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

        • ninetyNineCents on 01/02/2018 - 11:40

          @Gizdonk:

          G: It is an objective fact becoming a doctor is harder and longer than becoming a plumber.

          99: The problem is thats not what we are discussing. YOu brought up the matter of earnings not study time.

          ~

          G: Brain power is arguably more exhausting than tightening some taps.

          99: Plumbers require brains, every job is different they dont tighten taps non stop at every job.

          ~

          G: Doctors have to run their own business but can’t charge what they want due to full socialist government control,.

          99: Most people goto a doctor only because medicare pays for it. Thats why doctors dont charge "extra" on top of the medicare benefit because they know their customers wouldnt pay.

          G: plumbers just rip you off

          99: Says who ?

          WIth the logic you seem to be implying everybody rips you off. Electricians, dentists, woolies, sony, etc etc.

  • [Deactivated] on 29/01/2018 - 06:30

    Supply and demand. We need more houses to be built, even the government grants have been geared towards new housing. We are in the middle of an accommodation crisis. Our population is ever expanding, without building new houses and new towns, we are fubar.

    • ninetyNineCents on 31/01/2018 - 21:46
      +1

      No we need to stop immigration and declare Australia is full to keep the old way of life. WHo wants to spend even more time on trains or cars going to work every day of the year.

      • [Deactivated] on 02/02/2018 - 07:36

        People have babies, those babies have babies,we need to build more. Now grow up and stop being rascist, we are all bloody immigrants, this country has only been civilised 200 odd years.

        • ninetyNineCents on 02/02/2018 - 11:19

          S:People have babies, those babies have babies,we need to build more.

          99: Why ?

          S: Now grow up and stop being rascist, we are all bloody immigrants, this country has only been civilised 200 odd years.

          99: I never mentioned any race. How about you grow up and make your points without inventing insults that i never made.

          S: we are all bloody immigrants, this country has only been civilised 200 odd years.

          99: So what if we are. Sydney is obviously full and not ready for more people, just like we cant go add another 10 people to your home. Its called planning its something we adults should be doing.

        • [Deactivated] on 03/02/2018 - 07:12

          @ninetyNineCents: So you admit we don't have enough accommodation, yet you insist on over complicating things. Let us not build more houses, Let us have homelessness, overcrowding and immigration sanctions instead. Let us not build new towns and generate work, accommodation and ease the overcrowding. Let us stick our heads in the mud and cry foul instead. I know LNP is allergic to Capital Infrastructure (they prefer to sell assets not build them), but someone needs to address it, sooner rather than later, we are just generating our own dystopian future with this mindset.

        • ninetyNineCents on 03/02/2018 - 18:53

          @stormii:

          S: So you admit we don't have enough accommodation, yet you insist on over complicating things. Let us not build more houses, Let us have homelessness, overcrowding and immigration sanctions instead.

          99: You dont get it. Big cities dont need only houses, they need schools, public transport and a lot more. The fact your answer only mentions houses shows you have no clue how complex society is.

          ~

          S: Let us not build new towns and generate work, accommodation and ease the overcrowding.

          99: Australia has plenty of big and small towns. The problem is people dont want to go there for a lot of reasons.

          You make everything so simple, like just saying lets make a town and the problem is solved.

          ~

          S: d. Let us not build new towns and generate work, accommodation and ease the overcrowding. Let us stick our heads in the mud and cry foul instead.

          99: The problem too solve the many problems in major cities requires TIME. Just adding tens or hundreds of people at a rate far faster than the problems can or are being solved doesnt help.

          The big city problems need to be solved FIRST, the current approach of "trying" to do things in parallel doesnt work. Sydney has been swamped by immigration for over a dozen years. For better or worse govs on both sides dont work fast enough or smart enough. Thats how it is, there is no major pill that changes everything just like that.

          Therefore the smart thing is too stop immigration until we can get things fixed, and make sydney comfortable instead of a massive traffic jam.

        • [Deactivated] on 04/02/2018 - 19:27

          @ninetyNineCents: one, I said capital infrastructure, not just houses, don’t patronise me, and two, yes it takes time, what do you want to do, leave a big fat mess for your kids or start now.

        • ninetyNineCents on 05/02/2018 - 10:41

          @stormii:

          S: I said capital infrastructure, not just houses, don’t patronise me, and two, yes it takes time, what do you want to do, leave a big fat mess for your kids or start now.

          99: No you clearly said to build more houses. You then later mentioned capital infra as a throwaway statement.

          I know LNP is allergic to Capital Infrastructure (they prefer to sell assets not build them),

          ~

          S: what do you want to do, leave a big fat mess for your kids or start now.

          99: Thats right, and until those problems are on the way to being fixed we should stop immigration.

