The obvious solution is to lower Australian wages to match Tawaiin. What could be the possible downside ? Nothing.
brisbane what is going to happen now?
- Thread starter keneth
- Start date
The obvious solution is to lower Australian wages to match Tawaiin. What could be the possible downside ? Nothing.
Unless you're the person whose wages get cut. And the supermarket where that person buys groceries. And the restaurant where that person goes out to eat. And anywhere else that the wages of that person goes to. Including the government, from taxes.
Beebop, what's the downside if your employer cuts your wages to a 1/6 of what it is now?
Well, our son would not be able to pay his brand new, shiny mortgage, just for starters...... unless he rented it to seven workers
For the next 5 years potential purchasers will be asking how wet a given property got in 2011 and marking down those that did.
Agree Rixter and I'm sure you would be aware ..... 40 years ago people were happy in a basic 3 bedroom, one bathroom brick veneer, weatherboard or fibro house. Children shared rooms and there was no such thing as a family room, rumpus room, study, movie theatre, formal dining, parents retreat etc ..... it's no wonder it takes more of peoples wages to make repayments on the family home.
Mystery
So we should abandon all the productive farm land and mines, all migrate to Sydney and starve and freeze in the dark.
Get out of the city and see where your quality food comes from. The Hawkesbury River, the Hunter and the Lockyer are our "food bowl" and by definition, as flood planes they flood. If you like to eat, support the farmers. Their life is never easy for long.
+1 ...and don't forget they only started including the wife's income about twenty years ago! This generation, having never experienced loan discrimination based on sex, forget how this country was such a short time ago. The wife's wages weren't included because they assumed she would get pregnant and leave work-permanently. Not so many years earlier it was actually COMPULSORY for women to leave the workforce when they got married in many industries and the public service. This considerably skews the figures. 40 years ago and today apples and oranges I am afraid.
The new suburbs that these houses are being built in are further out of CBDs and therefore in cheaper areas than those built previously. The average land size is also now much much smaller. 300-500 sqm is the norm, 1/3rd to 1/2 the size of blocks houses were previously built on. One offsets the other.
Mattnz and Joanmc, ...... You both make valid points.
Mattnz - You mention that people have to build on the outskirts of CBD's to be able to afford an entry level home... this has always been the case. I had to do it in my younger days as did most of my friends. We bought and sold a few times in order to afford where we wanted to live.
Joanmc - Thank you for the info on the wife's income, I wasn't aware of that.
I suppose the point I was making is that I believe that it is possible to get into property for a reasonable price, but it will probably involve compromise. I have not paid over $228k for an IP and all are on the outskirts of CBD's (last one bought 2007), so I look at this and think that if people start at these levels then it shouldn't take 8 times the average wage to buy a property.
Maybe my generation (boomer) had a totally different mind set and expectations than today's generation. We used to dream, plan and sacrifice in order to achieve, whereas I look at young people today and it seems to be all about having it now. Maybe I'm wrong, but that is my perception.
I would also like to point out that in 2001/02 my wife and I had to start out again with no money and no house after some poor decisions. We had to save and pay cash for a block and I built a 2 bed kit-home as our savings grew ... this gave us equity. We have done what many on here say can't be done in today's property market..... We have now built up a good portfolio of properties. It involved sacrifice and hard work, but with belief ... it can be done.
Mystery
Mattnz - You mention that people have to build on the outskirts of CBD's to be able to afford an entry level home... this has always been the case. I had to do it in my younger days as did most of my friends. We bought and sold a few times in order to afford where we wanted to live.
Joanmc - Thank you for the info on the wife's income, I wasn't aware of that.
I suppose the point I was making is that I believe that it is possible to get into property for a reasonable price, but it will probably involve compromise. I have not paid over $228k for an IP and all are on the outskirts of CBD's (last one bought 2007), so I look at this and think that if people start at these levels then it shouldn't take 8 times the average wage to buy a property.
Maybe my generation (boomer) had a totally different mind set and expectations than today's generation. We used to dream, plan and sacrifice in order to achieve, whereas I look at young people today and it seems to be all about having it now. Maybe I'm wrong, but that is my perception.
