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TL;DR it's expensive in Sydney. Lot's of speculation and no real solutions... I live in Tel Aviv and actually found that refreshing. We've been in a housing bu

TL;DR it's expensive in Sydney. Lot's of speculation and no real solutions... I live in Tel Aviv and actually found that refreshing. We've been in a housing bubble since 2000. Here the main claim is that since the country is small, prices will always go up. This is BS since if you step out of Tel Aviv prices are still higher but fall drastically. This also shows it's BS, if there's one thing Australia has it's land. This is due to government decisions in development. The problem is that these policies take a decade+ to show the full impact and the political incentive is problematic.

YZF 3y ago
I don't think it's that simple. I live in Vancouver, I'm pretty familiar with Tel-Aviv, and I visited Sydney ;) Tel-Aviv is expensive because it's the place people want to be. As you say, it's cheaper outside of Tel-Aviv and there's a reason for that. Vancouver is like that as well, there are more amenities, more jobs, a better "life style" so to speak, in Vancouver. And people are willing to pay for that. And part of why it's like that is because of the density and the people that live there. So sure, in theory you could build another city like Vancouver on the Sunshine Coast, or on Vancouver Island, but in practice you can not - it's the results of decades of evolution. In Israel lessay Hadera or Netanya could be Tel-Aviv... But they're not. And so you pay less to live there. There's plenty of "land" in Australia but most of it is a) desert you don't want to live in, b) too far from anything. The Sydney metropolitan area is very large. Not unlike Gush Dan or Greater Vancouver. And in that area there isn't "more land" so all the other land, like all the other land in Canada, doesn't matter. Israel being a speck compared to those does actually have a shortage of land since you aren't going to turn the entire country into a city (one would hope). That said it's true there's been a bubble, mostly related to interest rates. But as they say the market can remain irrational longer than you can remain solvent. Even if prices correct in Israel or in Canada or in Australia the highly desirable areas are likely to still remain relatively, and absolutely, expensive. Things that can change that are reduced demand, economic downturn, those areas becoming less desirable, etc. People keep talking about lack of affordability, but the reality is there are (a lot of!) people that can afford to live in those places, the 1%. The 99% can't afford but those aren't the ones buying those properties. All these cities have a population that's significantly more affluent than lessay 40 years ago. In Vancouver and Tel-Aviv e.g. a lot of tech workers.
- invalidname 3y ago
  So I lived for years in a private property in the center of Tel Aviv. 2 min walking distance from Disengof center. While there are a few high rises in the area there's still a lot of low rises and old buildings. There are still single story houses right in the center. (Edit: my point here is that there's a lot of space and people don't build enough). The problems are multiple. You are correct, I over simplified and interest is a huge reason for this bubble. 1. The local government doesn't allow construction in the areas people want. They're afraid that the influx of people will reduce the quality of life since the school system, sewage, policing etc. needs to be updated. They also lose on residence financially. Businesses fund cities and municipalities go bankrupt if they allow too much construction. 2. Traffic to Tel Aviv is terrible which makes even the outskirts less attractive. There's no parking either and if you choose to use public transport then it's closed in the weekends. I hope the light rail will change this but I think it's too little, too late. I'd keep a close eye on the prices in Bat Yam and Jaffa. If they go up there it might be due to the rail. 3. The government is the biggest landowner in these parts, it sells lands using a process that values return rather than the price to the consumer. 4. The rent market isn't regulated at all. That means investors push up prices and then overcharge on rent. Rental properties have a lower tax bracket than stock market investments. My accountant has 10 apartments for rent and this isn't an exceptional scenario. People are hoarding properties.
  - YZF 3y ago
    Rental properties and landlords is part of how the market works. That can be a good thing. In Vancouver (so they say) people own condos and don't rent them out, they just sit empty. In North America people lose it when you talk about government interfering with market prices but Vancouver (or rather British Columbia) has limits on how much you can raise rent for existing tenants every year, but there's plenty of loopholes. All in all the rental returns are not great. A $2M house might rent for (guessing) $5-7K a month, that's a bit more than 3% return, before expenses. Prices have been crazy for the last two decades. They're not showing any signs of a major reversal. I remember talking with some real estate guy about how expensive Vancouver is- 15 years ago. There is so much more demand now despite prices being x3-5.
barrysteve 3y ago
Australia has the largest average house block in the world (or close to it) at 400m2. A lot of the older-style houses are 700m2 blocks. People have been subdivided and densifying older blocks, building two houses on one block. Working off a criminal sentence for a decade then receiving emancipation and ownership of large land holdings was the original lifestyle of the convicts sent over to AUS. It's in the culture to value land. One of our five major cities covers the distance of greater london measured north-to-south and has a population of 2.3mil, compared against 13mil for london. We need to make the Bush/Desert liveable. People don't realize how much work goes into maintaining housing outside the 'butter zone' where everything works. There's more thought put into terraforming Mars than there is, keeping salt out of the wind in the outback, or making it economical and affordable to keep wildlife out of your housing, or transporting water large distances for cheap. Basically we need rivers in the desert. The economy is built around sexy projects and consumer bait, but the real expansionist policies that could secure Australian housing and Australian life for centuries to come, are basically an afterthought of silly politicians.
iamthemonster 3y ago
As one bit of anecdata: there's a proposed development in my suburb of Perth just 3km from the city centre along one of the major bus routes. It's a 13-storey block of flats that got whittled down to 9 storeys by NIMBY backlash and the NIMBYs are pushing for six storeys, because that was the council's plan several years ago. This has been dragging on for over a year now. There's not just endless land in Australia but there's also endless room to grow cities upwards. There's nothing technical about our lack of housing, it's 100% a decision.
- fakedang 3y ago
  I like this anecdote because it's the exact opposite of what I've seen in Dubai, Doha, Riyadh and practically any city where they're building up massive infrastructure. The government has a vision for a certain skyline to take shape, so small scale residential don't really find much government support. On the other hand, the governments strongly encourage a 70-storey residential skyscraper with a wonky rad shape, because why not? The end result is a massive oversupply of homes - there was a such a large glut that prices remained depressed even now, except for Dubai after the Russo-Ukrainian war. My cousin lives in a cozy 3 bedroom rental in Dammam, just outside Aramco City (the part where all the Western oil engineers live and where there are American schools and bars and stuff), for a tenth of what I pay for my tiny apartment in Zurich (which is at the typical level for any non-sharing home for a major city worldwide). If living in a liberalizing autocracy doesn't rock your boat, Saudi Arabia and Qatar are nice options. I've seen a lot of Israeli techies moving to the UAE too.

