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Land Hogs and Housing Affordability
post Posted: Mar 17 2010, 12:32 PM
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I think this is something most of us are aware of, but still interesting to read any way...........

March 17, 2010 - 1:19PM
It will surprise few people that Sydney is seen as Australia’s most overvalued property market, but Brisbane is not that far behind. A survey of 1200 investors by property specialist PRDnationwide found 28 per cent saying Sydney was the most overvalued while 26 per cent believed Brisbane homes were above a fair market price.

How the capital cities are seen:

Sydney 28% overvalued
Brisbane 26%
Darwin 13%
Perth 12%
Melbourne 11%
Adelaide 3%
Canberra 3%
Hobart 3%

‘‘Basically what this research is saying is that the average buyer feels you get less bang for your buck in Brisbane and Sydney compared to other cities,’’ PRDnationwide research director Aaron Maskrey said releasing the survey results today.

And he doubts that that is about to change.

‘‘The number of people moving to Australia exceeds the number of dwellings becoming available - supply and demand suggests that this will continue to put pressure on house prices,’’ he said.

He said the survey shows that some cities are in the midst of a housing bubble in which prices bear no reflection of underlying economics.

Prices in the Brisbane Local Government Area have increased by 11.7 per cent per annum in the past 10 years, but wages have increased by just 4.5 per cent, he said.

‘‘There will come a time when people won’t be prepared to pay these prices in their home town and will look to invest in other states,’’ he said.

In the Sydney district, the median house price is $487,500, almost 10 times earnings, he said.

‘‘Sydney house prices are therefore almost one and a half times those of the allegedly overpriced UK (market) in relative terms,’’ he said.

post Posted: Nov 12 2008, 11:21 PM
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In reply to: watchmaker on Wednesday 12/11/08 09:01pm

Watchmaker-----Our problems are centred around a geniune shortage-----not quite correct:

A genuine shortage of AFFORDABLE housing.

Not quite with you re the multiples. The accepted ratio of mortgage to income is or was (should be) 3.5 times mortgagees income = maximum sum that can be borrowed.

Where the whole thing has come unstuck here is that with the advent of low (no) doc loans and mortgage brokers the 3.5 to 1 ratio blew out to in extreme cases to 8 to 1, ie mortgage way exceeded both the acceptable ratio and in many cases the total marketable value of the mortaged property, hence negative equity.

The only way to bring the ratio back to 3.5 to 1 is for wages to double, or property to halve.

eg: Mortgagees gross income $80K X 3.5 = $280,000

What happened was $80K X 8 =$640,000

Combining Fundamental comments with Fundamental charts.
post Posted: Nov 12 2008, 09:01 PM
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In reply to: flower on Wednesday 12/11/08 07:20pm

Only if you live in the US. Though it should be mentioned that even at its peak, housing affordability in the US translated to less than four years of income. Whereas here in Australia it was double that.

The US condition has no relevance to Australia - Period. Our problems are centred around a geniune shortage

post Posted: Nov 12 2008, 07:20 PM
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Is this coming to a suburb near you?

One-Third Who Sold Homes in Past Year Lost Money, Zillow Says

By Dan Levy

Nov. 12 (Bloomberg) -- One-third of U.S. homeowners who sold their property in the 12 months through September lost money as foreclosures depressed prices and more Americans became unemployed in a weakening economy, Zillow.com reported.

Home values fell 9.7 percent in the third quarter, the seventh consecutive decline, to a median $202,966, Seattle-based Zillow, a seller of real estate data, said in a report today. One in seven homeowners had negative equity, or owed more on their mortgages than their houses were worth.

``It's clear we are at a unique point in history,'' Stan Humphries, Zillow's vice president of data and analytics, said in a statement. ``We've had seven consecutive quarters of decline, and we expect that to continue until at least the middle of next year. Most markets are still seeing five-year annualized returns, but we will see more markets slip into flat or negative long-term change as the economy continues to suffer.'' etc etc etc

Combining Fundamental comments with Fundamental charts.
post Posted: Jun 20 2008, 10:20 AM
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In reply to: gmacafee on Friday 20/06/08 09:42am

Can I suggest you not bleat about Jon Stanhope: a majority put him there, however cobbled together. Lie back & enjoy the benefits of homosexual marriage etc.
What's wrong with the well-heeled having a refined ambience? They're the ones who know how to appreciate it . .become one of them if you're not already.
As to the homeless man's humpy, that's a contradiction in terms isn't it? You've supplied a picture of his home which could have been his domicile of choice for all we know.
Gawd, next you'll be going on about the aborigynes.
Have a good day! wink.gif

"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith
post Posted: Jun 20 2008, 09:42 AM
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The post could come under the heading of:

(A) "It seemed like a good idea at the time" or

(B) "Be careful what you pray for as you may get it!"

Canberra is a funny place. When I arrived here, self-government
had not arrived and the national capital was run by Fred Nurk who
was a Clerk Class 6 in the federal Department of Territories.

The Minister for Territories (Liberal or Labor) put out all the
media statements, but Fed Nurk did all the spade-work.

Fred ensured single workers had access to low-cost government
hostels and that low-income families had government housing.

Fred ensured block supply (for private housing) kept pace with
demand and held land auctions restricted to first home buyers.

Then some idiot decided we needed self-government.

Some people even *prayed* for self-government.

And so it came to pass that Fred Nurk was replaced
by squabbling Labor, Liberal and Green MLAs who
spend weeks on end in a splendid ACT Assembly
edifice (debating how best to fleece us) who use
thousands of Fred Nurks to ensure that we are
fleeced, billed, taxed and levied to create
not one but *two* Canberras...

In boutique Canberra, housing is plentiful. In desperate Canberra,
worker hostels and first-timer land auctions no longer exist.

In desperate Canberra, granny flats and converted garages
are banned. Where government flats once stood, boutique
units offer a refined ambience for the well-heeled.

To increase Labor's land leasing profits, the ACT's Chief Minister
Jon Stanhope choked supply sending prices and rents soaring.

Thank God for self-government. It means we can elect Labor,
Liberal or Green land-hogs. I prefer Labor land-hogs. They
tell wonderful fairy tales about a light on a hill.

As an old farmer once said: "Canberra: good sheep country ruined."

The merinos may have gone, but the pastoral tradition lives on.

Our self-government shed has Labor, Liberal and Green shearers.

We can't choose not to be fleeced. But we can choose the
political composition of the Assembly's shearing team.

That doesn't change the high cost of housing
but it makes us feel comfy and patriotic on
freezing Canberra nights while homeless
people build humpies near boutique
'investment opportunities'.

They don't tell you about humpies in
glossy Visit Canberra tourist guides!

This picture wasn't taken in a Third World
country, nor in a remote NT camp. It's
the humpy a homeless man had built
(and had died in of exposure) in the
national capital of Australia:

Attached File(s)
Attached File  humpy.jpg ( 47.3K ) Number of downloads: 0


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