Who Is Responsible for Continuous House Price Increases

jrt2020 on 28/01/2018 - 17:54
Last edited 28/01/2018 - 18:09

I went to few auctions to see how it works

The few houses i visited are very bad , good for nothing other than the land price

But saw quiet few people seriously bidding on it

I have checked everything - it is old house and visibly needs very good renovation

very far from school

very far from public transports

not in a convenient location too

land size is also <300 sqm

basically , if I want to buy such a house i can't go above 400k

but in auction people went over and finally it stood at 650k and then agent still persuaded others to bid more which then started more bidding and finally got sold for $680k

The agent being friendly told me after the auction that reserve was $450k and vendor is really happy

But I was wondering what made the buyer to go for such high price!

Seriously for $680K , so much better house with large lot close to all amenities were all available and easily

Seeing this , I believe there needs to be some common sense used by buyers to assess what they are paying for!

I see reasons for increase in house prices due to

  1. People who have lot of money from the home countries and buying land here
  2. Real estate agents who can sell houses not worth the amount to much higher prices
  3. People who think that if they dont buy houses now will never be able to buy

what do you all think?

Is it not a inflated market and certain section of people intentionally keeping the prices high?

And a real estate agent tells me that people queue at their office from 9 pm the previous night to buy a lot in their new release and even if the go for toilet , they will lose their place in the queue.

Seriously!!! Is house and land seriously not available much? The publications like domain and herald sun keep writing stories that create a fear that houses are really getting out of reach!

Is there a way to find good houses and which are worth their right price?
Is there a way to avoid real estate agents when you buy a house( they may be needed for selling house but for buying they should never be used) Thats what I feel

Poll Options

  • 52
    People misguided by media articles about scarcity of houses
  • 282
    People who bring truck loads from their home countries
  • 7
    People who dont value their money enough
  • 102
    Real estate agents
Financial

Comments

  • Xetrok on 28/01/2018 - 18:04
    +59

    4 - Lots of competition and low interest rates.

    People will pay more to live somewhere they really want.
    An extra 50k on top of the buying price is only 2k a year interest a year.
    These people are happy to outbid you because it's what they want.

    A place I looked at was listed 485,000 - 515,000.
    I inspected, made an offer of 530,000 and was told while it's a great offer all they wanted to do was bring the auction forward and have my offer as opening bid.
    The place sold for 590,000 well above what I expected it to fetch for a 2 bedroom apartment 15 mins from Melbourne CBD.
    But the guy who bought it saw value in his offer and who am I to blame him.

    Add more money or lower your expectations - that's all you can do in the current market.

    • fruxo on 29/01/2018 - 09:16
      +7

      That's a very bad deal for you, I hope you told them that the offer was only if settling before auction. There is no benefit for you to accept that offer, it purely benefits agent/owner. You can still bid freely regardless.

      • Xetrok on 29/01/2018 - 09:31
        +7

        I told the agent he was wasting my time and signed a contract for property elsewhere 5 days later :)
        I only attended the auction to see what it sold for.
        He did start the auction at 530,000 and it was continuous bids for a good 2 mins up to about 570,000 then the slow push to 590,000.

    • [Deactivated] on 29/01/2018 - 10:47
      +2

      High demand but low supply.
      Poor transportation also, and low job opportunities in suburbs area.

      • resisting the urge on 01/02/2018 - 13:08
        +2

        Factors affecting the market are not the answer: The question is WHO is responsible.

        And no, they ain't the buyers. Or the sellers. Not even prior & current politicians are the ultimate people responsible.

        Notice that, just like the mainstream media and brainwashed politicians who let these people fly under the radar all their lives, there is no way to vote for these RPs in the poll above!

        The RPs are the hidden rent seekers: A group (in the top 1-20%) that influence our rulers on a day to day basis via a mix of covert and overt mechanisms, with the sole aim of channeling more money out of the each economy to their various enterprises and bank accounts. This is the main reason they have significant investments in global corporations and why increasingly, they are who bill us via one means or another, instead of local suppliers. i.e. they take more and more rent from the masses, and in the process become richer and richer.

