I suspect there’s an element of truth to that. Inflation expectations lead inflation. Do you see that this cycle will inevitably fail though? Affordability is the main constraint on rent, and over time, purchase price.

F.[cowboy2]

Yup. Did you catch Media Watch last night?

http://www.abc.net.au/mediawatch/transcripts/s1857566.htm

Hilarious. And shocking, especially the involvement of certain prominant people who may or may not have their hands in the ‘industry’s pocket…

F. [cowboy2]

Nigerian Spam? Mmmm…. I’ll take three.

Hi Lozjas,

I’m a bit confused by the issue/s here. I’ve done a similar thing to you recently where we got a builder to build to a bit past lockup, then finished the internals, fitout, plastering, painting, bathrooms, kitchen, plumbing and electricals as owner builder in Victoria. We faced a myriad of difficulties, bureaucratic inefficiency and contradictions, but didn’t come across anything like what you face. That said… thinking out loud…

Am I correct in understanding that the main problem is that you can’t owner-build on another person’s property?

Would a creative work-around be to amend the applications such that your grandmother is listed as the owner-builder (actually I doubt this – you can only owner-build if you plan to live in the new building, and clearly she wouldn’t)? Otherwise you might need to acquire the property title or co-ownership.

This $12,000 issue has me worried.

If you are owner-building, and the total cost (including contractors/plumbing/electricals/connections) between taking over from the builder and gaining the Certificate of Occupancy is greater than $12,000, you need to get a ‘Certificate of Consent’ from the Building Commission in addition to the normal Building Permit. Note – this is to the best of my understanding, but we were required to do this. More details can be found here:

http://www.buildingcommission.com.au/www/html/284-choosing-to-be-an-owner-builder.asp

It’s a fairly basic application, and seems like an excuse for just another stupid layer of bureaucracy as the building permit is much more detailed. I think we waited about a month for consent.

Back to the beginning, and a summary. To complete as owner-builders, you will need to:

– Make sure you are allowed to build on this property – you may have to get your name on the title.
– Make sure you have a planning permit if required
– Make sure you have a certificate of consent
– Make sure you have a building permit (or permits if applicable)
– Make sure you keep all quotes, invoices and certificates from tradespeople.
– Make sure you get all required building inspections done
– Make sure you get a CofO before moving into the property.

I probably should add “get all advice from the council in writing”, but I think you’ve learnt that lesson. You need to understand that the building inspectors normally operate independently of the council planning department and aside from the planning permit, they are the ones you need to worry about.

Your alternative might be to get a friendly and flexible licensed builder to quote to finish the job to CofE (via a major building contract) with the understanding that you will complete a list of tasks (those that don’t require a license). This will be more expensive as he/she will want to make some profit and cover the various insurances he/she must pay. Might be worth asking for a quote though…

I don’t know if I’ve helped, but anyhoo. Don’t take my word as gospel either, this stuff can be pretty confusing!

F. [cowboy2]

A friend of a friend was recently in a similar situation. He was amazed to discover he didn’t even have the second option. The bank refused to let him sell his unit unless he could provide cash to cover the shortfall between selling price and outstanding debt. He found that nobody would lend him the difference as he had nothing to offer as security for the (large) loan.

Talk to your lender. You might find you’re wasting energy weighing up options that don’t exist!

May I simply ask how you can make this statement? You sound like you are stating a fact, whereas I cannot foresee how this is even a distant possibility*!

F. [cowboy2]
* Barring hyper-inflation

[stun]

Simply? Wayne’s a lucky bloke if he has a lazy $225,000 sitting around that he can plonk into his loan!

Sorry, I’ve been away a lot lately. I don’t have time to address your last point here mimaranda, but believe me, we’ve been building houses at a far greater rate than the household formation rate. The mathematics is simple:

(household construction) > ((births – deaths) + immigration) / (average household size)

This has been the case right through the recent housing boom. So the ‘basic law of supply and demand’ you cite should have seen house prices falling, no?

Anyway, the reason I am 100% confident of a very significant correction in house prices, either through stagnation while wages, and rents catch up (this will take many, many years, not, 2 or 3), or through outright nominal falls, or more likely through a combination of both is very simple.

Debt.

For house prices to continue to grow (on average) at the average rate over the last 30 years requires housing debt to grow at an unsustainable pace. Unsustainable because it would soon take more than the entire income of every man and woman in the country just to pay the mortgages of every mortgage holder… Impossible? Yes, therefore unsustainable.

Furthermore, for house prices to simply maintain current levels, additional housing debt must be acquired at a rate of $80 billion to $100 billion per year for at least the next decade. This too, is unsustainable, and would nearly bankrupt the country.

I’ve written much more on this subject, some of it can be found here using the search function. I’m happy to also discuss it further when I get time. I’d suggest some reading first, starting here:

http://www.debunkingeconomics.com

with the most recent Debtwatch newsletter.

Cheers, F. [cowboy2]

And once again, I thank you for your generosity!

[blink]

[biggrin]

F.[cowboy2]

I’d love to play along, just for fun. Unfortunately you exchanged something of intrinsic value (the $200 painting, whch was good, not great) for something fleeting. An object for an event.

Still, there are probably still a few sheeple prepared to trade something of some value for the worthless event.
Good luck.

F. [cowboy2]

I assume that’s a question. Over to The West Australian:

Google “Real estate whirlwind runs out of puff” then click cache below the link to retrieve the full text from Google cache. The original vanished shortly after it appeared……

F. [cowboy2]