will the melbourne market crash soon?

btw - an explanation for low loan rates to locals is because local people have just dropped out of the market due to the rising prices. They cant compete and have decided to sit on the sidelines.
 
Its not true - these suburns have not increased by 30-50 percent in the last 12 months.

OK, happy to concede 30-50% may be an overstatement for ALL houses in these suburbs, but I have definitely seen an increase of at least 30% in many of the high end ($1.5 million+) homes in these areas.
 
OK, happy to concede 30-50% may be an overstatement for ALL houses in these suburbs, but I have definitely seen an increase of at least 30% in many of the high end ($1.5 million+) homes in these areas.

Yep and you will need to concede that infact the levels now are only slightly higher then the 2007 prices.

Foreign buyers arent the 'only' reason prices are booming. I expect after an intial small effect there will be an evening out and then back to stable increases.

Either way im happy - i bought pre boom.
 
I have been wondering why Melbourne in particular has gone crazy for the last 12 months.

I think Melbourne has been affected the most due to the high number of overseas students studying here. Education of overseas students is a major industry in Melbourne (perhaps more so than any other city in Australia)

Well, unless you have some evidence to the contrary, this really isn't the case. International students are a source of revenue for ALL Australian universities and all of the uni's push to get the maximum number of international students allowed. This isnt a Melbourne specific thing.

The quota of international students allowed at a university was around 25% last time I looked and NSW, has 11 uni's vs Victorias 8. So if it was parents of international students buying up property, NSW would have out performed Vic in capital growth purely because there are more international students in NSW. As of 2008, NSW had 143 000 international students, while Vic had 115 000.

Further evidence of overseas buyers artificially inflating our market is the fact that the volume of home loans to locals has been steadily dropping over the past 5 months since interest rates have been rising which usually correlates to a plateauing or even slight decrease in house prices. We have seen the opposite with continuing price rises despite falling home loan volumes. The only explanation for this is foreign money entering our market.

Well, thats not really the only explanation. How about cashed up baby boomers that have made a fortune on property over the last 10+ years? They really dont need to take out huge loans to pay for the inflated property prices. From what I have seen at auctions, it is these people that have been throwing large amounts of money down for property. Combine that with FHB's dropping out of the market (~10% of buyers) and that would give you another explanation.

If there actually are more foreign investors in Victoria (does anyone have these stats?) the explanation could be as simple as investing in Melbourne was a sensible choice over the last few years. Once the numbers dont look so good (which isnt too far away) they will move on to other markets.

I'm happy with the gov's decision to tighten up foreign investment tho. It should never have happened in the first place.
 
China is not slowing down

I live in Perth, WA, and can tell you that mining companies are screaming for workers which indicates the expected resources boom is not far away. So do not be too concerend about China slowing down in the forseeable future.

I still believe that Melbourne has property issues with supply and demand and with increasing numbers arriving each week (See data) there will continue to be demand for property.

My hunch is a correction in the market which is a good thing, but still steady growth.

:)
 
Australasia

Sorry I cannot locate the West Australian newspaper source but I can assure you that Australia is in demand for relocation from overseas. Government wants it and so do the thousands who want to live in this great country.

The forcast is that at least 50% of Australias population will not have been born here within the next 50 years. :confused:
 
they only have to sell when they leave the country, yeh! that will happen.:rolleyes:


Craig, if there is a law in place to force sales once people return to their country then lets hope it is enforced.
Now even if that is not the case surely this will have an impact on the decisions of a lot of potential o's buyers.
I mean, if you are on a student visa and buy now and study here for 4 years, who knows where the prices would be in that small timeframe when you are forced to sell?
If you were able to hold it for ever (current law) then who cares if the price moves up and down in the short term as you know it will achieve growth over the long term.

