Housing market 2021

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triggering bro said:
6% RBA rate or interest rate with banks margin? Either way it’s a debacle. People need to take this into account when entering into a mortgage. Some crazy borrowers out there.
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I doubt we will ever get to 6% interest rates, people will not be able to afford it. Just saying that Economists typically say interest rates should be 2-3% higher than inflation. Which is about 6%.

The RBA & Government have allowed people to go into this much debt (#5 most indebted country in the world with over 200% of debt compared to income), and therefore put the entire economy at risk. The RBA literally assured people that they would not raise rates until 2024 at a minimum. They are absolute morons misleading people because they do not know how to plan for a successful economy.

The RBA + Federal & State Governments Should have raised rates the second they saw Housing Prices forecast to go up 30% (IE 1st QTR 2021). They did **** all and just looked at each other waiting for someone to take charge. in the meantime the average Mortgage has skyrocketed (in NSW alone its gone up 40% in a single year) putting basic rate rises at risk of blowing the economy.

There is a Reason RBNZ's raised their rates over 12 months ago. How the **** is NZ smarter than us?

How Phillip Lowe still has his job is beyond me. I doubt he will have it much longer after June.
 
Madas said:
I can’t say with any certainty what the best thing to do is but my thinking is why wait 2 years to save maybe 10% on the materials cost of the project ( which is roughly around 50% of the project value )
Labour rates are here to stay , they won’t come down till the next recession in 5 years or so.
And I think when prices do come down it will only be by maybe 10% at first but will increase as we head into the next inevitable recession.

So if your project was $500,000 for example then your materials might be $250,000 , so maybe $25,000 plus builders fee plus gst = maybe a $30,000 saving but waiting 2 years for it .

I might be off my head but tread your own path .

What I’ve learnt in life is when it’s your time to move just do do it .
If you wait for all the conditions to be optimal you miss precious years living in a nice home where you want to live .
But then again don’t extend yourselves too much financially .
Scale the house down to something affordable, thats what we are doing with our clients .
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Home builders going broke because of interrupted cash flow* during construction will be common.

* i pay you, so you can pay them, & they can pay him, who pays you ....
 
triggering bro said:
Can’t speak for private but govt sector unions are already negotiating 5 + 5 + 5 increases for next EBA.
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No wonder taxes across the board need to go up, more more. We've all seen the claim that government charges make up 30%+ of a new house purchase.
Digressing, but whats in the bargain in the EBA for the taxpayer?
 

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Kwality said:
Home builders going broke because of interrupted cash flow* during construction will be common.

* i pay you, so you can pay them, & they can pay him, who pays you ....
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This and Material Costs.

I pity anyone who has just started building a home.
 
RIP Phillip Lowe.

You useless ****.
 
Lyyynnnchy said:
Knock down rebuild is the plan. Likely 2024 when construction prices plateau

Drawing up plans myself atm before appointing an architect. Fine line between the dream home and overcapitalising


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Which area did you buy? I’m in Sydney, I bought in Kingsford.
 
This is but one example of how the housing market has become a very serious national problem.
About 3 years ago on the Sunshine Coast, a small pocket of land, maybe 4 acres, was put aside and marketed for "affordable housing".
Nautica Circuit, Mount Coolum.
The house and land packages were around $429k. Each block was very small at around 250m² and the developer put 3 x 2 x 1 houses on the blocks. So yes, it was affordable housing, ideal for 1st home buyers.
Roll forward to now and these same houses sell for $1M+. There are a couple currently on the realestate.com and domain sites.
Great capital gain for original owners, but a nightmare for those buying there now.
So what is to become of "affordable housing" as a means to get people into their own homes?
I certainly don't have any answers but perhaps existing CBD office blocks and commercial property be converted to residential living. Less impact on greenfields, infrastructure is already there, and a reduction on the urban footprint.
 
Cookie said:
This is but one example of how the housing market has become a very serious national problem.
About 3 years ago on the Sunshine Coast, a small pocket of land, maybe 4 acres, was put aside and marketed for "affordable housing".
Nautica Circuit, Mount Coolum.
The house and land packages were around $429k. Each block was very small at around 250m² and the developer put 3 x 2 x 1 houses on the blocks. So yes, it was affordable housing, ideal for 1st home buyers.
Roll forward to now and these same houses sell for $1M+. There are a couple currently on the realestate.com and domain sites.
Great capital gain for original owners, but a nightmare for those buying there now.
So what is to become of "affordable housing" as a means to get people into their own homes?
I certainly don't have any answers but perhaps existing CBD office blocks and commercial property be converted to residential living. Less impact on greenfields, infrastructure is already there, and a reduction on the urban footprint.
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JFC😵
I can not fathom where people are getting this money from ?
FOMO is out of control and people have surely lost all sense of value if they are paying that much for a “first homeowner kickstart package “ type house
Mind boggling
 
Madas said:
JFC😵
I can not fathom where people are getting this money from ?
FOMO is out of control and people have surely lost all sense of value if they are paying that much for a “first homeowner kickstart package “ type house
Mind boggling
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I believe affordability for the elevated house prices is coming from a number of sources:

1. Existing homeowners borrowing against their own equity - Fine assuming the gains/incomes are taxed like all other investments

2. Parents funding their children through early inheritance or drawing down against equity in their own homes - Dangerous, parents run the risk of outliving their resources, they also run the risk that their children's marriages breakdown and they've effectively gifted huge sums of money to someone no longer in the family.

