Sydney house prices

I'm with you Krusty, a lot of people will probably be at the limits of their available credit.

We rejected renting a lot of 3 bed 1 bath rentals because how the hell is a family of four going to get ready for school and work in a 1 bathroom home? Especially if the toot is in the bathroom too.

What I don't get is houses built on blocks that take up the entire block. There are no gardens, at all. Nothing.


****ing ugly. No character. No charm. Boring. Wouldn't want to live in it.

In (perhaps every) religious text heaven is illustrated as a garden. If I had the money to build one of these monstrosities I'd be setting aside a nice chunk of the land, or even most of the land, for a garden.

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evlPanda said..
What I don't get is houses built on blocks that take up the entire block. There are no gardens, at all. Nothing.


****ing ugly. No character. No charm. Boring. Wouldn't want to live in it.

In (perhaps every) religious text heaven is illustrated as a garden. If I had the money to build one of these monstrosities I'd be setting aside a nice chunk of the land, or even most of the land, for a garden.

Hahaha..like David Lee Roth said:
"Money can't buy happiness but it can buy a huge yacht that sails right next to it"

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evlPanda said..
What I don't get is houses built on blocks that take up the entire block. There are no gardens, at all. Nothing.


****ing ugly. No character. No charm. Boring. Wouldn't want to live in it.

In (perhaps every) religious text heaven is illustrated as a garden. If I had the money to build one of these monstrosities I'd be setting aside a nice chunk of the land, or even most of the land, for a garden.

The contrary view..... We moved from a house with garden and pool. After the kids grew up the only time the pool was used was when i had to jump in to free up the creepy crawly and the lawn was a nightmare trying to keep from infilling the garden beds.
Moving to a no garden house (a fair bit smaller than the one in the picture) with a park across the road, a lake around the corner and the beach down the road means we spend more time on the boat, extra sessions in the surf and evenings spent chillin.

How are things around Sydney at the moment?

Things have been gradually deteriorating since the commonwealth games here. For the 400 - 700k market we kind of went through a "i still want to buy but now can't get a loan", to a now just no longer interested phase. There's hardly anyone at at open homes near me

However there's still the occasional crazy paying in the prestige market here

Another spanner in the works is a Labour Government.

"Shorten is proposing to halve the current 50 per cent capital gains tax discount on investment properties to 25 per cent on all assets purchased after July 1, 2017.

While Shorten's rules will not technically apply to anyone who bought prior to mid-2017, they will directly impact the value of these assets insofar as any new purchaser will both have to pay much more capital gains tax and be denied the opportunity to negatively gear."
- Source AFR.

The recent Victorian State election must be scaring the bee geezzz out of the investors.

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Storm Ahead said..
Another spanner in the works is a Labour Government.

"Shorten is proposing to halve the current 50 per cent capital gains tax discount on investment properties to 25 per cent on all assets purchased after July 1, 2017.

While Shorten's rules will not technically apply to anyone who bought prior to mid-2017, they will directly impact the value of these assets insofar as any new purchaser will both have to pay much more capital gains tax and be denied the opportunity to negatively gear."
- Source AFR.

The recent Victorian State election must be scaring the bee geezzz out of the investors.

I wonder if they will soften their policies now that housing prices have started to fall?

If the intent was to take pressure of housing, and its now gone, maybe they will. Making it easier for young people to afford to buy a house is one thing, but I don't think they want to create a housing bust.

A smart government would relax the approach and introduce a staggered reduction in the ability to negative gear a property. A very cautious strategic government would change something in their term with further changes to occur in the next guys term.

A lazy government would defer any changes until the next term and hope its someone else's problem.

To drastically reduce the price of existing housing stock will do more than lower the prices of houses, it will affect the rest of the economy, and I think the Labour party will realise this.

I guess with a name of 'Storm Ahead' you are always on the lookout for the negative, but hopefully the people in charge are a bit more careful.

For sure, changes to taxation will affect investment property demand. However, I'd be thinking there'll be more of a balancing act than just a reduction of the CGT discount. I would argue that housing prices have started to fall as a result of a number of factors and one of these will be a looming change of government with a resulting change in housing investment taxation, so the problem hasn't exactly "fixed itself".

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Paddles B'mere said..
For sure, changes to taxation will affect investment property demand. However, I'd be thinking there'll be more of a balancing act than just a reduction of the CGT discount. I would argue that housing prices have started to fall as a result of a number of factors and one of these will be a looming change of government with a resulting change in housing investment taxation, so the problem hasn't exactly "fixed itself".

Who said it fixed itself?

I don't think the possible change of government has much to do with it either. The prices started to fall before this recent mucking around with Turnbull, and I think it was pretty much when they tightened lending standards.

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evlPanda said..
We rejected renting a lot of 3 bed 1 bath rentals because how the hell is a family of four going to get ready for school and work in a 1 bathroom home? Especially if the toot is in the bathroom too.

Grew up in a family of 6, with only one bathroom (and it included the throne). Simply due to necessity there was often four or five in there at once. Two in the bath, one on the lav, and a couple brushing teeth or hair.

I guess it goes a long way to explaining to why I think nothing of walking around the house naked eating breakfast, reading the paper, as I dry off properly after my morning shower.

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Adriano said..

Storm Ahead said..Sorry for pointing out the awful truth. I'll refrain from posting on this site again (if that helps).

eppo said.."I guess with a name of 'Storm Ahead' you are always on the lookout for the negative, but hopefully the people in charge are a bit more careful."Surely should be in the best Joke thread...

The awful truth is that years of poorly refined taxation policy (good only for a select group of investors on the property investment hamster wheel) has led to massive price increases in property and that hurts everyone far worse than slightly higher taxes.

Complaining about slightly higher taxes is a typical selfish viewpoint of those fortunate enough to have had the resources to get into the market before it went through the roof.

If Australia votes for a Labor government next year, it will be an endorsement of the urgent need for tax reform.

That's a good point. Australia has dumped huge amounts of money into housing over the last 20 years, and that's money that should have been spent on improving productivity instead of pumping up the prices of housing.

It makes everything else much more expensive. Why are rents so expensive? Because houses are expensive. Why are basic jobs so well paid? Because rents and housing is so expensive? Why is food expensive?

Perhaps if the Labour government concentrate on the investors that have a large number of properties, it might make the impact softer.

I'll go the money angle Adriano, the land is an "appreciating" asset and the building upon it is a "depreciating" asset. It's an unfortunate money truth and it won't go away.

But yes, values are grossly inflated by a system that has encouraged upward price trends which in turn encourages more real estate speculation by individuals that really can't afford the down trend and then get swallowed up by those that can afford to stay in the market for the down trend. It has a parallel with short selling stock and the big losers are the individuals who really shouldn't be in the market in the first place.

The system needs changing to perform how it was intended to perform and encourage rich people to get a suitable tax break for a short period of time to provide additional housing to the market.

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Paddles B'mere said..the building upon it is a "depreciating" asset.

Ahh, not in the case of good buildings...they end up being collectable like great cars....

But I take your point and in terms of pure conventional money yes you are right - which is the problem really.

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FormulaNova said..
Why are rents so expensive? Because houses are expensive. Why are basic jobs so well paid? Because rents and housing is so expensive? Why is food expensive?

I think you'd struggle to prove a causative correlation that rents are expensive because houses are expensive. I'd suggest rents are determined by the laws of supply and demand, and rents themselves are a factor (not the only factor) feeding into house prices. More so than the reverse anyway.

There is some circularity here of course.