          THe way things are going now and have been for the past dozen or more years, public transport as ane xample is not gaining capacity in relation to the population its going backwards.

          We have more people today and not enough trains/buses/etc.

          I will concentrate on sydney because thats what i know, i will assume melb and other cities are similar on heading to become another sydney in the near future.

          Sydney needs at least double the train lines, and the only progress we have had to making this possible in the past 20 years is the north west line. There have been other helpful things like the clearways etc, but in the end the improvements the later gained has been swamped by the volume or people. People are taking nearly 150% to twice as long to get to work every day.

          To build new lines takes years, at least 5 years, to build and at least an equivalent to plan, buy the land to make the corridors and all that.

          To build these lines we need at least 5 - 10 years of zero immigration so these can be done. If immigration contineus the way it is, that would mean another 1/2 m to a 1m people in sydney in that 10 years, and trains dont just appear in thin air. How are these people going to get to work/school etc ?

          Its madness to force everyone to spend even longer catching a train or driving in the carpark that is Sydney.

          When the trains, hospitals, schools and everything else are ready then we should think of immigration, not before. You wuldnt just invite 10 people into your house to live without having beds and everything else they need and yet thats what the immigration program is doing.

        • ninetyNineCents on 05/02/2018 - 14:18

          @stormii:

          Funny isnt this what ive been saying for days here ?

          http://www.smh.com.au/comment/metro-not-the-answer-to-sydney…

          terruptions to services, are symptomatic of a rail network operating at full capacity. In other words, there is no room to carry more passengers.

          …

          Small wonder when you consider that the pattern of electrified railway tracks around Sydney today has remained virtually unchanged since being approved by Parliament as long ago as 1915.

          …

          But this has not increased its capacity, rather only the size of its passenger workload.

  • Caped Baldy on 29/01/2018 - 08:05

    Where is the government on the poll?

  • Wallyt99 on 29/01/2018 - 08:16
    +1

    Until you accept that a house is worth what people will pay, you will never win an auction. There is no such thing as a bargain house.

  • buderim11 on 29/01/2018 - 08:17
    +7

    Why is negative gearing not on the poll ?

    A Melbourne investor recently bought a house in my street for $900,000 which at the time was at least $100,000 above market , they get $600 a week rent , how would that stack up without negative gearing ?

    • JIMB0 on 29/01/2018 - 09:43
      +3

      Even with negative gearing they'd still be losing money.

    • nukie on 29/01/2018 - 10:36

      Pretty sure they must be waiting for approval for a knockdown, rebuild.

    • [Deactivated] on 29/01/2018 - 21:47
      +2

      negative gearing is a waste of taxpayer's money, a scheme to reward stupid investors who couldn't get a profit out of their investments.

      • llllllllllllll on 30/01/2018 - 14:57
        +1

        Technically it's not a waste of taxpayer money because said investor will pay less tax - not that s/he will take any of other tax payers money.

        It just means that this government won't be able to collect the tax that investor would have paid if the property is positively geared.

        • [Deactivated] on 30/01/2018 - 18:13

          Technically yes, but remember neg gearing is paid as a tax refund, you can't collect it in advance. Having said that if you got tax payable, that means you didn't have neg gearing in the first place as your investment is making profit.

        • BobLim on 31/01/2018 - 01:33

          @blaccdong: As far as I'm aware, you can actually vary your PAYG installments downwards if you can prove they'd result in a large refund otherwise, so unless you're not employed you can 'collect' it every pay packet…

    • horsome on 30/01/2018 - 09:43
      +3

      Because most people who oppose it don’t understand the fundamentals on how it works. Would you like to pay tax on negative earnings? I would think not.

      The main issue is the discount on capital gains, negative gearing is a true reflection on someone’s net earnings, whilst the discount on capital gains is not.

      • llllllllllllll on 30/01/2018 - 14:58

        This is a more correct answer, the problem is not with positive gear - as they are not making any money.

        The problem is totally with pay less tax when you are making money - who wouldn't love that.

    • virhlpool on 30/01/2018 - 23:30

      A Melbourne investor recently bought a house in my street for $900,000 which at the time was at least $100,000 above market , they get $600 a week rent , how would that stack up without negative gearing ?

      This is another big misconception. Even with negative gearing, they can only 'stack up' 30-35% of losses at max, depending on their income level. No wise person would prefer to lose 70% to gain 30%. I wouldn't do it just to exercise neg gearing.