YZF 3y ago

I don't think it's that simple. I live in Vancouver, I'm pretty familiar with Tel-Aviv, and I visited Sydney ;) Tel-Aviv is expensive because it's the place people want to be. As you say, it's cheaper outside of Tel-Aviv and there's a reason for that. Vancouver is like that as well, there are more amenities, more jobs, a better "life style" so to speak, in Vancouver. And people are willing to pay for that. And part of why it's like that is because of the density and the people that live there. So sure, in theory you could build another city like Vancouver on the Sunshine Coast, or on Vancouver Island, but in practice you can not - it's the results of decades of evolution. In Israel lessay Hadera or Netanya could be Tel-Aviv... But they're not. And so you pay less to live there. There's plenty of "land" in Australia but most of it is a) desert you don't want to live in, b) too far from anything. The Sydney metropolitan area is very large. Not unlike Gush Dan or Greater Vancouver. And in that area there isn't "more land" so all the other land, like all the other land in Canada, doesn't matter. Israel being a speck compared to those does actually have a shortage of land since you aren't going to turn the entire country into a city (one would hope). That said it's true there's been a bubble, mostly related to interest rates. But as they say the market can remain irrational longer than you can remain solvent. Even if prices correct in Israel or in Canada or in Australia the highly desirable areas are likely to still remain relatively, and absolutely, expensive. Things that can change that are reduced demand, economic downturn, those areas becoming less desirable, etc. People keep talking about lack of affordability, but the reality is there are (a lot of!) people that can afford to live in those places, the 1%. The 99% can't afford but those aren't the ones buying those properties. All these cities have a population that's significantly more affluent than lessay 40 years ago. In Vancouver and Tel-Aviv e.g. a lot of tech workers.

