and that's why we have everyone wanting to live here, including the thread-starter, which is why property prices are so high, because we have bugger all of it.
Is Australia Really That Different?
- Thread starter Wibbly Pig
- Start date
I see, would you believe that these people who by the sounds are taking the money from the govt illegally ever be brought to task? I mean we're talking significant abuse of power / fraud here aren't we?
Imo relying on foreign investment and immigration to be a major player in real estate prices is a risky bet imo. Firstly if we were ever to have lack of jobs or a general slowdown in immigration (govt policy?) it would be adversely affected and also the exchange rate issue should the AUD keep rising for investors.
As a side note does anyone know the demographics of our immigrants? Are we getting in more middle aged / retiring or are we getting younger people? I personally believe that the retiring middle age who will downsize for retirement will also have an impact in the longer term on house prices.
We definitely are looking mainly for skilled, well educated, youngish, employable, healthy, non violent, personable and financially capable. However, the criteria and allocation of migrants to Australia includes smaller segments for humanitarian and family reunion reasons. It is the business of government to ensure the economy can absorb the migrants. Hence, the angst cause by the uninvited arrival of boat people disrupting the orderly government business of controlled migration, or occasional media coverage of disallowed family members on the basis of health disability that may be an impost on the community, or forced expulsion of non citizens for material conviction of crime.
You can read the details here:
http://www.immi.gov.au/media/publications/statistics/popflows2007-08/
Skilled program is about 70% and family reasons 30%.
Humanitarian program is about one third in size to family reasons.
I've got news for you: its happening in Sydney, Newcastle, Brisbane and a few other places around the country too.
In the case of Sydney the last boom was 2003. So here it has been 6 long years of waiting to see growth return.
** sigh**
Your kidding surely? Back in 2007 we (investors anyway) were paying 8% & 9% interest rates. For those of us who still have jobs (the vast majority) and with IRs now 5% something it means we are swimming in cash compared to 2 years ago
So withdraw $3,500 of govt FHOB back on 30 Sept and what happened? The market continues upward. Withdraw another $3,500 on 31 Dec and all the planned govt stimulus to housing is gone - and what will happen? FHBs who are getting the stimlus are only 20% of the whole market.....and that 20% is getting $7K less
Well that is the RBA, not the goverment
Yes, this has been responsible for lots of foreigners buying high end property but this has slowed recently due to the high $AUD and the therefore non-favourable excange rate.
This was a Melbourne centric boom - none in Sydney or Perth in 2007
My suspicion is that IRs will need to rise 2-3% before we see much of anything
No, neither in my opinion.
You do what you feel comfortable with. I hold an opposite view of the market.
I'm sure you are not the only one in this boat. Position yourself for a chance of a lifetime, and review your risk appetite.
thats crap, i ain't gonna eat baked beans
1. govt spending billions on upgrading schools, rebates for insulation
- keeping the subbies employed, more money for them to spend in the economy. investment or mal-investment, my opinion is the latter, it just keeps subbies employed by stimulating the construction industry which will have a flow on effect to retail.
2. govt doubling and tripling FHOG
- with previously high interest rates alot of first home owners were unable to enter the market. now with low rates and additional boost to their deposits, they are now able to enter into the market.
govt intervention to fast forward those who couldn't buy. getting those who can least afford, to buy.
when these people move into their newly built homes or new existing dwellings, yipee, new furniture, white goods etc etc, stimulating retail. Mostly from borrowing the money at 0 interest from harvey norman etc.
3. rba reducing interest rates to historical lows
- low interest rates, alot of mal-investments will be created because people will think everything is just dandy. When not alot has really changed.
4. govt guarantees for major banks and most recently guarantees on mortgage backed securities.
- if the big 4 were not recapitalised they would not be lending money. they have gone to market and raised billions over the last 12 months. now guarantees on mortgage backed securities? wow, isnt this how the GFC started?