        Follow where your money goes. For many it is simple:

        50%-> Bank (mostly interest)
        30% Living expenses and other fees associated with credit and steadily increasing bills servicing consumption.
        10%-> Luxuries like smashed avo and caffeine (or hookers and cocaine, whatever smokes your boat)
        0-10%-> Taxes and other fees
        0-10%-> People and causes that really need it

        Those with kids have to pay for them by limiting a few of the above items.

        • poohduck on 01/02/2018 - 18:43
          +1

          We went to melbourne recently. We stayed opposite southern cross station. On a walk to docklands, everything looked owned, inhabited, and catering to the asian market. Everything.

          Then on another walk, between footscray and Melbourne we went through this beautiful area of units and parkland, quiet tiny streets, kids and family out playing - Kensington I think. Not one anglo saxon australian. All the big money seems to be coming from abroad. None of my friends, or the people I work with, could afford to live in these areas let alone own something there.

        • Harold Halfprice on 01/02/2018 - 21:02
          +1

          @poohduck:

          You're absolutely right. There is a lot of money coming in from overseas which is over inflating our market. But, ultimately, who is responsible for that? It's the people in positions of power who allow it to happen because it suits their interests. Politicians, bankers, investors etc

          Money is bucketing in from overseas because it is being allowed.

        • supajuicy on 01/02/2018 - 23:52

          @poohduck:

          Have to correct you here sorry. From Kensington and I would say its probably 50%+ anglo-saxon but yes it is very multi-cultural with a large new migrant population as well. Glad you liked the area :)

        • Ozbfy on 02/02/2018 - 10:43
          -1

          @ILikeBargenz:

          I don’t see an issue with people wanting to invest in our country?

        • smartazz104 on 02/02/2018 - 14:56

          @Ozbfy: Who does that investment benefit though? This isn't making our economy stronger or creating more jobs.

        • resisting the urge on 02/02/2018 - 18:05

          @smartazz104: It's called doing what it takes to keep your rulers rich and your government (of the day) in power.

          Tell your local MP you won't vote for them until they act against preferential trade agreements (cos they sure aren't free trade agreements!) that benefit multinationals, mining companies and corporations selling live animals, cotton, rice and other ag-produce overseas.

          If not, nothing will change. If the housing market collapses, they'll lose power. Cheapest way to stop that happening is to prop it up with overseas buyers if the locals can't maintain the market prices and build rates themselves ;-)

        • nobro25 on 02/02/2018 - 19:20

          Man I pay 22 pc tax plus 2 pc medicare levy thats 24pc tax how do you reduce ur tax payable to less than 10pc?

        • resisting the urge on 02/02/2018 - 19:34

          @nobro25: I did not try to hard to be specific, so may well be out.

          But being PAYE and earning >$100k without deductions sucks.

          0 – $18,200 Nil
          $18,201 – $37,000 19c for each $1 over $18,200
          $37,001 – $87,000 $3,572 plus 32.5c for each $1 over $37,000
          $87,001 – $180,000 $19,822 plus 37c for each $1 over $87,000
          $180,001 and over $54,232 plus 45c for each $1 over $180,000

          Ask a tax lawyer perhaps? They won't pay 24pc. Rent seekers use corporations, companies and all kinds of other vehicles to develop deductions.

        • singlemalt72 on 05/02/2018 - 14:25

          @poohduck:

          Those with kids have to pay for them by limiting a few of the above items.

          Firstly, those with kids are usually not in a position where 30% of their income is living expenses - I'd say you are either living at home/sharehouse or have one hell of an income.

          Basic spending (rent,food, bills) has been steadily increasing for over a decade while discretionary spending is in a marked decline. Currently, for the average Australian, basic spending is at least 60% of income.

    • Hasbulla on 29/01/2018 - 11:56
      +3

      5 - Minimum Lot Sizes, AKA lack of small options (not everyone wants a 3 bedroom, although the Xiaomi Robo Vac could clean it all), AKA horizontal expansion, AKA land use/scarcity, AKA increase of distance from jobs and extra added value to hot areas.