      What actually 'stacks up' the numbers for such investors is their HOPE of continuous/consistent price appreciation. Nothing else makes sense financially. Sometimes this very hope works out, like Sydney market in last 5 yrs and sometimes it doesn't, again like Sydney market in 2018-19. You don't see TV shows and stories on the people whose 'hope' didn't work, unfortunately. They don't make a good meat for Media :-)

  • accountant4Jesus on 29/01/2018 - 08:19
    +2

    Continuous central bank currency printing drives up the volume of currency available to chase assets, and so those assets increase in price dramatically, acting like a sponge to soak up the excess currency. It's exactly the same as what's been happening to the stock market, especially in the US. Sydney and Melbourne house prices have to drop 70-80% to get back to historical averages before the massive currency printing started.

  • DiscoJango on 29/01/2018 - 08:46

    Your paying for the land. The house is free.

    • abb on 29/01/2018 - 10:36
      +1

      By that logic, apartments in Sydney suburbs should only cost about $100k. But they cost $1M…

      (I'm not even talking CBD or very close to it)

  • [Deactivated] on 29/01/2018 - 08:50
    +12

    The missing option is the correct one.

    Government

    When interest rates decrease and people can take a loan with 5% deposit, and double mortgage, and negatively gear the repayments… Buying property becomes a no brainer for the financially semi-able. This created a price bubble but for a long time, renters were able to suppress the price adjustment.

    The bubble gets further immunity because the elite have vested interested in property and will not allow the bubble to burst.

    Today, our economy depends on foreign investors injecting their money through property purchase which further inflates the prices.

    When double incomes became the norm, there was also a spike in housing price.

    We can blame the old, the rich, the foreigner but ultimately it is the government's inability and unwillingness to control the prices.

    • Baysew on 30/01/2018 - 18:51
      -2

      it is the government's inability and unwillingness to control the prices

      You want the government to decide how much property should be bought and sold for?

      • [Deactivated] on 30/01/2018 - 18:57
        +3

        I think you're taking it literally. No, I don't want the government to put a price tag on my house

        I'm sure you can appreciate that many government policies have a significant impact on property price.

        • Baysew on 30/01/2018 - 19:07
          +1

          I think you're taking it literally

          Well, I did quote exactly what you said.

          You are critical of the government for not bringing in something you don't want.

        • [Deactivated] on 30/01/2018 - 20:32
          +1

          @Baysew:
          Okay bud.

  • YellowDieselGolf on 29/01/2018 - 09:34

    680k would buy a mansion in a non-capital city.

    • abb on 29/01/2018 - 10:37
      +3

      Not in Wollongong or Newcastle :P

      • codinghelloworld on 29/01/2018 - 12:19
        +2

        With that price can buy big house in Brisbane.

        • virhlpool on 30/01/2018 - 23:37

          Only in some suburbs, mate. Not anywhere close to CBD.

        • codinghelloworld on 31/01/2018 - 06:36

          @virhlpool:

          Sure, but I saw that IT companies in Brisbane is distributed around the city, not focus in the CBD like Sydney, so traffic is probably lower than Sydney. Salary range is a bit lower or the same, and these jobs are less competitions than Sydney.

          I am on the way doing my homework, find good area with good school and safety for my kids in Brisbane, plan to take a big move from Sydney to Brisbane. I admit that Sydney is good and active, but in the long term, can't rent forever. With the range of 550k, I have many options in Brisbane (of course need to look at good area), but I have nearly no option in Sydney (except if I can stay 4 hours on the train to commute to work)

  • Cluster on 29/01/2018 - 09:44
    +2

    Housing is really cheap in Australia… if everyone isn't trying to cram into one of the seven major cities.

    People also have unrealistic expectations when it comes to housing in Australia. I met a girlfriend who insisted that she will never live 10km or further from the CBD in Adelaide. I already had a house, but 30km away. No way would she even consider living that far from the city. She ended up purchasing a townhouse 8km from the city and then complained how she didn't have any money for entertainment because the expensive mortgage was eating all the money she had.

    • SlickMick on 29/01/2018 - 10:03
      +1

      yep. There is very affordable housing available in Australia. Sydney folk would cry if they saw the prices in Gladstone QLD.

      But we make decisions based on where our job is, family and friends etc, not on the price of houses.
      Otherwise Gladstone would have a huge boom and I'd go and buy up the cheap houses when Sydney is abandoned.

    • BRYCELICIOUS on 29/01/2018 - 14:19

      30km is NOT EVEN far from a CBD. That's how far I choose to drive to work at the moment!

      • virhlpool on 30/01/2018 - 23:39

        You will know how far it is when petrol prices go up or when traffic plays hard tricks. Otherwise, it's all good.

    • horsome on 30/01/2018 - 10:29

      Jeez difference between 10 and 30 km from Adelaide is 5-10 min drive tops!

