Investors keep first-timers out of market
- Thread starter MsAli
- Start date
What kind of action would you suggest us property investors take?
I think he meant action taken regarding the thread going off track... like that never happens... much
.... but I don't think it has gone terribly far off track.
I know - I don't agree with this "generation bashing" that we appear to get into ... but I do notice none of us "oldies" are claiming it's easier now - just different - unlike some of the young un's claiming it's harder - and us "oldies" had it easy - and that frustrates me no end.
And because it's different, unfortunately expectations need to change ... there is a big difference between housing, and providing facilities for, a population of 8,000,000 as opposed to 23,000,000.
There just physically isn't the room for us to all spread out on our quarter acre blocks anymore ... and with scarcity comes value ... the old supply and demand equation ... and those with the money will be able to afford the desirable properties ... end of story.
No point in indicating the vast interior areas were no one wants to live either, there is no water and no practical services can be provided.
For housing to become more affordable we, as a country need to consider following the "larger" city mentality of overseas - go up and fill in and convert.
And government, at all levels, needs to make this more practicable by cutting red tape and approval times.
At the end of the day it comes down to individual choice ... and every choice we made in regards to property was based on what we could afford at the time, and our end purpose of the property ... at the moment we chose the live in the country on land - with all that entails in regards to hard work and lifestyle ... in the past we have chosen to live in dumps that we renovated ... in beachside suburbs ... in inland suburbs ... in near new houses ... in termite ridden houses ... in the future we plan to significantly downsize and travel ...
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I have a contrary example , maybe I should get the SMH to write an article about .
As an investor we were out bid by a first home owner . Unit in Fairway Pl in manly Vale . FHO paid way over market in an emotional driven Dutch auction . Set a street record in the worst street in the suburb .
Can't compete with emotion .
Cliff
As an investor we were out bid by a first home owner . Unit in Fairway Pl in manly Vale . FHO paid way over market in an emotional driven Dutch auction . Set a street record in the worst street in the suburb .
Can't compete with emotion .
Cliff
Maybe an option to OP issue is that there should be more properties available for FHB. Some properties should be built that are obviously intended for FHB. There will be implications. Developers should build properties that FHB rationally should aspire to and in areas more in keeping with the aspirational phase. Prices and quality should be commensurate with the expected lifestyle.
There may be some downside with this approach as there will be controversy about quality, price, size, and so on in the house specification. There may be interesting debate about lifestype expectation to match the specification of the FHB house and quality. I can imagine that there will be iterations of house specificatons to suit one income single FHB, one income with stay at home family and 2 income FHB. Age, income of the FHB and government contributions will be significant variables as well.
The BBs will get to contribute on property specification, quality and location to correspond to the household income, age and lifestyle sacrifice (such as travel time and family planning), while the Gen Y and others can contribute and shape on government contributions. A key issue to be resolved is whether younger gen FHBs are locked out of properties because of higher expectations, pricing all round or whether there is lack of supply of the right type of properties (pricing, quality, location).
The above approach can guide the debate on availability of specific properties for FHBs and focus on the socio-demographic data necessary to monitor for housing affordability. At the moment, the debate about affordability has been driven too much by generalisations, sloppy media articles, prejudices, anecdotes and polarity on the basis of FHBs vs investors.
There may be some downside with this approach as there will be controversy about quality, price, size, and so on in the house specification. There may be interesting debate about lifestype expectation to match the specification of the FHB house and quality. I can imagine that there will be iterations of house specificatons to suit one income single FHB, one income with stay at home family and 2 income FHB. Age, income of the FHB and government contributions will be significant variables as well.
The BBs will get to contribute on property specification, quality and location to correspond to the household income, age and lifestyle sacrifice (such as travel time and family planning), while the Gen Y and others can contribute and shape on government contributions. A key issue to be resolved is whether younger gen FHBs are locked out of properties because of higher expectations, pricing all round or whether there is lack of supply of the right type of properties (pricing, quality, location).
The above approach can guide the debate on availability of specific properties for FHBs and focus on the socio-demographic data necessary to monitor for housing affordability. At the moment, the debate about affordability has been driven too much by generalisations, sloppy media articles, prejudices, anecdotes and polarity on the basis of FHBs vs investors.
I know it's a fun gag you were making, but what Lizzie was doing was just illustrating life in that time for most folk.Congratulations - you win the gold medal in the Oppression Olympics
There are plenty.
The topic was that us evil investors are keeping FHB's out of the market.
Just using me as an anecdotal illustration; every IP we have bought has been on the market for a few weeks or longer...
Plenty of time for a FHB to have bought them.
One was our first IP - a nice 3x2 townhouse in a quiet complex of 4, just up from the Mentone beach a few hundred metres. A perfect first home for anyone...right near everything - except the CBD, but only a 30 min ride or less on the train.
