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Also given that the median house prices are just below a million in Melbourne, and "slightly" above a million in Sydney, it makes saving up 20% for a deposit qu

by daemin 6y ago

Also given that the median house prices are just below a million in Melbourne, and "slightly" above a million in Sydney, it makes saving up 20% for a deposit quite an endeavour. Then you need to account for all the other fees and stamp duty as well adding a few more percentage points of savings required. The big problem in Australia is that nobody really in the government wants to do things to make houses more affordable. Anything that would immediately lower house prices would be a disaster for the political party and somewhat for the country. In fact the government has been doing all it can to keep house prices rising further and further. First by adding a first-home-owners' grant, which just increased the prices of cheaper property, and most recently by allowing people to take money out of their retirement savings to buy a property. All this does is just add more fuel to the real estate market so prices would increase. The only real way to lower prices would be for a genuine crash to happen, one where the government would be incapable of doing anything to prevent. The other would be to get rid of negative gearing, maybe just for existing property initially, so that people won't leverage up the eyeballs buying more and more investment properties.

dbetteridge 6y ago
Yeah Melbourne and Sydney are just insane, First home owners grant is great on paper but essentially covers none of the expense of buying a first home and like you said encourages the prices to increase even further. I'm on a decent salary by Australian standards and am going to be waiting at least 2 more years before I can afford a 10% deposit (have been saving for several years already at a lower rate). Just have to hope all the decent land/houses are still around by then and that the house prices dont outpace my savings.
- verelo 6y ago
  I love, as an Australian, waking up in the morning seeing the Australians all talking. During the day it’s all North Americans, but obviously this is a game of time zones. Anyway. I just wanted to say that, and also, this issue is seemingly everywhere. I’ve been in Toronto Canada for over a decade now and prices have gone crazy for almost that entire time. When i arrived a house in the city was 350-400k, that same house today might fetch 1.6m, or if renovated I’ve seen them sell for as much as $3.8m
  - dbetteridge 6y ago
    I'm an Australian in London so for me its only mid afternoon :D Goddamn those are some crazy numbers, how does anyone even begin to afford that? You'd be saving for 20 years just for a deposit....
    - daemin 6y ago
      I'm an Aussie in Europe now as well. Back when I lived in Sydney the average price of a home near where I lived was about 1.3 million, now I checked the prices last week and the estimated price is 2 million. Somehow there was only a small dip in prices during the pandemic and now the property market is back on the boil again. I honestly don't think any family without high dual incomes can actually afford a home now close to the city. The only places that are close to affordable for middle income families are far away from the centre.
    - Copernicron 6y ago
      It’s actually a lot worse than that. For properties over $1 million CAD, you are required to put down a 20% deposit. I came across an article not long ago that it would take the average household 30+ years to save the necessary down payment. I earn six figures and I’m single. I can’t afford to buy any time soon.
  - FredPret 6y ago
    Toronto went through an insane boom, yes, but there was a period in I think the 90’s that was very quiet for property values, so some of it may have been pent-up demand. And now they’re building like crazy, with people leaving in droves. Hopefully that’ll depress prices long-term.
    - michael1999 6y ago
      The Toronto area consistently adds >100k people each year, and added a full mega-person in the last 5. We have never built units for 100k beds in any year in the last 20. Don't hold your breath.
viraptor 6y ago
There's another way out which seems to be popular recently - move out of the city and get prices closer to $200k median for an ok house. You can see available houses in Victorian towns disappearing off the market over the last year as people move out enabled by remote work. I get that not everyone can do it, but it's a possibility for more sanity in house ownership for a groups. Unfortunately that also allows Melbourne market to not crash for longer...
- daemin 6y ago
  The problem is there's already a lot of demand for property in those smaller towns, at least the more desirable ones. So the locals are now the one's getting priced out of the market as more and more city-dwellers are moving to the popular smaller towns.
  - viraptor 6y ago
    True. I don't think we can ever avoid that - city people moving out will raise prices elsewhere, but 1. there's a limit to it - it's a relatively small increase spread across many towns 2. small towns can grow aggressively around the current centres. Wang for example was planning for up to +23% 20y change in population until 2031 with all the related development areas and infrastructure. Many towns an do the same and will still be more attractive than the far suburbs of Melbourne (north beyond the airport). So basically, as long as regional towns keep up with development and infrastructure, the overall result may not be a crash, but rather slow exodus from the cities. Now if only transport/trains would keep up with the times...

