- Dan42 wrote:ummester wrote:say a 500k car = a 10mil house, where are the houses that equal 5k and under cars?
Oh, and BTW, the difference between a 500k and 5k is proved by the qulaity of the vehicle. How does that work with housing? You can get a 5k car within 30km of a city:) And cars depreciate with age – as houses should.
I agree that land value should apreciate, to a sustainable degree.
It's quality of house AND the land it's built on. The 'quality' of the land is pretty much determined by it's location, so a block of land in the desirable inner suburbs is worth more than the blocks of land 40km from the city.
And yes you can get a $5k car within 30km of the city. That's because they have wheels
So where are these houses equivalent to 5k cars, the real budget jobs? And, if you can find me one sub 100k house in some back of nowhere location, why are 5k cars so numerous and 100k houses so few and far between?
I'm not trying to say that some houses aren't worth a motza – same as some cars. Some top end and middle tier houses are reasonably valued, no argument from me there. But bottom end houses in this country are way overvalued.
ummester wrote:Dan42 wrote:ummester wrote:say a 500k car = a 10mil house, where are the houses that equal 5k and under cars?Oh, and BTW, the difference between a 500k and 5k is proved by the qulaity of the vehicle. How does that work with housing? You can get a 5k car within 30km of a city:) And cars depreciate with age – as houses should.
I agree that land value should apreciate, to a sustainable degree.
It's quality of house AND the land it's built on. The 'quality' of the land is pretty much determined by it's location, so a block of land in the desirable inner suburbs is worth more than the blocks of land 40km from the city.
And yes you can get a $5k car within 30km of the city. That's because they have wheels
So where are these houses equivalent to 5k cars, the real budget jobs? And, if you can find me one sub 100k house in some back of nowhere location, why are 5k cars so numerous and 100k houses so few and far between?
I'm not trying to say that some houses aren't worth a motza – same as some cars. Some top end and middle tier houses are reasonably valued, no argument from me there. But bottom end houses in this country are way overvalued.
Well lets put this in perspective…
Minimum wage in Australia is 569.90/wk
supposing that 'affordable' housing comes in at 5x the individuals wage, that would make the 'affordable' housing around 148k.I was looking at a place that met that category no less than 6 months ago in Ipswich, QLD. An easy 40 mins from Brisbane…. and plenty of local work for unskilled people paying well ABOVE minimum wage.
IF it's still unaffordable, there are contingencies… like taking on boarders, for one example.
People just need to stop woosing out and actually look deeper than the intermanetz or the realestate shop window.
What would a family, with two toddlers, who have lived in inner city Melbourne most of their lives, built up social networks, jobs and a life (it was affordable to rent until the last five years) do on a $40,000 household income? I did some rough maths on rental properties of $300-$350pw, and there's nothing left each week, even before nappies or clothes have been bought.
What would they do? Leave it all behind due to inflated property prices. Move to a rough neighborhood or the country, where there is not the same industries or employment options available.
Perhaps the end of the single income family is here. I'm all for equality, but there have been unexpected results to the duel income family. Higher household incomes have led to higher property prices. We only pay what we can afford. And its hit its peak (at least for this cycle). I sure can't imagine a single income family surviving in the city and staying above the poverty line anymore. And this is a fairly new reality, everyone has been priced out or rental and purchase in just the last few years – so its no wonder people feel displaced and resentful, all for someone to have a bit of 'equity' on paper and a big debt around their duel income necks.
There is a difference between 'overvalued' (a matter of opinion) and 'affordable' (a matter of fact).
Someone earning the average wage can afford a $200k – $250k unit / house in the outer suburbs of most capital cities.
They may not WANT to, and that's their choice, but affordable housing is available if you really want to find it.
