Residex's Dec report - median price for Melbourne & Brisbane to reach $500,000 in 08

Just read Residex's latest report. They predict Brisbane & Melbourne's median price is going to reach $500,000 sometime in 2008 and Sydney's to be $600,000.

See:

http://www.residex.com.au/newsletter/source2007-12bMC.html

The unaffordability crisis is going to deepen in 2008
 
not a crisis when you can go buy a 3 bedroom house in blacktown for 250k.

this really annoys me....

the only crisis is that people aren't willing to make sacrifices early on in life, and this to me is about attitude.
 
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Just read Residex's latest report. They predict Brisbane & Melbourne's median price is going to reach $500,000 sometime in 2008 and Sydney's to be $600,000.

The unaffordability crisis is going to deepen in 2008

I agree with the others. The affordability crisis is simply people wanting too much compared to what they can actually afford. Why should first home buyers be able to buy median properties anyway? Why should they expect to? People trade UP to median properties.
Alex
 
not a crisis when you can go buy a 3 bedroom house in blacktown for 250k.

this really annoys me....

the only crisis is that people aren't willing to make sacrifices early on in life, and this to me is about attitude.

Most people cannot or are unwilling to live in Blacktown. $250,000 is not a typical price that most first owners would pay for a house. Even those who are willing to make sacrifices early in life are going to find $500,000 very difficult to afford.
 
Most people cannot or are unwilling to live in Blacktown. $250,000 is not a typical price that most first owners would pay for a house. Even those who are willing to make sacrifices early in life are going to find $500,000 very difficult to afford.

There is no cannot. There is only unwilling. If they're unwilling, then it's not an affordability problem: it's an aspiration problem.

And why SHOULD they be able to afford $500k? Obviously enough people can, otherwise the median wouldn't be $500k. If some people can't afford $500k, so what? Let them buy cheaper.
Alex
 
This really annoys me too. My first property was a 2-br unit in the south. It wasn't my first choice as I grew up in a big house with a big backyard/pool in the eastern suburbs. I had to make sacrifices and settle for what my budget would allow me to buy at the time. I think the problem with a lot of people is that they are trying to keep up with the Jones', it's like a competition of who has the biggest McMansion, the bigggest 4WD, etc. Sadly not too many young people are willing to live in the Blacktowns of Australia because they aren't the right address.
 
Have to agree with the majority on this. My wife and I could not afford to buy in the Sydney area when we were young. So we bought a block of land at Tahmoor 1hr south. We paid $17500 for it when it was only worth $12500. Any way we paid it off in a couple of years and built a house. It cost us $40000 to build. After living in it for 3yrs we sold for $123k that was our start. We now live in a very nice house but it annoys me when I hear young ones say they could not afford to by the house of their dreams. Well hello neither could we but we started small and worked hard.;)
 
There is no cannot. There is only unwilling. If they're unwilling, then it's not an affordability problem: it's an aspiration problem.

And why SHOULD they be able to afford $500k? Obviously enough people can, otherwise the median wouldn't be $500k. If some people can't afford $500k, so what? Let them buy cheaper.
Alex

Residex's prediction is that Brisbane and Melbourne are likely to increase by over 15% in the next calendar year. Even the current cheaper areas like Blacktown are going to be difficult for many people to afford.

Moving away from friends, family and a safe environment is easier said than done. The reason why some of areas are so cheap is because of poor infrastructure, higher crime rates and poor transport. Many people cannot move into these areas because it is too far away from work. Many people cannot move into these areas because of crime problems. Many people cannot move into these areas because the schools provide such a poor standard of education.
 
Residex's prediction is that Brisbane and Melbourne are likely to increase by over 15% in the next calendar year. Even the current cheaper areas like Blacktown are going to be difficult for many people to afford.

Moving away from friends, family and a safe environment is easier said than done. The reason why some of areas are so cheap is because of poor infrastructure, higher crime rates and poor transport. Many people cannot move into these areas because it is too far away from work. Many people cannot move into these areas because of crime problems. Many people cannot move into these areas because the schools provide such a poor standard of education.

but if ppl r prepared to downsize their expectations, then they can still pick up a place in the area they like e.g. a 2 bedroom unit/flat in Parramatta, rather than a house in Blacktown. I think Alex has mentioned this quite a few times in another thread.
 