      • Cluster on 30/01/2018 - 11:53
        +1

        Especially as I live near the Southern Expressway, which covers 17km in maybe 12 minutes. Nup, much too far for her, but she'll complain about housing costs solely due to her life choices.

        • virhlpool on 30/01/2018 - 23:41

          Well.. North Adelaide lads wouldn't ever like Christies Beach or Noarlunga.. would they? They may like Glenelg though. There's also some emotional value (which may not be rational) attached to each suburb based on the stories a person has heard or people he/she has met or his/her own experiences of living there.

        • Cluster on 30/01/2018 - 23:47

          @virhlpool: The person who wants to live in North Adelaide but cannot possibly afford it has no right to complain about the costs. I would like to live in North Adelaide too, in a 150m2 home for $300k, but that's not going to happen. The woman I knew set her limits of acceptable living as 10km from the CBD. No further. Yet she still complained about how expensive it is to live that close. A rod for her own back.

  • iDroid on 29/01/2018 - 10:04
    +3

    The government gives tax breaks to turn housing into an investment vehicle.

    That's pretty much it.

    • lostn on 29/01/2018 - 10:21
      +2

      The government gets a cut every time a property changes hands, even if it's the same property over and over. There's something in it for them also.

      • Cluster on 31/01/2018 - 00:12

        The alternative to stamp duty is a land tax. Governments are quite unhappy when people stay in their homes for decades. Better to get home owners to pay a stamp duty, and then pay land tax on top of that.

      • ninetyNineCents on 31/01/2018 - 16:47

        L: The government gets a cut every time a property changes hands, even if it's the same property over and over. There's something in it for them also.

        99: Its a joke how little they get. Take GST everything else gets taxed 10%, regadless of profits, and homes should be the same perhaps more.

        • lostn on 31/01/2018 - 18:08
          +1

          When you resell goods you buy, the government doesn't get 10% every time.

          With a house or car they get their stamp duty every time. To make that 10% would be highway robbery.

          10% of a packet of chips is pennies. 10% of a $1 million house is 100k. That's going to crash the housing market (Except from chinese investors) and get them even less revenue as fewer people will buy a house.

        • ninetyNineCents on 31/01/2018 - 20:27

          @lostn:

          L: When you resell goods you buy, the government doesn't get 10% every time.

          99: It basically does.

          L: With a house or car they get their stamp duty every time. To make that 10% would be highway robbery.

          99: No it would be genius because it would stop the crazy increases, as money is slowly given to the gov. In the end everyone has less money with each transaction forcing prices to stop increasing.

          ~

          L: 10% of a packet of chips is pennies. 10% of a $1 million house is 100k. That's going to crash the housing market (Except from chinese investors) and get them even less revenue as fewer people will buy a house.

          99: No it will stop prices increases because people will have less money. Sellers will instantly have 10% less of their sale, which means they have 10% less to buy.

        • lostn on 31/01/2018 - 21:12

          @ninetyNineCents:

          Here's the reality.

          If you're looking to buy, you want the prices low so you can afford it.

          If you're a home owner or looking to sell, you don't want the pricing to stall or drop. You want it to continue rising. For most people, it's their biggest asset.

          Whenever a house is sold, there's both a seller and a buyer, and both of their wants are at odds with one another. It's not an election winning strategy to crash housing prices. You favor the buyers, but piss off the sellers.

          For every winner, there's a loser. There's no net gain in voters one way or the other. And everyone's going to want what's best for themselves.

          Become a home owner or investor, and suddenly you'll be on the other side of the fence hoping a chinese investor wants to buy your property for above market value.

          I want prices to increase. Sorry. Nothing personal.

          If you can't afford housing, buy an apartment. You don't own the land, so these properties don't go up, and they remain affordable.

        • ninetyNineCents on 31/01/2018 - 21:40
          +1

          @lostn:

          L: I want prices to increase. Sorry. Nothing personal.

          If you can't afford housing, buy an apartment. You don't own the land, so these properties don't go up, and they remain affordable.

          99: Dont worry about me, i earn far more than you. Im just thinking of the future. You dont understand that inequality results in revolution and i would rather have a peaceful quite Australia.

          ~

          L: If you're a home owner or looking to sell, you don't want the pricing to stall or drop. You want it to continue rising. For most people, it's their biggest asset.

          99: You dont see the big picture, all you can think of is your grubby hands. You dont appreciate that increasing the cost ruins society. Inequality makes for serious consequences. DO i really need to highlight examples from history ?

          In the end if your house goes up, its pointless, because if you sell you must buy somewhere else, your net gain is little if any and the costs i have briefly described above are far worse.

    • Toph Beifong on 31/01/2018 - 00:05

      Remember how John Howard promised to abolish CGT when he introduced GST?

