Are house prices set to tumble in Oz?

[rockola57]

Right now as always I am going to go with my personal experience because I am lousy at maths and cant do the sums but:

 

We could not afford the house we are renting at the moment if we were to try and buy it. We wouldnt be able to borrow the amount of money that it would take to buy it and even if we did we couldnt afford to pay it back.

 

Now we can afford the rent quite comfortably and we dont HAVE to pay anything other than electric and gas on top. Which means we can live in a lovely house in a lovely area which if we were to buy would mean we would have to move from the area just to rent from the bank for the next 25 years. The decorations are to my taste so no issue there.

 

I understand the need to buy as I had it in the UK but really it doesnt feel so necessary here. Just my experiences as I said I am not a maths person. We have no debt at all for anything whatsover and it means we sleep very comfortably :wubclub:

Precisely!Exactly the same as us to be honest.Live for today some say,and others live for the future,which may not happen!!!:yes:

[fish.01]

I read that the median house price for Perth is $485000, to top $600000 by 2012 appearently.

 

Down my street, tiny townouses (if you can call them that), an open living/kitchen area plus a bathroom downstairs, bedroom upstairs and a tiny courtyard, selling for $355000. May I also add that we are 40 k's out of the city.

 

That median house price is similar to the other cities so I assume the 286,000 average new mortgage might hold for Perth as well.

[milliem]

I am already on the ladder in Brisbane but unfortunately do not have a visa as yet.

 

We bought a block of land in Brisbane inner suburbs some time ago right next door to my sister's house and then plonked an old queenslander on it. The land was expensive but the house itself was very cheap. (less than 30k dollars) It cost a bit to be placed on site, mainly because a concrete pour is very expensive in Oz and we wanted to double the square footage to and make legal head height underneath.

 

The house needs some cosmetic work on the exterior and it hasn't been fully landscaped yet but the inside has all been finished and signed off by the planners. At the moment it is rented out as an office until i hopefully some day get there. I sold up in the uk and am renting here for the moment.

 

It might be an idea for some of you guys to look for blocks of land instead, as these can work out a lot cheaper; a lot more hassle but worth it.

 

Michelle x

[Guest gratom]

On a slight side issue there is a very interesting article in today's Sunday Times supplement concerning the Irish boom and bust--its a very salutory reading.I read it and kept inserting the word australia for the word Ireland.The parallels will become apparent to any reader--eg external borrowing etc[see the recent article on the unconventional economist website for a discussion of this].Australia is the last housing boom---I sense it may now be deflating or at least about to do that.

For a general and contrarian view of the world of finance and economics see also the site Zerohedge--well worth a read and invariably ahead of the newspapers/other media:wideeyed:

[Guest Newington1]

Yes I agree, the bubble is set to burst...but one thing that may hold it back is migration. Australia continues to be a great place to live, so people will always want to live here...

[Joebloggs]

On a slight side issue there is a very interesting article in today's Sunday Times supplement concerning the Irish boom and bust--its a very salutory reading.I read it and kept inserting the word australia for the word Ireland.The parallels will become apparent to any reader--eg external borrowing etc[see the recent article on the unconventional economist website for a discussion of this].Australia is the last housing boom---I sense it may now be deflating or at least about to do that.

For a general and contrarian view of the world of finance and economics see also the site Zerohedge--well worth a read and invariably ahead of the newspapers/other media:wideeyed:

 

Have you a link to that article in The Times I would be interested in reading it?

 

The Irish Boom/Bust was caused by unemployment, an as far as I am aware there is no sign of a mass unemployment in Australia yet.

 

Blue Chip companies pull out of Ireland--> European immigrants leave--> Housing lying empty --> Families owning 2 or 3 houses forced to sell --> Property value falls --> Construction industry stalls --> more unemployment--> property value falls further --> Developer loan guarantee sinks banking system --> Government falls apart--> Mass Depression.

 

Interestingly enough there was an Article in the Sunday Telegraph yesterday.

 

 

 

While horses starve and people work without wages, a village near Cork in the south of Ireland reportedly lost 30 men last weekend, all headed to England and Australia. Lucy Carne examines how the fallout of a collapsing economy in the Emerald Isles is forcing thousands to seek greener pastures.

