How is the real estate market.

xelasnave · #1 28-04-2016, 07:56 PM

What is the real estate market doing in your area.

A friend of mine was showing me a list of properties that had sold near him in Ryde.

That market seems to have gone mad with ordinary home selling well past the million dollar mark.

I noticed a semi on a main road sell at auction and having been a real estate agent selling in that area can say that once upon a time that property would have been on the books for months. Now no problem.

Have you noticed anything like this.

The prices seem beyond belief.

Alex

JB80 (Jarrod) · #2 28-04-2016, 10:39 PM

I have been watching the market for the last few years and have been saying that the market is dangerously overvalued and more to the point getting more and more unaffordable.

My Nans home was sold last year, a 2 bed house on a plot of land and in a condition that was for the most part unliveable for nearly $400,000 to a developer who tore it down immediately and is building 3 sub plots on it and he stands to make a killing.
Shame that because had it been in a normal market I probably could of worked something out to keep it in the family.
To be fair the land was the selling piece there.

And this is suburban Adelaide. I look in the areas I grew up and we couldn't afford the sort of houses we lived in growing up or would be looking to buy now and more to the point the houses have long since sold off their yards and just aren't as desireable to me anymore.

That said I can find some extremely well priced(for now) and amazing properties in rural areas but of course that has other problems like work availability.

I don't foresee a rosy future for the housing market, something will give eventually.

Atmos (Colin) · #3 28-04-2016, 10:45 PM

5 years ago I was looking at buying a house in northern Melbourne, would have cost me about $300,000, looking nearer to $450,000.

5 minutes up the road from me a very standard house went for $960,000, this is in Watsonia!

jenchris (Jennifer) · #4 28-04-2016, 11:21 PM

If they rezone my place, I'm on a winner . I'm on acreage on the M1 between gold coast and brisbane.
Near shops and a pub, rail link and schools.

casstony · #5 29-04-2016, 09:27 AM

Warragul is a popular town an hour away from Melbourne and a standard house here is about $400,000; that's still expensive but those city prices are insane.
I feel sad for the younger generation who've been taken for suckers in this real estate boom - banks doing very nicely.

Atmos (Colin) · #6 29-04-2016, 09:45 AM

The property prices are said to fall for my generation within the next 12 months... Not sure if I see it happening though.

xelasnave · #7 29-04-2016, 09:53 AM

I have noticed up north prices for "life style" properties are going crazy as well.
A small acerage that you could not farm but have a horse etc seems to be very expensive.
I think folk sell up in a major city get a huge price and think the country stuff is cheap. The properties sell quick supply falls prices move up.
A neighbour of the mate from Ryde sold at 1.8 mil He may well move out to the country and see a 100 acres with a house for $400,000 and be very happy he still has a million in the bank. If he had to pay another $100,000 he would not object and I suspect that is the way it goes.
I am near Epping and the talk is 25 storey blocks are going ahead causing prices to go thru the roof. I have heard of main road dumps going for 4 mil cause of high rise.
I once thought it was a bubble but I now think that we aint seen nothing yet.
And a lot of the market comes from or via Hong Kong where a shoe box costs a fortune.
For those folk Australia must seem very cheap.

Alex

casstony · #8 29-04-2016, 10:12 AM

Quote:

Originally Posted by xelasnave

I once thought it was a bubble but I now think that we aint seen nothing yet.
Alex

It's always hard to see a bubble from within and justifications abound for why it's different this time, but historically every market bubble has ended the same way (whether it's real estate, commodities or tulips).

Over the last few decades bubbles have been blown in various markets around the world propelled by cheap money (low interest rates, easy loan terms, government stimulus) effectively stealing from future generations who will have to pay for our excessive spending.

xelasnave · #9 29-04-2016, 10:23 AM

Ah yes the tulip bubble.
But this time it is different

Alex

xelasnave · #10 29-04-2016, 10:26 AM

The market economy will not work if you take away the boom bust part.
Alex

UniPol · #11 29-04-2016, 10:38 AM

What's the old adage? Your house is worth nothing until you sell it. Where do you go if you don't want to spend any more money than you got for it?

GeoffW1 (Geoff) · #12 29-04-2016, 10:56 AM

Hi,

I'm in Mortdale, Sydney, and prices here are just crazy. I saw a feature fibro 3-bed single story place sell for $1.2M over a year ago and thought 'Ah yes, demolition and a project home there', but no, the buyers settled in.

I am fond of saying I could now not afford to buy my own home from me at the price I would ask me.

My son and his family have been shut out of the market, I think they will be renting for a very long time.

No Cheers

gregbradley · #13 29-04-2016, 11:21 AM

The property market peaked a little while ago in Sydney. Its already showing signs of some pullback. 10% pullback would not be unrealistic in some areas.

I have seen several real estate booms but this is the first time I was concerned it was over the top. Mind you its been 12 years since the last boom so immigration, wage rises have added pressure plus interest rates are at all time lows.

