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While I appreciate your optimism, things in Sydney for example are so egregious that if you were to deposit say the $100 each week you had left after food and r

While I appreciate your optimism, things in Sydney for example are so egregious that if you were to deposit say the $100 each week you had left after food and rent, over 20 years with an average 5% return, you’d not quite have a 20% deposit for a house in Sydney at the prices they were when you started. In that time, they’ll probably have doubled again… EDIT: I also wanted to add that in general the idea of compounding wealth is totally correct, but the biggest vehicle for this has been the family home for generations, and it seems that for all intents and purposes, my generation and most of the one before me have been locked out of this. Personally, I’m very regularly investing any spare money into a range of index and diversified funds to try and keep myself ahead but without the 10-1 leverage property here offers its not enough.

bamboozled 4y ago
Honestly, why do you think house prices in Sydney will double again? Not saying your wrong but where's the appeal / drive coming from? Australia has a pretty low birth rate, there is immigration, but not everyone moving to Australia is rich, it's limited. There is climate change which IMO makes Sydney less desirable (becoming crazy hot in summers). Why would it double again? Even if it did, why do you think it will stay at all time highs? The only way I can see the high prices being sustainable is if developing countries populations were growing, more people with money to come compete for properties. Ultimately, that's not what's happening, so won't there be more properties on offer in the future? I've spent time in Australia and in the area I lived in Sydney, many of my neighbors were 50+, this was some while ago but still...
- PebblesHD 4y ago
  I suspect the current property owning class will keep buying it up as investments and land banking, and bidding up the price as they go. The only way they could be as high as they are is as ‘investments’ where the purchaser either had capital or is anticipating selling before their loan reverts from interest only.
  - bamboozled 4y ago
    Ok, what's the end game there? You own a bunch of land with less and less demand for it?
  - PebblesHD 4y ago
    @bamboozled - Can’t reply directly as we’re too nested, but I think as long as our services and jobs are concentrated around Sydney, there won’t be any particular decrease in demand. The end goal for these people is to own all the property around the city that could feasibly be rented out to workers, who have no choice but to live there because that’s where the hospitals, jobs, and people are. 40 years of successive governments have set the city up to make decentralisation basically impossible. We have next to no fast transit options, our roads in and out are all privately owned toll roads, and once you leave the ‘greater sydney area’, which is fairly massive anyway, there’s basically nothing there to support you.
    - bamboozled 4y ago
      Workers can't afford to pay the rent being asked though? If you're paying such insanely high prices for land, you need to get a pretty high return on the land to fund the next purchase ? In that regard it seems like a race to the bottom? Also, remote work is now becoming more of a thing than ever, so people have much less of a need to live in Sydney itself and pay crazy high rent. I can see this happening in many other major cities. I actually left a major city recently where I was paying 5x the rent I was paying pre-pandemic. Things just aren't what they used to be in this regard. I also now have way more money to save and invest in property myself, or other things such as shares. I feel like before I was a slave, now I'm somewhat liberated.
      - UncleEntity 4y ago
        This is what I don’t understand with the tech workers who can work remotely, why live somewhere really expensive? I’m not in tech but it really doesn’t matter where I have a place to live so I’m in the process of buying a house in Iowa which is literally less expensive than the storage unit I rent in Phoenix — relatively speaking, over time, if you aren’t that good at math, maybe? Sure, after closing I have to deal with the squatters (or maybe renters, dunno?) and probably have to do some repairs (again, dunno?) but the price is basically for a shell of a house which, after a bit of research, is how these things are priced if you’re willing to take on some risk and don’t mind doing some work before you can move in. At the risk of just rambling…the flowers in the front yard are what really sold me, what kind of person is going to stay in a bank-owned house and still maintain the yard?
- jamil7 4y ago
  Anecdotally speaking as someone who grew up there, I feel investment property is tied culturally to wealth building in Australia above all other asset classes (I left 6-7 years ago so maybe it's changed), it's also encouraged by the government with tax breaks. Despite declining birth rate the property owning class will continue to buy up and rent out everything available.
- moistly 4y ago
  > Honestly, why do you think house prices in Sydney will double again? In Canada, up until a couple years ago, house prices appreciated 7% per annum on average. That is a doubling every ten years. In the US, prices have appreciated by 3-4%. That’s a double every twenty years. Sydney prices will be on the same trend.
  - bamboozled 4y ago
    So I should just pay $3,000,000AUD for anything I can find because it's only going to double no matter what?
    - moistly 4y ago
      It will eventually double. Canada’s 7%pa seems high to me, but so it seems to be. Mind, homes are much bigger, more energy efficient, better finishes. I think reasonable home appreciation should be close to the inflation rate. Or better, wage increases. But, yah, even then it eventually doubles. Look up “Rule of 77” for an explanation.