Wynyard wrote:What would a family, with two toddlers, who have lived in inner city Melbourne most of their lives, built up social networks, jobs and a life (it was affordable to rent until the last five years) do on a $40,000 household income? I did some rough maths on rental properties of $300-$350pw, and there's nothing left each week, even before nappies or clothes have been bought.What would they do? Leave it all behind due to inflated property prices. Move to a rough neighborhood or the country, where there is not the same industries or employment options available.
A family on that level of income would be receiving large amounts of government welfare. Family Tax Benefit Part A, as well as Part B if it is a single income family. Maybe even Rent Assistance as well.
Here are the choices.
a) Continue to rent
b) Move to somewhere more affordable
c) Increase your income
d) Hope and pray that house prices come down.Wynyard wrote:What would a family, with two toddlers, who have lived in inner city Melbourne most of their lives, built up social networks, jobs and a life (it was affordable to rent until the last five years) do on a $40,000 household income? I did some rough maths on rental properties of $300-$350pw, and there's nothing left each week, even before nappies or clothes have been bought.I sympathise with this, however if a family like that didn't start looking for a solution, and fast, then things are going to stay tough. We don't NEED to live in inner city Melbourne if rents are too high. What about people who moved to an entirely different continent just to find work and hope for some quality of life? They too have built up all their networks and a life back home but lost all of that to go overseas in the hope of greener pastures. In life, sacrifice seems to be a daily occurrence. It's a matter of weighing things up and deciding if the advantages outweigh the sacrifices.
Okay, let's talk cheap rentals. Just plucking an outer-eastern suburb out of the sky: Croydon. We can find rentals here for $250 a week or less. That would get you into a 2BR unit. A little crammed for a family of 2 adults and 2 toddlers, but not unworkable. And didn't I tell you previously about some suburbs near Geelong where you can find cheaper houses and rentals?
Has this family (or your family, seeing that you are probably in this situation) tried seeking advice from an accountant or financial adviser as to whether you're entitled to any help from the government? Or just rock up at Centrelink and ask some questions. It never hurts to ask pertinent questions.
Wynyard wrote:What would they do? Leave it all behind due to inflated property prices. Move to a rough neighborhood or the country, where there is not the same industries or employment options available.Drive. I drive 50 minutes to work (one-way) and many people drive far greater distances than this. It is NOT realistic to expect to be able to walk to work, or to catch a short bus or tram ride there. Or perhaps catch a train.
Sure, the cheaper places could be a rough neighbourhood, I got road-raged by ONE mentally-unstable idiot (probable future wife-beater) after living there only 4 months, his girlfriend in the same car so embarrassed with her enraged boyfriend that she didn't even want to look at me (and she probably left him after the incident), but you get over it. There's nasty folk EVERYWHERE (well-heeled area or not) but the vast majority are extremely nice.
Wynyard wrote:Perhaps the end of the single income family is here. I'm all for equality, but there have been unexpected results to the duel income family. Higher household incomes have led to higher property prices. We only pay what we can afford. And its hit its peak (at least for this cycle). I sure can't imagine a single income family surviving in the city and staying above the poverty line anymore. And this is a fairly new reality, everyone has been priced out or rental and purchase in just the last few years – so its no wonder people feel displaced and resentful, all for someone to have a bit of 'equity' on paper and a big debt around their duel income necks.Perhaps this is why there are some astute kids delaying the start of a family (deciding not to have kids or even stay single for life) and staying longer with their folks so that they can save every cent and get a head-start before moving out. I'm not saying that we shouldn't start a family, or that we shouldn't be a family on a single income. But as with everything in life, we have choices, and with each choice comes a consequence. Assuming I had made certain choices in life, I'd rather manage the consequences than do nothing and starve.
1. Some cities – Melbourne, Sydney, Canberra – do not have 200k units, your pushing to find them at 300k.
2. Affordable has been factually qualified outside Australia as being 4x the average income or less. Of course, we are different, so our affordability levels must also be:)grimnar – 5x income is not affordable by global standards. Not to belittle your efforts of ensuring home ownership via sacrifice – but world standards suppose that individuals shouldn't have to sacrifice as much as Australian's do just to own a depreciating material asset.
ummester wrote:1. Some cities – Melbourne, Sydney, Canberra – do not have 200k units, your pushing to find them at 300k.