I would also like to point out that in 2001/02 my wife and I had to start out again with no money and no house after some poor decisions. We had to save and pay cash for a block and I built a 2 bed kit-home as our savings grew ... this gave us equity. We have done what many on here say can't be done in today's property market..... We have now built up a good portfolio of properties. It involved sacrifice and hard work, but with belief ... it can be done.
Mystery
I think you will find that for many, the price of land has caused their decision to go for a larger home.
Let's say you are building a new house on the outskirts of Sydney. You could have a 130 sqm house on 400 sqm for $500k or you could stretch to $600k and have a 260 sqm house.
For the extra $100k you would choose to have a house twice the size every time.
The other reason people in Australia want the large family home as their first purchase is the insane transaction costs in Australia. Stamp duty in Australia totally distorts the market, especially in places like NSW where it is waived for your first purchase, but you get charged stamp duty on every subsequent purchase. The cost just to change houses in Australia including real estate fees etc is around $50k!! This is obscene to take the average annual after tax wage of a person, just to move from one house to another.
This also impacts on existing houses, making them larger too. Instead of selling the 3 bedroom house when your family grows and moving to a larger house, the high transaction cost forces them to add another bedroom and second living area to the existing house.
Let's say you are building a new house on the outskirts of Sydney. You could have a 130 sqm house on 400 sqm for $500k or you could stretch to $600k and have a 260 sqm house.
For the extra $100k you would choose to have a house twice the size every time.
The other reason people in Australia want the large family home as their first purchase is the insane transaction costs in Australia. Stamp duty in Australia totally distorts the market, especially in places like NSW where it is waived for your first purchase, but you get charged stamp duty on every subsequent purchase. The cost just to change houses in Australia including real estate fees etc is around $50k!! This is obscene to take the average annual after tax wage of a person, just to move from one house to another.
This also impacts on existing houses, making them larger too. Instead of selling the 3 bedroom house when your family grows and moving to a larger house, the high transaction cost forces them to add another bedroom and second living area to the existing house.
My understanding is that for the last 40 years residential property ownership remains around 70%. If today it was less affordable than before I'd expect that metric to be much less than 70%.
I belive that the only country in the world that has over 900 years of land price records is England. I remember seeing that those records show that in average land price increases approx 10% pa. A thing or 2 had happened in almost a millenium in England however, land price has been very consistent. How could it be possible?
I beliebe that in AUS we only have around 124 years of the same data and the 10% increase over time remains the same. The caveat is that we could live in a period of 10 or 20 years in which no much happens in relation to CG however, it would be compensated by yield as long as population continues to grow of course.
We experienced the 1974 flood in Brisbane, at New Farm.
Our house was on stilts,fortunately, which meant that the water stopped 18 inches short of the floor boards. Other families weren't so lucky.
As a result of that, we decided to that our next house would be high enough , so that we would never have to worry about flooding again.
Some of our friends were affected and sold up immediately; others snapped up a bargain, believing that we would never see another flood like that in our lifetime.
As time passed, people became quite confident that another flood like that was highly unlikely; besides, the Wivenhoe Dam was going to save us!
The 2011 flood caused far more damage than the 1974 one and it seems that this could happen maybe every 30 to 40 years. I think it'll take Brisbanites longer to forget and they may be a little more cautious than my generation was after 1974.
Eventually, there'll be promises of better flood mitigation programmes, more dams etc and people will simply forget, as they get on with theit lives.
As for me and my children, if we're looking at a potential purchase, one of the first questions we ask is: "Has it ever been flooded?"
Watching the news , it was like a horror film unfolding, day by day. For people like me, there is no room for smugness! A disaster can happen to anybody, and we can only count our blessings if we've been spared and lend a hand to others.
RK
Our house was on stilts,fortunately, which meant that the water stopped 18 inches short of the floor boards. Other families weren't so lucky.
As a result of that, we decided to that our next house would be high enough , so that we would never have to worry about flooding again.
Some of our friends were affected and sold up immediately; others snapped up a bargain, believing that we would never see another flood like that in our lifetime.
As time passed, people became quite confident that another flood like that was highly unlikely; besides, the Wivenhoe Dam was going to save us!
The 2011 flood caused far more damage than the 1974 one and it seems that this could happen maybe every 30 to 40 years. I think it'll take Brisbanites longer to forget and they may be a little more cautious than my generation was after 1974.
Eventually, there'll be promises of better flood mitigation programmes, more dams etc and people will simply forget, as they get on with theit lives.