    • ribze1 on 30/01/2018 - 11:55
      +3

      FOMO

    • Aceboy884 on 31/01/2018 - 12:22
      +1

      let them pay the premium

      i have had the best 12 months without debt

  • mysterytal on 28/01/2018 - 18:07
    +7

    My limit is 300k….I have no chance. I've given up.

    Problem is extremely limited supply.

    • jrt2020 on 28/01/2018 - 18:10
      +1

      for 300 there are so much apartments in CBD in Melbourne

      and in west u get smaller houses now ( u would have got houses in west at 300k year back)

      • mysterytal on 28/01/2018 - 18:14
        +2

        My budget would need to be lower than 300k as I'd need to take into account body corporate fees in my monthly budget.

        I'm looking for a small house near to public transport (I do not have a car), shops (I'd like to walk to the shops and carry my shopping home), schools and health facilities.

        Seems like I'll be renting forever.

        • jrt2020 on 28/01/2018 - 18:42
          +26

          dont give up

          wish u get ur home soon!

        • UncommonName on 28/01/2018 - 19:09

          Shared housing mate, all the cool kids are doing it.

        • MrBear on 29/01/2018 - 08:15
          +1

          My limit is 300k
          My budget would need to be lower than 300k as I'd need to take into account body corporate fees in my monthly budget.

          So your limit isn't 300k then, it is somewhat lower…

          And you don't use your mortgage to pay for monthly budget stuff if you can help it. It means you are over-extended if you do.

          But good luck.

        • smux on 29/01/2018 - 10:16
          +1

          You're not going to find a small house for that much, especially not one that is as close to amenities as you want. I don't even know if you can find a town house or unit for that much anymore in Melbourne.

        • mysterytal on 29/01/2018 - 12:39
          +1

          @MrBear:

          That's why I want to buy a house for $300k as I won't have body corporate fees.

          I'm currently paying the rent on a flat, the fees that the landlord pays for out of the rent, pays for so much rubbish that I wouldn't be able to control. Mowing, gardening, cleaning (common areas), window cleaning, painting, electricity (for hall and car park lights), smoke alarms etc… Being a home owner I can do those things myself for no charge. Or I could choose not to do them at all if I don't feel they're needed.

        • mysterytal on 29/01/2018 - 12:44
          +5

          @zaidoun:

          Then in that case I would have to leave Melbourne.

          I've been looking at the Latrobe Valley cities of Moe, Morwell and Traralgon.

          Affordable but major lack of employment opportunities. However, with a decent internet connection I can make a reasonable amount of cash online.

        • knk on 30/01/2018 - 08:59
          +1

          Look into buying a place and renting it out while you rent.

          With the depreciation, negative gearing etc you should come out ahead in a few years and be able to move in :)

        • mysterytal on 30/01/2018 - 11:52
          +2

          @knk:

          That makes no sense. Depreciation means the value of something goes down…doesn't it?

          Negative gearing means there is a loss which can then be offset against other income to reduce tax.

          I don't want to lose money.

        • knk on 30/01/2018 - 13:51

          @mysterytal:

          So you 'depreciate' fixtures in the house. Think airconditioners, paint, floors and anything else which has a finite lifespan. There are companies that specialize in providing schedules for depreciation. The newer the house, the higher the depreciation. I've used washington brown and had a great experience.

          Even though you're wearing down the house, the idea is the property value goes up due to inflation / the ridiculous market we have.

          After that you have interest on the loan which is tax deductible, around 12k per year @ 300k.

          Assuming it was brand new, and so we can round things off, if you were to have 20k expenses a year that would mean 20k you don't pay tax on. Say you're in the 32.5% tax bracket that'd essentially be $6500 back in your pocket. That'd essentially be untenanted, if you pulled in 10k rental income you'd end up 3250 in the green. Very basic estimates, however if you do that for a few years and you're probably in a position to move in.

          A financial planner would be better able to explain the ins and outs, but overall there can be advantages to doing things this way.

        • twww on 30/01/2018 - 14:00
          +1

          @bargainaus:

          Nah. Vanlife is where it's at!