3. Dual incomes + lower interest rates allowing for greater borrowing potential - Dual incomes are fine, elevated borrowing potential during emergency interest rate scenarios is a dangerous risk, though you need to allow people to be in charge of their own destiny/failures.

Let's also keep in mind that the supply of desirable locations is fairly static while the population is growing, the days of forgotten pockets of paradise are well in the past.
 

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Madas said:
JFC😵
I can not fathom where people are getting this money from ?
FOMO is out of control and people have surely lost all sense of value if they are paying that much for a “first homeowner kickstart package “ type house
Mind boggling
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When money is cheap people will borrow that they can especially when the RBA is openly telling everything they wont raise rates until 2024. There is a reason the AVG NSW Mortgage debt jumped 40% from 2020 to 2022.

There will be a lot of pain for people over the next 2-4 years starting June.

People will come off fixed rate mortgages and be staring down the barrel of a 2-3% rate rise since they signed. And Starting June Variable rates will sky rockets too.
 
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Cookie said:
This is but one example of how the housing market has become a very serious national problem.
About 3 years ago on the Sunshine Coast, a small pocket of land, maybe 4 acres, was put aside and marketed for "affordable housing".
Nautica Circuit, Mount Coolum.
The house and land packages were around $429k. Each block was very small at around 250m² and the developer put 3 x 2 x 1 houses on the blocks. So yes, it was affordable housing, ideal for 1st home buyers.
Roll forward to now and these same houses sell for $1M+. There are a couple currently on the realestate.com and domain sites.
Great capital gain for original owners, but a nightmare for those buying there now.
So what is to become of "affordable housing" as a means to get people into their own homes?
I certainly don't have any answers but perhaps existing CBD office blocks and commercial property be converted to residential living. Less impact on greenfields, infrastructure is already there, and a reduction on the urban footprint.
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This is what happens when the Federal & State Governments, APRAH & the RBA have ZERO policy for Housing Affordability.

It is an absolute cluster**** that is just flailing in the breeze.

It is mind boggling that the RBA of all bodies has zero mandate for Housing. Yet Housing is worth well in excess of Superannuation and the Stock Exchange Combined.
 
triggering bro said:
We purchased a block of land in 2020, prior to the recent spike. It has since gone up about 200% in value. We have so far dropped about 40k in architectural & planning fees but haven’t commenced building.

We also sold our home at the end of last year & like many that opted out at that time walked away with significant capital which we have in the bank while we rent/consider our build.

We have quickly learnt that construction costs have significantly risen & material/labour shortages have blown build timeframes out by up to two years for the house we have designed.

My question is, do we continue to rent & wait to see if the construction industry normalises & materials become cheaper with imminent rate rises or do we bite the bullet & start the long process of our build?

From what I’ve read that’s available to me interest rates will go up approx 2% over the next 2.5 years. But, does that equal cheaper materials & build costs or does it simply mean they just stop going up? And how much more will they go up between now & then?

It’s a bit of a dilemma. Yes, we’ve considered selling the block of land but we don’t want to completely drop out of the land/housing market with the current uncertainties. Plus we lose significant of capital on CG’s tax.
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This does not sound right?

Either you got one hell of a deal or you pressed the wrong button on a calculator....
 


"He wanted to short against housing bonds? Who bets against housing? What's the ABX at?"

"What's the ABX?"

"It tracks sub-prime mortgage value. Go back to sleep."

"The ABX is at...wow, it's down...it's down 3 points since last year. Haven't heard a peep about that."

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Seeds said:
The boom in the housing market in the past year has reached stratospheric levels.

what have we learned:

immigration has nothing to do with australias housing price problem. ofcourse most economists have been saying this all along as demand doesn’t impact long run price but the punters didn’t care and wanted to blame their fears of immigrants. Yet house prices now rise even faster with immigration plummeting to almost zero.

so now we can eliminate immigrants as the problem what is the actual problem:

record low interest rates, incredibly lax lending criteria (so much for the royal banking commission) and too much red tape with land releases.

do people even care about this anymore? Are we just happy to turn our country into a medieval land of rich land owners and serfs? The media doesn’t even raise this as an issue anymore. Yet it’s worse then it’s ever been.
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No immigration but they've been replaced and probably surpassed in numbers by returning Aussies
 
Herne Hill Hammer said:
No immigration but they've been replaced and probably surpassed in numbers by returning Aussies
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Nope. Population growth fell further again during the pandemic years. Its been falling for a while too and nearly half of what it was 14 years ago.

plus a number of those returning aussies are just temporary and were moving back in with their parents or relatives until they left again rather then adding to housing demand.
 
Mjs94 said:
Are we expecting another rise from the RBA tomorrow?
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100% going to be a rate rise. There will likely be a rate rise every single month to December so we end the year around 2.00%

June rate rise is going to be between 0.25 and 0.40 with my money being on 0.40 to get cash rate to 0.75.

then in July they will push to 1.00%
 

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Housing market 2021

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