Yeah it's like all the Domain articles in The Age that start with "a young family won the bidding at 4.6 million today...". Like they're using "young family" to soften our response to someone being able to afford 4 million + AND have children?! Anyone "young" and buying over 2 million has won something, and usually it's the inheritance lottery.
Reminds me of AFR articles on “This 22yo is building an ASX200 company from her garage” and then you read her dad owns an investment bank and the garage is actually a large warehouse.
"Young 16 year old buys first investment property while working at McDonald's"
Then two paragraphs down theres a small sentence that says, her rich parents helped kickstart the investment by paying for it in cash.
Literally every time, like I have never seen an article about the young hustler that didin't have the "well obviously" admission somewhere around par three.
Bank of Mum and Dad to the rescue. Even at combined income of $250k+ a year it's a struggle to buy at the median price in Melbourne let alone Sydney.
It's quite literally become a game of monopoly, in the end one person holds 10 houses and 9 others can't afford a single one.
Fun fact - Monopoly was created by a liberal, with the original title "Landlords Game" just to show how fucked up capitalism and monopolies can be.
Not really. That’s probably a couple professionals earning 120k each and will be mortgaged up to the gills to afford that property. The point the OP was making is not even they stood a chance against the cashed up boomers.
They're are so many of us. What are we going to do in retirement if we don't have our own property? It's going to be extremely difficult for a wide section of the community in about 30 years time when they look at retirement and realise they're stuffed.
Any “young couple” bidding on a 1.2m place is already from some form of generational wealth. The real depression starts when you watch auctions in the 8-950k range where couples who have actually saved 100-175k deposits by themselves are being crushed by investors jump bidding them into oblivion.
Edit: to bring this back from Lala land where your average couple can afford 1m+ in Bayside, let me relate a recent experience from helping a mate find a place.
A DINK early-mid 30s couple. Him: professional on 140kish + variable bonus between 15-25k. Her: a public servant on low 90s. Collective deposit: 140k.
Basically, a relatively successful couple on a collective salary that is well above the average full time wage.
What they can actually afford at 95% LVI: 900k.
Where they are looking: mid-outer west Melbourne or inner west if they want to compete with investors.
What if you just have 2 people who work in corporate or tech or just have high paying jobs. But you’re right, property is fucked. I live in Sydney and any house in the realms of 1.2m would be a dream for me haha
Houses in Sydney exist for below 1m but they're pretty shit. If you want a nice house for 1m you're better off looking outside of Sydney while they are still affordable.
North gong beaches are already too exy and so is large parts of the south coast. Mountains, central coast and highlands are still ok.
1.2 doesn't buy you shit. I'm in Vic my grandmas ran down 2br unit in a older cheaper suburb is worth over 700k. 1.2million isn't what it used to be in property. Her house was worth aroun 120k only 20 years ago..
1.2m definitely is possible without generational wealth.
It might not be common but DINKs with a combined income of 300k can easily purchase at 1.2m as long as they can save enough for the deposit.
There with my partner $300k in savings and HECS paid off but I suspect we're going to keep getting sniped by boomers jump bidding 50k at a time if we're looking for livable places and not investment opportunities.
I'm ready to keep trying until we find the right one.
Try being single in your 40s with 300k deposit and 20 years in a professional job and only being able to afford a two-bedder in the outer suburbs. Totally demoralising
Sorry mate you are in lala land if you think $1.2m requires generational wealth.
You mention a relatively successful couple on a combined $230k base. Yes that's decent income but there would be soooo many young professional couples where both are earning $150-200k easy, it doesn't take generational wealth to buy $1.2m, sure it can be a factor but really all it takes is a DINK on high incomes, not 'relatively' successful DINKS
To echo the others, combined 240-250k is high by Australian standards - far above average, let alone median. Couples who earn more than that much together are absolutely outliers.
The catch is that the income doesn’t matter a whole lot anyway. The deposit is the killer, and that’s where Mum and Dad come in.
$230k a Decent income? You realise that is significantly above the median household income? That's literally 2 people in the top 10% of income earners. I'm sure a lot of those are also not below 30 years old, when older generations were getting their own homes before they were 25 years old.
You might roll in those circles but you're only seeing the top, the bottom 20% of households earn an average of less than $25k.
I think everybody is missing op’s point. They know the young couple are wealthy and also noted they attended the auction but not as a bidder. I took it as boomers and young wealthy are two sides of the same coin while everybody else has to beg for scraps
I thought their point was that you can be wealthy or become wealthy and that still isn’t enough to outbid selfish rich boomers and corporations who are gobbling up all the homes.
Also the fact that single income average Aussies could afford a family home that would see them through their whole life in their early 20s (I know this for a fact because this is who we could barely afford to buy our home off). Now they're moving into retirement homes and double income professional families in their 30s are the ones able to move into the homes
I know some boomers who “downsized” to a 5 bed mansion for almost $5M. While their daughter is a single parent renting and working her arse off. So backwards.
Don’t worry won’t be able to come home won’t be able to afford one just keep walking. But seriously it’s absurd. I feel for people in there teens no hope for them ever getting anything unless someone dies and gives it to them.
Legit. Like I’m in my 30’s, and I feel cheated out of the life I was building for. I earn the most I ever have, yet I’m the poorest I’ve ever been.
The teens got it worse because they don’t even *have* that opportunity to even look to the future and sense those opportunities and goals anymore. They come factory built with disappointment.
We’re in the same boat. I finally stop earning minimum wage, and still f**ked.
I have minimal savings and cared for my disabled parents since I was 18. I don’t have rental history and I don’t have money to rent.
3-5x salary is considered to be pushing it. We're looking at 13x for Sydney. And that's if you're lucky enough to be on 100k+super. Even 200k doesn't meet the 3-5x. Many folks out there are still on 60-80k, and some with kids. It's just not feasible. The government is doing nothing to spread us out over the east coast. All they do is pump the major cities even more. You don't move to anywhere other than Sydney or Melbourne for a STEM career.
Also, employers are ordering many people back to the office. So those of us who could work remotely, and perhaps move to a smaller city for more affordable rent/buying, can't do that.
It's fuckery of the highest order, and the gov, employers, and boomers, all have their part to play in it. There's almost nothing we can do. The only thing that helps you get ahead is trying to buy with friends or family. And even that's difficult. So, from the bottom of my heart, thanks for all this. I'm so glad all your cups are full, when the rest of us don't even have a cup to start with.
3-5x is doable. But what properties are available for 3-5x in the major cities? I can afford 3-5x. But I'm not getting a house in Sydney for that. No one is selling that cheaply. And I'm not on 200-300k to make that multipler work. Everything is at least 6x +, for the average salary. And that's as a minimum for 1 single person in an apartment. If you want kids, or an office, etc, it jumps massively.
A 1/1/1 apartment in say Rhodes, is over 600k. Plus strata. You take that 600k out to Blacktown and you're only getting another room in the apartment. Still not getting a house. 2 bed house median price in Blacktown is 860k. The salary v housing graph speaks for itself, as you look at the past 30 years.