        • mysterytal on 30/01/2018 - 14:53

          @knk:

          So to summarize it would cost me $20k in expenses (using your figures and rounded) and I would get $10k rental income.

          I'm losing $10k. Yes I get $3,250 back in tax later…but I'm still losing $10k upfront.

          Where does this $10k come from?

        • knk on 30/01/2018 - 16:14
          +4

          @mysterytal:

          You're losing a fictional 10k in depreciation.

          Ignoring property acquisition costs (not sure exactly what is tax deductible and isn't, ask an accountant…

          +$10k rental income
          -$10k depreciation schedule
          -$12k interest (4% @ 300k)
          -$1500 rates
          -$400 water levies
          -$500 repairs (guessing)

          The last 3 you actually pay out of your pocket.

          = actual expenses of 2400 in bits and pieces + $12000 interest. 14200.

          Depreciation, Basically fictional, you never really lost this money you're just factoring in the fact that a kitchen costs 20k and looks like shit in 15 years so 15/20 = $1300 loss a year. This is a really damn basic figure, just to give you an idea of what they factor in.

          So lets say you depreciate 10k (your depreciation schedule will tell you exactly how much).

          14200 + $10000 = 24200.

          10k in rental income puts your loss at 14200.

          Say you make 60k a year, you pay 32.5% tax. $14200 x 0.325 = 4615. You'd essentially get 4615 back you'd otherwise be paying on tax. Out of this 4615 you actually paid $2400 to keep the house. So you're in the green $2215. It's small, but it all adds up.

          This method can help people get into the property market when they'd otherwise have to wait a few years and may face house prices rising further.

          I'm not a financial genius, and might not know what the hell I'm on about so it's always best to pay to sit down with a professional and go over your plan before actuall executing anything. I can't stress enough aswell, these figures are very basic and there are alot of little things (and possibly some major) that I have forgotten to mention which all factor in.

        • mysterytal on 30/01/2018 - 16:25

          @knk:

          As I said I can only afford to buy a house priced at no more than $300,000. I have about $65,000 saved and can borrow $240,000 with a 20% deposit funding the rest.

          I earn $40,000 per year. Tax/Medicare is about 12.5% of my income. I pay about $4,500 in income tax plus $800 in Medicare. I get $400 back as low income tax offset. I pay nowhere near 32.5% tax.

          I don't think the numbers add up if you're saying I would get $4,615 back. That's more than I pay.

        • knk on 30/01/2018 - 16:29
          +1

          @mysterytal:

          That's based on 32.5% / 60k.

          Being on the lower end of the income does mean the savings will be quite a lot lower as you've evidenced.

          Also, if you only have 65k saved and can borrow 240k you cant buy a 300k property. You need to factor in stamp duty, transfer costs and all the little bits and pieces that add up when buying a property (probably 15-20k extra)….unless your first home buyers will cover this.

          Honestly you could probably do it on your income, it wont be easy but with some bargaining etc you'd manage to do it. Depends what area you're in too, here In Melbourne if you go out west (where I am) into the umm….less desirable parts (still safe enough) you can get properties within your budget. I"m assuming you're in Sydney and it's game over though lol

        • mysterytal on 30/01/2018 - 16:32
          +1

          @knk:

          In Melbourne and yes it's relying on grants/rebates.

          Stamp Duty is zero on a $300,000 purchase.

        • knk on 30/01/2018 - 16:34

          @mysterytal:

          Oh I forgot about that, that's pretty good then man I'd personally go for it. I bought my first place for $235k when I was 21 (6 years ago) and it was in hindsight, a great decision.

          Shoot me a PM if you've got any areas in mind, I was actually researching some really low cost areas with a family member recently so may have some insight.

        • freemoneyhunter on 30/01/2018 - 16:50
          -2

          @mysterytal: No it is the depreciation of the building that you can claim back against your tax, it's something like 5%-10% per year, but the house price can go up because of the land value rising because of the mass immigration. If you use an interest only loan, if the rent doesn't cover the interest payments, you can take the rest out of your taxable income to pay for it, it doesn't cost you anything and while you been doing that for a year, your house has gone up another 50k in market price but on your tax it looks like you are losing money.

