You think housing is unaffordable now?

There seems so much that this "wall-to-wall" Labor govt could try...They have all the money to give things a real go since Mr. Howard left the economy so strong.
So what about some different thinking?

What about getting the people overflowing from our gaols to "swing a few picks and shovels" and build a few train lines and roads. Maybe thay could even design new equipment and methodology for mass transport. They may be crims, but it doesn't mean they are stupid or incapable. It may give many of them some dignity too and help them come back in to society....but it will never happen. The do-gooders will scream to high heaven that we must not force anything upon these dear sensitive souls, but rather they should do woodworking inside all day and watch TV if they feel tired.

The current thinking will not alleviate any woes about housing shortage, skyrocketing mortages etc. Over in Quatar (or whatever that place is) they build cities in the desert! Yeah they have loads of money, but we can do it too...We have cheap labor in the gaols (the equivalent of loads of money) and if we pull out of Iraq we will have an army that is well eqiipped just waiting around their barracks. They could guard the crims and drive the heavy machinery etc etc. We could build new cities or expand existing ones relatively easily, but with the current thinking of high wages and increased unionism, my rights, her rights, blah, blah blah, it won't happen. Instead we will stagnate in our cities and build more "Londons" instead of expanding into this beautiful country of ours.

At the last state election in WA the opposition was thought to be stupid for even thinking about building a water pipelene down the whole coast of WA, fed by the ORD River Scheme. I thought it was a great idea. Open up the whole of that dry country. Never have a fresh water problem again. But the cries went up..."Dreamer, not practical, yada yada yada"

Anyway a few paragraphs worth to stir the pot. I wonder if Mr. Rudd's advisors are even thinking outside the square..Peter Garrett, Julia, Maxine? Hmmmm....

Have a nice day,
JB
 
Since any specific property we buy will not actually move physically, the area around it 'evolves' from outer to middle to inner. Since I don't believe the govt will ever improve transport to the point where it beats increase in demand for dwellings, I'm buying in outer areas with transport. I have certain areas in mind in Melbourne, Brisbane and Sydney.
Alex

Hi Alex,

Could you please help a PI novice by answering a couple of questions? Please PM me if you feel this is derailing the main thread of discussion.

Do you mind providing a couple of examples of areas you had in mind for Sydney? Do you aim for suburbs within walking distance to a main train station, or transport "hub", with frequent and express services, or just a suburb with a small train station will suffice?

Shouldn't there be an equal emphasis on the proximity to good road infrastructure? i.e. near motorways, bus routes etc.

Most importantly, however, how do you determine the "subdividibility" when purchasing a house sitting on a block of land? Is there a way to determine whether you can subdivide prior to purchase?

Trying to reflect on my own observations...why does one area, say Quakers Hill have an abundance of townhouses, whereas there seems to be a lot less development in a neighboring suburb, Blacktown, which is a regional hub?

Thanks,

J
 
The ins and outs of subdivision

Hey Alex,

DaJackal made a number of great points in his/her post. So hopefully if you do reply you might do so directly to the forum as your expertise:cool: will only add to the quality of this thread.

I am also interested in the prospect of subdivision. Reading through this thread it appears that the direction is to buy a house on a large piece of land, tear it down and then subdivide and build. Is this the way to go or is there an argument to suggest that buying a large parcel of land (possibly in an outer area) and then subdividing would be the best option. The latter suggests more of a risk, but if the land is well selected and the purchase timed to coincide with new infrastructure, there may be opportunity for significant gain. How is this land then marketed. Say for example, the subdivision provides for forty home lots -- do you sell through an agent or sell the subdivision to a developer.

Are there any books out there that cover the issues surrounding land subdivision. I am sure that this could be a minefield of legal/council issues.

Are there any positive or negative stories on subdivision Forumites would be willing to share so that members interested in this form of investment can make an intelligent:confused: decision.

thanks
 
I haven't done a subdivision (though that is on the cards) but my understanding is that it's council specific. So each council has different rules as to the minimum size you need for a subdivision, and how likely they are to approve it. Therefore, there are no books: get the relevant concil's development plan.

