I have spent a few hours perusing the UK property market, looking at "For Sale" listings around that country. Well my view is that for the equivalent of, say, $300,000 you get pokey 2 bedders, sometimes a semi-detached, and almost never a free-standing house.
All are small by our standards, kitchens are tiny, no laundry, and are located on a handkerchief sized piece of land.
Here in Melbourne, on a metro rail line, you can get 18 imp. squares, double car port, 2 bathrooms and brand new for that money, on 650 sq.m. of land.
Australia is still a bargain.
Australia keep coming up near the top on lists of the most expensive housing, and like you sometimes I scratch my head about how they reach those assessments. Sometimes it seems like we are just comparing Mosman, Toorak and Peppermint Grove to the world (i'm sure its more scientific than that but it seems that way). Many of these surveys are more about affordability than absolute costs. The absolute $ amount doesnt matter unless you relate it to what people earn.
Until recently I was on a work assignment for a few years in Switzerland and city prices there and in surrounding countries made Oz seem quite modest. The idea of being able to by nice city apartment for 400-500k ish in 2008 would be laughable. However people eant more and there are tax benefits for owners so it quite doable to by. Even so many people are happy to just rent as rents are not to bad and legally tenants have more security than they have here.
If you are prepared to live within your means and dont need the brand new McMansion median priced house , I think Oz is still reasonable. What isnt reasonable is the high interest rates that go with it here and tax benefits which to me (even as an investor) seem to be on the wrong side of the equation.
Re your link to:
Sure it's a bargain, that's because it's going to be underwater in 20 years time!
Expensive or not isn't measured in real terms, its a measurement in relative terms. Simply put, the average income to home prices in Australia is close to 8 times, which makes it among the most expensive place to get a house compared to many other parts of the world where it is more like 3 times income.
In absolute terms Australia is nowhere near the top ten list. Just look at prices around The Peak in Hong Kong and THAT is what we call crazy…
home price is only 8 times if you wont compromise and want everything now, its much less if you are prepared to do that. Still tough at 8.5-9.5% starting out….and via perverse bank logic you will probably pay the higher rates if you are just starting out.
I'm sitting in Europe at the moment and looking around here it doesnt seem out of kilter with Oz, which I guess only invites the usual comments from global house price crash fans.
House Prices in Australia are comparably and relatively cheaper than in India. Delhi , Bombay/Mumbai property market have peaked to a level that buying a property in either of the cities is just a dream.Delhi is a landlocked city, and Mumbai is situated on the west coast of India the Financial Centre and Bollywood Capitol and will soon be known as the city which has the most Expensive house in the World, a whooping USD $2Billion is being spent for the construction of a 22 storey residential proeprty to house the Chariman of Relinace Industries.
A friend of mine owns a PPOR is one of the most sort after suburbs in South Delhi, no water views, as a matter of fact no views at all, main busy road location, 750 sq yards aprroximately 620 sq meters, 2 and 1/2 floors, all floors can be used as a seperate dwelling. He has been offered around Rs 300,000,000 which equates to AUD $7.2 million and guess what he doesnt want to sell. In 1996 the same house was valued at Rs70000000 and in 11 years time its 4 times the price. Apartments in Delhi too are unaffordable, a 3 bedroom 3 bathroom with off street parking apratment can fetch anything from $400,000 + depending on the suburb. South Delhi and Central Delhi are the most sort after regions of Delhi. Central Delhi is so expensive that the friend who owns the $7 million property, even if he sells that house and adds another 10 million he cant get an independent house in Central Delhi. for $17 million And an apartment which are rare to find will not leave much change in his pocket.
Enjoy your Day
Regards
AshishDon't forget that wages are alot higher in the UK also. A job that you're paid $50k here would have a wage of about ?50k over there (of course this is not always the rule, but pretty close). The Aus dollar is worth about 48pence at the moment, making salaries in the UK about double what they are here. That being the case, you would have to look at what you can but there for ?300k to get a proper affordability comparison. Also, anyone who's been to London knows how great their tube system is, so with public tranport being so much better there than here, you wouldn't need to live so close to the city.
Ashish, what you are comparing is select parts of India whereas the starter of the thread is remarking about Australia as a nation. Taken as a whole and averaged out, India housing should be pretty affordable.
