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Having moved from California to Australia a year ago, I'm amazed that Australians deny that there is a property bubble. Anecdotally, in the neighborhood I'm li

by jbarham 15y ago

Having moved from California to Australia a year ago, I'm amazed that Australians deny that there is a property bubble. Anecdotally, in the neighborhood I'm living in, it costs at least twice as much to buy a house as to rent. I live in a lower middle-class suburb in Melbourne, and a couple of weeks ago a two-bedroom, one-bathroom house up the block sold for $600,000. Keep in mind too that mortgage interest rates in Australia are higher than they are in the U.S. (7% vs. 5%) and they don't have long-term fixed interest mortgages. The amount of debt home buyers are taking on is insane. Needless to say I'm renting and waiting for the bubble to pop.

hartror 15y ago
A good % of me and my friends are all sitting on our hands and waiting as well. We're all about the same age as our parents were when they got their first house (late 20s early 30s). The prices are nuts, at least the market has flattened out of late, but with the population growth rates we are seeing around the country the pressure for housing isn't likely to lift any time soon.
- robryan 15y ago
  Yeah I don't see an end to it, if you want to be around and work in the inner city there only a reasonable distance away you can buy before it becomes prohibitive. The majority of that land is either already in use or running up $300,000+ just for a regular block of land.
  - damncabbage 15y ago
    Half an hour out from Sydney, you're lucky to get a two-bedroom unit for $400,000. Actually getting land seems like a dream.
- psyren 15y ago
  I'm not convinced that waiting is the best strategy. In my case I'm a 26 year old developer in Perth. I bought my first 2x1 apartment 13 months ago in a nice area 7km from the city and have now paid it off to the point where if I were to rent it out, it would pay for itself. Now all my savings still go into the loan (offset account), but they are essentially a deposit for my next property which I will be able to buy around 28-29 (2-3 years).
vacri 15y ago
There are plenty of Australians who shout about the property bubble. The problem is that there is so much middle-class wealth tied up in it, that any political party that steps forward and eliminates negative gearing is basically signing their own death warrant - they won't be a player for 10-15 years.
feralmoan 15y ago
Ever considered moving back to the states now that you're established? I'm the opposite, having moved from .au to California and now using australian bank accounts and investments as my savings vehicles, 6.3% on aud savings + 3% currency is a lovely offset vs a US mortgage.
- jbarham 15y ago
  > Ever considered moving back to the states now that you're established? Not without a Green Card. I'm Canadian, not American, and the constraints that you have to live under on an H-1B visa whilst in the multi-year wait for a GC are IMO intolerable. I may complain about the high cost of living in Australia compared to the US, but I am thankful for much greater personal freedom I have--although that's mostly thanks to my Aussie wife. :)

by jbarham 15y ago

hartror 15y ago

A good % of me and my friends are all sitting on our hands and waiting as well. We're all about the same age as our parents were when they got their first house (late 20s early 30s). The prices are nuts, at least the market has flattened out of late, but with the population growth rates we are seeing around the country the pressure for housing isn't likely to lift any time soon.

robryan 15y ago
Yeah I don't see an end to it, if you want to be around and work in the inner city there only a reasonable distance away you can buy before it becomes prohibitive. The majority of that land is either already in use or running up $300,000+ just for a regular block of land.
- damncabbage 15y ago
  Half an hour out from Sydney, you're lucky to get a two-bedroom unit for $400,000. Actually getting land seems like a dream.
psyren 15y ago
I'm not convinced that waiting is the best strategy. In my case I'm a 26 year old developer in Perth. I bought my first 2x1 apartment 13 months ago in a nice area 7km from the city and have now paid it off to the point where if I were to rent it out, it would pay for itself. Now all my savings still go into the loan (offset account), but they are essentially a deposit for my next property which I will be able to buy around 28-29 (2-3 years).

vacri 15y ago

There are plenty of Australians who shout about the property bubble. The problem is that there is so much middle-class wealth tied up in it, that any political party that steps forward and eliminates negative gearing is basically signing their own death warrant - they won't be a player for 10-15 years.

feralmoan 15y ago

Ever considered moving back to the states now that you're established? I'm the opposite, having moved from .au to California and now using australian bank accounts and investments as my savings vehicles, 6.3% on aud savings + 3% currency is a lovely offset vs a US mortgage.

jbarham 15y ago
> Ever considered moving back to the states now that you're established? Not without a Green Card. I'm Canadian, not American, and the constraints that you have to live under on an H-1B visa whilst in the multi-year wait for a GC are IMO intolerable. I may complain about the high cost of living in Australia compared to the US, but I am thankful for much greater personal freedom I have--although that's mostly thanks to my Aussie wife. :)