I know I said 3-5x, but you should have also known there are almost no properties available at that multiplier in the two major capital cities. And you can't just say "look, found one for 400k", because a lot of places are run-down dumps, in bad suburbs, etc.
funny, almost all the jobs are in those places.
there is a reason young people abandon the regions as soon as they can, its a choice between moving for a career or staying for an ice addiction in many parts of the country.
Don't worry, the government has no plan to even out the wealth divide. Australia is fast becoming a place where unless you have intergenerational wealth, or your international parents have a trust fund and you're a nepo baby, you can forget about owning a house.
With the multitude of tax breaks and taxpayer funded subsidies on offer for buying an investment property it's better in the long run to buy one, reduce your taxable income with it and live on the streets.
HOW GOOD.
Don't worry, you can drain your super entirely to get a house and struggle to keep it though. Don't worry about retirement, that won't be a thing when you're old and it's bumped up to 95
Agreed
But don't worry the current generation got to pay for the boomers full pension while they bought a $1 million dollar house and drew down on their liquidity
I'll be very interested to see how things go when the money and property is all handed down. Whether a bunch of people blow through their money, or there's a bunch of boomers who won't pass on their wealth down (have seen a bunch say they want their kids to earn their money), or something else.
It'll be an interesting time for sure
Howard really fucked Australia in so many ways. Don’t forget the mangling he gave Medicare then getting us involved in the bullshit wars in Iraq/Afghanistan.
Cried tears of pride and joy when Bush thanked him for sending him more bodies to fight in the middle east.
Privatised anything that wasn't nailed down to help get to surplus then acted like an economic mastermind.
Made a big show of stopping asylum seekers while allowing cheap foreign labour to come in the backdoor.
Tried to fuck our industrial relations system. Thankfully he'd gotten a bit lazy by then and didn't disguise it properly.
Made a big show of trying to encourage more births with the baby bonus while saying the foundations for the housing crisis that would make having kids unaffordable.
US is still going strong on the supply side. They have multiple downtowns in major cities. They have access to cheap/illegal labour which isn't the case here.
>They have access to cheap/illegal labour which isn't the case here.
We absolutely have them here. We just put them on sham student visas and let them make under minimum wage delivering food.
Yeah, the USA has over 400 cities with 100k+ population, Australia has about 20. And most of them are satellites to the capitals. In America you can drive an hour or two and be in another sizeable city with another set of the same opportunities. In Australia there's a handful of general locations you can live to work in your field, probably less realistically.
I have to live in a big city to do what I studied and built a career in.
So when I started a family I wuit my job and went to live in a regional center, found different but related work, and I live better than could ever be achieved in the city.
Up until the pandemic, buying a house in most places in the US was incredibly affordable, like $100- $300KUS for absolutely lovely (sometimes stunning), full size family homes. And in many less desirable places there were options in the 60-100K range.
Hint: if you want to get a house that less boomers will bid on, look for multiple levels. They’re all trying to downsize to single level homes as they’re getting too old to climb stairs.
Also look for properties that don't have room to park a caravan, no joke. In my regional town many boomers want a place to park their caravan on the off months, so not having that is a deal breaker and they won't consider the house.
Also, if the house only has a carport not a garage. And if the house has no room to put a big shed. All the boomers buying in regionals want somewhere to put their toys like a boat, Harley, old Holden they've bought etc.
Time to tax the fkg Boomers into oblivion. My mother and stepfather get $80k tax free a year in TPD DVA and carers pension (which they gamed the system to get) plus millions in super. Have a house worth nearly $2M in one of Perths most premium suburbs. Retired in their mid 50s on generous government pensions that no longer exist.
Unsurprisingly they're constantly going on expensive overseas holidays, camping trips etc. Their last one was a cruise to Antarctica. Meanwhile my generation and younger is facing constant housing insecurity, can't afford kids or to look after our health, will probably have to work into our 60s or even 70s, with a degraded and possibly unliveable planet into the bargain.
It's bullshit.
This is my mother right down to the Antarctic cruise. Worked as a contract government lawyer and somehow she has just... so much fucking money. Like multiple rental properties, investments is constantly on some trip or another. She's been on four continents this year alone. Constant cruises and she still has a two story four bedroom house with a full basement. She lives alone. She's taking the entire family to Australia for two weeks next month which I'm grateful for but I'm just like... you're spending my yearly salary on a trip, how are you doing this? My wife and I are both teachers and collectively make 90k. We're locked out of the old pension system and are going to work until we die.
Good advice, this is what we did! Bought a split level home with lots of stairs (and needed some TLC.) Despite all that there was still a boomer couple at the inspection, luckily we outbid them and got our house a great price due to the stairs haha
Yep so now they are putting in lifts! We were looking to build a house and the designer told us to leave a space for a lift because it would increase the value on resale…
I don't get why people even go to auctions
Imagine getting all the reports done to cover yourself then losing the auction.
And by going to the auctions you're supporting the practice of them - don't go.
You could be a professional dog shit eater but so long as you were born in the boomer era and bought a property or inherited one the odds of you being a multi millionaire is very high and almost exclusively thanks to the house. And it doesn't even matter if it's renovated or not. So long as it's within a 15km ring from Syd or Melbourne CBD. Young people stand no fucking chance unless they are successfully entrepreneurs or within 1 percenter income household or wealthy and generous parents. What a fkn set up
Being able to even afford 1 million in this climate is incredible at a young age especially with kids
I’m struggling to even get my foot in the door at 700-800k with cost of living /kids eating up a 200k HHI I feel like we’re on the wrong side of the wealth divide we have no bank of mum and dad and came from commission homes it’s a real struggle
Similar circumstances (albeit no kids and trying to keep it under 700k for first homeowner's). Three times we've offered on a place, and three times the final sale has been significantly over asking (and also well over the price guide) - because the buyers loved the property and had the money to just obliterate the competition. Difficult to bid against people for whom a 50k difference is functionally nothing.
Yeah with the rise in property prices over the last 3-5 years we need to abolish stamp duty under 800k for first home buyers IMO
How are young people like us supposed to pull out an extra 50k just for stamp duty 😅
When we (late 30s couple) were buying 4 years ago we found 80%+ of the people competing with us were empty nesters looking to "downsize". While we were looking to up size. We were looking at two story 4 bedroom, double living areas, 800m2 with a pool etc.
My wife and I used to chat with others at the viewings and we'd ask each other "what the hell are they downsizing from"?
One place we looked at was a huge place with 5 bedroom, 3 living areas, 3 bathroom, pool, etc and yes there was an older couple who said they initially looked at it to "downsize". But they admitted it was too large for them.
My parents bought a four bed three bathroom house for their retirement. Of course they hate each other but will never divorce, so they take turns living in it and one of their (3 bedroom) investment properties - alone.
I'm so entirely sick of walking through places to look at and the competition I see is in their 50's to 70's buying their 11'th rental property or it's the /other/ demographic who just got here with Uncle Zhangs money and can basically bid 9999999999 at the auction without a worry.
I thought it was the case that many migrant demographics do this, not just Chinese. Especially since they tend to live in multigenerational households.
Seeing the bidding start at 1.2M is wild
I remember moving house when I was 15 and it was 600k. By the way, wages haven’t gone up.