5. Housing rental affordability scheme
- boost the construction industry and to lend a helping hand to those who cant afford to get into their own property.
-----------
We aren't much different to the other western countries. Our govt just doesn't have to spend as much as they do yet to keep the sheeple happy.
- keeping the subbies employed, more money for them to spend in the economy. investment or mal-investment, my opinion is the latter, it just keeps subbies employed by stimulating the construction industry which will have a flow on effect to retail.
2. govt doubling and tripling FHOG
- with previously high interest rates alot of first home owners were unable to enter the market. now with low rates and additional boost to their deposits, they are now able to enter into the market.
govt intervention to fast forward those who couldn't buy. getting those who can least afford, to buy.
when these people move into their newly built homes or new existing dwellings, yipee, new furniture, white goods etc etc, stimulating retail. Mostly from borrowing the money at 0 interest from harvey norman etc.
3. rba reducing interest rates to historical lows
- low interest rates, alot of mal-investments will be created because people will think everything is just dandy. When not alot has really changed.
4. govt guarantees for major banks and most recently guarantees on mortgage backed securities.
- if the big 4 were not recapitalised they would not be lending money. they have gone to market and raised billions over the last 12 months. now guarantees on mortgage backed securities? wow, isnt this how the GFC started?
5. Housing rental affordability scheme
- boost the construction industry and to lend a helping hand to those who cant afford to get into their own property.
-----------
We aren't much different to the other western countries. Our govt just doesn't have to spend as much as they do yet to keep the sheeple happy.
From an article in the Age
One Melbourne real estate agent, who asked not to be identified, privately worried about what the Chinese demand would do for the chances of local buyers.
He said the topic was a constant subject within the real estate industry, although few agents wanted to question a trend that generated financial benefits for them.
In his view, "the rising Australia dollar has not impacted at all the demand from Chinese,'' he said, estimating that currently in Melbourne about 40 per cent of properties over $1 million in the inner suburbs were being sold to Chinese and Indian investors.
Full text
http://www.theage.com.au/business/d...foreign-property-investors-20091105-hzx3.html
One Melbourne real estate agent, who asked not to be identified, privately worried about what the Chinese demand would do for the chances of local buyers.
He said the topic was a constant subject within the real estate industry, although few agents wanted to question a trend that generated financial benefits for them.
In his view, "the rising Australia dollar has not impacted at all the demand from Chinese,'' he said, estimating that currently in Melbourne about 40 per cent of properties over $1 million in the inner suburbs were being sold to Chinese and Indian investors.
Full text
http://www.theage.com.au/business/d...foreign-property-investors-20091105-hzx3.html
why is it that a nation founded by immigration now has a problem with migrants?
why is he worried? is it bad? how? where is it explained?
OO's are going to be "forced out"....of what? a house going to auction? cry me a river. auctions are set for the highest bidder - it's like TC having the right to sell his grain to the highest bidder - why is it a problem?
why is he worried? is it bad? how? where is it explained?
OO's are going to be "forced out"....of what? a house going to auction? cry me a river. auctions are set for the highest bidder - it's like TC having the right to sell his grain to the highest bidder - why is it a problem?
yeah, all the talk has pretty much been centred on mainland Chinese investors, but the Indians are here to stay as well. I have attended several auctions where the Indians outdid the Chinese in A list suburbs like Camberwell, Balwyn and Canterbury.
couldnt agree more!
if we let too many in, they'll take over the country, just like those english did to the aborigines... oh wait.
The other interesting point from that article is overseas investors are hedging their bets on the exchange rate... if the dollar keeps going up as well as house prices, they're all making out like bandits.
Seems alot of the world is as confident in the aus economy as some of us here, which is some good confirmation bias for us all
Seems alot of the world is as confident in the aus economy as some of us here, which is some good confirmation bias for us all
absolutley. couldn't agree more.