      • Cluster on 31/01/2018 - 00:10
        +3

        And state governments were supposed to abolish stamp duty. As Paul Keating said, never get between a premier and a bucket of money. Applies to all politicians really.

    • ninetyNineCents on 31/01/2018 - 16:46

      The gov should be taxing the hell out of foreign buyers (50%) and sellers ( at least 10%).

      • lostn on 31/01/2018 - 18:11

        If driving them away is your game, may as well just ban foreign buyers altogether. No one is going to pay 50%. What's the point in still letting buy anyway? It is effectively cutting them off, and a ban would work just as well.

        • ninetyNineCents on 31/01/2018 - 20:25

          L: If driving them away is your game, may as well just ban foreign buyers altogether. No one is going to pay 50%. What's the point in still letting buy anyway?

          99: Because some will still buy, simply because Australia is that wonderful. If you are a multi millionaire, if a home in a safe, free place costs $5M or $8M it doesnt matter, you will buy if you really want it.

          L: It is effectively cutting them off, and a ban would work just as well.

          99: But the option is there for those that really want to pay. Its a win win.

        • lostn on 31/01/2018 - 21:16

          @ninetyNineCents:

          Being rich doesn't mean they burn money and shrug it off.

          If stamp duty is 50%, they go to another country to invest instead. 50% will hurt local buyers a lot though.

          But the option is there for those that really want to pay. Its a win win.

          No one will want to. It's only a win-win for a buyer. It's a lose-lose for a seller whose property will become worth a lot less than it was when they bought it. Believe me, you're going to get voted out of government if you try something this boneheaded.

        • ninetyNineCents on 31/01/2018 - 21:36

          @lostn:

          L: Being rich doesn't mean they burn money and shrug it off.

          If stamp duty is 50%, they go to another country to invest instead. 50% will hurt local buyers a lot though.

          99: Which other countries are as grand as Australia for any cost ? The only other is NZ, the rest of the world is a shithole.

          You simply dont appreciate how much of a paradise Australia is compared to the rest of the world. The China rich want to live here because its clean, safe, and free something that isnt true of China or the rest of Asia.

  • rowdy on 29/01/2018 - 10:16
    +8

    Who, or what, Is Responsible for Continuous House Price Increases?

    1 - excessive immigration
    2 - record low interest rates
    3 - negative gearing
    4 - central banks flooding the world with (essentially negative interest) debt
    5 - belief that house prices will never go down
    6 - FOMO, fear of missing out
    7 - no incentive to save
    8 - the 'must have it now' US style culterism

    Which results in - The Everything Bubbles

    There's not many countries that have higher household debt to income than Oz.

    No one under 40 even knows what a recession is?

    Prepare for the wailing when the bubbles pop, and they will!

    • moar bargains on 29/01/2018 - 12:50
      +1

      Yep, this pretty much sums it up. The overarching theme of a lot of those items is poor or ineffectual governmental policies (both here and internationally).

      We (as a country) are in for a world of pain when this thing pops, which seems to be a long time coming, but will absolutely happen some day.

    • [Deactivated] on 29/01/2018 - 21:56
      -8

      The big 4 banks willing to lend $1.3 million to a combine income household of only $80k p.a

      And at the same time, NAB is planning to offshore one-fifth of their workforce.

      Thus did we become the architect of our own demise.

      • ozbd on 30/01/2018 - 09:27
        +3

        If you look at any borrowing calculator, you will find your example doesn't even come close to being true.

        And I don't think there is a source that says NAB is offshoring one fifth of their workforce.

        • [Deactivated] on 30/01/2018 - 18:09
          -2

          Google it.

          The 6 neggers most likely big 4 banks employees or Nab's.

        • paul11 on 31/01/2018 - 01:00
          +2

          @blaccdong: Mate, I earn close to $100k. I have tried hard to get a loan of $650K. Tried different banks, none interested. The best offer I got is from loans.com.au for $450K if I put down $75K as down payment. I am debt free, no other loans, just 2 credit cards. Please enlighten me, which bank, which branch is offering $1.3m loan with $80K annual income?

        • ozbd on 31/01/2018 - 15:37

          @blaccdong:

          "Google it" ie. you have no source…

        • [Deactivated] on 31/01/2018 - 18:21
          -1

          @paul11: are you kidding me? fair dinkum? is this for investment or 1st home owner? if this for 1st home owner, PM me, I can give you more info.

          If it is for investment loan, then your figure is about right.

        • [Deactivated] on 31/01/2018 - 18:29
          -1

          @ozbd: https://www.aussie.com.au/home-loan-calculator/borrowing-pow…

          play around with the numbers and you'll see.