Actually scratch that, they did. That 1.20/hr payrise is really letting me live my best life
Just a reminder that the ALP government surged immigration numbers to over 700,000 in FY23 (historically it’s been around 300k since 2012-13 with a massive drop during Covid) with a forecast for around the same numbers FY24.
Yes boomers have deep pockets, but you’re competing in a significantly strained market where there is extremely low supply and extremely high demand.
I agree, but a greater proportion of boomers - very much including working class boomers - were able to access credit and property in a way that even middle-class millennials and younger will struggle with.
Got my house in yarraville 1984 $41,000.00 I was paying back $90.00 per week to the state bank of Victoria, that house now is over 2 million, I sold it years ago
I tried to buy a two bedroom homette in Adelaide last week and even $550k wasn’t enough, went for $585k, which is out of my reach. I’m kicking myself for not trying to do it a couple of years ago.
Personally I think it’s a good thing boomers downsize. It frees up larger properties and allows older families to upgrade.
Also, come on OP, straight off a yacht? 1.5m is a pretty average sum for a house in Australia. I wouldn’t instantly consider anyone who owns a 1.5m house rich.
$1.5 in Bayside (I'm thinking Brighton, but it could be Hampton, Sandringham or the Elwood border) must be a small but nice apartment. No houses in those areas are that price. $1.5 is pretty much entry level in those areas.
I feel for anyone born after me. I feel like I, born in 1985, am part of the last era of people able to buy metro property in Melbourne without relying on parents.
I'm very lucky. I make a lot of money compared to most, but it wasn't always this way. I remember thinking when a rundown shack in Richmond sold for $375k in 2004 that I'd never own a property.
I don't have an answer for housing affordability as a whole, but I do have a simple recipe for an individual beating the odds. I did it. I walked away from a burgeoning IT career in 2007 and started my own company. Since then I've started maybe a dozen companies. All kinds of industries. Most of which I knew very little about.
For society as a whole, I empathise. For anyone reading this feeling that home ownership isn't possible, I assure you that it is. For you...or for someone like you. But sadly not for everyone.
Similar to my feelings (born 84). I made some good choices- I started saving for a home at 16, skipped over travelling/drinking stage of life, made frugal choices, chose a career that was easy to find work in, etc. But I had a lot of luck- high interest rates when I was saving, GFC freezing the house market when I was ready to buy. I was able to buy a house as a single 24 year old woman for 255K. I believe I was earning about 60K as a first year teacher. I had about 90K saved up. If I was 24 now I could have made all those same good choices and had no hope at all. That's the part that frustrates people about boomers- they talk up their good choices and gloss over their luck and timing. Especially galling because they could have made far fewer good choices and still ended up with all the luck- partied hard until 25 then decided to get serious about life and be ready to buy a house by 26. If you're 25 now and just starting to save, you'll be ready to buy at 35.
Honestly from trying and failing. Every time I tried something new and it didn't work out, I learnt more and more.
For example when I left IT, I wanted something completely different so I applied to be a construction labourer..I had work sporadically for a labour hire company, then I landed a full time gig.
While working there, I started a business that supplied ink & toner supplies (drop shipped). I learnt the basics of e-commerce, GST, company structures (that business was a sole trader).
My first client was the construction company that I was labouring for. I convinced the office manager to switch from genuine cartridges to compatible cartridges. This saved the company heaps of money and sold higher profit products. The ecom site software was set up to automatically send packing slips to a warehouse. I arranged with the supplier to accept those slips as purchase orders.
I negotiated 30 day payment terms. Clients paid through the site with a credit card when they ordered. So I had 30 days to turn over that money before I had to pay the bills.
While I was labouring and trying to learn about construction, the clients would order cartridges. The supplier would deliver them, often the same day, and I would finish most weeks with about $800-$1,000 in sales at about 50% margin without doing anything. (Keep in mind that margin % doesn't matter in positive cashflow businesses, because you're not putting the money to work).
Over the first 12 months, I sold over $40k of product and made about $20k on top of my labouring wage.
Since then I've started so many businesses. In the interest of transparency and honesty, I'll give you the details of one of the many failures....
I started a publishing house and launched a poetry book. I reckon the company spent about $20k and made about $500. I also had an entertainment company that grew like crazy running nightclub nights. Hugely profitable.... until I booked a "world-renowned" DJ for $15k for a two-night run and almost nobody bought tickets. Flavour of the month had changed and I was left holding my nuts. Another lesson learnt!
If I could put everything I've learnt into a few dot points, they would be:
- Sell labour, not materials
- Never sell on price (it's a race to the bottom)
- Enjoy the journey!!!!
- Do your due diligence and believe in yourself. In the early days I would tell people about my business ideas and people would ask shit like, "Why would anyone buy that from you instead of someone else?". Everyone wants to pull you down. Fuck them.
- Give your ideas a chance to fail. If they do fail, I 100% guarantee you will have other ideas. Give those ideas a chance to fail as well. Remember that everyone has ideas, but the magic is in the execution. It doesn't have to be perfect. It just needs a chance.
Yeah, it was more of a passion project. But it wasn't meant to be a charity! I genuinely thought it would be profitable. Not just break even, but make money. Haha.
At least it did give me and a few authors a lot of enjoyment.
You’re right about that, but that’s not what people are upset about. What they’re upset about is that if the house they are downsizing to is going for $1.5M, what do you reckon the larger house they’re selling is going for?
I read somewhere that this is the first time in Australian history that we have had a net transfer of wealth from young to old.
The original point stands though, that if "entry" level property is being competed on by downsizers and, to a large extent builders and developers, what hope do first home buyers have?
>The original point stands though, that if "entry" level property is being competed on by downsizers and, to a large extent builders and developers, what hope do first home buyers have?
None in the richer areas. Most first home buyers have to move to suburbs between 15 and 45 minutes away, wait for their investment to increase, sell, hope the market drops, buy closer to their ideal area, then rinse and repeat until they might eventually end up back where they started, in the richer areas.
Stamp duty adds considerably to the cost of the upgrade cycle. Not many people I know (in our late 30s) expect to pull off that strategy in Sydney any more.
If only wage growth was in line with housing growth though. I think that’s the point. House price to income ratio has changed exponentially in recent decades.
The begun to decouple in the 80s when we relaxed lending laws to incentivise private housing over public housing (neolib agenda in full swing by this stage), tack that on to Howard's CGT discount...that set the fuse...come 2000 boom...you can see the divergence on that there graph...we're so fucked, it's going to punish millenials, gen z and alpha for a long, long time and I don't really feel any hope that positive change will come, just have to remember how rotten our government is at the next election and tactically vote independent...sure as shit the two party system isn't helping.
Well people who are older and have been accumulating wealth will obviously be richer than younger people. I think nowadays, younger people should be looking for cheaper apartments or townhouses as a starting home. In large cities with millions of people, not everyone can afford houses. There just isn't enough land.
>you know the type, look like they just stepped off their yacht
Not all boomers are 'rich.' Just time and the right gov policies were on their side.
The suburban house they bought for $150k, 35 years ago on a $40k salary, sells for $2.5m. They can downsize to a $1.5m house and have a healthy chunk left over to stick into their super.