        • knk on 30/01/2018 - 18:04

          @twww:

          If you consider the cost its pretty appealing.

          If I didn't have a wife I'd consider gutting and renovating a caravan. Provided I had somewhere to park it.

        • nicbaz on 30/01/2018 - 22:41
          +1

          @knk:

          When you say you’re in the green by $2215, you’re excluding interest, why is this?

          My understanding is that the tax loss will offset the interest paid, but cannot totally negate it.

          Also, deductions for plant on new purchases appears to no longer be available:
          https://www.ato.gov.au/General/New-legislation/In-detail/Dir…

        • scrottyB on 30/01/2018 - 23:40

          @knk: thank you for the explanation

        • virhlpool on 30/01/2018 - 23:58

          @mysterytal: 'Cash online' sounds interesting. Would you mind giving some further tip?

        • Hasbulla on 31/01/2018 - 06:33

          @knk:
          "Say you make 60k a year, you pay 32.5% tax".
          What??????! It's not even 19%.

        • knk on 31/01/2018 - 08:06

          @pentole:

          The deduction comes off your upper most bracket until you hit the next one.

        • knk on 31/01/2018 - 09:06

          @nicbaz:

          My math was probably off, the idea is though if everything lines up your interest is covered by your rental income and then the deductions for depreciation offset the rest bringing you into the green or breaking even at least.

        • 4foxache on 31/01/2018 - 13:57

          @mysterytal: Have a look in Frankston North you might find a cheapie there although even that area has moved a lot in the last few years.
          FYI my first 2 investment properties were <$300k a house in Cranbourne North 2009 and unit in Seaford 2013. Now you'll need to be in the $400-500k zone or like you say will need to look a lot further out. That money won't get you much in 2018.

        • elliot81 on 31/01/2018 - 14:08

          This. Those 'cheap' shoebox 1BR apartments in the CBD usually have colossal body corporate rates due to all the amenities (pool,sauna, outdoor bbq, spa, cinema). I ended up looking west and got a great 2BR place on a boutique block for mid 350's, low body corporate with no pointless crap I have to pay yearly for.

        • Antikythera on 31/01/2018 - 16:14
          +2

          @mysterytal:

          the OP needed another category.

          5/ Dual income households since the 80s(or 60s ?) have been pushing up prices.

          you need another 40k income in your household. that would alter your budget significantly. spend more money on dating.

        • McBanjo on 31/01/2018 - 19:34

          @mysterytal:

          Do your research. Body corporate fees can be really small in smaller buildings with no pool/lift/gym. I pay $2,300/year.

        • mysterytal on 31/01/2018 - 19:58

          @McBanjo:

          I would have thought that I have done my research.

          $2,300 is a huge amount. If I reduce the amount available to pay a mortgage by $2,300 per year ($192 per month) then it reduces my borrowing capacity from $240,000 ($1,300 per month) to $204,000 ($1,105 per month). That along with my $60,000 deposit won't get very much.

        • Steptoe on 31/01/2018 - 20:14
          +1

          @mysterytal:
          You need to take into account the Strata pays your building insurance, and in some cases water usage, so not that much actually.

        • gezza90 on 31/01/2018 - 23:07

          @knk: Assuming that the capital value of the house will go up. But yes I agree with you and currently doing this until I'm positively geared.

        • Kunalk222 on 01/02/2018 - 06:33
          +1

          @mysterytal: buy a apartment and while you live there get someone to rent with you or AIRBNB the other room…this is the best way of making money to pay mortage

        • knk on 01/02/2018 - 16:59

          @gezza90:

          Yep I guess that is a big assumption.

        • poohduck on 01/02/2018 - 18:46

          @mysterytal: I used to live in Gippsland - Traralgon and Sale. It's awesome if you are into outdoor stuff. You're right about employment though.

        • Yankyviking on 02/02/2018 - 09:32

          @mysterytal: “reasonable amount of cash online” how much is reasonable cash for you per week and what do you do online to achieve that? Curious to know if you dont mind sharing. Thanks

        • mysterytal on 02/02/2018 - 13:25

          @Yankyviking:

          Affiliate Marketing. Online commission sales. etc..