  • lostn on 29/01/2018 - 10:20
    +1
    • population growth
    • china
    • price appreciates leading to more investment leading to more appreciation, leading to more investment, etc. If you can afford it, it gets you much more than bank interest and is less volatile than shares.

    Other factors too, but these are the biggest ones.

  • thord on 29/01/2018 - 10:54
    +9
    1. Government who has allowed ridiculous levels of immigration because they can't run an economy and it's literally the only thing keeping australia afloat. (Majority of the people immigrating are relatively wealthy too, after all, if you're a government do you want poor people who will commit crime and not contribute coming to your country, or do you want wealthy people?)
    2. Cheap easy credit throughout the world.
    3. An idiot public who think "equity maaaate", "house prices only ever go up", "Houses double every 7 years", "Gotta get on the ladder mate", "gotta get ahead ((profanity) everyone else)", "interest rates will never go up"
    4. Greedy policies by banks who DGAF because they know the government will bail them out if things go wrong.
    5. Pathetic and ineffectial government regulatory bodies.
    6. A reserve bank without any balls who won't act in the best long term interests of the nation and are happy to keep things "status quo".
    7. Scumbag politicians who own multiple properties who are more than happy to keep growing their own investments at the expense of the youth
    • Amores on 30/01/2018 - 00:00
      -1

      (Majority of the people immigrating are relatively wealthy too, after all, if you're a government do you want poor people who will commit crime and not contribute coming to your country, or do you want wealthy people?)

      Only one German PM b!tch who brought millions of poor, penniless, uneducated Africans/Middle Easters to Europe

    • virhlpool on 30/01/2018 - 23:51
      -2

      (Majority of the people immigrating are relatively wealthy too, after all, if you're a government do you want poor people who will commit crime and not contribute coming to your country, or do you want wealthy people?)

      Mate, do you even know how immigration to Australia works? The biggest category of immigrants is 'skilled migrants'. They are assessed for the skills that Aus government needs. Their assessment has nothing to do with wealth. In fact, most of them are 'not wealthy' at all, but they are skilled. Wealthy people from abroad don't come here to struggle (entry level jobs, high living cost, family resettlement, etc). They have servants, cooks and drivers in their homes. Their life here isn't more luxurious even if they were 'skilled' too. Let's be clear about it.

      Other categories - students, employer sponsored, holiday visa holders (mainly from EU), and finally refugees. Yes, some of these can be wealthy but very few - probably some students (kids of rich dads).

      Lastly, a very small number of people who come on investor visa by investing a huge sum in Australia (a few million $$) - they can be wealthy and they are supposed to be wealthy but we are talking about a very tiny number.

      Please note that some other foreign buyers of Australian houses can be wealthy but they haven't moved here. They are investors and still sitting in their home country, churning money.

      • paul11 on 31/01/2018 - 01:41
        +1

        @virhlpool, @thord may not be absolutely right. But he has a valid point about immigration being one of the problems.

        Wealthy Chinese are pumping billions into Australian property market. Who wants to invest in a dictatorship country ? They will love to keep their factories inside China, but homes outside.

        The aussie government brings in thousands of skilled migrants who then loan big bucks from banks to buy 2BR apartments for half a million dollars and become life long slaves in the grand scheme of things. Or rent these properties by paying upto 50-60% or more of their hard earned salary on rent every month.

        It then creates a cycle or help to keep the housing bubble afloat. They (politicians) will continue to do this for as long as they can. It's easy and serve their purpose very well. When the bubble pops, (it will, sooner or later, for sure, because this kind of property growth is unsustainable) they will always have an excuse, and they can easily get away with.

        Politicians/ministers themselves have multiple properties and have absolutely ZERO interest in fixing housing affordability problem.

      • thord on 31/01/2018 - 10:33

        I used a broad definition of wealthy, probably a bit misleading. My point was simply, generally when you design an immigration policy, you design it to take away the best people from another country.

        If you have high levels of immigration, you're #1 impoverishing the original country of some of it's best workers, and #2, causing problems for your native citizens by increasing competition unnaturally.

        Generally the people you get are the "well off" from other countries. We're not bringing in the poverty stricken carpenters from other nations, we're bringing in the carpenters who previously ran their own businesses and were successful. Sure, they may not have been "rich", but they're generally upper middle class in their home countries or better.

      • JIMB0 on 04/02/2018 - 12:32

        The biggest category of immigrants is 'skilled migrants'

        So you are saying we have a shortage of people in this country with the following skills:

        Service station cashier
        Courier/taxi/truck driver
        Convenience store cashier
        Cleaner
        Trolley collection
        Car washing/detailing
        Massage

        • virhlpool on 04/02/2018 - 12:54
          +2

          You are mistaken. They aren't the people who came on 'skilled migration'. They are mostly low skilled people, mainly students (or their partners) who came to some of our low-rung, money-minting unis, which offer shite quality programs that are often used as 'easy' pathway to enter the country. I am not referring to reputed unis which have stringent entry requirements though worth noting that even good unis have some easy entry programs for which there aren't many takers locally. Many of these people eventually own those businesses anyway if they manage to or decide to live here permanently.