Was on the market for about 5 months before I bought it at a discount.
Our 2nd one was a 2x1 in Highett which I renoed - 2 min walk to Highett station and 10 min walk to Southland - on the market for a month. I offered below asking price.
So, there's plenty of available time and places to buy before us sharks move in and they all disappear, I reckon.
Where do you get your ideas from? Australia is one of the most sparsely populated countries in the world. We're only beaten by the likes of Greenland and Mongolia. And no, that's not just because of the outback. Even our cities have very low density.
If we're in trouble, it must be a state of emergency in places like Japan, Germany, Italy, France and the Netherlands. Yep, they're all running to Australia
If we're in trouble, it must be a state of emergency in places like Japan, Germany, Italy, France and the Netherlands. Yep, they're all running to Australia
Where I live north of Brisbane there have been plenty of "FHB's homes" built like Francesco alluded to. They are on postage stamp sized blocks of land in suburbs like Warner and the industrial estate end of North Lakes, a few miles away from train stations. Make that a long drive away from the train in peak hour traffic.
I cant say whether anyone has bought any or not, but the four duplexes they built here at Eatons Hill sat untouched for two years before being sold off for about $150K less than the asking price.
I understand that big developers like Stockland are building modest homes for FHBs, but the only affordable land is , wait for it, out in the boonies.
When I was a spring chicken, you couldn't give away big boarded up Victorian mansions on the beach at Sandgate, nor could you give away ANY house in an inner ring suburb like Kelvin Grove or Spring Hill. That was where the deros lived (druggies and squatters). Imagine the horror when a single 19 year old suggested she would like to buy a big Victorian Terrace (the entire building, not just one) on Petrie Terrace, Spring Hill or in South Brisbane. The only offers of support I received was to go see a Psychiatrist.
People's wants change, as others my age have already posted. What was cheap one decade is highly sought after another. Live with it.
I cant say whether anyone has bought any or not, but the four duplexes they built here at Eatons Hill sat untouched for two years before being sold off for about $150K less than the asking price.
I understand that big developers like Stockland are building modest homes for FHBs, but the only affordable land is , wait for it, out in the boonies.
When I was a spring chicken, you couldn't give away big boarded up Victorian mansions on the beach at Sandgate, nor could you give away ANY house in an inner ring suburb like Kelvin Grove or Spring Hill. That was where the deros lived (druggies and squatters). Imagine the horror when a single 19 year old suggested she would like to buy a big Victorian Terrace (the entire building, not just one) on Petrie Terrace, Spring Hill or in South Brisbane. The only offers of support I received was to go see a Psychiatrist.
People's wants change, as others my age have already posted. What was cheap one decade is highly sought after another. Live with it.
I don't understand the meaning of your last sentence?Where do you get your ideas from? Australia is one of the most sparsely populated countries in the world. We're only beaten by the likes of Greenland and Mongolia. And no, that's not just because of the outback. Even our cities have very low density.
If we're in trouble, it must be a state of emergency in places like Japan, Germany, Italy, France and the Netherlands. Yep, they're all running to Australia
Moving on; just because we have an enormous Country and apparently low density cities, it doesn't mean we should follow the rest of the world and clog them up with folk.
I've visited many large cities world wide, and they are exciting places to see, but to live life within them for many is a pain in the derrieire I'll wager, and I'll wager that their lifestlye for all the extra folks has not really improved all that much as people will think it will.
The saying that more population will improve the economy is waaay innacurate.
Almost everyone who lives near or in cities who has to work in them whines about the commute and traffic and so forth.
Of course; there does need to be a few folk, otherwise amenities won't appear,
But you know what I mean...who wants a Bangkok, or Manilla type scenario? and others.
I don't want to see a 30,000 human per square kilometre equation like some of those places are - tragic.
The world is already overpopulated.
Wow, this thread has legs
Not sure it has been mentioned as I haven't read it all (been to Mungo National Park for a week) but the reason that FHB are finding it tough to compete with investors is all thanks to Mr Greenspan and Ben Bernanke in the USA. To stop all their merchant banking cronies from going broke they have created havoc in the worlds financial markets.
Now the rest of the world is still trying to recover from the GFC and things are slow, so the RBA drops the interest rates, baby boomers who have provided or are trying to provide for their old age can get a better return on a rental property than they can on money in the bank.
Simple really, where can I get 4% or 5%, not in a bank, even some TDs are only in the 3% so OK buy that unit at 5% return. If interest rates start to go back up the RE boom will stop again.
Before the next generation start to complain about BBs please ask yourself if you had been working and saving for 50 years would you expect to have more money than someone who is 23 and been working for 3 years ?