In Australia and most if not all other western countries too many people expect too much too early in their life i.e. a nice big house, a fancy car, the latest electronic gadgets, overseas holidays etc. and all that without putting in many years of hard work and saving. The years of easy credit has made people believe that it's their god given right to have all this without compromise and without first having had to work for it. This will change, it has to and if people can not adjust it will be a very rude awakening.
Here here EricH,
Ask anyone over 40 what they had to do to get into their first property.
My grandparents lived with my grandmas sister and family till my mother was 7 (4 adults, 3 kids in the house, 2 bed with a closed in verandah acting as another bedroom). My grandfather spent a few years of that time building their very modest 2 bed house on weekends. About 12 years later they added a 3rd bedroom.
My own parents first home was a one bedroom fixer upper, bathroom unfinished, outside toilet, on the outskirts of town. For the first 2 years they had to use an esky because they couldn’t afford a fridge.
To get my first home I lived on base (was in the airforce for 13 years). For about $70 p/f, you got a room about the size of a bedroom (no lounge room or any other personal space), shared bathroom facilities with about 20 other people, all meals at the mess and having to do a big clean up every Monday night. I lived like that for 8 years and was able to save up for a deposit on a 2 bed cottage with a kitchen made out of packing crates, a bathroom on its last legs, an outside toilet (thankfully not a septic) and carpet that stank to high heaven. It cost me $79 K in 1999 which was about 2.5 times my wage then. I lived with no carpet for 4 years (couldn’t stand the smell so I ripped it up), an outside toilet for 3 years and the sorry excuse for a kitchen for 6 years. I spent about 40k in 2005/6 painting, new plasterboard, rewiring, new bathroom, new kitchen, deck, knocking down some walls, polishing floor boards and reluctantly sold in Feb 2006 for $235K. This was then about 4.5 times my wage, but it was a much better house.My point is I did the hard yards to get into my own home and I did it when I was single. When I sold I only owed $5K.
I do think that now people starting out do want everything now and are less willing to do the hard yards like generations before them. There are so many more “essentials” that we “need” now. Ie mobile phones, computers, ipods, take away meals etc etc. Our grandparents didn’t have these things to have to factor in to their budgets though.
Still from the original post, What your money buys you here is a much bigger house than you would get in the UK for a similar location and the wages are higher (my husband is English and can compare his wage here to what he was earning there) but the cost of living is generally much higher there. My in laws and husband friends who have visited think we live in a massive house and by my standards it is only average.
Getting into your first home has never been easy. You have to make some sacrifices and I do think a lot of people forget that.Property prices in different regions is always up to personal perspective and personal financial situations.
You cant compare apples and oranges, BUT you can compare the cost of the apples against the apple market and the cost of oranges in the orange market, capisce?
For over 5 years I have been following the property market in Croatia and trying to buy into that market. I was overwhelmed when I saw that the property prices for the same 2 bedroom apartment in town etc was costing the same money as an apartment in Switzerland! Again, it all comes down to apples & oranges.
Someone earning GPB might think these prices are a bargain, Aussies might feel these prices are very steep. Germans looking for investments may find them too risky or costly to set-up and run when comparing prices in Euros for a similar sized property bakc in their home-country.
Take for example the fact that I live in Switzerland but own property in Australia and Spain. I get paid in Swiss Francs (CHF), which at the moment is doing 25-30% stronger than what it usually does against the AUD. This is great for paying off my mortgage quicker if my lender was Australian (which it isnt). My point is, there are some interesting benefits you can take advantage of if a) you are buying property in Australia AND b) you arent actually IN Australia.
I can afford to buy an additional investment property in Australia because I dont reside there and bank/lenders are very willing to lend me up to 80% of the value of my investment as long as I am not a resident. Well thats bloody unfair if you are Australian and ARE living in Australia. This means that Australia is ACTIVELY promoting properyt to be sold to non-residents. Consequently, someone like my brother who lives in Melbourne has next to no chance of buying a property as its just way too expensive for him to try and break-in to the property market.
So, to answer your question: Is Australia still a great place to buy property? Sure, if you can afford it! Just like anywhere else. Be happy that at least in Australia the property market is very mature and there are no (or little) corruption problems, scams that target foreigners and fraudsters looking to relieve you of your lifetimes savings
Cheers from Fribourg,
Val
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