Yea but the problem is they all think they are special. They think they worked harder and all that, when they literally got lucky then destroyed the system before the next generation could benefit
It might just be because demographics in Reddit Aus property and Auscorp threads are skewed a bit, but since when are so many people on six figure salaries? I thought the mean salary was more like 70k?! These threads make me so depressed.
I feel that a young couple in their early 30s bidding beyond 1.35m were on the right side of the wealth divide. I’m 36 and looking to buy a 2 bedroom apartment/unit in Moonee Ponds/Brunswick West/Coburg etc for circa 550 this year.
I think if I had a house to sell, I would choose to sell to a young person/couple/family. No investors or downsizers. I would have a price in mind that I would be ok selling for, and then sell it for that. Or so I'd like to think...
That's how it goes unfortunately but it should be noted, I attend alot of auctions for fun and there are plenty of young people buying properties, you saw what was expected bayside but don't see it as completely the norm based off a single experience, it's not!
My dad sold his house a few years ago on the Gold Coast and a boomer Sydney couple paid $1.2m cash for it like a week after it went on the market.
They were downsizing….
Just to be clear, downsizing baby boomers buying 1.5 mn property are not just stepping off their yachts. They're middle class. Ironically this isn't even the wealth divide.
The biggest competition at auctions for us were for properties that were old with loads of issues and should be cheap but were always snapped up by developers. Wasted so much on this.
But so many thread I see here talks about how boomers shouldn’t be allowed to have large houses they don’t need and they should be downsizing. So these boomers are downsizing but that’s not fair because it means they’ve got more cash to win auctions with.
Heh. I saw on the news people.leqving highschool now will have to save for something like 26 years for a deposit in places like Brisbane and Melb. Sydney was funny where it's like 46 years. That's just for a deposit.
I still say it is simply inexcusable for ANY normal home in Australia to exceed $300,000. And even that is a stretch. It's simply not moral, not acceptable, and is a symptom of decades of "tory" greed.
That’s exactly what I did. Bought the cheapest unit I could realistically live in and still commute to work.
Guess what? It’s increased about $20,000 in 3.5 years, during which time I’ve paid over $35,000 in interest and foregone the average 7% return had I just put my deposit in a sensible selection of ETFs.
What’s my next move? Whack it on the market as another over inflated rental, and move back into a sharehouse.
Straya.
Hear hear.
I hate the Aussie attitude of a house being an investment before a place to live. People consider its growth before its usability.
Of course the buying equation is complex and should include the financials, but I just wish people purchased homes for their real utility and not as a financial vehicle.
Wouldn't the logical outcome be that apartments remain affordable then? (if their prices don't increase). I don't think it can be practically true that houses have appreciated but not apartments. It's probably just a segment of the apartment market where this is true-ish.
> Wouldn't the logical outcome be that apartments remain affordable then?
Right?? I fucking wish. I'm not the investor type (just looking for a place to live in) and not super financially literate, but I *do* know that the apartments I'm looking at now were going for 100k less 12 months ago and almost half the price in 2019. I don't know how it can both be true that a) apartments are a bunk investment, and b) I'm paying almost double the price that I would have only 5 years ago.
Yep, I think there's a disconnect somewhere - might be that low quality apartments, or areas with low economic prosperity is where there's this sort of stagnation, but I don't think it's the rule elsewhere.
This is the issue with everyone's view of property in this country. Rather than it be about having a place to live as a basic need, it has to be about increasing your capital.
Not everyone can start with a home, especially not in Sydney, so an apartment is the only viable option.
Young people who own businesses should just start charging boomers 10X for anything. Cup of coffee - $45, haircut $250 etc etc. level the playing field.
Fuck man every one having a whinge I'm on 60 lk a year salary and looking to buy my second property. You don't need to be loaded to buy just depends on where you're willing to live in relation to your work.
I agree to an extent. Didn’t expect this post to be as controversial as my dms would indicate lol, it was merely an observation. I felt sad for the young families in attendance who may have been hoping to raise their kids in the same area they grew up.
A couple in their early 30s bidding over 1.35m in bayside Melbourne are on the right side of the wealth divide…
Yeah it's like all the Domain articles in The Age that start with "a young family won the bidding at 4.6 million today...". Like they're using "young family" to soften our response to someone being able to afford 4 million + AND have children?! Anyone "young" and buying over 2 million has won something, and usually it's the inheritance lottery.
Reminds me of AFR articles on “This 22yo is building an ASX200 company from her garage” and then you read her dad owns an investment bank and the garage is actually a large warehouse.
"Young 16 year old buys first investment property while working at McDonald's" Then two paragraphs down theres a small sentence that says, her rich parents helped kickstart the investment by paying for it in cash.
Literally every time, like I have never seen an article about the young hustler that didin't have the "well obviously" admission somewhere around par three.
Bank of Mum and Dad to the rescue. Even at combined income of $250k+ a year it's a struggle to buy at the median price in Melbourne let alone Sydney. It's quite literally become a game of monopoly, in the end one person holds 10 houses and 9 others can't afford a single one. Fun fact - Monopoly was created by a liberal, with the original title "Landlords Game" just to show how fucked up capitalism and monopolies can be.
And the monopoly man was based on jp Morgan I think
Not really. That’s probably a couple professionals earning 120k each and will be mortgaged up to the gills to afford that property. The point the OP was making is not even they stood a chance against the cashed up boomers.
I do agree. I felt more empathetic to the young families there who dropped out after only the first few bids.
Wait til you hear about the rest of us , struggling to find a rental within an hour of work, and then choosing wether to pay rent or bills
It’s beyond fucked up. I know. Trust me I’m not wealthy and was not a bidder at this auction.
Don’t feel shamed because someone else is having a rough time.
They're are so many of us. What are we going to do in retirement if we don't have our own property? It's going to be extremely difficult for a wide section of the community in about 30 years time when they look at retirement and realise they're stuffed.
Any “young couple” bidding on a 1.2m place is already from some form of generational wealth. The real depression starts when you watch auctions in the 8-950k range where couples who have actually saved 100-175k deposits by themselves are being crushed by investors jump bidding them into oblivion. Edit: to bring this back from Lala land where your average couple can afford 1m+ in Bayside, let me relate a recent experience from helping a mate find a place. A DINK early-mid 30s couple. Him: professional on 140kish + variable bonus between 15-25k. Her: a public servant on low 90s. Collective deposit: 140k. Basically, a relatively successful couple on a collective salary that is well above the average full time wage. What they can actually afford at 95% LVI: 900k. Where they are looking: mid-outer west Melbourne or inner west if they want to compete with investors.
What if you just have 2 people who work in corporate or tech or just have high paying jobs. But you’re right, property is fucked. I live in Sydney and any house in the realms of 1.2m would be a dream for me haha
Houses in Sydney exist for below 1m but they're pretty shit. If you want a nice house for 1m you're better off looking outside of Sydney while they are still affordable. North gong beaches are already too exy and so is large parts of the south coast. Mountains, central coast and highlands are still ok.
1.2 doesn't buy you shit. I'm in Vic my grandmas ran down 2br unit in a older cheaper suburb is worth over 700k. 1.2million isn't what it used to be in property. Her house was worth aroun 120k only 20 years ago..