 

"There are people who have beautiful houses and a car but no food. All their spare cash goes on the mortgage" 'We need some luck right here, luck and a miracle," the young restaurant owner says.

 

Luck is big for the Irish, but as the nation struggles to keep its head above water in a whirlpool of record unemployment, deficit and a disintegrated property market, any luck has long been washed away.

 

On a Saturday night in a plush Limerick restaurant in the nation's southwest, the room is empty but for a table of two tourists.

 

The glossy menus have been put in storage, replaced with typed pieces of paper offering just three simple meals.

 

"We couldn't keep up with the costs of buying all the produce," the young owner says. "No one is eating at restaurants. We can't even pay our staff. They're just working for nothing now in the hope money comes in soon."

 

In Cork in the south, horses are starving to death.

 

More than 20,000 horses have been dumped this year, many dying from hunger on golf courses outside the city or so emaciated they must be put down.

 

For this nation of horse lovers, whose people own the highest number of the animals per capita in Europe, horses were the first to be bought as a sign of wealth in the boom and the first to be scrapped when the sudden slump arrived.

 

In the capital, Dublin, the new poor are swarming to food banks and shelters. Two years ago the Capuchin Day Centre fed 250 people a night. Today they must serve warm meals for 520.

 

"There are people who have beautiful houses and a car but no food," the centre's Theresa Dolan says. "All their spare cash goes on the mortgage."

 

The land of the smiling eyes was dubbed the Celtic Tiger for emulating Asia with its impressive financial growth thanks mainly to foreign investment, particularly from the technology giants Dell and Google.

 

Three years later and the Irish Republic is in a ruin of empty-pockets and barren banks.

 

Unemployment went from 4 per cent to 14 per cent. House values dropped 60 per cent.

 

The burst property bubble left the banks infected with bad loans, forcing the Government to prop them up. And in the final gaping wound, Ireland this year ran a budget deficit equivalent to 32 per cent of its E200 billion GDP.

 

Signs of shakiness emerged in September when Ireland's Central Statistics Office announced gross domestic product dropped 1.2 per cent from the first three months of the year.

 

Forecasters were confused. It was meant to have grown at a 0.5 per cent rate, extending the brief Irish economy expansion seen earlier in the first quarter. The weaker than expected prognosis triggered the euro to drop and prices of Irish bonds to plummet.

 

But it wasn't until November 18 that deluded Ireland finally stopped insisting it was fine.

 

After the Irish Government tried to hold up the banks, they became responsible for all the banks' debts, which were unfortunately several times more the economy's output. Foreign investors became nervous and started pulling their money out of the banks, losses grew, and politicians started sweating.

 

With the bitter aftertaste of Greece's financial collapse earlier this year still lingering, the European Union governments became highly agitated with Ireland's instability. Ultimately it was the European Union which pushed Ireland into admitting it was in crisis and to accept a bailout.

 

Last Sunday they agreed on an E85 billion rescue package to contain the fallout and show

 

the Euro-sceptics they could handle any problems.

 

Irish Prime Minister Brian Cowen also last week outlined a desperate austerity plan involving E15 billion of cuts to state spending, reducing the minimum wage, axing 25,000 jobs and hopefully earning an extra E1.9 billion from raised tax.

 

"This is not a rescue plan," prominent commentator Fintan O'Toole said during mass protests last Saturday. "It is the longest ransom note in history: do what we tell you and you may, in time, get your country back."

 

With a third of the population aged under 25 out of work, the tough, some say unrealistic, measures in the rescue plan are predicted to push people out, particularly young people.

 

"The younger generations have all grown up thinking its normal to be loaded," a 28-year-old Dublin TV presenter, who asked not to be named, said. "We need to realise there is nothing normal in a family owning three houses.

 

"The Depression has set it. We really know we're in trouble, the worst we've seen in our lifetime."

 

As University College Dublin professor Declan Kiberd said of the prevailing atmosphere: "Nobody knows what will happen next - not even our leaders.

 

"We walk as a community in darkness down a strangely unfamiliar road, into a new landscape for which there are no maps."

 

The Irish have a history of stoic survival. When a crisis hits, they flee. During the Potato Famine in the mid-1800s, more than one million Irish left their homeland.

