Where to Buy: NOT in Australia!

[straight]

http://www.demographia.com/dhi.pdf

If you read the demographia report you will see that the sunshine and gold coasts are two of the three top most UNaffordable places in the survey.

On a scale where severly unaffordable is over 5.0, the sunshine cost rates 9.1, the MOST unaffordable suburb in the survey covering Australia Canada Republic of Ireland New Zealand United Kingdom and the United States.

If you look up charts of the US, Japan and Australian house prices over the last decade you will see that the US and Japan have fallen off a cliff [Japan is still 40% off its highs set 14yrs ago], Australia is till up there near its peak!

the fundamentals are clearly not there to support these prices. Is the crash coming to a dinner table near you? I fear it is!

 

[zaph]

i'm cooking up some war food (silverside) - i'll see you at the local dole office some time soon!

 

[BoatBoy]

Here you go, heres the thread you are after and a big list of sites that contradict demographia

http://www.somersoft.com/forums/showpost.php?p=505054&postcount=244

Dave

 

[phil]

i'm cooking up some war food (silverside) - i'll see you at the local dole office some time soon!

I really think some of these guys need a cold shower. Will unemployment levels go up? Probably. Will there be a reduction in median house price values in Australia? Perhaps. Will it get better in a few years ? Well, I would put money on it.

There seems to be the voice of a minority who *appear* to take some kind of joy in the misfortune of others lately, as well as displaying a very negative attitude towards everything and nothing. I don't really understand where this comes from. It certainly was not around when I was younger, ( or maybe it was and I just wasn't in tune to it at the time ). I like to think of myself as a realist, although generally optimistic by nature, and given a long enough time frame, I believe most things get better. Having a downer of an attitude not only gets very boring, but eventually also very lonely.

Anyway, just my rant for the day.

Phil

 

[sparky23]

I second the motion!

 

[Sabitor_84]

Third over here.

Anyone for forth?

 

[The_Bludger]

Is the crash coming to a dinner table near you? I fear it is!

Nothings impossible. Spread your eggs...

 

[THEHEATH]

Spread your eggs...

Where I come from.......

 

[troyhunt]

There seems to be the voice of a minority who *appear* to take some kind of joy in the misfortune of others lately, as well as displaying a very negative attitude towards everything and nothing. I don't really understand where this comes from.

Tall poppy syndrome?

 

[Raja]

http://www.demographia.com/dhi.pdf

If you read the demographia report you will see that the sunshine and gold coasts are two of the three top most UNaffordable places in the survey.

On a scale where severly unaffordable is over 5.0, the sunshine cost rates 9.1, the MOST unaffordable suburb in the survey covering Australia Canada Republic of Ireland New Zealand United Kingdom and the United States.

If you look up charts of the US, Japan and Australian house prices over the last decade you will see that the US and Japan have fallen off a cliff [Japan is still 40% off its highs set 14yrs ago], Australia is till up there near its peak!

the fundamentals are clearly not there to support these prices. Is the crash coming to a dinner table near you? I fear it is!

I am glad you fear this and hope others also fear this otherwise if everyone jumped in and bought a house then who would rent my IP's?

 

[mja]

*yawn*

Are these D&G guys still around?

 

[newhigh]

luddites abound

Well, the respected real estate commentator and author Margaret Lomas spoke on Sky Business News last week. She is an investor herself and said that the bottom third of Aussie property would probably see a rise in price - particularly those houses selling under $300k. Obviously overpriced housing in rural mining towns may be set to fall but the major population centres are realtively safe

 

[BoatBoy]

luddites abound

Lud·dite <img src="[url]http://cache.lexico.com/g/d/speaker.gif" border="0" />[/url] (lŭd'īt) Pronunciation Key
n.

1. Any of a group of British workers who between 1811 and 1816 rioted and destroyed laborsaving textile machinery in the belief that such machinery would diminish employment.
2. One who opposes technical or technological change.

Luddites?

Dave

 

[Angelo]

I think the issue is land supply or lack of it in Australia. Unlike places such as America where whole cities have such urban sprawl that they virtually merge into each other, here in Australia we tend to have strict urban boundaries which in effect artificially limits land availability thus placing more demand on land. In South Australia and probably other parts of the country demand for land is greater than supply. This being the case I cant see how there can be a crash. Things may slow down a little until the world gets back on its feet, however the long term forecasts for land release certainly do not suggest that we will have oversupplies of land. I think a big issue that America had was that it did have an oversupply of property which helped fuel the storm when the finance markets crashed.

Newhigh I also agree with you and Margaret. There certainly is a demand for cheaper housing across the country and once again there is only a limited supply of cheap housing. For this reason we may very well see the lower end outperforming the top end this year, particularly given the governments incentives for first home buyers.

 

[boomtown]

We also dont have illegal Mexican labour to build houses at $2 per hour.

 

[BayView]

We also dont have illegal Mexican labour to build houses at $2 per hour.

Actually, they earn about $7 per hour and don't ask them what a W2 is.

It's quite interesting; even thought they are earning peanuts as a Race, they all band together, live in larger groups, pool their funds and are now the largest buyers of (resi) property (by volume) as a race, in L.A, and no doubt other areas as well such as Arizona and probably Texas.

In 50 more years (they breed prodigiously), the USA will be Mexico.

 

[RightValue]

Actually, they earn about $7 per hour and don't ask them what a W2 is.

are now the largest buyers of (resi) property (by volume) as a race, in L.A, and no doubt other areas as well such as Arizona and probably Texas.

In 50 more years (they breed prodigiously), the USA will be Mexico.

They lost the war; but will win the peace; those places you mentioned used to be part of Mexico

cheers

 

[MichaelW]

Here you go, heres the thread you are after and a big list of sites that contradict demographia

http://www.somersoft.com/forums/showpost.php?p=505054&postcount=244

Dave

And yet another commentator arguing the uselessness of that Demographia study:

Don't believe the house price gloom

And you can rely on our headline-obsessed, due diligence free media to not in any way question — just for a moment — either the usefulness of the rankings you publish or the interests of the individuals responsible for producing them. After all, rankings are rankings — they must be right. And with a fancy name like “Demographia”, you might as well be the World Bank (more on the World Bank later).

No-one will draw attention to the fact that in your ranking of some of the world’s 32 most unaffordable metropolitan markets you have listed, alongside the obvious culprits, Bundaberg, Newcastle, Wollongong, Cairns and Hobart. In fact, according to Demographia, housing in Bundaberg is less affordable than New York and London!

All of the Demographia International Housing Affordability Survey findings are based on one extremely simple metric known as a “house price-to-income” ratio. In short, Cox & Co. assume that you can “value” housing markets using this crude measure.

The first problem here is that there is no statistical evidence that there is any stable or predictable long-term relationship between median incomes and house prices.

You get the drift...

A very good article with some very compelling arguments. Definitely worth a read for anyone who thinks that the demographia study has any relevance at all. Good to dispel that myth...

I particularly like the embedded chart of the "RBA Estimate of Australia's House Price to Disposable Income". Succinctly paints the picture that some here seem unable to comprehend, that its the "disposable" portion of the income which is relevant for this "superior" good in economic terms which has a different demand elasticity profile to a stable "necessity" good. Sure, accommodation is a necessity, but better accommodation is a want, not a need.

Cheers,
Michael