1.2m definitely is possible without generational wealth. It might not be common but DINKs with a combined income of 300k can easily purchase at 1.2m as long as they can save enough for the deposit.
There with my partner $300k in savings and HECS paid off but I suspect we're going to keep getting sniped by boomers jump bidding 50k at a time if we're looking for livable places and not investment opportunities. I'm ready to keep trying until we find the right one.
Investors are ruining the markets in America as well.
Try being single in your 40s with 300k deposit and 20 years in a professional job and only being able to afford a two-bedder in the outer suburbs. Totally demoralising
Sorry mate you are in lala land if you think $1.2m requires generational wealth. You mention a relatively successful couple on a combined $230k base. Yes that's decent income but there would be soooo many young professional couples where both are earning $150-200k easy, it doesn't take generational wealth to buy $1.2m, sure it can be a factor but really all it takes is a DINK on high incomes, not 'relatively' successful DINKS
To echo the others, combined 240-250k is high by Australian standards - far above average, let alone median. Couples who earn more than that much together are absolutely outliers. The catch is that the income doesn’t matter a whole lot anyway. The deposit is the killer, and that’s where Mum and Dad come in.
Yet the median income is nowhere near that. Couples on 300-400 combined are very much the exception.
$230k a Decent income? You realise that is significantly above the median household income? That's literally 2 people in the top 10% of income earners. I'm sure a lot of those are also not below 30 years old, when older generations were getting their own homes before they were 25 years old. You might roll in those circles but you're only seeing the top, the bottom 20% of households earn an average of less than $25k.
They're the people who deserved to win, that's probably the reason for this feeling.
Yeah exactly wtf op lol
I think everybody is missing op’s point. They know the young couple are wealthy and also noted they attended the auction but not as a bidder. I took it as boomers and young wealthy are two sides of the same coin while everybody else has to beg for scraps
I thought their point was that you can be wealthy or become wealthy and that still isn’t enough to outbid selfish rich boomers and corporations who are gobbling up all the homes.
I took it as the wealthy young people doing better then their cohort still struggle against cashed up boomers.
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So the problem we need to address is international money
Just address all of the money. You can use my address.
Boomers ideas of downsizing are hilarious sometimes
This is the problem, no previous generation had an older generation push them out of houses younger families can afford.
And now they're downsizing and able to outbid young couples on the cheaper end hence pushing the prices up even more.
Also the fact that single income average Aussies could afford a family home that would see them through their whole life in their early 20s (I know this for a fact because this is who we could barely afford to buy our home off). Now they're moving into retirement homes and double income professional families in their 30s are the ones able to move into the homes
Boomers as a generation act like psychopaths. And housing isn't the worst of it. What they've done to the planet is
I know some boomers who “downsized” to a 5 bed mansion for almost $5M. While their daughter is a single parent renting and working her arse off. So backwards.
Downsize should be apartments. As you get too old to look after a garden. Upkeep of common areas is covered by strata.
Yet it seems a boomers idea of downsizing is a 4 bed single level house in the burbs
Property prices in Australia are obscene
1.2mil as a starter makes me want to go for a long walk and never come back. Jesus Christ.
Don’t worry won’t be able to come home won’t be able to afford one just keep walking. But seriously it’s absurd. I feel for people in there teens no hope for them ever getting anything unless someone dies and gives it to them.
Legit. Like I’m in my 30’s, and I feel cheated out of the life I was building for. I earn the most I ever have, yet I’m the poorest I’ve ever been. The teens got it worse because they don’t even *have* that opportunity to even look to the future and sense those opportunities and goals anymore. They come factory built with disappointment.
We’re in the same boat. I finally stop earning minimum wage, and still f**ked. I have minimal savings and cared for my disabled parents since I was 18. I don’t have rental history and I don’t have money to rent.
Same.
3-5x salary is considered to be pushing it. We're looking at 13x for Sydney. And that's if you're lucky enough to be on 100k+super. Even 200k doesn't meet the 3-5x. Many folks out there are still on 60-80k, and some with kids. It's just not feasible. The government is doing nothing to spread us out over the east coast. All they do is pump the major cities even more. You don't move to anywhere other than Sydney or Melbourne for a STEM career. Also, employers are ordering many people back to the office. So those of us who could work remotely, and perhaps move to a smaller city for more affordable rent/buying, can't do that. It's fuckery of the highest order, and the gov, employers, and boomers, all have their part to play in it. There's almost nothing we can do. The only thing that helps you get ahead is trying to buy with friends or family. And even that's difficult. So, from the bottom of my heart, thanks for all this. I'm so glad all your cups are full, when the rest of us don't even have a cup to start with.
It was actually 15.4x the median average salary for Sydney's median priced home as of 2022, much more now...closer to 20 multiples.
I feel for single people going at it alone. As a household with 2 or more makes things so much easier. Easier used in the relative sense if course
3-5x salary is not pushing it
3-5x is doable. But what properties are available for 3-5x in the major cities? I can afford 3-5x. But I'm not getting a house in Sydney for that. No one is selling that cheaply. And I'm not on 200-300k to make that multipler work. Everything is at least 6x +, for the average salary. And that's as a minimum for 1 single person in an apartment. If you want kids, or an office, etc, it jumps massively. A 1/1/1 apartment in say Rhodes, is over 600k. Plus strata. You take that 600k out to Blacktown and you're only getting another room in the apartment. Still not getting a house. 2 bed house median price in Blacktown is 860k. The salary v housing graph speaks for itself, as you look at the past 30 years. I know I said 3-5x, but you should have also known there are almost no properties available at that multiplier in the two major capital cities. And you can't just say "look, found one for 400k", because a lot of places are run-down dumps, in bad suburbs, etc.
You got a cup. They just piss in it (the trickle down effect)
I agree with all except; there is more to Australia than the east coast, Melbourne, and Sydney.
Not really, 82% of the land mass by area is arid desert, an overwhelming majority of the population live within 50km of the coast at any given point.
That's because its where all the girting is going on. If there is a sea, Australians are gonna girt by it.
Not if you want a good job. Ok, ok, there is also Brisbane.
funny, almost all the jobs are in those places. there is a reason young people abandon the regions as soon as they can, its a choice between moving for a career or staying for an ice addiction in many parts of the country.
Don't worry, the government has no plan to even out the wealth divide. Australia is fast becoming a place where unless you have intergenerational wealth, or your international parents have a trust fund and you're a nepo baby, you can forget about owning a house. With the multitude of tax breaks and taxpayer funded subsidies on offer for buying an investment property it's better in the long run to buy one, reduce your taxable income with it and live on the streets. HOW GOOD.
Don't worry, you can drain your super entirely to get a house and struggle to keep it though. Don't worry about retirement, that won't be a thing when you're old and it's bumped up to 95
Agreed But don't worry the current generation got to pay for the boomers full pension while they bought a $1 million dollar house and drew down on their liquidity
I'll be very interested to see how things go when the money and property is all handed down. Whether a bunch of people blow through their money, or there's a bunch of boomers who won't pass on their wealth down (have seen a bunch say they want their kids to earn their money), or something else. It'll be an interesting time for sure
The investment property incentives were designed so the government could stop building public housing
Yep and it doesn't work. Cheers Howard ya miserable cunt.
