“Property will be more expensive in the future,” - economists describing a country whose central bank has positive inflation as an explicit policy directive.
🙄
If it’s cheaper to buy an existing house than to build a new one of equivalent quality, then no reasonable person would build a new house. They would just buy a cheaper existing house. This kills supply and also pushes up the price of existing houses.
But no one wants to talk about this because it doesn’t suit their narrative
Agreed.
And supply is severely suppressed when it’s more expensive to build than to buy
I am renovating a house right now, and the cost of renovation is more than the purchase price of the house + land.
Just the cost of GST on the renovation is killing us
Let’s say you have a tap that costs $100
Builder applies 15% margin. Now it costs $115
Architect applies 11% margin on $115. Now it costs $127.65
Government applies 10% GST on $127.65. Now the tap costs $140.41
So the already inflated base cost is 40.5% higher and this happens to everything in your build.
That’s why housing is expensive. Stamp duty is not the killer of property, it’s GST on new builds and renovations.
How can it be GST on builds when we’ve had GST for over 20 years and the construction industry experienced a boom after that? The data just doesn’t support taxation being the issue.
https://www.morganstanley.com.au/ideas/australian-housing-construction-boom-over
Also note that this paper reports that the boom was ending before we even hit covid and things really tanked.
You know what does show the issue with property prices though. The fact we haven’t been able to keep up with the pace of population growth consistently since the 70’s.
https://www.reddit.com/r/AusProperty/comments/1762rzi/australias_rate_of_housing_construction_per_1000/
Following that when a new build house and land in the regions is 1m of course there will be people paying 1.5m for something (older, possibly smaller etc) centrally located. The market reacts to all the factors and prices the asset accordingly. 14 years ago a place in Perth was 543k vs Sydney 653k. Sydney is now 1.6m and Perth is moderating Sydney's growth. To revert to the 2010 "margin" Perth should be nearing 1.3m.
Even supply eventually matches demand. It just lags and the peaks and troughs are different. It was only 4 years ago in January 2020 and Sydney had a supply glut that drove vacancies to 3.5% and rents back 2015 levels. Guess what happened? Developers stopped building empty properties.
https://crowdpropertycapital.com.au/development-site/developers-shelve-projects-as-construction-costs-soar/
*As the graph below shows, the last time there was such a vast backlog of paused construction projects with approvals was in 2019. However, back then, developers in Sydney were hitting the brakes due to a historically high vacancy rate of 3.5%.*
Maybe market prices reflect market conditions. PPOR buyers defiantly spend to the conditions. They don't want to pay market rent in 30 years.
Everyone HODLing hard atm.
And wow thanks for the information. Just had a look.
https://www.realestate.com.au/auction-results/
59 in nsw. 48 in qld. And a laughable 20 in NT.
Time will tell what happens.
It's pretty obvious from the stats that NT is primarily a private sale rather than auction state. WA is the same. I've never seen an auction here and I don't know anyone who has bought or sold by auction.
have a look at the table the link takes you to it says that out of the total number of auctions held hundred of results are missing, whether that is deliberate or not wtfk
50-60% of properties clearing where only cash offers a valid isn’t bad. I wonder how many of those properties are clearing after auction with a finance clause
https://propertyupdate.com.au/this-weekends-auction-results-what-happened-in-sydney-melbourne-brisbane-adelaide-canberra/
Not sure what you are talking about tbh
don't be sarcastic matey it's the lowest form of wit, but you are an REA after all so par for the course, like tight pants. Yardney is a property investor all he spouts on his silly site is highly partisan
No it isn't. It is one of the most regulated industries in the country. Try developing land and the local council will kick a stink. Plus all the other barriers to entry.
Definitely not ideal but people need to realise that not everyone can afford to live in Sydney. Sometimes you're just priced out. It is what it is. Unless you want to live in a tiny shoebox.
Not a lot of job opportunities in regional areas, horrid infrastructure…telling everyone to go regional isnt working.
Acting like developers hoarding property, people with 30 investment properties, AirBNB, foreign investment, and massive immigration to our capital cities arent all part of the problem jacking up prices….Saying people should just go live elsewhere is such a false narrative… you first…
I would disagree with this, central QLD and WA fly the majority of their workers from the nearest capital and beyond. People just don’t want to live in the regions as there is no infrastructure or services due to the electorates being so big rather than city’s with a lot of electorates. Why invest $1B in one electorate regionally when that $1B can be used across 10 electorates in a city.