2. Affordable has been factually qualified outside Australia as being 4x the average income or less. Of course, we are different, so our affordability levels must also be:)
.
Average income is about $57,000. Four times this, with a 10% deposit, is approx $250,000.Here's something on the outskirts of Melbourne
Something a little closer to Melbourne
Righto.
Firstly FAMILIES should not be living in the city. Yep. There, I said it. Why should your poor little kids suck up all that garbage while you push them around in between smackies and mad taxis. Why should your kids not know what a park looks like or have lungs that look like a smokers. Look at the trams and the buildings, see that black stuff. You BREATHE that up.
Also I don't see house with nice big yards in the cities, so kids and mums are crammed into little airless boxes. Why? What people wanna go out on the town with a 6mth old? Maybe they want to take their 2 year old to the latest clubs? Shops, trains, jobs, other are everywhere, not just in the city!
I don't get Melbournes OBSESSION with inner city. It ain't so great. Why suck up everyone else garbage everyday, don't get it.
As far as freaking out about the cost of having kids, curse ACA and TT for the media beat up.
Nappies – buy reusable ones if you are poor or cheap. You can hand wash things if you don't own an washing machine. At the risk of putting everyone off their coffee, breast feeding is FREE. Buy fruit and veg at the market. Buy in bulk and put it in the cupboard. Buy clothes on ebay, markets and op shops.
I don't understand why everyone in this country can't work out how to save a $1. We were so dirt poor when I was a kid yet my parents made it work. They never bought a house, they could barely buy food. They ended up buying in the middle of the recession. Now people are complaining about earning $40k, people in other countries would think you are mad. Then tell you to swap them.
I think everyone has it just a bit too easy now. Don't get me wrong I love Australia and the fact that we do have it easy, I'm getting a bit tired of the whinging. You've got 24 year olds earning $50k and complaining they can't afford to buy a house in Balwyn. Grow up. Go live in a tiny shack with 20 other people in many parts of the world then complain.
Time to decentralize people. What is the difference between working in a shop in the city and in an outer suburb. It's cheaper to work in the outer suburb shop and you get the same pay. Not rocket science. The housing is cheaper, there are great schools, cleaner lifestyle, more FREEDOM.
Housing is the most affordable it is going to get. It's not going to get more affordable. Even if there were oversupply the market would be ruined and every day Aussies wouldn't be able to buy anyway.
Time for better planning and forward thinking by pollies, rather than bs short sightedness. Time for better planning and forward thinking by ourselves. I wouldn't go letting the govt or the media do your thinking for you.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeDan42 wrote:Close to the train station and a short drive to the beach as well. There are other, even cheaper houses in this suburb.
As a hint to anyone who's checking this area out: if you can swing a bigger loan, look south towards North Geelong/ Rippleside where you'll find a nice enclave of property where houses can be had for less than $550K, walking distance to the train station, literally next to lovely parkland and the beach. This area is mere minutes from Geelong CBD, the waterfront and shopping.
This is where I would like to retire when that day comes. Weekend bar-bee at the park, a swim at the beach in the mornings or a jog along the waterfront, and fishing in the evenings. And whenever desired, catch a train ride right into Melbourne CBD.
How lucky are we to have property like this in Australia. In Singapore, you can tear your clothes off and beat your chest and still you wouldn't find an APARTMENT for anywhere near that price and this close to transport, parks and the water's edge.
"Is property really unaffordable?" Well, I don't know. Just have a think about it.
http://www.realestate.com.au/property-unit-vic-lilydale-107216289 Singles palace
http://www.realestate.com.au/property-house-vic-woori+yallock-107054044 Bit further out, still commuting distance to CBD (bout an hr)
http://www.realestate.com.au/property-house-vic-boronia-107132147 Short trot to Eastlink (Love Boronia!)
