Housing Crisis

What are people's thoughts on the cost of housing presently? Is there a crisis? I was watching a 4 corners programme the other night and a young couple had just purchased there first home in Mascot for $1,700,000 and had a mortgage of $1,400,000. Their parents had to go guarantor on the loan. There must be a few Sydney residents on this forum with kids looking to buy their first home. Is this the norm? Would you guys do the same?

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  • It's a housing crisis caused by corrupt governments. Australia with one of the greatest land masses and 20 million people lol, then we have unaffordable housing. It's all government corruption 

    • That was one point which was raised that despite being one of the largest countries in the world a huge percentage of our population is packed into two cities. There needs to be more infrastructure (high speed rail networks was mentioned) servicing our rural areas.

      Luke Bona (host of the nightshift radio on MMM) was saying that his daughter is wanting to buy somewhere on the northern beaches of Sydney but a 2 bedroom unit was over a million dollars. He was saying to his daughter that she might have to consider looking at other areas further out but she was having none of it. So is part of the problem that the current generation want the best of everything immediately? 

      • Yup, this is their problem. Whilst they're sooking about prices they're unwillling to negotiate on the location.  Our first home was in an area deemed a bit undesirable . We realised I wasn't going to be able to buy where I grew up, so we decided to hunt in an area more sure to our budget. We picked the less desirable area we thought would have the most growth possibilities and settled on a place that was in probably the least desirable area of them all but the difference is this place was only 200m from the water . Turns our that area grew big time. more than tripled  our money in 9 years . 

        wasn't easy by any means , we had some years we lived week to week , but back then even a 300k mortgage seemed like a million dollar one. Once we'd moved out of where I grew up and our eyes were more open to living in other reas we were able to start buying smart. 

        I have zero sympathy for these people who bitch and moan about the house prices but aren't willing to negotiate on where they want to buy.

      • Mate we're not packed in that's a myth.  Plenty of room past edmonson park, Rouse hill way and campbeltown regions.   You go to the central coast and prices are through the roof. It's all government corruption . With a stroke of a pen they could reduce prices by negating landlord tax incentives,  reducing overseas countries like China buying up big  ect....

        • Chief I often wonder this, 

           

          why aren't we building pipelines to pipe water from all the rain on the coast into big dams right across the middle of the country . Imagine when we have these huge coastal downpours how much water could be caught before it flushes out to sea and then pumped into a series of catchments right acorsss the country.  We woudnt hear shit about housing crisis's, droughts or global warming , and you could generate power from the flowing water . 

           

          Maybe I'll run for the next election .

      • Adam Magrath This is an interesting topic. My first born has just bought her first apartment, she is single, 25 and we are (well not me as i'm injured) painting it and pulling up carpet. 

        I started at South Windsor, I did not grow up there, but it was what I could afford. I wanted to live on the Northern Beaches. The Mrs bought at Camperdown with her sister. So we partnered up, I sold South Windsor, she sold Camperdown and we rented together in Granville while we saved our asses off, cheap rent in her Grand Mothers place. After 3 years we bought land at Bella Vista and built a house. Got stuckin to the mortgage and bought and sold a couple of investment places with family on the mental coast. Then bought 7.5 acres at North Kellyville, shit house, big land, did it with the hope it would be subdivided one day. That was 2000. Finally after many sleepless nights and protests and lobying Gov ministers we achieved a partiall rezone and sold to a developer. That was 2018. So after many years and a few homes we finally had the coin to buy on the Northern Beaches and we love it.

        Problem is the daughters love it as well and they want to live here as well. The prices here have gone stupid over the last 2 years. I told daighter 1, why don't you buy at Newcastle near the Uni, near the hospital, I will build a granny flat and you can have both rents. Nah, nope she wants to keep surfing and living the Beaches life. so anyway she is a good kid, has saved $100K as she has worked since 15, started at Maccas like many kids do. The bank of Mum and Dad stepped in as well (small loan / gift really) and she is now the proud owner of a single bed shoe box at Dee Why. Crazy thing is she paid $20K less than I did for my 7.5 acres at Kellyville 20 years ago.

        But what are you going to do? She is on the treadmill and prices may stabilize, even fall a bit, but the graph always goes up, she will move in, new kitchen and then flip it if there is a gain in 12 months. This is the only way I found to get up the ladder, make enough in your job or business to fund property transactions, buy well, fix up a bit, hold a bit, sell. 

        • That's a great story MB, I think you appreciate the value of things a lot more in life when you've had to work really hard and for a really long time to get them.

          There's a common trend here of parents in some shape or form being there to help out their kids (I know our properties will get handed over to our kids when the time comes).

          There are interest rate rises predicted in the not too distant future (next year). I haven't done the sums but a rise of a few percent might make things interesting for people with a debt in the vicinity of $1.4 million like this young couple on 4 Corners.

          • Thanks Adam. 
            I honestly do not know how someone sleeps at night with a 1.4 mil mortgage. When my daughters loan was approved the rate is something like 2.5% but the bank assessed it as 5% to see if she could still support the debt with the 2.5% increase. I understand that this is rising to 6% now and loans can not be more than 6 times the salary. 
            The problem is that so much of people's salary is now tied up supporting the debt that it is affecting the rest of the economy and the Governments and banks are tightening up to ease this growth.  
            Interesting that the Sydney medium house price is $1.3mil so a couple with 20% deposit need a combined salary of about $170K to get the over $1mill loan, that today will take $4K per month to service, however if rates rise as expected 2023-2024? What happens?

            • To put it simply Ads, a loan of 1.2mill will go up $1000per month for every 1% rise in interest rates. For most, this is $1000 per month after tax so it can have a huge negative impact on the wealth effect - people's ability or desire to spend on the many discretionary things that are integrall in keeping the economy humming along. 

              I do believe that it is best to dive in, and dive in deep, when you are young. The younger the better. You have the time and energy to work it off and see out the troughs. And if things do go pear shaped, there's plenty of time to pick yourself up, dust yourself off, and go again.

              • I agree, this is why we supported our daughter to get in now. I have nephews who are 27 & 29 and they haven't bought yet, they complain about the crazy prices, but while young and free of the expense of children, I say get in and go hard. 

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