          It doesn't earn much so it's really only good for a few hours each week. If I put more effort into it I can earn much more.

        • snook on 02/02/2018 - 22:35
          +1

          @knk:

          In Victoria, if it's their first property and to be principle place of residence, there is NO stamp duty.
          If not principle place of residence, stamp duty is $13070 on 300,000

          Transfer fees aren't going to cost more than $1500-1700

        • Jewdas90 on 02/02/2018 - 23:57
          +1

          @mysterytal:

          It's quite simple really…just do what the treasurer advised; get a better job 😂

          https://youtu.be/AFlJUo3qvIs

        • mysterytal on 03/02/2018 - 11:42

          @Vdawg88:

          I know you've said this sarcastically.

          I wish it was as easy as the treasurer advises. In my day job I work as an IT Support Engineer which I thought was quite a good job. These jobs tend to only be found in high population centres such as cities or large towns.

      • Cronium on 29/01/2018 - 10:04

        Really? You can't buy a shoebox in Sydney CBD for 300k.

        • abb on 29/01/2018 - 10:31
          +13

          I don't think you can even buy a shoebox in Penrith for 300k

        • [Deactivated] on 29/01/2018 - 10:48
          +1

          @abb: lol

        • virhlpool on 31/01/2018 - 00:01
          +5

          @abb: Does Penrith really deserve $700k pricing? Ask thyself in fronta mirror, mate. Your heart would say 'noy'.

        • Steptoe on 31/01/2018 - 19:25

          You can buy 6 for that price

          http://www.domain.com.au/2014134662

        • ItsMeAgro on 01/02/2018 - 09:58

          @virhlpool:

          Does Sydney CBD even? Probably not compared to similar places in similar cities around the world.

        • snook on 02/02/2018 - 22:35

          Not even south penrith anymore

      • picklewizard on 29/01/2018 - 13:29

        The west of what, the state?

        No freestanding house within the urban fringe was under 300k for at least 2-3 years.

    • sweetnipples on 30/01/2018 - 09:09

      mysterytal, stop looking where you cant afford

      • mysterytal on 30/01/2018 - 11:55
        +2

        I don't think there is anywhere that I can afford so as I said I've given up looking.

        Renting seems to be much cheaper than a mortgage, council rates, water rates, building insurance and maintenance. So…I'll keep renting.

        • knk on 30/01/2018 - 16:20
          +2

          Look at how much you spend in rent vs your capital gains. That rent money is gone regardless, is the additional cost you put into your mortgage (repayments, council water etc everything you've mentioned) less or equal to that of your capital gains?

          You'll probably be in the green pretty quickly.

          This assumes you actually want to buy a property, there are definitely upsides to renting if you want to move around quite a bit.

        • [Deactivated] on 31/01/2018 - 08:55
          -4

          @knk:

          You don't have a clue what you're talking about

        • knk on 31/01/2018 - 09:00
          +2

          @jared444:

          That's a productive comment

        • [Deactivated] on 31/01/2018 - 09:00
          -8

          @knk:

          OK Mr Tulip

        • belispeak on 03/02/2018 - 01:24

          @knk: the other poster being rude but they've got a point - your argument is predicated on increasing apartment prices which is maybe a bit optimistic

        • knk on 03/02/2018 - 07:46

          @belispeak:

          It is optimistic, however in Melbourne where OP is historically this has been the case. If I'm not mistaken he was looking at houses not apartments.

          All I was trying to say is factor it in / think about it - not buy based on that assumption alone.

    • mp3police on 03/02/2018 - 00:19

      I work as a casual for 2 years and just purchased a property I feel if I can do it anyone can my limit was also $300k

      I saved $50k got a $256k loan, After looking for a year got extremely lucky buying a 1020m^2 block with a huge 220m^2 home with ocean views in a good location. But yes I grew up in Western Sydney, Mt Druitt and had to move away from family.

      have a look
      https://imgur.com/a/NnOGo

      • knk on 03/02/2018 - 07:48

        300k? Where is that I'm moving!