Have to agree with the majority on this. My wife and I could not afford to buy in the Sydney area when we were young. So we bought a block of land at Tahmoor 1hr south. We paid $17500 for it when it was only worth $12500. Any way we paid it off in a couple of years and built a house. It cost us $40000 to build. After living in it for 3yrs we sold for $123k that was our start. We now live in a very nice house but it annoys me when I hear young ones say they could not afford to by the house of their dreams. Well hello neither could we but we started small and worked hard.;)

You paid it off in a couple of years? You must have been on some sweet wages or perhaps property was cheaper compared to wages back then.

Partner and I are on around $80k combined. Mortgage of $273k on a property now worth around $340-350k. We certainly haven't over extended ourselves or bought a mcmansion. No way you could pay off a mortgage like this in a couple of years unless we were on like $175k+ (combined, before tax) per year. Can't see our wages doubling until my partner gets out of Uni in another 3 years and starts working fulltime instead of part time.

I think sometimes users on here just like having a stab at first home buyers, trying to make it look like the unaffordability whining is all coming from them. Fact is $500-600k is a lot of money to 90% of the population, not just first home buyers.

Sadly not too many young people are willing to live in the Blacktowns of Australia because they aren't the right address.

Who's living there then? Are there just a bunch of empty houses? Is it all baby boomers that have decided after building lots of equity in their mansions they will downgrade to the area? I imagine there are a lot of renters, but chances are there are also probably a lot of young people/FHB also making up the population.

Stats here:
http://www.domain.com.au/Public/suburbprofile.aspx?mode=research&searchTerm=Blacktown#mapanchor

Show 70% owner occupied housing and the largest age bracket is the youngest bracket: 20 to 39
 
You paid it off in a couple of years? You must have been on some sweet wages or perhaps property was cheaper compared to wages back then.

Partner and I are on around $80k combined. Mortgage of $273k on a property now worth around $340-350k. We certainly haven't over extended ourselves or bought a mcmansion. No way you could pay off a mortgage like this in a couple of years unless we were on like $175k+ (combined, before tax) per year. Can't see our wages doubling until my partner gets out of Uni in another 3 years and starts working fulltime instead of part time.

I think sometimes users on here just like having a stab at first home buyers, trying to make it look like the unaffordability whining is all coming from them. Fact is $500-600k is a lot of money to 90% of the population, not just first home buyers.

Thanks Hobo-jo, you are the first person to support me on this thread. This article is not about present prices, it's about what is going to happen in 2008. If people are struggling now, how are they going to cope when prices go up by 15% next year and say another 15% in 2009?

Most people on this forum own property and haven't got a clue on how difficult it is going to be for first home buyers in the future. In the past, you may have been able to scrimp and save to buy your first home. In the future, will first home buyers still be able to scrimp and save to buy their first home? If Residex's predictions are correct it will mean that a median priced house in Brisbane will have increased by 50% in 3 years by the end of 2009. I still maintain that there will be an affordability crisis.
 
Nth Brissy & Hobo-Jo,

We are not "having a stab at FHB's" on this thread, or on this site. We don't raise the complaint about affordability - you guys do; we just respond, the same way a parent does to a child who says "it's too hard", when as a parent we know the whole planet can do it.

We hear the complaint about buying your first home being so tough all the time, and for all of us that are older, and have bought houses long before you started to earn an income, we had it tough as well, and we just found a way to buy something.

We could not buy where we wanted, saving a deposit was just as hard, and there were no LoDoc or NoDoc loans around then to "get us over the line" like now.

Yes, it is hard to move from family and friends, but we all did it; it's what you have to do. Life's not fair.

Are you gunna fold, or fight? Folding is easy, and keeps you poor.