          In any case, even if they were skilled migrants who arrived here as IT developer or chemical engineer or accountant and now work as cleaner for a long term (which is highly unlikely), it's not a good sign for local youth who have been living here for much longer time. If a new person who doesn't even know English or our accent well, who knows nothing much about the locality - if he/she can find these jobs and work successfully, then it clearly shows that our low skilled people are either not competent enough for those jobs OR they simply don't want to work and prefer be on doles breaking their couch in their housing commission accommodation all day. Nothing to defend them really, rather more concerning for us as taxpayers. Many people would rather have hard-working immigrants who are paying taxes and making economy run and country prosper rather than dole bludgers who have preferred to remain unemployed for generations. They have luxury of time to get involved in any kind of crimes while still enjoying free meals. What would we defend them for? On other hand, locals who want to work find their way to work anyway. I see school kids working hard in retail stores.. in warehouses.. in restaurants.. Salute to those kids. Which skills were they born with that the dole-bludgers can't attain?

        • Hasbulla on 04/02/2018 - 14:31
          -1

          @virhlpool: Newstart, currently costs approximately A$10 billion per year. Ihttp://www.ncoa.gov.au/report/appendix-vol-1/9-11-unemployment-benefits-minimum-wage.html

          You don't even buy 5 4bedroom dwellings in Sydney with that much.

        • virhlpool on 04/02/2018 - 22:47
          +1

          @pentole: You understand the difference between million and billion.. right? And even if it was million, why would I as a taxpayer prefer to pay my cent to a dole-bludger instead of a hardworking immigrant who is in turn helping the country and economy?

        • Hasbulla on 05/02/2018 - 10:43

          @virhlpool:
          oops, sorry I missed a k: My bad!!!! 5k.
          Because foreign investors do not help the economy. At all.

  • Tuttorix on 29/01/2018 - 11:52
    -3

    Anyone that thinks Real Estate Agents are the ones that are jacking prices up is hilarious. If you believe that, you are sorely mistaken.

    • smuggler on 29/01/2018 - 12:34

      Yes! They're only here to take a piece of the pie. They don't have much power.

    • outlander on 30/01/2018 - 11:04

      Yes they do. Here's one I caught in the act!

  • dave999 on 29/01/2018 - 12:58
    +1

    The actual reason is demand is greater than supply - all the ideas are just red herrings.

    • paul11 on 31/01/2018 - 01:45

      True, but then who is responsible for this imbalance ? Don't need a space scientist to see the real culprit. It's the government.

      • dave999 on 31/01/2018 - 11:12

        Definitely government policy - just nothing to do with negative gearing, foreign investment or any of the other ideas. The increasing prices is because demand is so high and supply is limited. The government needs to pursue policies that decrease the demand to live in the capital cities by making it more desirable to live in areas other than the capital cities.

  • zealmax on 29/01/2018 - 13:21

    Mate missed out on an Auction last year by $1K. Went up 20% in 3 months. Melbourne is crazy.

  • horsome on 29/01/2018 - 13:23
    +1

    The domestic economy got it going in the early 2000s with low interest rates and govt incentives.

    Now the Australian housing market is a global commodity. That combined with investment data availability (ie running stats, etc) speculative purchases are well and truly taking over.

    Unless government controls foreign investment through regulation or taxation (current measures are too weak) it will keep going, forget the supply issue as there will never be enough.

    Don’t give too much credit to real estate agents, some of them can’t even spell and not all of them are doing well and lose ground to foreign agents.

  • IMadeYouReadThis on 29/01/2018 - 14:41
    +1

    I don't know where you are OP but in Sydney area I would grab it ($680k house) with my both hands. Bloody paid more than that for 2 br apartment 20 km north of Sydney!

  • dogboy on 29/01/2018 - 14:43

    It is the market that dictates the prices but I think real estate agents have a lot to answer for as well.

  • ozlab on 29/01/2018 - 14:51
    +4

    It's becoming part of Australian culture to own multiple properties and multiple mortgages as a way to retire early. While in other countries, the culture is to innovate to make more money.

    • [Deactivated] on 29/01/2018 - 22:00
      +1

      when the economy collapse, you won't be able to escape the country with your properties. on the other hands, diamonds and gold bars can be fit into your pockets, and still holds the same value in other countries.

