5 ms·

This is pretty much the same in Australia. And if you're a buyer, it's even harder because nobody wants to sell right now, particularly established homes. It's

This is pretty much the same in Australia. And if you're a buyer, it's even harder because nobody wants to sell right now, particularly established homes. It's mostly just new (and tiny) units/townhouses/apartments.

entangledqubit 4y ago
I was under the impression that Australia doesn't have the 30-year fixed-rate mortgages that the US has. I assume this leads to having less of a locked-in real estate base?
- JenrHywy 4y ago
  In general, we have variable rate loans, though you can choose fixed rates for a certain period (usually 1-5 years). So yes, it should be more liquid than the US.
- neverforever 4y ago
  In theory yes, but in the most populous states we also have large stamp duty taxes that get charged every time you buy a house that lock people in. For a $1 million house I bought this came out to ~$40k. In general people usually renovate their houses or stay inside houses that are way too big for them instead of moving into one that better fits them.
  - tastysandwich 4y ago
    What's mental is that people buying $1m houses aren't anywhere near rich. That's just how much houses cost now. You spend years saving, and then the Government pinches most of your deposit!
- tastysandwich 4y ago
  You're correct. Most people have variable-rate home loans. In the past few years, fixed five-year loans have become more common. Basically you're on a fixed rate for the first five years, and then after that you're onto a normal variable rate. Most economists here predict house prices will fall further as people sell due to mortgage stress. At the moment it looks like most people are hanging on. Historically speaking, interest rates are still pretty low. And I think people are reluctant to sell due to fear they won't get a decent price, and that if they wait a few years house prices will be back up.
sumedh 4y ago
> it's even harder because nobody wants to sell right now The problem is not with selling, there are no buyers now since the interest rates are going up.
- lotsoweiners 4y ago
  The sellers can’t sell either because the next house will have a disproportionate loan amount compared to what we’ve been paying. I’m in this situation and it is just keeping inventory low and listing prices high (for the few houses on the market).
  - sumedh 4y ago
    > The sellers can’t sell either because the next house will have a disproportionate loan amount I dont have the numbers but most houses dont have loans specially old people houses who want to downsize or kids want to sell because their parents have paswed away. On the other hand most majority of buyers need loans which is expensive in a high interest scenario.
    - nmfisher 4y ago
      I don’t think that’s true. Recent (2020) stats at https://www.abs.gov.au/statistics/people/housing/housing-occupancy-and-costs/latest-release https://www.abs.gov.au/statistics/people/housing/housing-occ... “…from 1999–00 to 2019–20, the percentage of Australian households that own their own home: … Without a mortgage decreased from 39% to 30%. With a mortgage increased from 32% to 37%.” And that’s only talking about owner-occupiers, not investment properties, which I suspect would overwhelmingly have mortgages.
      - sumedh 4y ago
        Why would investment properties be selling when rents are going up? You graph actually proves my point, amount of people with mortgages is increasing aka buyers need loans while old people who are selling who bought their properties 20-30 years back dont have loans.

entangledqubit 4y ago

I was under the impression that Australia doesn't have the 30-year fixed-rate mortgages that the US has. I assume this leads to having less of a locked-in real estate base?

JenrHywy 4y ago
In general, we have variable rate loans, though you can choose fixed rates for a certain period (usually 1-5 years). So yes, it should be more liquid than the US.
neverforever 4y ago
In theory yes, but in the most populous states we also have large stamp duty taxes that get charged every time you buy a house that lock people in. For a $1 million house I bought this came out to ~$40k. In general people usually renovate their houses or stay inside houses that are way too big for them instead of moving into one that better fits them.
- tastysandwich 4y ago
  What's mental is that people buying $1m houses aren't anywhere near rich. That's just how much houses cost now. You spend years saving, and then the Government pinches most of your deposit!
tastysandwich 4y ago
You're correct. Most people have variable-rate home loans. In the past few years, fixed five-year loans have become more common. Basically you're on a fixed rate for the first five years, and then after that you're onto a normal variable rate. Most economists here predict house prices will fall further as people sell due to mortgage stress. At the moment it looks like most people are hanging on. Historically speaking, interest rates are still pretty low. And I think people are reluctant to sell due to fear they won't get a decent price, and that if they wait a few years house prices will be back up.

sumedh 4y ago

> it's even harder because nobody wants to sell right now The problem is not with selling, there are no buyers now since the interest rates are going up.

lotsoweiners 4y ago
The sellers can’t sell either because the next house will have a disproportionate loan amount compared to what we’ve been paying. I’m in this situation and it is just keeping inventory low and listing prices high (for the few houses on the market).
- sumedh 4y ago
  > The sellers can’t sell either because the next house will have a disproportionate loan amount I dont have the numbers but most houses dont have loans specially old people houses who want to downsize or kids want to sell because their parents have paswed away. On the other hand most majority of buyers need loans which is expensive in a high interest scenario.
  - nmfisher 4y ago
    I don’t think that’s true. Recent (2020) stats at https://www.abs.gov.au/statistics/people/housing/housing-occupancy-and-costs/latest-release https://www.abs.gov.au/statistics/people/housing/housing-occ... “…from 1999–00 to 2019–20, the percentage of Australian households that own their own home: … Without a mortgage decreased from 39% to 30%. With a mortgage increased from 32% to 37%.” And that’s only talking about owner-occupiers, not investment properties, which I suspect would overwhelmingly have mortgages.
    - sumedh 4y ago
      Why would investment properties be selling when rents are going up? You graph actually proves my point, amount of people with mortgages is increasing aka buyers need loans while old people who are selling who bought their properties 20-30 years back dont have loans.