For those FHB's in Melb who want to live in a good area, close to work, nightclubs etc, etc; have a look at these two:

This is Richmond; 10 mins from the CBD at the most. Near trains, buses, parks, shops -
http://www.realestate.com.au/cgi-bi...eader=&c=51027418&s=vic&snf=rbs&tm=1197902098

OR:

Frankston: one of the hotspots at the moment. Near where I live. On the Bay, great infrastructure, freeway, train; both 40 mins to CBD (if you must go there).

http://www.realestate.com.au/cgi-bi...header=&c=2318865&s=vic&snf=rbs&tm=1197902693

This was a 30 second search. Give me an hour and I'll turn up some beauties.

Now, I am the first to admit that these two joints aren't ideal. But they are affordable, and once you have a foot in the property door, the rest is easy.

You guys don't know what is going to happen in 2008. No-one does. Don't assume that the prices will go up forever. They might stop. We haven't had time for Lapdance Kev to weave his "magic" yet. But I'll tell you one thing; the prices in the long term will go up, so buy as soon as you can afford it, somewhere.
You can always move to where you want when you've got yourself established.

Just a quick sob-story for you to give you hope;

When I was 23, I spent 6 months in a hotel on Toorak rd in Sth Yarra. It was $12 per night, communal bathrooms, kitchen and home to the "down and out". It was funny; I was down and out, but never thought this; I used to look at the poor old boys in that hotel and feel sorry for them, yet I was in there with them. It's all attitude I guess.
I had to get a train from Sth Yarra to Oakleigh, then a bus down Warrigal rd to work. Approx 45-50 mins. 45 hours a week in the Proshop of a Golf Club. No car. Wage was $240 per week. I saved $75 per week. Some weeks $100.
Bought the first house 2 years later.
Now; 46, own multiple properties and nett worth over 1 mill. Didn't do anything spectacular unfortunately, and wasted about 5 or so working years "playing up" and buying doodads.
I wished I knew at 23 what I know now.
You've heard it all before.

Get out there and do it.
 
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Most people on this forum own property and haven't got a clue on how difficult it is going to be for first home buyers in the future. In the past, you may have been able to scrimp and save to buy your first home. In the future, will first home buyers still be able to scrimp and save to buy their first home? If Residex's predictions are correct it will mean that a median priced house in Brisbane will have increased by 50% in 3 years by the end of 2009. I still maintain that there will be an affordability crisis.


Not all the properties will increase by the predicted growth figure. The ones the FHB should be looking at will probebly lag behind because they will be in slightly less desirable locations.
(note: I am a first home buyer and dont earn more than most people my age (25) I just dont have a $25,000 car and an overseas travel habbit)
I agree with most.. it's people wants which are the problem
 
Moving away from friends, family and a safe environment is easier said than done. The reason why some of areas are so cheap is because of poor infrastructure, higher crime rates and poor transport. Many people cannot move into these areas because it is too far away from work. Many people cannot move into these areas because of crime problems. Many people cannot move into these areas because the schools provide such a poor standard of education.

My response: boo frigging hoo. If people aren't willing to live where they can afford, they can, at least for now, rent where they want. Rents, you'll note, are going up too, Soon the FHBs will be priced out of their desired areas for buying AND renting. Then they'll have no choice, or get help from parents. Any government help is just going to increase prices. Instead of a 3 bedroom house, go buy a 2 bed unit in a nicer area instead, then. Don't like the idea of living in a 2 bed unit with a family? Tough. By definition not everyone can afford median properties. Go overseas and see how families live in Hong Kong, Tokyo, London and New York.

I can't afford to live in a mansion on the North Shore. I'm so gutted.

Moralism isn't going to help the situation here. A dose of cold hard reality will.
Alex
 
Most people on this forum own property and haven't got a clue on how difficult it is going to be for first home buyers in the future. In the past, you may have been able to scrimp and save to buy your first home. In the future, will first home buyers still be able to scrimp and save to buy their first home? If Residex's predictions are correct it will mean that a median priced house in Brisbane will have increased by 50% in 3 years by the end of 2009. I still maintain that there will be an affordability crisis.

