At least you found out before you bought it.

I recently went to bid at an auction for a property which needed a total renovation, hadnt been touched since built 40-50 years ago. It was a deceased estate and I was expecting it to sell for a price that would have allowed the 50k renovation required and a profit margin for the time and effort, as well as the time it couldnt be lived in while the work is carried out.

I was surprised that the property still went for $680k (I was expecting the renovated apartment to go for low 700s). There was no margin in it at all, even if you hadn't had to pay the stamp duty and other closing costs.

There are some price brackets where it is much easier to sell unrenovated due to crazy government grants. If it would be worth $550k to $600k renovated and the renovations would cost $50k, it is worth more to a first home buyer unrenovated as it will save approx $11k in stamp duty.

Expect conditions to continue to tighten over the next few years and not let up for decades. (until the next generation that forgot the mess we are in now thinks it would be a great idea to lower lending standards again).

Greater regulation and stricter lending controls will become the norm internationally. It will be the price we pay for the current crisis.

I should have added that with significant FHBGs available for new home buyers, a 5 year old home appears significantly less attractive than a new build to a first home buyer. It will be a trap for many who lose equity on new homes. Why buy an older one when you can get the max grants for a brand new one. Until they stop building new houses, new build resales will always be difficult in Australia due to inequitable government policies that discourage "recent builds" being bought.

Wow, people will now actually have to demonstrate they can save money to be able to purchase houses for hundreds of thousands of dollars.

I was at a property auction this evening in Sydney's lower North Shore. There were 5 properties for sale.

3-4 bidders on the properties which sold for under $700k, not one bid on the other 3 which would have been over $1 million and were passed in.

Seems to reflect what I am hearing, bottom end of the market is booming, top end isn't selling.

I work at the head office of a major bank in Sydney. My department is currently restructuring and for my role 9 of us have had to reapply for 7 jobs. Should hear at the end of the month if it affects me personally.

On the plus side I am waiting for property prices to drop and interest rates dropping have helped too. I wasnt even thinking of possibly owning property 3 months ago.