 

Between 2010 and 2015 more than 200,000 Irish will emigrate, Ireland's Economic and Social Research Institute said.

 

The exodus will mainly be young people to Australia, New Zealand and England, according to the research body.

 

Australia has already had a taste of this exodus with a record jump in Irish migrants in the 12 months to June 30 this year. More than 3000 Irish people permanently migrated to Australia in that period, which was a 21.6 per cent increase on last year, according to the Department of Immigration.

 

In addition to the number of migrants is a "huge number" of working holidaymakers on temporary visas who "will switch and try to stay", according to Migration Expert senior Australian migration consultant Rebecca Matanle.

 

"Previously it was more positive and Irish people were attracted to Australia's lifestyle and climate," Ms Matanle said. "Now it is more driven by the fact that people feel they have no future. There are a lot of people in Ireland thinking "That's it, I'm done'."

 

One village near Cork in the south of Ireland reportedly lost 30 men last weekend all headed to England and Australia.

 

"Ireland needs young people with energy to take the country in a different course, but they are simply having to leave the country," Cork teacher Liam Young, 28, said.

 

Ireland's Shadow Minister on Foreign Affairs Sean Barrett said the skills drain was a massive failure that needs to be urgently corrected.

 

"I hate to think as a country we are not capable of looking after our people," the Irish Fine Gael politician told News Limited.

 

But while the bailout pushes people to cross borders in search of stability, the biggest concern is that it may knock over the debt dominoes of Europe.

 

On Monday, 24 hours after the bailout was announced, the euro dropped to a two-month low and the major European markets plummeted sharply.

 

The EU clearly has a tough job convincing the world it can handle its finances.

 

The major fear is the risk of financial contagion that Spain and Portugal will join Ireland and Greece to become the PIGS who have been too greedy in the EU trough.

 

Like Ireland, Spain and Portugal have overwrought finances coupled with high unemployment and unstable governments. Both are expected to raise their hands for bailouts soon.

 

Yields on Spanish and Portuguese long-term debts - an indicator of how much the market would charge to lend governments money - are trading near their highest levels since joining the eurozone in 1999.

 

This sends a loud message that the world's markets have unrelenting concerns the eurozone cannot handle its debt.

 

Whether they can prop each other up or the European house of cards tumbles, is still unknown, but it will take more than luck to see them through.

 

 

 

 

P52 Sunday Telegraph

[pablo]

But if they can't afford it, then it isn't an option. There are many other less expensive parts of Australia than Sydney - my point is no-one seems to be comparing apples with apples. I'm sure there is a better lifestyle to be had coming from Liverpool but it won't be in one of the most expensive cities in the world...

 

And plenty of other places in the uk?the hse joebloggs put on is in a high crime area of lpool thats why 100k btw

[NZStidz]

Sorry Pablo, just re-read that and it sounded a bit bitchy; not my intention, just that IMHO, living in Sydney would be far preferable to Liverpool!

[Guest lynne underwood]

Have you a link to that article in The Times I would be interested in reading it?

 

The Irish Boom/Bust was caused by unemployment, an as far as I am aware there is no sign of a mass unemployment in Australia yet.

 

Blue Chip companies pull out of Ireland--> European immigrants leave--> Housing lying empty --> Families owning 2 or 3 houses forced to sell --> Property value falls --> Construction industry stalls --> more unemployment--> property value falls further --> Developer loan guarantee sinks banking system --> Government falls apart--> Mass Depression.

 

Interestingly enough there was an Article in the Sunday Telegraph yesterday.

 

 

 

 

 

P52 Sunday Telegraph

 

Unemployment was at 5% when the bubble burst in Ireland..and not till then did unemployment rise..classic bubble behaviour its never the other way round...http://www.bubblepedia.net.au !!:jiggy:

[pablo]

Sorry Pablo, just re-read that and it sounded a bit bitchy; not my intention, just that IMHO, living in Sydney would be far preferable to Liverpool!

 

 

Sunnier Stidz,but good and bad places everywhere even sydney,plenty of lovely places in the uk like the lakes,cotswolds etc,lpool no worse than many other UK cities tho:wink:

 

oh yeah and a blue ocean,and "more" dolphins:biggrin: and............

[robfromdublin]

Yeah, the blue chips didn't pull out of Ireland. Big employers like Intel, Google, etc are still big employers.