The other interesting point from that article is overseas investors are hedging their bets on the exchange rate... if the dollar keeps going up as well as house prices, they're all making out like bandits.
Seems alot of the world is as confident in the aus economy as some of us here, which is some good confirmation bias for us all
Those are investors, I mean they are not only PIs, they trade share, currency....etc. Another common things of those Asian traders is they don't believe the best time to buy is the market bottomed, they only buy in bull markets, the better the market, the more stock they will buy. We haven't heard many Chinese/Indian investor around last Xmas, en?
Australian housing un-affordable? Hardly. It's all a matter of choices. I could have a nice new Commodore, like many of my friends, yet instead I bought a two bedroom unit in Sydney 12 months ago at the age of 22...using nothing but my tax return. Seriously, does that sound un-affordable?
This crap about renting being so much cheaper than purchasing is also a novel concept. The reason I decided to buy was mortgage repayments on the place I purchased, admittedly 12 kilometres further away from the city to where I was renting, were $50/week cheaper than renting. Historically low interest rates, right? Wrong! My calculations were based off the 8% interest rates were at the time - prior to the first reduction. Add in the low interest rate environment and I'm about $450 up per month, which more than covers the additional costs of strata fees and council rates.
Sure, I had to move to Parramatta area from Ashfield area to get that, but it will pay dividends as I upgrade over the years. 5k reno later and I've got a nice little block of equity to purchase number two.
I can't stand this stuff about Australian property being un-affordable for those in the United Kingdom here. Talk about whining Poms. Just because exchange rates are shafting you guys doesn't mean our property is un-affordable. These are the same people who run the company I work for - they earn Aussie dollars, convert it back to Pounds, then cry poor when they have to spend money in AUD. Swings and roundabouts people.
Cheers
Greg
It has also been due to change of FIRB rules, which came into full effect Feb/March this year *I think
Here's the slides from a speech given this week (by the bullish Chris Joye). He compares Aus housing affordability with UK, US & various other countries.
A couple of snippets....
Anyone who's been planning to emigrate from the UK to Australia and is only now in a position to do so will have been well and truly knocked by the double whammy of the declines in the UK market and the exchange rate. When I bought my 2-bed unit here in Melbourne Docklands in early 2007, if I'd been in a position to move then I could have sold my London home and had a load left over (say £300K x 2.50 = $750K). I ended up selling into a falling market and accepted £235K a year ago which was converted at about 2.30 = $540K. UK prices are reportedly back where they were a year ago, so at today's rate of 1.81, that would deliver just $425K. These numbers assume no mortgage: if you're a UK owner with a mortgage, then the gearing hits you harder.
So in short one of the key draws of emigrating was that you could come to Australia and end up with a much better home than you had in the UK: no longer true.
No doubt. But how does this mean that Australian housing is un-affordable for Australians?
It doesn't.Sure, it may stem the flow of Poms coming into the country which in turn has an impact on demand here, but last time I checked (outside of Bondi at least
) it's not only the Poms contributing to our population growth.I would think (yes, no facts here) that the largest buyer of Australian residential property is Australian residents who earn Australian dollars. So when it comes to the question of is our property affordable, isn't this the core market we're talking about? Can the average Aussie, on an average wage, still afford the so called great Australian dream?
Sure, overseas players have a bearing on the answer to this. The Chinese, Indian populations coming in and laying down wads of cash obviously impacts it, but the question I believe remains, is residential property affordable for Australians...the answer, I believe, is yes.
Cheers
Greg
P.S. Background, I got told the other day the British parent company of who I work for couldn't pay me a salary competitive with the Australian market because once converted back to pounds I'd be on more than my boss because of the current exchange rate. It's the same argument - salaries in my industry are determined by our local market; that a British company can't compete is unfortunate, but it doesn't change the fact that the local market can and is paying a higher amount.
sorry - since when, after Thatcher - has Britain been competitive for anything other than tourist dollars?
Similar threads