What is most concerning though is the fact that Australia has 175% debt not including financial sector. I believe that is mostly personal debt from mortgages and credit cards. Its the 2nd highest in the world after Sweden.

Couple that with the fact that our national debt has been in the red now for quite a long time since the Howard years when he somehow had us in the black and paid off the national debt. With deficits now seemingly locked in for the foreseeable future plus more manufacturing shutting down (no more cars made, steelworks in SA under threat, mines weaker now) its hard to see much of a case for high real estate prices.

If interest rates go back to historical averages of around 7% how many of these 2 income $1 million plus mortgaged couples will be able to cope financially? I'd say a lot will go back on the market and could cause a big drop from oversupply.

Getting rid of negative gearing even if for only existing properties could also cause problems. Keating did that in the late 80's and that and other factors had interest rates going to around 16% plus. Stopped a lot of houses from going on the market because they would lose their 12% mortgage and stopped apartment construction overnight.

Greg.

AussieTrooper (Ben) · #14 29-04-2016, 01:05 PM

Same story where I live. You can’t get a house for under $1M, and even flats go for $600K. Just a few months ago, someone bought an old house near me, knocked it down, cut it in half and sold the two (attached) houses for $900K each.
This may level off, but I don’t see the boom ending any time soon. The vast majority of buyers are wealthy folk from overseas, and that’s not likely to change any time soon.

w0mbat (Ian) · #15 29-04-2016, 05:49 PM

Well I have a different story to tell. I recently had a couple of real estate agents value the 15 acre property I live on in East Gippsland and was shocked to discover that the asking price today would be at most the same as we paid ten years ago. We could not even rebuild the house we have on it for the suggested sale price!
Frankly I simply don't understand why more city dwellers don't consider moving to regional areas (especially those into astronomy). Clear dark skies, safe healthy environment for kids AND adults. No traffic, no noise, friendly people and community. Having lived in both the city and country it amazes me how much MORE community activity there is than in the city. Across the road some Melbourne people recently bought a small property and they are already remarking on how many more visitors they get than they ever had in the city and how their neighbours actually offer to help them.
We have better TV than in the city via satellite. And when the new NBN satellites are up and running we will also have good internet.
So much to gain and so little to lose.
Ian

JB80 (Jarrod) · #16 29-04-2016, 06:50 PM

Quote:

Originally Posted by casstony

It's always hard to see a bubble from within and justifications abound for why it's different this time, but historically every market bubble has ended the same way (whether it's real estate, commodities or tulips).

Over the last few decades bubbles have been blown in various markets around the world propelled by cheap money (low interest rates, easy loan terms, government stimulus) effectively stealing from future generations who will have to pay for our excessive spending.

This is exactly the truth of it.

Here in Spain the bubble blew in 2007 in a huge way and the market is at rock bottom still. Worse still it was the underlying cause of what they call "The Crisis" here which when the housing market went everything else in the economy did as it was reliant almost entirely on this perceived wealth and the construction industry to prop it up.

Some of the similarities are striking to the Aussie bubble, terms like foreign investors, 2nd or 3rd investment properties, negative gearing, subprime mortgages, huge levels of household debt etc....
Maybe because I am not on the inside I can see this clearer but it is hard to miss really.

Do I think the Aussie bubble will burst as hard as Spain's?
Probably not, or at least you would want to hope not.
For example I know what losses the previous owners of our house made as we have all the receipts from them building and they took a 150,000 euro hit, nearly 50% and they got off lightly.

I have no idea what is in store for the Australian market but this statement is bang on the money.....

"but historically every market bubble has ended the same way (whether it's real estate, commodities or tulips). "

xelasnave · #17 29-04-2016, 07:30 PM

How many houses to get a good tulip these days?

casstony · #18 29-04-2016, 08:21 PM

Quote:

Originally Posted by xelasnave

How many houses to get a good tulip these days?

I heard the tulip market is heating up - better get some while they're still cheap.

xelasnave · #19 29-04-2016, 08:52 PM

https://en.m.wikipedia.org/wiki/Tulip_mania

The above link will help anyone wondering about tulips and economic bubble colapse.

xelasnave · #20 29-04-2016, 09:01 PM

Quote:

Originally Posted by w0mbat

Well I have a different story to tell. I recently had a couple of real estate agents value the 15 acre property I live on in East Gippsland and was shocked to discover that the asking price today would be at most the same as we paid ten years ago. We could not even rebuild the house we have on it for the suggested sale price!
Frankly I simply don't understand why more city dwellers don't consider moving to regional areas (especially those into astronomy). Clear dark skies, safe healthy environment for kids AND adults. No traffic, no noise, friendly people and community. Having lived in both the city and country it amazes me how much MORE community activity there is than in the city. Across the road some Melbourne people recently bought a small property and they are already remarking on how many more visitors they get than they ever had in the city and how their neighbours actually offer to help them.
We have better TV than in the city via satellite. And when the new NBN satellites are up and running we will also have good internet.
So much to gain and so little to lose.
Ian

Hang in there real estate agents can be wrong.