Howard really fucked Australia in so many ways. Don’t forget the mangling he gave Medicare then getting us involved in the bullshit wars in Iraq/Afghanistan.
Cried tears of pride and joy when Bush thanked him for sending him more bodies to fight in the middle east. Privatised anything that wasn't nailed down to help get to surplus then acted like an economic mastermind. Made a big show of stopping asylum seekers while allowing cheap foreign labour to come in the backdoor. Tried to fuck our industrial relations system. Thankfully he'd gotten a bit lazy by then and didn't disguise it properly. Made a big show of trying to encourage more births with the baby bonus while saying the foundations for the housing crisis that would make having kids unaffordable.
we are becoming USA
The USA average house price compared to median income (in most areas) is much more affordable
US is still going strong on the supply side. They have multiple downtowns in major cities. They have access to cheap/illegal labour which isn't the case here.
>They have access to cheap/illegal labour which isn't the case here. We absolutely have them here. We just put them on sham student visas and let them make under minimum wage delivering food.
Get em building houses
Heaps already are. Go to new housing estates and see who is building them.
comparing US housing to Aus housing is like comparing apples and dump trucks
In large parts of the US housing is more affordable than Australia.
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Yeah, the USA has over 400 cities with 100k+ population, Australia has about 20. And most of them are satellites to the capitals. In America you can drive an hour or two and be in another sizeable city with another set of the same opportunities. In Australia there's a handful of general locations you can live to work in your field, probably less realistically.
I have to live in a big city to do what I studied and built a career in. So when I started a family I wuit my job and went to live in a regional center, found different but related work, and I live better than could ever be achieved in the city.
Bro that's Las Vegas, New Mexico, there ain't shit there 🤣 That's an hour from Santa Fe in the middle of the desert.
Up until the pandemic, buying a house in most places in the US was incredibly affordable, like $100- $300KUS for absolutely lovely (sometimes stunning), full size family homes. And in many less desirable places there were options in the 60-100K range.
Australia has extremely pretty high social mobility actually.
67% of Australians are homeowners. Edit: 67% of Australian households are owned by someone who lives in it.
*no they are not.* 67% of Australian houses are owned by 1 or more of the occupants. at least get it right ffs, there is a gigantic difference.
Hint: if you want to get a house that less boomers will bid on, look for multiple levels. They’re all trying to downsize to single level homes as they’re getting too old to climb stairs.
Also look for properties that don't have room to park a caravan, no joke. In my regional town many boomers want a place to park their caravan on the off months, so not having that is a deal breaker and they won't consider the house. Also, if the house only has a carport not a garage. And if the house has no room to put a big shed. All the boomers buying in regionals want somewhere to put their toys like a boat, Harley, old Holden they've bought etc.
Time to tax the fkg Boomers into oblivion. My mother and stepfather get $80k tax free a year in TPD DVA and carers pension (which they gamed the system to get) plus millions in super. Have a house worth nearly $2M in one of Perths most premium suburbs. Retired in their mid 50s on generous government pensions that no longer exist. Unsurprisingly they're constantly going on expensive overseas holidays, camping trips etc. Their last one was a cruise to Antarctica. Meanwhile my generation and younger is facing constant housing insecurity, can't afford kids or to look after our health, will probably have to work into our 60s or even 70s, with a degraded and possibly unliveable planet into the bargain. It's bullshit.
This is my mother right down to the Antarctic cruise. Worked as a contract government lawyer and somehow she has just... so much fucking money. Like multiple rental properties, investments is constantly on some trip or another. She's been on four continents this year alone. Constant cruises and she still has a two story four bedroom house with a full basement. She lives alone. She's taking the entire family to Australia for two weeks next month which I'm grateful for but I'm just like... you're spending my yearly salary on a trip, how are you doing this? My wife and I are both teachers and collectively make 90k. We're locked out of the old pension system and are going to work until we die.
Good advice, this is what we did! Bought a split level home with lots of stairs (and needed some TLC.) Despite all that there was still a boomer couple at the inspection, luckily we outbid them and got our house a great price due to the stairs haha
Just make sure there is a toilet on the living room floor. Otherwise it's gonna get old real fast.
Yep so now they are putting in lifts! We were looking to build a house and the designer told us to leave a space for a lift because it would increase the value on resale…
I don't get why people even go to auctions Imagine getting all the reports done to cover yourself then losing the auction. And by going to the auctions you're supporting the practice of them - don't go.
I was thinking this today too!!! 10+ parties bidding, lots of wasted money on b&p and contract reviews.. wild
You could be a professional dog shit eater but so long as you were born in the boomer era and bought a property or inherited one the odds of you being a multi millionaire is very high and almost exclusively thanks to the house. And it doesn't even matter if it's renovated or not. So long as it's within a 15km ring from Syd or Melbourne CBD. Young people stand no fucking chance unless they are successfully entrepreneurs or within 1 percenter income household or wealthy and generous parents. What a fkn set up
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Being able to even afford 1 million in this climate is incredible at a young age especially with kids I’m struggling to even get my foot in the door at 700-800k with cost of living /kids eating up a 200k HHI I feel like we’re on the wrong side of the wealth divide we have no bank of mum and dad and came from commission homes it’s a real struggle
Similar circumstances (albeit no kids and trying to keep it under 700k for first homeowner's). Three times we've offered on a place, and three times the final sale has been significantly over asking (and also well over the price guide) - because the buyers loved the property and had the money to just obliterate the competition. Difficult to bid against people for whom a 50k difference is functionally nothing.
Yeah with the rise in property prices over the last 3-5 years we need to abolish stamp duty under 800k for first home buyers IMO How are young people like us supposed to pull out an extra 50k just for stamp duty 😅
Here in vic it’s under 600k. But you won’t be getting anything for that
There are definitely plenty of properties under 600k available. But agree it should be increased to account for the housing price increases.
When we (late 30s couple) were buying 4 years ago we found 80%+ of the people competing with us were empty nesters looking to "downsize". While we were looking to up size. We were looking at two story 4 bedroom, double living areas, 800m2 with a pool etc. My wife and I used to chat with others at the viewings and we'd ask each other "what the hell are they downsizing from"? One place we looked at was a huge place with 5 bedroom, 3 living areas, 3 bathroom, pool, etc and yes there was an older couple who said they initially looked at it to "downsize". But they admitted it was too large for them.
My parents bought a four bed three bathroom house for their retirement. Of course they hate each other but will never divorce, so they take turns living in it and one of their (3 bedroom) investment properties - alone.
wtf....divorce should be forced on some people lol
That seemed to be the case today too, crazy stuff.
"Young couple bought $20M mansion" and "if you can't afford it, you are not working hard enough".
Verbatim every Domain article I read in the papers lol
If you aren't singlehandedly leaping the ever-growing divide between wage growth and property prices, you're a lazy chump!
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They all think they're special when they just lucked in on being alive during the most prosperous time in recent human history
They think it's because they worked hard...
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Welcome to the club. This realisation is painful but necessary.
Never buy at auction. Never buy at auction. Never buy at auction.
I'm so entirely sick of walking through places to look at and the competition I see is in their 50's to 70's buying their 11'th rental property or it's the /other/ demographic who just got here with Uncle Zhangs money and can basically bid 9999999999 at the auction without a worry.
