Grey money from China blow property bubble

[property_girl]

Sorry, that should be:
Grey Money from China Blows Property Bubble.

I have just read this article:
http://www.theage.com.au/comment/gr...-blow-our-property-bubble-20140928-10n7a8.htm

This is one of the comments. Is this true?

What many also don't realise is that a developer can get a single approval from the FIRB for sale of apprtments to overseas investors on any development that has 100 apartments or more.

If "granted" (and it ALWAYS is just rubbed stamped) the foreign purchaser doesn't need to apply for permission to purchase as it's already been granted!

There are huge developments going on across Sydney where the entire lot being built isn't even marketed in Australia.

So this is the new Australia Tony has for us, Singapore money buys smaller blocks of land in Sydney, consolidates into a larger parcel, builds towers of units with workers on 457 visas, and sells resulting units to Chinese investors.

How does this help those wanted to buy their first home???

 

[equitymate]

Sorry, that should be:
Grey Money from China Blows Property Bubble.

I have just read this article:
http://www.theage.com.au/comment/gr...-blow-our-property-bubble-20140928-10n7a8.htm

This is one of the comments. Is this true?

What many also don't realise is that a developer can get a single approval from the FIRB for sale of apprtments to overseas investors on any development that has 100 apartments or more.

If "granted" (and it ALWAYS is just rubbed stamped) the foreign purchaser doesn't need to apply for permission to purchase as it's already been granted!

There are huge developments going on across Sydney where the entire lot being built isn't even marketed in Australia.

So this is the new Australia Tony has for us, Singapore money buys smaller blocks of land in Sydney, consolidates into a larger parcel, builds towers of units with workers on 457 visas, and sells resulting units to Chinese investors.

How does this help those wanted to buy their first home???

Sounds like typical leftwing age commentary its all Tonys fault.
Somebody call the wambulance
The new Australia Tony has for us. LOL

 

[Xenia IM]

I don't think it was ever intended to help first home buyers.

It certainly helps developers.

 

[BayView]

How does this help those wanted to buy their first home???[/I]

It doesn't, but FHB's can always buy existing stock of apartments in every city.

If they look for older apartment buildings - especially ones that need a reno - there's their entry level.

But the question is; do they want to stoop that low?

God forbid a FHB would have to buy some old clunker 2x1, sleep on a sec/hand bed/matress on the floor, sit at a sec/hand table, put up sheets on the windows....

They might even have to curtail takeaway coffees and postpone that new IPhone 6.

And so forth.

 

[property_girl]

The words written in itals are not mine. That was a comment made about the article. I don't know who said it.

 

[boeman]

God forbid a FHB would have to buy some old clunker 2x1, sleep on a sec/hand bed/matress on the floor, sit at a sec/hand table, put up sheets on the windows.

Bingo.

Everyone I talk to talks about an affordability crisis, yet they earn $80k and are looking at $750k + properties.

Meanwhile, speaking from a Perth perspective, there is a $hitload of homes for $450k and under. Some are houses, some villas. Most are old but they don't leak.

Instead they pay through the roof for houses in the suburbs that are prestigious, or build new in the "new north" because it is shiny, and then complain there is a lack of freeway/services.

I have my old $430k first home with a dining table from gumtree and my parents old couch. Couldn't be happier and will be debt free in my mid 30's.

 

[D.T.]

I have my old $430k first home with a dining table from gumtree and my parents old couch. Couldn't be happier and will be debt free in my mid 30's.

Wish people would do a lot more of this

 

[windyzz]

FHB in Australia (especially Sydney) must have the highest expectation in the world.... Majority of FHB in my age group (high 20) won't look anywhere further than 15km from CBD, and to make things worst.. most of them want a BRAND New luxury Apartment... if they cant afford it, then they'll complain about the high property prices.

There are so many established 2 bedder unit around 20-30km from CBD for a very affordable price (350-400k), and with a bit of reno (new carpet,paint and kitchen) it will be pretty nice to live in.