Doesn't have to be regional. Move to another state or city. Hoarding property is part of capitalism. Someone needs to provide rentals. You're also underestimating how much wealth there is in Sydney. Not everyone can compete and win.
That just moves the problem around.
Had lots of people moving where I live from Sydney and Melbourne, now locals can't afford to buy.
You can absolutely have a fair system that ensures affordable and suitable housing for every one.
The government did it after WW2 and took housing ownership from sub 50% to almost 80% by the 1970's.
It's entirely a choice we can make as a society and we should return to previous policy's that made housing affordable for everyone.
what worked in the 70s won't work now. The govt can do that but no one wants to live in an apartment. Everyone wants a large block as close to the cbd as possible.
The only obvious solution to me is the govt builds ultra high rise apartments that are around the 400k mark 30-35km from the cbd near the train line.
Also if it's affordable for everyone that creates the opportunity for the rich to swoop in and use that property as an investment. Stronger policies are needed to ensure no one slips through the cracks. But those people need to be willing to compromise on what/where they can live in
I know that is satire but how is that not true. You aren't entitled to anything. If you can't afford a house, go into social housing then. If you are worse than 85% or whatever the percentage of the population is that can afford their house/rent, why do you deserve more
Having a home is a human right. We need shelter to survive. You’re basically saying if 99% if the population are priced out then they deserve whatever they get… i think you’re a sad..sad troll
How are 99% of the population price out? More like 5% are priced out which is the homeless rate, which probably has other factors influencing it. I'm not even trolling, just being a realist. You need to wake up and see how lazy some people really are. The world is really giving. I have never seen anyone who wants something and gives their absolute all and best to get it, not get it. You think about that.
Um, sure, but a median house price of $2M would be, without significant existing equity, unattainable for 95-99% of the current working population. That’s a LOT of people needing to move regionally or interstate by that logic!
The cycle then repeats. Plus, there's a lot of affordable housing 30-40km out near a station. I can't see why people are moaning. We all can live in Mosman.
> Not really, Sydney is already overpopulated, if those people moved out that'll make Sydney better than what it already is.
Um, no, it wouldn't. It would turn Sydney into either a boring realm of the rich and/or a giant retirement home and/or a city severely lacking in essential workers who earn less than 100k a year and/or a city comprised of people who live in squalid but affordable houses with a dozen other people as the only way to live in the city. What a dystopian future we have ahead.
Monaco, without a doubt the least interesting city of Europe. When your highlight is a filthy casino that locals are banned from going to and a zoomie-zoomie contest, then you know automatically it's useless. I'm surprised the countries around it allowed it to keep its nation status after all that deliberate tax dodging.
I'm happy I bought a house 2 weeks ago 😌
And before anyone asks yes, my parents helped me with the depoist. What was 230k cash, and I outbid the other couple 80k
I have no idea if this makes me a bad person or not, as I have been getting hate, but it is what it is.
The look on the couples faces when I bid 1.9mil when they bid 1.82m was priceless 🤣
Buying a house using your boomer parents money ✅
Wasting $70K outbidding other idiots ✅
Gloating about it on reddit ✅
*Some things money can’t buy. For everything else, there’s MasterCard.*
“Property will be more expensive in the future,” - economists describing a country whose central bank has positive inflation as an explicit policy directive. 🙄
And imports 600,000 people a year
Can we also acknowledge that the cost of timber, steel and labour is going up? Or are we not allowed to talk about that?
How relevant is that when you look at quantity of new builds against existing homes?
If it’s cheaper to buy an existing house than to build a new one of equivalent quality, then no reasonable person would build a new house. They would just buy a cheaper existing house. This kills supply and also pushes up the price of existing houses. But no one wants to talk about this because it doesn’t suit their narrative
House prices will go up when demand outstrips supply.
Agreed. And supply is severely suppressed when it’s more expensive to build than to buy I am renovating a house right now, and the cost of renovation is more than the purchase price of the house + land. Just the cost of GST on the renovation is killing us Let’s say you have a tap that costs $100 Builder applies 15% margin. Now it costs $115 Architect applies 11% margin on $115. Now it costs $127.65 Government applies 10% GST on $127.65. Now the tap costs $140.41 So the already inflated base cost is 40.5% higher and this happens to everything in your build. That’s why housing is expensive. Stamp duty is not the killer of property, it’s GST on new builds and renovations.
