quotes for Mamma Mia at the Prince of Wales from Mamma-mia.com

 

Until the 27th March 2010 the prices range from 19.50 (pounds) to 58.00 (pounds)

 

Wii games (I am referring to new games such as Super Mario Brothers) are priced at 32.99 (pounds sterling) on Amazon as opposed to $99 in all Australian stores.

 

I filled an entire suitcase full of clothes for my children for 100 (pounds) in London that I would estimate would cost me a minimum of $400 here.

 

Australia is chronically over-priced.

 

 

TICKET PRICES:

Until 27 March 2010

£58.00, £49.00, £39.00, £29.50, £19.50

 

From 29 March 2010

£62.50, £50.00, £40.00, £30.00, £20.00

 

 

 

 

 

ALL PRICES INCLUDE £1 RESTORATION LEVY

There are 4 easy ways to

 

 

 

 

 

book your tickets for MAMMA MIA!

 

 

 

 

BOOK TICKETS

 

 

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here are the quotes for Mamma Mia at the Prince of Wales from Mamma-mia.com

 

Until the 27th March 2010 the prices range from 19.50 (pounds) to 58.00 (pounds)

 

Wii games (I am referring to new games such as Super Mario Brothers) are priced at 32.99 (pounds sterling) on Amazon as opposed to $99 in all Australian stores.

 

I filled an entire suitcase full of clothes for my children for 100 (pounds) in London that I would estimate would cost me a minimum of $400 here.

 

 

 

 

TICKET PRICES:

Until 27 March 2010

£58.00, £49.00, £39.00, £29.50, £19.50

 

From 29 March 2010

£62.50, £50.00, £40.00, £30.00, £20.00

 

 

 

 

 

ALL PRICES INCLUDE £1 RESTORATION LEVY

There are 4 easy ways to

 

 

 

 

 

book your tickets for MAMMA MIA!

 

 

 

 

BOOK TICKETS

 

 

 

 

I can see you are a finance person, I don't think Australia is for you, I feel you would be better off in London, but then you could make a lot of money buying WII games in UK and selling them here. As for your ticket prices it amazes me how you compared them, no more said!


"640K ought to be enough for anybody." Bill Gates 1981

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super mario bros 70 dollars toys r us then haggle,mamma mia her majesties theatre melbourne 49.90

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Guest gratom

Thank you to everyone who replied to my initial post concerning the article in the SMH--very interesting,stimulating and contrasting series of views.Where the Oz economy is concerned I have a powerful sense of de-ja-vue it reminds me of the Uk economy approx three years ago.And to quote Southrick 'there is something deeply wrong' financially when people use credit cards to pay for their groceries.I sense an overheated and inflated financial structure--these are just my instinctive gut feelings[though I have sought various sources to back it up].This by a rather convolute route brings me to another 'gut-feeling' are we living in the twilight of a very large double-dip recession?-- are we stood looking into the abyss of a new 1930's?.I merely pose this as a discussable proposition.Any economic activity/recovery seems extremely anorexia;with a hangover of massive govt' debt.Because of the interlinks in the world economy whether the Australian govt' has little debt is not a massively important factor[we are all in the same boat together--no one is any longer financially autarkic].Geographic isolation does not beget financial isolation.To take something of a truism from the bible have we had our seven years of feasting and are now beginning the seven years of famine.To show the 'shakeyness' of the world economic structure just look at the effect[and still ongoing] of the Greek debt debacle[also don't forget the financial weakness of the other PIIGS-Portugal,Italy,Ireland,Greece and Spain--all have very large short term debt]The UK's is long to very long term.If pushed into a corner I am deeply pessimistic--and I think many Australians are living in something of a foolish-paradise.Having said that I desperately wish to be proved wrong---I have seen and my family has experienced the effects of recessions;I sense that many Ozzies haven't.I look forward to reading all of your thoughtful and considered retorts to my views[please prove me wrong I have several good australian friends].One final point-much has been made of australian natural resources;I suggest you read Jared Diamonds book[2005]titled Collapse;particularly the chapter on mining and Australian its a real eye openner on this point.It doesn't go into great detail with reference to decreased demand in a recession.As for the point about the huge coal contract with China;as an example of the Oz resource base,people should be aware that this is for a total quantity the price it is purchased at is fixed by reference to the day-to-day spot market and may therefore be much lower than the quoted total.The same applies to the gas/oil contracts in WA.Once again thank you for your views I greatly enjoyed reading them

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