 

The economy was built (pardon the pun) on development, which is ridiculous. Houses were built with no people to rent them apart from the labourers themselves. People bought into them hoping to cash in on the rise in asset value rather than rental income. And they were encouraged to do so by banks recklessly offering cheap credit terms.

 

The rise in value was based purely on market sentiment and not the underlying economics. Then the credit crunch came along and this was the needle that burst the bubble. EU migrants left which collapsed the rental market but this was not the direct cause of the bubble in the first place.

 

Sorry if all this has been said, just skipped to the end of the thread!

[rockola57]

Well if you are hoping for a drop in house prices so you can afford a house then you must also be hoping for a huge spike in unemployment.

 

If you cant afford a house now I wonder how you would manage with no job or a job with 25% pay cut.

WTF you on about?Was not asking for an in depth analysis on the economy and trends!Like many others i would like to buy my own place here,but find the costs prohibitive.Pray tell,where in my post did it state that i MUST?:confused:,be hoping for a huge spike in unemployment?

[NZStidz]

Sunnier Stidz,but good and bad places everywhere even sydney,plenty of lovely places in the uk like the lakes,cotswolds etc,lpool no worse than many other UK cities tho:wink:

 

oh yeah and a blue ocean,and "more" dolphins:biggrin: and............

 

Hence my point that you can't compare house prices in a high crime area of Liverpool with Dee Why. Redfern, maybe, but not the Northern Beaches!

 

We discounted Sydney long ago as it is too expensive and are off to the Gold Coast for our Australian Adventure!

[pablo]

Hence my point that you can't compare house prices in a high crime area of Liverpool with Dee Why. Redfern, maybe, but not the Northern Beaches!

 

We discounted Sydney long ago as it is too expensive and are off to the Gold Coast for our Australian Adventure!

 

Each to their own i suppose eh Stidz? Sydney wouldnt be for me tbh,simply because i dont want to live in any "biggish" city thats all(not just sydney) but im sure it suits plenty of people,all the best on your journey mucker:wubclub:

[Guest littlesarah]

I totally 'get' the argument about home ownership not necessarily being the wisest investment in terms of financial return; however, where I live rental properties are scarce. Most of the good ones are snapped up in a bidding process, with the person prepared to pay the most per week the one who gets the lease! Add to that the fact that the owner may decide to sell, that landlords aren't always good at keeping up with basic maintenance, and that agents act for the landlord, and it's not necessarily ideal to be a tenant either!

 

It's about what you want to achieve, as much as anything. I'm not actually that interested in financial return - I'm more bothered about having a stable home life and a place that feels like 'home'. If I can achieve that for myself, it's all I need!

[fleabo]

I was watching the news about a week ago and there was a report in depth about the artificially inflated house prices here,and how the bubble will burst soon as it is not sustainable!What do you think?I hope it does,from a purely selfish angle,so i can get a house!

Cannot afford to buy and live a decent life here at the moment,i prefer the latter at present!!!!:wink::goofy:

 

Sorry to dissappoint but the world economy is beginning to motor along courtesy of the B®ICs nations. Commodity prices are rising. Germany and the UK are in good shape, and Corporate US sitting on mega-bucks. China still has a low rate of urbanisation, as does India, so everything points towards 'business as usual' growth in the next 10 years...

 

and I predicted a draw in the 2nd test.:swoon:

[Addy]

Sorry to dissappoint but the world economy is beginning to motor along courtesy of the B®ICs nations. Commodity prices are rising. Germany and the UK are in good shape, and Corporate US sitting on mega-bucks. China still has a low rate of urbanisation, as does India, so everything points towards 'business as usual' growth in the next 10 years...

 

and I predicted a draw in the 2nd test.:swoon:

 

Ermm not quite...

 

China's credit bubble on borrowed time as inflation bites - Telegraph

 

China looks a bit fragile at the moment.

[Guest The Ropey HOFF]

My cousin lives in Robina on the gold coast, which is heaven on earth, but he has rented for years and i said what are you going to do when you retire, how are you gonna afford to pay the rent?

 

His reply was................. i will have to work until i die.

 

This has stayed with me ever since and being mortgage free here in the uk after 27 years of paying, if we emigrate now, i will have to do one of two things, get another mortgage at 50, i don't think so, or rent................. not likely after what my cousin said.