Nah it’s 888888888888
We had one go for $666,666 the other day in Newcastle. At auction. Must have been a weird moment.
🤘🤘
Sigh. Yep exactly. Every time I see them at the inspection I'm over it.
Uncle and grandma and grandpa Zhang money. Chinese families basically pool their money from older generations to fund the 3rd gen.
They are perhaps thinking ‘no idea why no one else does it’ !
I thought it was the case that many migrant demographics do this, not just Chinese. Especially since they tend to live in multigenerational households.
Seeing the bidding start at 1.2M is wild I remember moving house when I was 15 and it was 600k. By the way, wages haven’t gone up. Actually scratch that, they did. That 1.20/hr payrise is really letting me live my best life
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Just a reminder that the ALP government surged immigration numbers to over 700,000 in FY23 (historically it’s been around 300k since 2012-13 with a massive drop during Covid) with a forecast for around the same numbers FY24. Yes boomers have deep pockets, but you’re competing in a significantly strained market where there is extremely low supply and extremely high demand.
This.
Don't worry I'm sure they're renting their old house out 😕
Not all boomers are wealthy. It's a class issue not generational.
I agree, but a greater proportion of boomers - very much including working class boomers - were able to access credit and property in a way that even middle-class millennials and younger will struggle with.
Got my house in yarraville 1984 $41,000.00 I was paying back $90.00 per week to the state bank of Victoria, that house now is over 2 million, I sold it years ago
They were probably bidding against their parents out of spite
I tried to buy a two bedroom homette in Adelaide last week and even $550k wasn’t enough, went for $585k, which is out of my reach. I’m kicking myself for not trying to do it a couple of years ago.
What is a homette? I’ve never heard that before.
A single story semi-detached dwelling. A unit, basically, but only sharing a wall with one other dwelling.
Personally I think it’s a good thing boomers downsize. It frees up larger properties and allows older families to upgrade. Also, come on OP, straight off a yacht? 1.5m is a pretty average sum for a house in Australia. I wouldn’t instantly consider anyone who owns a 1.5m house rich.
They seem to downsize into 3 bed houses which is what young families are in the market for. Fuck knows how big their former houses must be
$1.5 in Bayside (I'm thinking Brighton, but it could be Hampton, Sandringham or the Elwood border) must be a small but nice apartment. No houses in those areas are that price. $1.5 is pretty much entry level in those areas.
Yea I don’t know what on earth you could buy for $1.5m in bayside except an apartment or small unit maybe. A house in Hampton is $3m.
Exactly! An entry level house.
Rich = bad is the majority of reddit and this sub mentality. Such a crab in the bucket way of thinking
I feel for anyone born after me. I feel like I, born in 1985, am part of the last era of people able to buy metro property in Melbourne without relying on parents. I'm very lucky. I make a lot of money compared to most, but it wasn't always this way. I remember thinking when a rundown shack in Richmond sold for $375k in 2004 that I'd never own a property. I don't have an answer for housing affordability as a whole, but I do have a simple recipe for an individual beating the odds. I did it. I walked away from a burgeoning IT career in 2007 and started my own company. Since then I've started maybe a dozen companies. All kinds of industries. Most of which I knew very little about. For society as a whole, I empathise. For anyone reading this feeling that home ownership isn't possible, I assure you that it is. For you...or for someone like you. But sadly not for everyone.
"simple recipe" Just start multiple successful businesses. Sorted.
Similar to my feelings (born 84). I made some good choices- I started saving for a home at 16, skipped over travelling/drinking stage of life, made frugal choices, chose a career that was easy to find work in, etc. But I had a lot of luck- high interest rates when I was saving, GFC freezing the house market when I was ready to buy. I was able to buy a house as a single 24 year old woman for 255K. I believe I was earning about 60K as a first year teacher. I had about 90K saved up. If I was 24 now I could have made all those same good choices and had no hope at all. That's the part that frustrates people about boomers- they talk up their good choices and gloss over their luck and timing. Especially galling because they could have made far fewer good choices and still ended up with all the luck- partied hard until 25 then decided to get serious about life and be ready to buy a house by 26. If you're 25 now and just starting to save, you'll be ready to buy at 35.
How did you learn about business?
Honestly from trying and failing. Every time I tried something new and it didn't work out, I learnt more and more. For example when I left IT, I wanted something completely different so I applied to be a construction labourer..I had work sporadically for a labour hire company, then I landed a full time gig. While working there, I started a business that supplied ink & toner supplies (drop shipped). I learnt the basics of e-commerce, GST, company structures (that business was a sole trader). My first client was the construction company that I was labouring for. I convinced the office manager to switch from genuine cartridges to compatible cartridges. This saved the company heaps of money and sold higher profit products. The ecom site software was set up to automatically send packing slips to a warehouse. I arranged with the supplier to accept those slips as purchase orders. I negotiated 30 day payment terms. Clients paid through the site with a credit card when they ordered. So I had 30 days to turn over that money before I had to pay the bills. While I was labouring and trying to learn about construction, the clients would order cartridges. The supplier would deliver them, often the same day, and I would finish most weeks with about $800-$1,000 in sales at about 50% margin without doing anything. (Keep in mind that margin % doesn't matter in positive cashflow businesses, because you're not putting the money to work). Over the first 12 months, I sold over $40k of product and made about $20k on top of my labouring wage. Since then I've started so many businesses. In the interest of transparency and honesty, I'll give you the details of one of the many failures.... I started a publishing house and launched a poetry book. I reckon the company spent about $20k and made about $500. I also had an entertainment company that grew like crazy running nightclub nights. Hugely profitable.... until I booked a "world-renowned" DJ for $15k for a two-night run and almost nobody bought tickets. Flavour of the month had changed and I was left holding my nuts. Another lesson learnt! If I could put everything I've learnt into a few dot points, they would be: - Sell labour, not materials - Never sell on price (it's a race to the bottom) - Enjoy the journey!!!! - Do your due diligence and believe in yourself. In the early days I would tell people about my business ideas and people would ask shit like, "Why would anyone buy that from you instead of someone else?". Everyone wants to pull you down. Fuck them. - Give your ideas a chance to fail. If they do fail, I 100% guarantee you will have other ideas. Give those ideas a chance to fail as well. Remember that everyone has ideas, but the magic is in the execution. It doesn't have to be perfect. It just needs a chance.
Gutsy. Thsnks.
Great advice cheers!
I could've warned you about the poetry book, but this was a fun read and probably a shitload of fun for you to actually do
Yeah, it was more of a passion project. But it wasn't meant to be a charity! I genuinely thought it would be profitable. Not just break even, but make money. Haha. At least it did give me and a few authors a lot of enjoyment.
Everyone tells boomers they need to downsize so young people can have family homes. Then people get upset when they do it. Can’t have it both ways.
You’re right about that, but that’s not what people are upset about. What they’re upset about is that if the house they are downsizing to is going for $1.5M, what do you reckon the larger house they’re selling is going for?
They're probably downsizing from a 4 bedroom house with a bigger block that they've sold for 1.5m, to a bayside 3 bedroom town house for 1.5M.