I don't know why some areas have more medium density than others, but for example there are certain lots of unit developments around blacktown (walk around Third Avenue, etc and it looks like Hornsby). I do suspect it has something to do with what the council approves at the time. Maybe at a certain point whoever was in charge of redevelopment at Quakers Hill just liked townhouses?

My personal strategy is to aim for trainlines. Mainly because I've taken trains all my life and I don't understand motorway and bus commuting. There are far too many suburbs to research out there, so by narrowing my search to places with trains only, I focus on a few areas only. I'm sure people do very well buying in places with motorways and buses. That is why, for example, I've never thought about buying in places like Alexandria, Maroubra, Neutral Bay or Kellyville (all places my friends live or thought about buying IPs in, which I dismissed because I only understand trains).

So my strategy is very limited by the fact that I only look for trains. You may well find even better suburbs than I will by looking for bus transport, but that's how I'm narrowing my focus. There are just too many suburbs out there.
Alex
 
and I don't understand motorway and bus commuting.

motorways don't change (and can quickly get congested) but bus authorities are subject to change their routes and destinations on occasion. newcastle buses are undergoing a radical change early next and the bus at the end of the street will no longer go to one major shopping centre, but instead to a completely different one in a different suburb. bit of a pain cause the kids and i liked the first one best and it meant i didn't have to drive them. but it could equally apply to employment.
 
Do you mind providing a couple of examples of areas you had in mind for Sydney? Do you aim for suburbs within walking distance to a main train station, or transport "hub", with frequent and express services, or just a suburb with a small train station will suffice?

My preference would be for walking distance to a main station. e.g. I would prefer Strathfield and Burwood over the stations in between. But of course it depends on your budget. The better transport the better, but only if the numbers (rental yield, mainly) look right.
Alex
 
I am also interested in the prospect of subdivision. Reading through this thread it appears that the direction is to buy a house on a large piece of land, tear it down and then subdivide and build. Is this the way to go or is there an argument to suggest that buying a large parcel of land (possibly in an outer area) and then subdividing would be the best option. The latter suggests more of a risk, but if the land is well selected and the purchase timed to coincide with new infrastructure, there may be opportunity for significant gain. How is this land then marketed. Say for example, the subdivision provides for forty home lots -- do you sell through an agent or sell the subdivision to a developer.

There are some books that might help here

http://www.businessmall.com.au

Also, there are some buyers advocates that specialise in this kind of projects and they will even do the project management for you. But it takes time to find the right land it seems as they don't come up all the time.

For small size development/subdivision, I was told to steer away from new land parcels in the outer suburbs. They are unproven. But that was for small developments and not 40 houses.
 
Say for example, the subdivision provides for forty home lots -- do you sell through an agent or sell the subdivision to a developer.

If your strategy was to hold for the long term (and you could afford to actually hold 40 houses), what would be the consequence of all 40 of them being rental properties? Would you be better off selling every second house so that the area has some owner occupiers? I've often wondered the same thing for high rise apartment buildings.
 
Rising immigration will push underlying demand towards, not past, 200,000 per year but with ... rising interest rates and infrastructure charges we will probably maintain developer activity of only around 50,000

Stupid question from someone who has never read a book on economics.

Supply and demand.........

To my mind I define supply as the number of units available

To my mind I define demand as the (total) amount of money that consumers will throw at obtaining that supply. The total number of consumers is one factor in demand but so are things like
- the income of the consumers (wages, asset rises)
- confidence / sentiment
- boosts to spendable income (tax rates, grants, etc)
- drains on spendable income (fuel prices, interest rates, etc)

How do you make a statement like "demand towards...200,000 per year"? I can see how you can get a hard number for supply but demand ....... ?
 
How do you make a statement like "demand towards...200,000 per year"? I can see how you can get a hard number for supply but demand ....... ?