by daemin 6y ago

dbetteridge 6y ago

Yeah Melbourne and Sydney are just insane, First home owners grant is great on paper but essentially covers none of the expense of buying a first home and like you said encourages the prices to increase even further. I'm on a decent salary by Australian standards and am going to be waiting at least 2 more years before I can afford a 10% deposit (have been saving for several years already at a lower rate). Just have to hope all the decent land/houses are still around by then and that the house prices dont outpace my savings.

verelo 6y ago
I love, as an Australian, waking up in the morning seeing the Australians all talking. During the day it’s all North Americans, but obviously this is a game of time zones. Anyway. I just wanted to say that, and also, this issue is seemingly everywhere. I’ve been in Toronto Canada for over a decade now and prices have gone crazy for almost that entire time. When i arrived a house in the city was 350-400k, that same house today might fetch 1.6m, or if renovated I’ve seen them sell for as much as $3.8m
- dbetteridge 6y ago
  I'm an Australian in London so for me its only mid afternoon :D Goddamn those are some crazy numbers, how does anyone even begin to afford that? You'd be saving for 20 years just for a deposit....
  - daemin 6y ago
    I'm an Aussie in Europe now as well. Back when I lived in Sydney the average price of a home near where I lived was about 1.3 million, now I checked the prices last week and the estimated price is 2 million. Somehow there was only a small dip in prices during the pandemic and now the property market is back on the boil again. I honestly don't think any family without high dual incomes can actually afford a home now close to the city. The only places that are close to affordable for middle income families are far away from the centre.
  - Copernicron 6y ago
    It’s actually a lot worse than that. For properties over $1 million CAD, you are required to put down a 20% deposit. I came across an article not long ago that it would take the average household 30+ years to save the necessary down payment. I earn six figures and I’m single. I can’t afford to buy any time soon.
- FredPret 6y ago
  Toronto went through an insane boom, yes, but there was a period in I think the 90’s that was very quiet for property values, so some of it may have been pent-up demand. And now they’re building like crazy, with people leaving in droves. Hopefully that’ll depress prices long-term.
  - michael1999 6y ago
    The Toronto area consistently adds >100k people each year, and added a full mega-person in the last 5. We have never built units for 100k beds in any year in the last 20. Don't hold your breath.

viraptor 6y ago

There's another way out which seems to be popular recently - move out of the city and get prices closer to $200k median for an ok house. You can see available houses in Victorian towns disappearing off the market over the last year as people move out enabled by remote work. I get that not everyone can do it, but it's a possibility for more sanity in house ownership for a groups. Unfortunately that also allows Melbourne market to not crash for longer...

daemin 6y ago
The problem is there's already a lot of demand for property in those smaller towns, at least the more desirable ones. So the locals are now the one's getting priced out of the market as more and more city-dwellers are moving to the popular smaller towns.
- viraptor 6y ago
  True. I don't think we can ever avoid that - city people moving out will raise prices elsewhere, but 1. there's a limit to it - it's a relatively small increase spread across many towns 2. small towns can grow aggressively around the current centres. Wang for example was planning for up to +23% 20y change in population until 2031 with all the related development areas and infrastructure. Many towns an do the same and will still be more attractive than the far suburbs of Melbourne (north beyond the airport). So basically, as long as regional towns keep up with development and infrastructure, the overall result may not be a crash, but rather slow exodus from the cities. Now if only transport/trains would keep up with the times...