 

[BayView]

Bingo.

Everyone I talk to talks about an affordability crisis, yet they earn $80k and are looking at $750k + properties.

Far out; I'd love to earn $80 frickin kay, right about now.

 

[Ausprop]

if they really want, the locals can buy the finished product at a discount on completion when the otp buyers flood their stock onto the market. think of it like this... the land component is stuff all, so effectively we are exporting a bunch of materials at a healthy mark up. Tony aint so dumb after all, good on ya Tone!

 

[Ausprop]

Far out; I'd love to earn $80 frickin kay, right about now.

? you would need a heck of a lot more than that to live in Sydney. Professional salaries are about $150k in Perth and I think the equivalent in Sydney is $300k but you would need that uplift to pay the ridiculous housing prices there

 

[Terry_w]

? you would need a heck of a lot more than that to live in Sydney. Professional salaries are about $150k in Perth and I think the equivalent in Sydney is $300k but you would need that uplift to pay the ridiculous housing prices there

many of my Sydney clients earn much less than $80k. Some $40k full time.

 

[boeman]

I earn a fair amount over the $80k mark and cant fathom how someone on my salary could possibly feel ok with borrowing $750k - $1m on their PPOR for their first home.

Sure I could afford the repayments, but all it takes is a downturn in my industry/medical emergency/major car repairs and suddenly things would really start looking ominous pretty quickly.

Instead I know I can lose my job tomorrow and cover my repayments for 12 months no worries because I bought within my means.

 

[Aaron Sice]

peoples complaining like FHBs somehow had it easy at some point in time.

 

[perthguy]

This is one of the comments. Is this true?

No.
.
.
.
.
.
Still no.

 

[Ausprop]

many of my Sydney clients earn much less than $80k. Some $40k full time.

yeh but many probably earn nil as well (and work no time)

 

[MIW]

I earn a fair amount over the $80k mark and cant fathom how someone on my salary could possibly feel ok with borrowing $750k - $1m on their PPOR for their first home.

Sure I could afford the repayments, but all it takes is a downturn in my industry/medical emergency/major car repairs and suddenly things would really start looking ominous pretty quickly.

Instead I know I can lose my job tomorrow and cover my repayments for 12 months no worries because I bought within my means.

Probably you wouldn't be able to borrow ^^ as you have to pass the serviceability too. I doubt $80K would allow that, more likely 30% of income for repayments plus your deposit, speaking very broadly in loose terms.
But I totally agree with you, we should all have at least 6 to 9 month buffer for the unforseen circumstance, and surely if you lost your job you would try to find another one, but the timing is the uncertainty, right?

 

[boeman]

Probably you wouldn't be able to borrow ^^ as you have to pass the serviceability too. I doubt $80K would allow that, more likely 30% of income for repayments plus your deposit, speaking very broadly in loose terms.
But I totally agree with you, we should all have at least 6 to 9 month buffer for the unforseen circumstance, and surely if you lost your job you would try to find another one, but the timing is the uncertainty, right?

I think at the time of applying for my FHO loan I was earning $100k, and they gave me the all clear to borrow something like $650k?

This would have left me, after repayments, around $500 a week. Can write off $200 a week for food and utilities. Another $200 for a car (fuel, service, rego). Then health/car/home/contents insurances.

I think the lending is still too generous these days in a lot of circumstances. It is all about the maximum you can BORROW, not the maximum you can AFFORD.

 

[C-mac]

Hopefully these new macro-prudential / APRA policies lenders are looking to introduce; will help prevent people borrowing loan sizes that are greater than their 'affordability' means. I am speaking from a PPOR perspective of course, however I believe that if these policies are introduced by most lenders (at least the big 4 lenders); this might help cool the market whilst also doing the wannabe FHB's who are looking to overextend themselves, a favour.

 

[ellejay]

That story has a bit of everything. Great that they even managed to squeeze the 457 visa in just to rub some more salt in the wound.