  • xuqi on 29/01/2018 - 14:58

    It's a complex problem requiring a multi-faceted approach, something that no Australian government / opposition had/has been or willing to sort out.

    —We need to wind-back, discontinue negative gearing altogether.
    —Crack down hard on foreign buyers (None of the BS Scomo, or that F.F. Hockey approach of parading a few million $ rule breakers for the TV cameras once an election cycle).
    —Tighten lending requirements to discourage speculative forces.
    —Invest $ in to new social housing developments (perhaps forgo buying a couple of F35 WE's to pay for it)
    —Force state governments to release land for housing.

  • shangoz on 29/01/2018 - 14:59

    Don't complain, Market driven, look at Japan, House prize down hill more than 20 years, If Every one can purchase in Sydney or Melbourne can purchase there 2 or more houses, BUT, Can you purchase there and migrate there? NO! Also, everyone can afford to purchase house in Afghanistan, But, Do you want to do it and mover there ? No!

    • [Deactivated] on 29/01/2018 - 22:01
      +4

      with the worsening transports, massive immigrations, lack of jobs, we'll be like Afghanistan in 20 years.

  • [Deactivated] on 29/01/2018 - 15:14
    +5

    Given that rents do not cover the interest + expenses even at historically low interest rates, the answer is prices are going up because people expect capital gains. The Howard government halved the capital gains tax on property which gave them an advantage over other investment types, so of course they immediately increased in price.

    Basically, they're going up, because people are buying them with the expectation that they will go up. There's no point in buying property unless you expect it to go up, because rents have stagnated big time. In Brisbane rents are now lower than they were 10 years ago. Unit prices, are also 'for the same unit' lower than they were 8 years ago. (The average has risen slightly over that time because newer units are more expensive).

    Foreign buyers are also buying them because it's a great place to park the money you think the Chinese government will seize if you leave it in China, and it doesn't take much to make prices go up. Just one extra buyer in an Auction, even if they don't end up getting the property, can make a major difference.

    Basically, at the moment, I wouldn't buy property. It may not crash, but in Brisbane / Sydney / Melbourne the lack of wages growth has meant that prices have basically hit the ceiling for now. They'll only start moving upwards a year or so after wages begin growing at any decent pace again. So for now, renting is cheaper, especially if you invest the money you would have put into a mortgage into shares or something similarly high growth.

    • virhlpool on 31/01/2018 - 00:15

      I agree with you for most of the points but in case of Brisbane, the prices and rents have been at these levels for a bit too long. I think it should move up slowly.. it just can't remain at this level for too long when other markets are moving, including Perth which has started showing some positive signs. Better to rent as it's cheaper than owning a mortgage but the money can still be used for real estate where the numbers stack up. Sydney and Melbourne aren't the end of the world.

      • [Deactivated] on 31/01/2018 - 11:58

        Just as some idea, rents in my area (of Brisbane) are lower than in 2010, for a similar quality property. It's a unit heavy suburb, for which sale prices have actually dropped over the last 8 years. But the rents still wouldn't cover mortgage payments let alone body corporate + rates etc as well. Rents aren't going up because supply is flooding onto the market, and will keep doing so for at least another year to three due to the projects underway now.

        After that, rents and prices could start increasing again.

        Newer units tend to cost more than the existing stock though, so the average price is probably hiding the like for like drop in prices.

        • virhlpool on 31/01/2018 - 13:13

          This problem isn't this severe for houses though. Apartments over-supply in Brissy is well-known.

        • HoracePinker on 01/02/2018 - 00:20

          Sounds like youre describing Carindale. The big development estates have stagnated there because of the sheer numbers of properties. As a result there is usually quite a few for sale at any one time and in a competition to sell … prices go down. Similiarly with rents with multiple properties for rent people can shop around for lower rent.
          I'm in the market for a house as my landlords OCD is becoming annoying. I went to a freshly listed property to the first viewing on a saturday ( 3 days after listing) only to be informed that an offer has been made and accepted. there was about 20 groups that came to see the house it was a circus and everyone was peeved at agent for not cancelling because they wanted people on their database. The trend is the more dilapidated the house is the higher the price it will go for I am assuming reno investors are flipping the houses. which is funny cos renovated houses attract less attention than the reno delights

  • aussie bargain on 29/01/2018 - 15:29
    +1

    I think the poll is an attempt to overly simplify the answers to a complicated question.
    The answer to the question is actually "many factors".
    I'm actually surprised why we haven't got "property investors/speculators" in the list.

    As with any complex issues in society, we need to openly discuss this and agree how to handle this best.
    Personally, I would say that ending negative gearing would put some sort of a break in the price, but again it is probably easier for most people to blame the foreign buyers for everything.

Login or Join to leave a comment
Login Join