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  1. #11
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    Quote Originally Posted by Elijahs Mum View Post

    I can only speak for my area in southern Sydney and I've been selling real estate for now 25 years ( I started in 1990 when interest rates were 16%!) but investors account for approx 7% of our market , we don't have the mega rich investors buying up our houses, we have families buying to them live in and most of the investors who do by here are mum and dad investors trying to set themselves up for retirement or retirees investing some of their super and that's mainly apartments as the rent return of houses in Sydney just doesn't make it affordable for most investors , even with the negative gearing tax breaks
    My brother did that. Scraped a deposit together (hit me up too for $$$) and bought a small 2 bedroom apartment off a plan 6 years ago. He lived in it for a year and now rents it out. He does NG it. Now he had bought another place on the equity of that apartment as the price has rocketed in that suburb.

  2. #12
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    The value in the housing market isn't real, it's just debt. That's what is worrying...

    The Australian domestic debt is huge.
    http://m.smh.com.au/business/the-eco...15-1lzyz4.html

    One economic downturn, people starting to fail their repayment and the correction will be severe.

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  4. #13
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    Quote Originally Posted by babyno1onboard View Post
    I didn't mean that rising interest would fix the problem, but I believe house prices are what they are because of interest rates. Interest rates have impacts on many more aspects of the economy and can't be messed around with just to fix one problem as it would create another.

    But for example when I brought my first house 8 years ago I was able to borrow ~$300,000 with interest rates at 8.5%. If the interest rates were 4.35% at the time (what my mortgage is at now) the bank would have lent me ~$600,000. Big difference in buying power.
    Just to add to my example, this property is now worth about $425,000. So it's actually far more affordable now (with interest rates at 4.35%) than it was 8 years ago (interest rates at 8.5%).

    The place was an absolute tip and verging on uninhabitable when I brought it, but hey as a single first home buyer that's all I could afford.

  5. #14
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    Quote Originally Posted by ExcuseMyFrench View Post
    The value in the housing market isn't real, it's just debt. That's what is worrying...

    The Australian domestic debt is huge.
    http://m.smh.com.au/business/the-eco...15-1lzyz4.html

    One economic downturn, people starting to fail their repayment and the correction will be severe.
    Remember though they predicted the same thing in 2007 and it never happened, a slight down turn in prices but nothing severe and it bounced back in a year - I still think our population growth is pushing demand which is keeping prices high, also the one good thing about our banks compared to the rest of the world is they are quite tough with loan applications and deposits , a lot of banks have been requesting 20% deposits now for a few years and they are very tough with their valuations

  6. #15
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    Quote Originally Posted by Janesmum123 View Post
    If interest rates where 9% house prices would drop. There are lots of factors to high house prices. Negative gearing is one of many. Not enough housing, people buying beyond their means. I'm not someone who believes it's all negative gearings fault and everything would be fine if we got rid of it but I don't deny it has some impact on prices.
    Also people's expectation on buying property is very different than it was years ago. Another issue is that it's takes sacrific to buy a home which is beyond some people. And of course Sydney and Melbourne are just 2 places in Australia. You can pick up a decent house in Tasmania for $250k.
    Wow 250k really? But what if you are from Melbourne or Sydney, have family there and want to stay? I find the idea that it's accepted now that people should just be happy to move so far away, just to find a place to live, a bit bizarre.

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  8. #16
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    Default Housing / negative gearing / politicians

    Well if you can't afford a house in Sydney or Melbourne but still want to live there, you can always just buy a cheap property elsewhere, like Brisbane or Adelaide or Hobart, negatively gear it and then push the house prices up for the people wanting to buy there

  9. #17
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    Quote Originally Posted by babyno1onboard View Post
    I didn't mean that rising interest would fix the problem, but I believe house prices are what they are because of interest rates. Interest rates have impacts on many more aspects of the economy and can't be messed around with just to fix one problem as it would create another.

    But for example when I brought my first house 8 years ago I was able to borrow ~$300,000 with interest rates at 8.5%. If the interest rates were 4.35% at the time (what my mortgage is at now) the bank would have lent me ~$600,000. Big difference in buying power.
    Do you think a lot of people buying now base their ability to repay on today's rates or factor in that rates could rise? We borrowed 5 years ago and based what we borrowed on that interest rate plus 2% as at the time rises seemed likely. Means we are overplaying which is great. I hadn't thought about the affect lower interest rates must be having. The people I know who feel locked out are struggling to save for deposits while house prices keep rising but could probably pay the mortgage. It's tricky though because 100% or near to mortgages are really dangerous territory but it must be so demoralising to be trying to save for a deposit when the goal post keeps moving. At the same time I miss the freedom of renting!!!
    I think the whole idea of property for investment doesn't sit well with me. Feels like people would be better investing in something productive and not messing around with something so essential to us all.

  10. #18
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    Quote Originally Posted by Freyamum View Post
    Wow 250k really? But what if you are from Melbourne or Sydney, have family there and want to stay? I find the idea that it's accepted now that people should just be happy to move so far away, just to find a place to live, a bit bizarre.
    Why is that bizarre?

    People move for various reasons- work opportunities, social, cultural and housing. We've moved to Canberra in hopes that if Dh leaves the adf he is most likely to find work here. We've got nothing else here to entice us to stay.

  11. #19
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    Quote Originally Posted by BigRedV View Post
    Well if you can't afford a house in Sydney or Melbourne but still want to live there, you can always just buy a cheap property elsewhere, like Brisbane or Adelaide or Hobart, negatively gear it and then push the house prices up for the people wanting to buy there
    Don't forget Darwin!

  12. #20
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    Quote Originally Posted by Rose&Aurelia&Hannah View Post
    Why is that bizarre?

    People move for various reasons- work opportunities, social, cultural and housing. We've moved to Canberra in hopes that if Dh leaves the adf he is most likely to find work here. We've got nothing else here to entice us to stay.
    I think the point is that people shouldn't have to move. Housing should be affordable. An article just popped up in my newsfeed about cheap homes being history in Sydney.

    The cheapest listed house in Sydney is a 3 bedroom old housing commission house in Willmot (the suburb of Mt Druitt where they filmed Struggle Street) and it is listed for $409,500


 

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