 

So what do i do?

 

Until the uk picks up and the dollar goes up against the pound, we can't emigrate, is anyone else in a similar position?

[pablo]

My cousin lives in Robina on the gold coast, which is heaven on earth, but he has rented for years and i said what are you going to do when you retire, how are you gonna afford to pay the rent?

 

His reply was................. i will have to work until i die.

 

This has stayed with me ever since and being mortgage free here in the uk after 27 years of paying, if we emigrate now, i will have to do one of two things, get another mortgage at 50, i don't think so, or rent................. not likely after what my cousin said.

 

So what do i do?

 

Until the uk picks up and the dollar goes up against the pound, we can't emigrate, is anyone else in a similar position?

 

Alrite Jim

You wouldnt need a massive mortgage tho jim because of the amount your going over with?

Granted ,if your insisting on a 4x2 with pool you would need more,but do you have a 4x2 with pool here?IF you dont,why do you have to have one in oz?

Im guessing you and your mrs could pay off any borrowing you would need within 10 yrs,to retire at 60 isnt bad mate?

[fleabo]

Ermm not quite...

 

China's credit bubble on borrowed time as inflation bites - Telegraph

 

China looks a bit fragile at the moment.

 

Ah, The Telegraph....

[Guest The Ropey HOFF]

Alrite Jim

You wouldnt need a massive mortgage tho jim because of the amount your going over with?

Granted ,if your insisting on a 4x2 with pool you would need more,but do you have a 4x2 with pool here?IF you dont,why do you have to have one in oz?

Im guessing you and your mrs could pay off any borrowing you would need within 10 yrs,to retire at 60 isnt bad mate?

 

I take on board what you are saying pablo and we have thought about a smaller place, 3 bedrooms not as plush as we would like it, but these houses are still around the $400.000 mark and we would still need a $100,000 mortgage for something that we wouldn't be really excited about, i sound selfish i know, but the dream move to Australia is what we want, nothing less, being greedy i know.

[Joebloggs]

Hence my point that you can't compare house prices in a high crime area of Liverpool with Dee Why. Redfern, maybe, but not the Northern Beaches!

 

Ok for sake of apples for apples and your example of High crime area of Liverpool UK with the high crime area of Redfern.

 

Liverpool UK v Redfern

[basil]

Until the uk picks up and the dollar goes up against the pound, we can't emigrate, is anyone else in a similar position?

 

Me!

 

We've made a similar decision (for now at least). We're mortgage free here and whilst we love Australia it's not to the point that we feel we can take both a wage cut AND a hike in our monthly outgoings.

With the current exchange rate we cannot afford the lifstyle we have here or would like there tbh. Moving overseas is stressful enough without living hand to mouth I feel.

 

It's just our choice currently, but like I say it might change particularly when the pressure of an expiring visa hits and the dream starts to disappear.

[Que Sera Sera]

I take on board what you are saying pablo and we have thought about a smaller place, 3 bedrooms not as plush as we would like it, but these houses are still around the $400.000 mark and we would still need a $100,000 mortgage for something that we wouldn't be really excited about, i sound selfish i know, but the dream move to Australia is what we want, nothing less, being greedy i know.

 

 

You can get a lot cheaper than that. Not sure where you are thinking of but you can get a nice area hear in WA for between $300 and $400 here alone. It certainly can be done and actually they are advertising for resort style living in Rockingham for less that $ 300 for anyone over 45 :biggrin:

[NZStidz]

Ok for sake of apples for apples and your example of High crime area of Liverpool UK with the high crime area of Redfern.

 

Liverpool UK v Redfern

 

Are you being deliberately obtuse? My point is, if you can't afford it, LOOK SOMEWHERE ELSE. My old house in the UK was a small 2 bed end terrace in Surrey which sold in 2002 for 160k GBP. is now on the market for 275k GBP - so heaven knows where the house you keep using as an example is.

 

Sydney is not the be all and end all. Incase you didn't know there are still many other parts of Australia which would all give a different lifestyle to the one you could have in Liverpool.

 

I am not sure what point you are trying to make. Emigrating is not a right, it's a privilege. If you can't afford it, you can't do it. Simple as that.