Of course it isn't exact, but I'm thinking it's an estimate based on how many people reach a certain age, how many people get married, that sort of thing?
Alex
 
The state governments are years behind in supply. Funny thing is, its the state ALP governments who stuffed it up, but everyone wanted the ALP in federally (well, not everyone I know, but enough...)

This is why investing in property works. Too much demand, not enough supply. Its simple economics. Perhaps some people (well, one I'm thinking of) need to understand this.

I still suggest the removal of CGT on properties where the number of dwellings has been increased.
 
Obviously you have FAR more faith in the abilities of the government than I do. You really should talk to Kenneth. The government has ALWAYS been behind demand in terms of providing infrastructure such as transport. Why? Because no government ever wants to pay for infrastructure that will be enjoyed by the next government. I don't see that changing.

You make your bet, I make mine. I'm planning for a 5-10 year stagnation in prices. I don't think you have to have land that close to the city: with the underinvestment in transport, even being close to a decent train line will be of great value. That's what I'm going for.
Alex
*******************
Dear Alex,

1. You know and agree with my concerns about the importance of having a good government and rational economic planning as well as its related impact on the various housing markets, yet you remained "unruffled" about this change of Federal Government.

2. Am I missing something here or what?

3. Thank you.

Cheers,
Kenneth KOH
 
Alex isn't the only one who is unconcerned about change of government. The market will do what the market will do... The govt can temporarily interrupt that, but over the longer term the market will trend towards it's natural level.

Besides, Rudd is the most liberal labor leader you could imagine. It's unlikely he's going to simply wade in and make changes without carefully considering the outcomes.
 
This is why investing in property works. Too much demand, not enough supply. Its simple economics. Perhaps some people (well, one I'm thinking of) need to understand this.

I still suggest the removal of CGT on properties where the number of dwellings has been increased.
****************
Hi Tub,

Hence you are deliberately ignoring the truth regarding present political realities in Australia, the role of politics and its impact on housing affordability.

Rational economic planning/management vs Political Realities

Cheers,
Kenneth KOH
 
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Alex isn't the only one who is unconcerned about change of government. The market will do what the market will do... The govt can temporarily interrupt that, but over the longer term the market will trend towards it's natural level.

Besides, Rudd is the most liberal labor leader you could imagine. It's unlikely he's going to simply wade in and make changes without carefully considering the outcomes.
******************
Dear VYberlinaV8

1. All depending on Kevin Rudd + ALP Government own political convictions and true understanding of how the Australian Economy works and need to function as well as its skills in economic management.

2. Will this new ALP govt able to ignore its political party's interests and truly govern for the National Interests for Australia and for all Australians? ... Kevin Rudd says he WILL ...which is political correct and highly appealing... but I think he'sound "hollow" and "insincere" to me despite his pretense with a ever smilling face and airs of (false) confidence, as far as I am concerned....

3. Time will tell

Cheers,
Kenneth KOH
 
The market will do what the market will do... The govt can temporarily interrupt that, but over the longer term the market will trend towards it's natural level.

*********************

... Eventually only and provided the market is truly Rational. With these qualifications, I will fully agree with your statement wholeheartedly.

How's about during first 4 years of Kevin Rudd and his new ALP government office term?
What can we truly expect to see as far as the housing markets are concerned, in the mean time?


Cheers
Kenneth KOH
 
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1. You know and agree with my concerns about the importance of having a good government and rational economic planning as well as its related impact on the various housing markets, yet you remained "unruffled" about this change of Federal Government.

2. Am I missing something here or what?

Yes, having good government and rational economic planning is important. Where you and I disagree is that you believe the Liberals were good economic managers, I don't. I think the boom was a combination of world conditions, and events (such as the temporary end of high inflation) prior to the boom.

In short, I don't think the Libs were the great economic managers you think they were. Therefore, I honestly don't think Labour will be much worse.
Alex
 
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