bamboozled 4y ago

Honestly, why do you think house prices in Sydney will double again? Not saying your wrong but where's the appeal / drive coming from? Australia has a pretty low birth rate, there is immigration, but not everyone moving to Australia is rich, it's limited. There is climate change which IMO makes Sydney less desirable (becoming crazy hot in summers). Why would it double again? Even if it did, why do you think it will stay at all time highs? The only way I can see the high prices being sustainable is if developing countries populations were growing, more people with money to come compete for properties. Ultimately, that's not what's happening, so won't there be more properties on offer in the future? I've spent time in Australia and in the area I lived in Sydney, many of my neighbors were 50+, this was some while ago but still...

PebblesHD 4y ago
I suspect the current property owning class will keep buying it up as investments and land banking, and bidding up the price as they go. The only way they could be as high as they are is as ‘investments’ where the purchaser either had capital or is anticipating selling before their loan reverts from interest only.
- bamboozled 4y ago
  Ok, what's the end game there? You own a bunch of land with less and less demand for it?
- PebblesHD 4y ago
  @bamboozled - Can’t reply directly as we’re too nested, but I think as long as our services and jobs are concentrated around Sydney, there won’t be any particular decrease in demand. The end goal for these people is to own all the property around the city that could feasibly be rented out to workers, who have no choice but to live there because that’s where the hospitals, jobs, and people are. 40 years of successive governments have set the city up to make decentralisation basically impossible. We have next to no fast transit options, our roads in and out are all privately owned toll roads, and once you leave the ‘greater sydney area’, which is fairly massive anyway, there’s basically nothing there to support you.
  - bamboozled 4y ago
    Workers can't afford to pay the rent being asked though? If you're paying such insanely high prices for land, you need to get a pretty high return on the land to fund the next purchase ? In that regard it seems like a race to the bottom? Also, remote work is now becoming more of a thing than ever, so people have much less of a need to live in Sydney itself and pay crazy high rent. I can see this happening in many other major cities. I actually left a major city recently where I was paying 5x the rent I was paying pre-pandemic. Things just aren't what they used to be in this regard. I also now have way more money to save and invest in property myself, or other things such as shares. I feel like before I was a slave, now I'm somewhat liberated.
    - UncleEntity 4y ago
      This is what I don’t understand with the tech workers who can work remotely, why live somewhere really expensive? I’m not in tech but it really doesn’t matter where I have a place to live so I’m in the process of buying a house in Iowa which is literally less expensive than the storage unit I rent in Phoenix — relatively speaking, over time, if you aren’t that good at math, maybe? Sure, after closing I have to deal with the squatters (or maybe renters, dunno?) and probably have to do some repairs (again, dunno?) but the price is basically for a shell of a house which, after a bit of research, is how these things are priced if you’re willing to take on some risk and don’t mind doing some work before you can move in. At the risk of just rambling…the flowers in the front yard are what really sold me, what kind of person is going to stay in a bank-owned house and still maintain the yard?
jamil7 4y ago
Anecdotally speaking as someone who grew up there, I feel investment property is tied culturally to wealth building in Australia above all other asset classes (I left 6-7 years ago so maybe it's changed), it's also encouraged by the government with tax breaks. Despite declining birth rate the property owning class will continue to buy up and rent out everything available.
moistly 4y ago
> Honestly, why do you think house prices in Sydney will double again? In Canada, up until a couple years ago, house prices appreciated 7% per annum on average. That is a doubling every ten years. In the US, prices have appreciated by 3-4%. That’s a double every twenty years. Sydney prices will be on the same trend.
- bamboozled 4y ago
  So I should just pay $3,000,000AUD for anything I can find because it's only going to double no matter what?
  - moistly 4y ago
    It will eventually double. Canada’s 7%pa seems high to me, but so it seems to be. Mind, homes are much bigger, more energy efficient, better finishes. I think reasonable home appreciation should be close to the inflation rate. Or better, wage increases. But, yah, even then it eventually doubles. Look up “Rule of 77” for an explanation.