As for me and my children, if we're looking at a potential purchase, one of the first questions we ask is: "Has it ever been flooded?"
Watching the news , it was like a horror film unfolding, day by day. For people like me, there is no room for smugness! A disaster can happen to anybody, and we can only count our blessings if we've been spared and lend a hand to others.
RK
We have house sat in Gin Gin and Beenleigh recently.We would travel around to the outlying areas. Not being from the area, I thought all houses in Qld were on stilts. There were so many that weren't. The place we stayed at in Gin Gin was on stilts, plus it was way up on a hill.Same with the Beenleigh place. I was told so many of the newer houses were ground level, because they had forgotten what it is like to have floods.
In April of this year we return to Qld to house sit, in a small town of Kilcoy.I was a bit nervous, because of all the media, but the home owner said they personally haven't been flooded, but it did restrict road access for a few days. Keeping fingers crossed everything will be settled down by then.
We have a joke, that when we come to Australia we always bring the weather you need. You were in a drought in 2008, and it rained while we were here (in Melbourne 2 wks) and this time we are here for 8 months and there has been tons of rain.
My MIL asked we were coming back this year (sept 2011) I said yes, but we will be bringing the sunshine, because you won't need that much rain again.
Unless we go to WA.....
At the risk of pulling this thread more off track, let me just say this. Yes, you could get a new house at those prices, but if you are buying on the outskirts of Sydney why would a FHO be looking at this price bracket when there are plenty of entry level homes available for well under $300k, some as low as $200k.
As has been said many times already, many of the FHO want the world, then complain that they can't afford it. If a small 3x1 was good enough for their parents to start with, why is it not good enough for them to start with? Yes, they are small, but most importantly they are affordable.
Yes I agree. One third own ppor outright and one third with mortgaged ppor. 90% of the population have rented at some time in their life and out of those one third continually rent for ever.
This is all a big lie that I have seen many times and heard property spruikers use on a regular basis.
Lets say that extremely conservatively, property prices in England were on average only 2 pounds 900 years ago. Assuming that property prices doubled only every 10 years since then, that is 90 periods of 10 years. The calculation then becomes 2^90 = 1,237,940,040,000,000,000,000,000,000 pounds!!
This is more money than there has ever been on earth, just for a single house and actually clearly proves that the compounding effects of doubling every 7-10 years is impossible to have happened!
no no no no no............insensitive comments?? rotflmao...do you not think the media are trying to outdo each other milking this??? ch 9 has been in a huge ratings war with ch 7 and since they have been milking the coverage they now have overtaken ch 7 with the coverage...
champ im directly in the flood zone and work at night for the past three weeks helping people............if you think im insensitive then perhaps your one of those longe lizzards who wouldnt be bothered getting your little lilly hands dirty..
ill take flack where warranted but as you dont know me ill take your comments as ignorant.
have a nice day/
ps; blue storm? no idea who that is...dont read their posts either
Ill take up your bet wylie............market pressure will force down prices without question in these areas..
agents will start discounting appraisal prices immediately//the flow on effects for listings will be way down for some i promise...others in time may do better in 2=3 years time but first and foremost buyers will be targeting large discounts before they are willing to enter these suburbs for quite some time.
to think otherwise is definitely fraught with zero knowledge of previous floods when r/e tanked markedly in these areas....
i have seen it happen in rocky at least 3 or 4 times and in brisbane once before............
i was alive in 74, were you?
I was 14 and houses on the river belonged to the rich back then, just like now. I think many riverside houses now are owned by wealthy people who were around in 1974 and, like myself, know that river front properties (think New Farm, Chelmer, you get the drift.... expensive suburbs - especially right on the river) will always be out of reach of the "average" homeowner.
I am happy to be proved wrong but a house worth $3M last week isn't going to be sold next week for a song because the owners know it will always be a valuable property.
People in their 40s and 50s who can afford to buy riverfront properties would very often have lived through the 1974 floods or have family who did so.
I actually think that in 2011 most people who live in a premier riverfront property has bought there, inherited it or made the conscious decision to take the risk. Back in 1974 there possibly were more people who didn't have a memory of the last big flood but anybody buying over the past 35 years does so knowing there is threat of flood. If I could afford to buy on the river I would take the risk.