Not sure it has been mentioned as I haven't read it all (been to Mungo National Park for a week) but the reason that FHB are finding it tough to compete with investors is all thanks to Mr Greenspan and Ben Bernanke in the USA. To stop all their merchant banking cronies from going broke they have created havoc in the worlds financial markets.
Now the rest of the world is still trying to recover from the GFC and things are slow, so the RBA drops the interest rates, baby boomers who have provided or are trying to provide for their old age can get a better return on a rental property than they can on money in the bank.
Simple really, where can I get 4% or 5%, not in a bank, even some TDs are only in the 3% so OK buy that unit at 5% return. If interest rates start to go back up the RE boom will stop again.
Before the next generation start to complain about BBs please ask yourself if you had been working and saving for 50 years would you expect to have more money than someone who is 23 and been working for 3 years ?
I'm not sure why you have to jump to the most extreme examples - i.e. Manilla. There is certainly not that type of overcrowding in any of the examples I mentioned. They are all first world cities and have better infrastructure than any city in Australia. It is impossible to live so spread out and expect that you will receive good quality services or access to decent infrastructure. It just doesn't happen and I can't think of one place in the world where that has been successful done. The population density of the Sydney metropolitan area (~300/sq km) is comparable to Reykjavik in Iceland (http://upload.wikimedia.org/wikipedia/commons/0/03/Reykjavík_panorama1.JPG) and I don't think anyone would consider that a major international city in any context. I'm sorry but there is no conceivable way that anywhere in Australia could be considered even remotely overpopulated. Find another scapegoat.
Overpopulated compared to what?
Other cities?
That is hardly a reason for any City/Country to think they should blast away ad nauseum trying to fill up the joint.
It's insanity.
Remember that next time you are stuck in one of those traffic-stopped-on-the-freeway-due-to-whatever, scenario....
Maybe that doesn't occur in Canberra.
The world has too many people in it right now.
Period.
I don't know that this will happen in large numbers.
Most folk are scared witless at the prospect of buying another house; it is expensive, it has a lot of processes and work behind it....not an easy thing to do comparatively (to shares and TD's etc).
Then there's angst about dodgy tenants, repairs, rates, repairs and so forth - most folk just put it in the too hard basket, and chuck it into super or such like.
Growth is fine if you have governments that
a) invest in infrastructure
b) when they do finally build something, don't just build something that only just covers the current level, with no future planning or future proofing carried out.
The Harbour Bridge was constructed at a level that allowed for significant future growth. At a time when cars were something relatively new. The M5 motorway was planned 20 years ago and was built as 2 lanes each way. Now, it is nowhere near sufficient, and to upgrade it will cost roughly the same as the construction costs, whereas if it was built to an appropriate level at the time, it would have added roughly a third to the cost.
It is this short sighted attitude from government, of all brands, at all levels, that is causing the issues. Not growth in itself.
a) invest in infrastructure
b) when they do finally build something, don't just build something that only just covers the current level, with no future planning or future proofing carried out.
The Harbour Bridge was constructed at a level that allowed for significant future growth. At a time when cars were something relatively new. The M5 motorway was planned 20 years ago and was built as 2 lanes each way. Now, it is nowhere near sufficient, and to upgrade it will cost roughly the same as the construction costs, whereas if it was built to an appropriate level at the time, it would have added roughly a third to the cost.
It is this short sighted attitude from government, of all brands, at all levels, that is causing the issues. Not growth in itself.
Exactly, and the problem is dollars.
They already know what the likely population will be in say; 20 years time, but can only spend XYZ dollars now - and usually too late for what is required anyway.
My final say on this;
What was the world population 20 years ago, 40 years ago, 100 years?
What do you expect it to be in 50 years based on those patterns?
Now; that is scary.
Folk whine about no fish in the ocean, GM food, preservatives and so forth already...
But Cimbom; if you reckon go forth and multiply, then good.
Earlier this week there was a big hold up on the main freeway I take into the city at about 8am. I was stuck in traffic for almost 5 minutes!
I don't think "the whole world is overpopulated" is a really meaningful statement. The world is a very large and diverse place. In Australia, the problems described can be put down to poor governance and planning. Not the number of people that live here. It is far easier to just blame "the population" because this absolves you of any responsibility. The problems that exist are largely due to the decisions made by our representatives - which we elected.
Here is an example of good urban planning, in case you need some more inspiration (also note the scale in the top left - each of the brown "clumps" is an independent city):
Maybe increasing population density to support a respectable public transport system (shock horror) will go some way to reducing congestion and traffic jams? I know it's a very radical idea and all that.
Here is an example of good urban planning, in case you need some more inspiration (also note the scale in the top left - each of the brown "clumps" is an independent city):
Maybe increasing population density to support a respectable public transport system (shock horror) will go some way to reducing congestion and traffic jams? I know it's a very radical idea and all that.