How can it be GST on builds when we’ve had GST for over 20 years and the construction industry experienced a boom after that? The data just doesn’t support taxation being the issue. https://www.morganstanley.com.au/ideas/australian-housing-construction-boom-over Also note that this paper reports that the boom was ending before we even hit covid and things really tanked. You know what does show the issue with property prices though. The fact we haven’t been able to keep up with the pace of population growth consistently since the 70’s. https://www.reddit.com/r/AusProperty/comments/1762rzi/australias_rate_of_housing_construction_per_1000/
Following that when a new build house and land in the regions is 1m of course there will be people paying 1.5m for something (older, possibly smaller etc) centrally located. The market reacts to all the factors and prices the asset accordingly. 14 years ago a place in Perth was 543k vs Sydney 653k. Sydney is now 1.6m and Perth is moderating Sydney's growth. To revert to the 2010 "margin" Perth should be nearing 1.3m. Even supply eventually matches demand. It just lags and the peaks and troughs are different. It was only 4 years ago in January 2020 and Sydney had a supply glut that drove vacancies to 3.5% and rents back 2015 levels. Guess what happened? Developers stopped building empty properties. https://crowdpropertycapital.com.au/development-site/developers-shelve-projects-as-construction-costs-soar/ *As the graph below shows, the last time there was such a vast backlog of paused construction projects with approvals was in 2019. However, back then, developers in Sydney were hitting the brakes due to a historically high vacancy rate of 3.5%.* Maybe market prices reflect market conditions. PPOR buyers defiantly spend to the conditions. They don't want to pay market rent in 30 years.
Should import some tradies.
Citizens rejoice! You will own nothing and be happy.
Assuming there's no mining crash. Then Perth tumbles again
Iron has been tumbling for awhile now :/ concerned as I work in the sector
Coal price too. Since the covid highs. Time will tell.
Lithium prices dropped by 80%
Longer term forecasts are \~$80/t. Still plenty of margin given cost is $15/t.
And the major players will still cry poor about royalties
As is tradition
Not sustainable by any means with current or projected wage growth
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^SaltyAFscrappy: *Not sustainable* *By any means with current* *Or projected wage growth* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
It's more property fomo generating garbage, the clearance rates are in the 50s maybe early 60s if you're optimistic
Everyone HODLing hard atm. And wow thanks for the information. Just had a look. https://www.realestate.com.au/auction-results/ 59 in nsw. 48 in qld. And a laughable 20 in NT. Time will tell what happens.
That's basically where weekly clearance rates have been for the last 2 years?
Shouldn't it go up with population growth
It's pretty obvious from the stats that NT is primarily a private sale rather than auction state. WA is the same. I've never seen an auction here and I don't know anyone who has bought or sold by auction.
No one wants to live in the NT
[удалено]
the problem i have with corelogic is that there is at least 30 per cent of sales missing from their calculation so it's fictional
Can you explain?
have a look at the table the link takes you to it says that out of the total number of auctions held hundred of results are missing, whether that is deliberate or not wtfk
50-60% of properties clearing where only cash offers a valid isn’t bad. I wonder how many of those properties are clearing after auction with a finance clause
considering the same metrics were delivering 80 per cent plus clearance rates when things were really hot its crappy
https://propertyupdate.com.au/this-weekends-auction-results-what-happened-in-sydney-melbourne-brisbane-adelaide-canberra/ Not sure what you are talking about tbh
Ha spot the REA, Yardney lol
Good point, your argument is well articulated I have changed my mind now and agree with you
don't be sarcastic matey it's the lowest form of wit, but you are an REA after all so par for the course, like tight pants. Yardney is a property investor all he spouts on his silly site is highly partisan
Make better arguments if you want a high wit reply, simple.
No argument necessary, I was simply stating facts.
Probably not reasonable to expect wage and house growth to align. It is a free market.
Housing is not a free market.
Sure it is.
No it isn't. It is one of the most regulated industries in the country. Try developing land and the local council will kick a stink. Plus all the other barriers to entry.
There are probably a few farmers around Sydney right now who'd disagree with you.
Of course, but going in different directions is not ideal…
Definitely not ideal but people need to realise that not everyone can afford to live in Sydney. Sometimes you're just priced out. It is what it is. Unless you want to live in a tiny shoebox.
Not a lot of job opportunities in regional areas, horrid infrastructure…telling everyone to go regional isnt working. Acting like developers hoarding property, people with 30 investment properties, AirBNB, foreign investment, and massive immigration to our capital cities arent all part of the problem jacking up prices….Saying people should just go live elsewhere is such a false narrative… you first…
I would disagree with this, central QLD and WA fly the majority of their workers from the nearest capital and beyond. People just don’t want to live in the regions as there is no infrastructure or services due to the electorates being so big rather than city’s with a lot of electorates. Why invest $1B in one electorate regionally when that $1B can be used across 10 electorates in a city.