As for 30% drops, I think this will be true for some areas of the east, namely Box Hill and Blackburn. Box Hill has gone through the roof, helped along by people paying 800+ for small 2 bedroom places:)confused:) and for anyone who lives there knows there is a large chinese community and many who are students.
Prior to the laws changing they would have rented a flat/unit for around 15k per year as they weren't allowed to buy them then once they finish studying gone back home, but now they can buy that same flat/unit for 400-500k and keep it forever. Makes more sense than renting it for 4 years but with the proposed changes maybe it doesn't any more.
 
as soon as they are trained here they can apply for citizenship, very few will go back home ... they stay and can then invite their loved ones.

our immagration policies require trained people to enter this beutiful brown land,
uni here is one of the easiest way to obtain entry, and good luck to them too!
 
It is not just the eastern suburbs that have had massive growth, i could show you examples in Carrum, Mentone, Parkdale, Black Rock and Ocean Grove, Barwon Heads etc etc that have had 35-45% increases since 2008 that are approx 25% above 07 highs,

My opinion is Melb is due to slow down at end of year regardless, might have very small decrease then flat for a while, and then will take off again when time is right. Talk of 30% drops are insane, so many people would have to sell for that to happen and why would they? So many other factors in place on a house than on a stock.
 
as soon as they are trained here they can apply for citizenship, very few will go back home ... they stay and can then invite their loved ones.
Only if they study in a particular profession. Not every degree guarantees you pr status.
our immigration policies require trained people to enter this beautiful brown land,
uni here is one of the easiest way to obtain entry, and good luck to them too!

Secondly, please drop the idea that every single foreigner want to live here. I studied in Melbourne and had lots of Vietnamese and Chinese and Korean friends and more than half of them returned home once they finished.
Having an Australian degree not to mentioned the English skills you would have from studying in Aus will practically buy you a well paid job in a lot of Asian countries.
Plus, for the wealthy in countries like China, Vietnam etc they live like kings compared to the general public. You can rent maids, drivers etc for pittance and the living costs are so low that you have money to burn.
I know a lady who moved back here (Asia) from France for that exact reason, and since I’m currently living here I can speak of it first hand.
Plus from cultural perspective a lot of people can’t cope with the difference between Asia and Australia, just as some Aussies coming here suffer the same problem.
 
Can someone explain to me, how many properties were temporary residents allowed to buy? I assumed that they were only allowed to buy 1 property.

The new laws states they any one caught flaunting the laws will be made to sell the properties. From what i know there has been many, many multipy Chinese that have bought over 10 props.

In some ways the breaking of the rules is the goverments fault. They did not issue any warnings, thus the buy as many as possible mentality of many . I think many of the buyers thought the goverment was turning a blind eye on their activities.

I would hate to be in the shoes of those whom bought multiple properties.

The Rudd govt seems to have great ideas, but not the ability to manage them. The insulation rebate and the laxing of foreign ownership plans are great schemes. But Rudd seems to ignore any problems until it is too late. Then they ending up spending $$$$$ cleaning the aftermath.
 
Hi,
I actually heard from an extremely good source early on this week that the ATO will start to look at all these property transactions as its there belief that they are not paying tax.
They are wanting to take some form of bond upfront from these overseas residents.
I then read about Krudd and FIRB in todays papers, so i do think they are prepared to do something, albeit what and if it restricts hese people we will only find out in the future
 
Hi,
I actually heard from an extremely good source early on this week that the ATO will start to look at all these property transactions as its there belief that they are not paying tax.
They are wanting to take some form of bond upfront from these overseas residents.

which highlights a big part of the problem.
the govt hasn't got the means to monitor or enforce these laws and regulations.

money hungry nesb foreigners from nations with less evolved regulatory and justice environments, who are free to move in and out of the country, aren't likely to give a rats.
 
which highlights a big part of the problem.
the govt hasn't got the means to monitor or enforce these laws and regulations.

money hungry nesb foreigners from nations with less evolved regulatory and justice environments, who are free to move in and out of the country, aren't likely to give a rats.

you criticise other economic systems yet have no faith in your own. do you support the free market, or perhaps or we should have all property rights vested in the state? Ruddy seems to really have a handle on things and I reckon he could do a much better job than you or I
 
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