        • mp3police on 04/02/2018 - 18:03

          I live north tasmania mate

      • mysterytal on 03/02/2018 - 11:45

        That looks like a really nice property. Almost all of my classmates at school have moved out of the area as it's so unaffordable. When I look at Facebook they have been scattered all over Australia.

        Are there any jobs in the area?

        • mp3police on 04/02/2018 - 18:02

          yeah mate quite a fair bit of work u just gotta get out there

  • CLoSeR on 28/01/2018 - 18:08
    +2

    Market demand is driving prices; perhaps a unit is within your budget?

    • jrt2020 on 28/01/2018 - 18:22
      +10

      my point is this market is inflated and continuously being inflated

      • kipps on 28/01/2018 - 21:52
        +11

        You say that like it is an objective fact. There are two independent concepts - price and value. Price is what you pay, value is what you get. You seem to suggest that the prices exceed value. This implies you have independently assessed, objectively, the value of a particular piece of land. What process did you undertake? What do you even mean by "market is inflated"?

        • Illian on 29/01/2018 - 15:05
          +7

          A quick google search will give you all the answers you need. The market is f*****.

        • kipps on 29/01/2018 - 16:52
          +4

          @Adonael: It is most unfortunate if you consider referring me to a "a quick Google search" to be an adequate response to a call for critical, and objective, reasoning. While you are on Google, have a look for "groupthink", as you are evidently afflicted.

        • meowbert on 30/01/2018 - 12:13

          Value isn't objective.

        • [Deactivated] on 31/01/2018 - 08:57
          +1

          Prices do exceed value. Value is determined by interest rates, and they are at historical lows.

      • CLoSeR on 29/01/2018 - 14:59
        +1

        It's being inflated due to demand, when the demand drops so will prices.

        • [Deactivated] on 01/02/2018 - 18:08

          And demand is highly dependent on interest rates

        • Jewdas90 on 03/02/2018 - 00:07

          @jared444:

          Yes, but the real question (and main reason for inflation) is, where is the majority of the demand coming from..?

        • [Deactivated] on 03/02/2018 - 00:22

          @Vdawg88:

          Low interest rates and a hanging economy. The market has been heading going down in the the major cities for the past few months, increase interest rates and let me know in what direction the price will go.

          Inflation was supposed to happen a few years ago but commodities tanked, with oil rising you'll see that inflation soon.

  • citygal on 28/01/2018 - 18:09
    +13
    1. Real estate agents doing their job properly.
    2. People who really love the place would go for the price.
    3. Limited supply
    4. Low interest rate in the market at the moment
    • jrt2020 on 28/01/2018 - 18:12
      +5
      1. yes for the vendors they do their job properly and for their commission
        2 .people who dont know there are better options available
      2. limited supply is a lie spread by all
      • citygal on 28/01/2018 - 18:16
        +2

        Some people may have lived in the area for a while and like it. Don't forget investors don't really care about the neighbourhood - all they care about is rental income.

        • llllllllllllll on 30/01/2018 - 14:50

          I believe property investors at the moment doesn't give a crap about the rental income - not because it's not there - it's just it's too little compared to capital (speculative) gain.

          What they care for is the result of the equation: capital_gain + rental income - interests - maintenance

          As long as you can make sure (rental income - interests - maintenance) >= 0, you are making money (in a growing market).

      • dizzle on 28/01/2018 - 20:25
        +2
        1. It seems like you're blaming the RA agent for doing their job well. It doesn't matter whether they're getting commision if they price it too high and it doesn't sell
        2. People get emotionally attached and pay more than it may be worth. People get caught up in the bidding (If I only pay another $10k, the other bidder will drop out) and pay more than they should. Investors may have an idea of an area that will be worth more in future or looking for a 2nd investment that they aren't as concerned about.
        3. The fact that you're having trouble finding a place in your range shows that supply is limited.

        Really it's not an inflated price if they can resell it for a similar price.

    • MrBear on 29/01/2018 - 08:17
      +3

      /5. People who get swept up in the auction bidding process.

    • npnp on 29/01/2018 - 19:54
      +5

      Limited supply? Seriously? Biggest scam in Australian property market.

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