It's a self servicing market. If people can't afford to pay so much for a piece of property then plainly and simply they won't, and just like in any free market, prices will come down, or they will saunter until people can afford it. Prices aren't dictated by sellers, they are dictated by buyers, which is why the arguement previously made, that 90% of people can't afford the median price, is flawed.

I know that your arguement is based on FHB's but i still maintain that there are plenty of affordable housing for these families, especially considering i know a few close 4-5 person families on one parent incomes that are purchasing at the moment. It's never easy, all you need to do is ask your parents or grand parents what they had to go through, and they will tell you the same.
 
My response: boo frigging hoo. If people aren't willing to live where they can afford, they can, at least for now, rent where they want. Rents, you'll note, are going up too, Soon the FHBs will be priced out of their desired areas for buying AND renting. Then they'll have no choice, or get help from parents. Any government help is just going to increase prices. Instead of a 3 bedroom house, go buy a 2 bed unit in a nicer area instead, then. Don't like the idea of living in a 2 bed unit with a family? Tough. By definition not everyone can afford median properties. Go overseas and see how families live in Hong Kong, Tokyo, London and New York.

I can't afford to live in a mansion on the North Shore. I'm so gutted.

Moralism isn't going to help the situation here. A dose of cold hard reality will.
Alex


Well said Alex.

Don't even start me on how the Mexicans in L.A, who are usually in the minimum wage job, can all work in Maccas, or B.K's, or do gardening and home cleaning, can band together as a family (or 2 families) and buy a small house and live in it; sometimes 10-14 people at a time.

Last year, over 50% of the property transactions in California were by Latinos, and I can tell you first hand that they definitely do not earn the big dollars. But they grind it out, work hard, band together and buy as soon as they can.

One of the apartment complexes we lived in in L.A had a Mexican family as the maintenance crew. Mother, Father and oldest son. Lovely family. They lived in a 2 bed apartment in the complex. They had 4 kids; one my son's age and at the same school. They have been living in that apartment for 20 years.

OOPS! Sorry; I got started.
 
It's a self servicing market. If people can't afford to pay so much for a piece of property then plainly and simply they won't, and just like in any free market, prices will come down, or they will saunter until people can afford it. Prices aren't dictated by sellers, they are dictated by buyers, which is why the arguement previously made, that 90% of people can't afford the median price, is flawed.


Quite right, and we investors are doing all we can to buy low, so it's not our fault the prices go up.

The other thing about the median price is that it represents the exact halfway mark of the dollar value of the properties sold in a period.

It could be that there were more houses sold in the lower price range, but the sales in the higher price range, while being less in number than the lower end, turned over far more dollars, thus the median goes up.

Totally irrelevant to the cost of a house in the area.
 
starting small is the way to go. For example, if you are 2 adults and a kid, buy a 2 bedroom apartment. Whatever you do, just start.

In Victoria, there are net 1000 people coming into the state each week so housing is in high demand and booming. So get in asap before prices keep rising.

Try Springvale, a real up & coming suburb with real potential. good shops, and good public transport, near major roads, multi cultural community.
 
You paid it off in a couple of years? You must have been on some sweet wages or perhaps property was cheaper compared to wages back then.

Partner and I are on around $80k combined. Mortgage of $273k on a property now worth around $340-350k. We certainly haven't over extended ourselves or bought a mcmansion. No way you could pay off a mortgage like this in a couple of years unless we were on like $175k+ (combined, before tax) per year. Can't see our wages doubling until my partner gets out of Uni in another 3 years and starts working fulltime instead of part time.

I think sometimes users on here just like having a stab at first home buyers, trying to make it look like the unaffordability whining is all coming from them. Fact is $500-600k is a lot of money to 90% of the population, not just first home buyers.

Hobo Jo We paid off the block of land not the house and land. It was the only way we could afford to get into the game. I was a fitter and turner still on apprentices wages and my girlfriend at the time soon to become my wife was a bank clerk. I cant believe you have to pay 500 to 600k to get into the housing market. You only have to pay this much if you are unwilling to start small and work hard that is my point. I have no sympathy for anyone who is not willing to do the hard yards. :(
 
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