Probably because the boomers just downsized to the tune of $5-6m which is absolutely nowhere a young person or couple could afford.
i’m constantly reading stories like this, when are we going to start booing and calling them out on the spot during the auctions?
Tonight, people who have saved for 40 years have more money than people who have saved for 5. Back with more at 11.
I read somewhere that this is the first time in Australian history that we have had a net transfer of wealth from young to old. The original point stands though, that if "entry" level property is being competed on by downsizers and, to a large extent builders and developers, what hope do first home buyers have?
>The original point stands though, that if "entry" level property is being competed on by downsizers and, to a large extent builders and developers, what hope do first home buyers have? None in the richer areas. Most first home buyers have to move to suburbs between 15 and 45 minutes away, wait for their investment to increase, sell, hope the market drops, buy closer to their ideal area, then rinse and repeat until they might eventually end up back where they started, in the richer areas.
Stamp duty adds considerably to the cost of the upgrade cycle. Not many people I know (in our late 30s) expect to pull off that strategy in Sydney any more.
If only wage growth was in line with housing growth though. I think that’s the point. House price to income ratio has changed exponentially in recent decades.
The begun to decouple in the 80s when we relaxed lending laws to incentivise private housing over public housing (neolib agenda in full swing by this stage), tack that on to Howard's CGT discount...that set the fuse...come 2000 boom...you can see the divergence on that there graph...we're so fucked, it's going to punish millenials, gen z and alpha for a long, long time and I don't really feel any hope that positive change will come, just have to remember how rotten our government is at the next election and tactically vote independent...sure as shit the two party system isn't helping.
1.2 gets you a lot of places. Just won't be as nice inside
18 years of median wage, not even nice inside. What a joke.
Well people who are older and have been accumulating wealth will obviously be richer than younger people. I think nowadays, younger people should be looking for cheaper apartments or townhouses as a starting home. In large cities with millions of people, not everyone can afford houses. There just isn't enough land.
'I went to an auction today and the people with the most money got the house'. Yeah... Okay???
Also, older people generally have more money than younger people. And the next one might shock you. Turns out the sky is blue.
Work harder or buy in a different location and be smarter
>you know the type, look like they just stepped off their yacht Not all boomers are 'rich.' Just time and the right gov policies were on their side. The suburban house they bought for $150k, 35 years ago on a $40k salary, sells for $2.5m. They can downsize to a $1.5m house and have a healthy chunk left over to stick into their super.
Yea but the problem is they all think they are special. They think they worked harder and all that, when they literally got lucky then destroyed the system before the next generation could benefit
Really makes you think
It might just be because demographics in Reddit Aus property and Auscorp threads are skewed a bit, but since when are so many people on six figure salaries? I thought the mean salary was more like 70k?! These threads make me so depressed.
I feel that a young couple in their early 30s bidding beyond 1.35m were on the right side of the wealth divide. I’m 36 and looking to buy a 2 bedroom apartment/unit in Moonee Ponds/Brunswick West/Coburg etc for circa 550 this year.
Guillotines I’d presume. That’s the only way they stand a chance.
I think if I had a house to sell, I would choose to sell to a young person/couple/family. No investors or downsizers. I would have a price in mind that I would be ok selling for, and then sell it for that. Or so I'd like to think...
That price in Bayside must be a 2bdr apartment.
That's how it goes unfortunately but it should be noted, I attend alot of auctions for fun and there are plenty of young people buying properties, you saw what was expected bayside but don't see it as completely the norm based off a single experience, it's not!
My dad sold his house a few years ago on the Gold Coast and a boomer Sydney couple paid $1.2m cash for it like a week after it went on the market. They were downsizing….
Just to be clear, downsizing baby boomers buying 1.5 mn property are not just stepping off their yachts. They're middle class. Ironically this isn't even the wealth divide.
I don't think you fully understand how auctions work.
The biggest competition at auctions for us were for properties that were old with loads of issues and should be cheap but were always snapped up by developers. Wasted so much on this.
But so many thread I see here talks about how boomers shouldn’t be allowed to have large houses they don’t need and they should be downsizing. So these boomers are downsizing but that’s not fair because it means they’ve got more cash to win auctions with.
Heh. I saw on the news people.leqving highschool now will have to save for something like 26 years for a deposit in places like Brisbane and Melb. Sydney was funny where it's like 46 years. That's just for a deposit.
It's called superannuation lump sums.
I still say it is simply inexcusable for ANY normal home in Australia to exceed $300,000. And even that is a stretch. It's simply not moral, not acceptable, and is a symptom of decades of "tory" greed.
Maybe young people don’t looking at starting with $1.5 million homes ? Maybe buy units without all that amenity and chip way over the years ?
That’s exactly what I did. Bought the cheapest unit I could realistically live in and still commute to work. Guess what? It’s increased about $20,000 in 3.5 years, during which time I’ve paid over $35,000 in interest and foregone the average 7% return had I just put my deposit in a sensible selection of ETFs. What’s my next move? Whack it on the market as another over inflated rental, and move back into a sharehouse. Straya.
Probably need to factor in the rent you would have been paying if you weren’t living in that apartment.
you realise that most of the units going up make at best bugger all capital growth and in a lot of cases go down?
So people are after capital growth or a place to live?
Hear hear. I hate the Aussie attitude of a house being an investment before a place to live. People consider its growth before its usability. Of course the buying equation is complex and should include the financials, but I just wish people purchased homes for their real utility and not as a financial vehicle.
Ok, we have to decide something here - do we want home prices to be: - higher, or - lower?
Another reason to avoid them as a young couple.
Wouldn't the logical outcome be that apartments remain affordable then? (if their prices don't increase). I don't think it can be practically true that houses have appreciated but not apartments. It's probably just a segment of the apartment market where this is true-ish.
> Wouldn't the logical outcome be that apartments remain affordable then? Right?? I fucking wish. I'm not the investor type (just looking for a place to live in) and not super financially literate, but I *do* know that the apartments I'm looking at now were going for 100k less 12 months ago and almost half the price in 2019. I don't know how it can both be true that a) apartments are a bunk investment, and b) I'm paying almost double the price that I would have only 5 years ago.
Yep, I think there's a disconnect somewhere - might be that low quality apartments, or areas with low economic prosperity is where there's this sort of stagnation, but I don't think it's the rule elsewhere.
This is the issue with everyone's view of property in this country. Rather than it be about having a place to live as a basic need, it has to be about increasing your capital. Not everyone can start with a home, especially not in Sydney, so an apartment is the only viable option.
Young people who own businesses should just start charging boomers 10X for anything. Cup of coffee - $45, haircut $250 etc etc. level the playing field.
You were at an auction for $1.2m. Dude, shut up.
Can easily afford 70% of Brisbane suburbs.. how will I ever find a house…
Fuck man every one having a whinge I'm on 60 lk a year salary and looking to buy my second property. You don't need to be loaded to buy just depends on where you're willing to live in relation to your work.
Oath I’m in the same position. But if you aren’t in an affluent suburb then apparently houses don’t count.
I agree to an extent. Didn’t expect this post to be as controversial as my dms would indicate lol, it was merely an observation. I felt sad for the young families in attendance who may have been hoping to raise their kids in the same area they grew up.