invalidname 3y ago
So I lived for years in a private property in the center of Tel Aviv. 2 min walking distance from Disengof center. While there are a few high rises in the area there's still a lot of low rises and old buildings. There are still single story houses right in the center. (Edit: my point here is that there's a lot of space and people don't build enough). The problems are multiple. You are correct, I over simplified and interest is a huge reason for this bubble. 1. The local government doesn't allow construction in the areas people want. They're afraid that the influx of people will reduce the quality of life since the school system, sewage, policing etc. needs to be updated. They also lose on residence financially. Businesses fund cities and municipalities go bankrupt if they allow too much construction. 2. Traffic to Tel Aviv is terrible which makes even the outskirts less attractive. There's no parking either and if you choose to use public transport then it's closed in the weekends. I hope the light rail will change this but I think it's too little, too late. I'd keep a close eye on the prices in Bat Yam and Jaffa. If they go up there it might be due to the rail. 3. The government is the biggest landowner in these parts, it sells lands using a process that values return rather than the price to the consumer. 4. The rent market isn't regulated at all. That means investors push up prices and then overcharge on rent. Rental properties have a lower tax bracket than stock market investments. My accountant has 10 apartments for rent and this isn't an exceptional scenario. People are hoarding properties.
- YZF 3y ago
  Rental properties and landlords is part of how the market works. That can be a good thing. In Vancouver (so they say) people own condos and don't rent them out, they just sit empty. In North America people lose it when you talk about government interfering with market prices but Vancouver (or rather British Columbia) has limits on how much you can raise rent for existing tenants every year, but there's plenty of loopholes. All in all the rental returns are not great. A $2M house might rent for (guessing) $5-7K a month, that's a bit more than 3% return, before expenses. Prices have been crazy for the last two decades. They're not showing any signs of a major reversal. I remember talking with some real estate guy about how expensive Vancouver is- 15 years ago. There is so much more demand now despite prices being x3-5.

barrysteve 3y ago

Australia has the largest average house block in the world (or close to it) at 400m2. A lot of the older-style houses are 700m2 blocks. People have been subdivided and densifying older blocks, building two houses on one block. Working off a criminal sentence for a decade then receiving emancipation and ownership of large land holdings was the original lifestyle of the convicts sent over to AUS. It's in the culture to value land. One of our five major cities covers the distance of greater london measured north-to-south and has a population of 2.3mil, compared against 13mil for london. We need to make the Bush/Desert liveable. People don't realize how much work goes into maintaining housing outside the 'butter zone' where everything works. There's more thought put into terraforming Mars than there is, keeping salt out of the wind in the outback, or making it economical and affordable to keep wildlife out of your housing, or transporting water large distances for cheap. Basically we need rivers in the desert. The economy is built around sexy projects and consumer bait, but the real expansionist policies that could secure Australian housing and Australian life for centuries to come, are basically an afterthought of silly politicians.

iamthemonster 3y ago

As one bit of anecdata: there's a proposed development in my suburb of Perth just 3km from the city centre along one of the major bus routes. It's a 13-storey block of flats that got whittled down to 9 storeys by NIMBY backlash and the NIMBYs are pushing for six storeys, because that was the council's plan several years ago. This has been dragging on for over a year now. There's not just endless land in Australia but there's also endless room to grow cities upwards. There's nothing technical about our lack of housing, it's 100% a decision.

fakedang 3y ago
I like this anecdote because it's the exact opposite of what I've seen in Dubai, Doha, Riyadh and practically any city where they're building up massive infrastructure. The government has a vision for a certain skyline to take shape, so small scale residential don't really find much government support. On the other hand, the governments strongly encourage a 70-storey residential skyscraper with a wonky rad shape, because why not? The end result is a massive oversupply of homes - there was a such a large glut that prices remained depressed even now, except for Dubai after the Russo-Ukrainian war. My cousin lives in a cozy 3 bedroom rental in Dammam, just outside Aramco City (the part where all the Western oil engineers live and where there are American schools and bars and stuff), for a tenth of what I pay for my tiny apartment in Zurich (which is at the typical level for any non-sharing home for a major city worldwide). If living in a liberalizing autocracy doesn't rock your boat, Saudi Arabia and Qatar are nice options. I've seen a lot of Israeli techies moving to the UAE too.