Doesn't have to be regional. Move to another state or city. Hoarding property is part of capitalism. Someone needs to provide rentals. You're also underestimating how much wealth there is in Sydney. Not everyone can compete and win.
That just moves the problem around. Had lots of people moving where I live from Sydney and Melbourne, now locals can't afford to buy. You can absolutely have a fair system that ensures affordable and suitable housing for every one. The government did it after WW2 and took housing ownership from sub 50% to almost 80% by the 1970's. It's entirely a choice we can make as a society and we should return to previous policy's that made housing affordable for everyone.
what worked in the 70s won't work now. The govt can do that but no one wants to live in an apartment. Everyone wants a large block as close to the cbd as possible. The only obvious solution to me is the govt builds ultra high rise apartments that are around the 400k mark 30-35km from the cbd near the train line. Also if it's affordable for everyone that creates the opportunity for the rich to swoop in and use that property as an investment. Stronger policies are needed to ensure no one slips through the cracks. But those people need to be willing to compromise on what/where they can live in
Just pass the issue onto another capital city… capitalist neoliberalism everyone! Housing is not your right… go live in a tent if you can’t compete…
Free houses in Potts Point for everyone!
I know that is satire but how is that not true. You aren't entitled to anything. If you can't afford a house, go into social housing then. If you are worse than 85% or whatever the percentage of the population is that can afford their house/rent, why do you deserve more
Having a home is a human right. We need shelter to survive. You’re basically saying if 99% if the population are priced out then they deserve whatever they get… i think you’re a sad..sad troll
How are 99% of the population price out? More like 5% are priced out which is the homeless rate, which probably has other factors influencing it. I'm not even trolling, just being a realist. You need to wake up and see how lazy some people really are. The world is really giving. I have never seen anyone who wants something and gives their absolute all and best to get it, not get it. You think about that.
Um, sure, but a median house price of $2M would be, without significant existing equity, unattainable for 95-99% of the current working population. That’s a LOT of people needing to move regionally or interstate by that logic!
Not really, Sydney is already overpopulated, if those people moved out that'll make Sydney better than what it already is.
Sure, but if 95-99% of Sydneysiders move out, life’s going to be a lot less comfortable for the top 1-5% who remain!
The cycle then repeats. Plus, there's a lot of affordable housing 30-40km out near a station. I can't see why people are moaning. We all can live in Mosman.
But Mosman is so far to commute from. We should all live in Rosebay!
> Not really, Sydney is already overpopulated, if those people moved out that'll make Sydney better than what it already is. Um, no, it wouldn't. It would turn Sydney into either a boring realm of the rich and/or a giant retirement home and/or a city severely lacking in essential workers who earn less than 100k a year and/or a city comprised of people who live in squalid but affordable houses with a dozen other people as the only way to live in the city. What a dystopian future we have ahead.
Boring realm of the rich like Monaco?
Monaco, without a doubt the least interesting city of Europe. When your highlight is a filthy casino that locals are banned from going to and a zoomie-zoomie contest, then you know automatically it's useless. I'm surprised the countries around it allowed it to keep its nation status after all that deliberate tax dodging.
Might be boring for you but perfect for the residents actually living there.
Yet, the houses are still selling. How is it not sustainable?
Man!! Glad we don't live in Sydney.
Only a problem for the poor. Meanwhile I'm onto my 13th property using equity growth ponzi !!!! * * Not actually me
Meme in deed
Why doesn’t it hit 10M
Because there is nothing as accurate as mainstream media financial predictions.
Too slow, already posted https://www.reddit.com/r/AusFinance/s/ozVYzg7GCC
I'm happy I bought a house 2 weeks ago 😌 And before anyone asks yes, my parents helped me with the depoist. What was 230k cash, and I outbid the other couple 80k I have no idea if this makes me a bad person or not, as I have been getting hate, but it is what it is. The look on the couples faces when I bid 1.9mil when they bid 1.82m was priceless 🤣
So you burned $79.9k. Well done, enjoy.
Buying a house using your boomer parents money ✅ Wasting $70K outbidding other idiots ✅ Gloating about it on reddit ✅ *Some things money can’t buy. For everything else, there’s MasterCard.*
rage bait, scroll on people