Plenty out there just have to look.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeDWolfe wrote:Buy clothes on ebay, markets and op shops.Oh, don't get me started on the op shops. As an op-shop junkie I am often amazed at the stuff you can find there. On an unrelated note, I bought a nice old chess book (from the 70s) and chess set (old-looking, little metal pieces and all). Reminds me of the days when I played chess with my Dad when I was a kid, probably 15 years ago. Very inexpensive, but a source of enjoyment nevertheless.
Sometimes the old stuff is still better. Garage sales are another good source of pre-loved goods, selling for a fraction of the price that you'll find if buying new. And no, buying old stuff doesn't mean your house needs to look like a junk yard. There's a style of decorating called 'shabby-chic', and I swear, when I finally get my own place, this is exactly how I'm going to decorate.
It's casual, cheap, hard-wearing and easy to replace. What's there to complain about?
Some of us have been conditioned through our parents and others, to have a "scarcity" mentality.
It's up to the newer generation who're whingeing about "cant' afford this, can't afford that," to break out of the scarcity frame of mind. And it can easily be done, just look at the examples given by some of the posts immediately preceding mine
Don't let fear get in your way.
You don't have to be wealthy to invest, but you sure need to invest to be wealthy (as in own your own home).Some of the property shown is just within 4x av wage, granted. Though averge earings in this country may be a little lower than that. Av full time wages are around 67k but overall av earnings are harder to judge and haven't been listed accurately since the 80s. I do agree that around 55k is a reasonable assumption though.
However, less than 20 years back, a starter house was 3 bedrooms on 1/4 acre, not 2 bedrooms on 500m2. The value for money of the product has greatly decreased in this country over the last 2 decades.
I agree with Dwolfe that decentralisation is a needed element in increasing value. The way our cities infrastructure and state government budgets are currently structured would suffer greatly if it took off, though.
I also think Dwolfes parent brought at a good time – middle of recession. The country sorely needs another so that people do take less for granted <moderator: delete language>.
ummester wrote:1. Some cities – Melbourne, Sydney, Canberra – do not have 200k units, your pushing to find them at 300k.
2. Affordable has been factually qualified outside Australia as being 4x the average income or less. Of course, we are different, so our affordability levels must also be:)grimnar – 5x income is not affordable by global standards. Not to belittle your efforts of ensuring home ownership via sacrifice – but world standards suppose that individuals shouldn't have to sacrifice as much as Australian's do just to own a depreciating material asset.
True, some people don't 'have to' sacrifice as much. But when has home ownership in this country ever been 'expected' for anyone without some form of sacrifice?
There are large parts of the world where practically no-one can afford to buy property. As mentioned above, they cram into places like cattle cars in horrible living conditions. By that standard, we got it great! Well… per capita at least.
For us, it has been this way since we settled this country. Home ownership can only occur as the result of sacrificing something for your future security or lifestyle benefits, whether that be location (decentralising and even family ties), convenience, choice of employment, or any number of other lifestyle and other needs.
I don't disagree that it's hard, but I do think that home ownership is not for everyone.
In this way, neither is the 'right' to live wherever you want, in whatever standard you want, for whatever reason you want it.We do what we need to in order to provide a better way of life for ourselves. And those who do not live within their means are sooner or later forced to make changes.
"Such is life, that whatever is proposed, it is much easier to find reasons for rejecting than embracing."
grimnar wrote:For us, it has been this way since we settled this country. Home ownership can only occur as the result of sacrificing something for your future security or lifestyle benefits, whether that be location (decentralising and even family ties), convenience, choice of employment, or any number of other lifestyle and other needs.True, there have been other hard times. But there have also been much easier times. 80's, early 90's.
Why would an article like this exist if our houses were really affordable?
When people start talking about costs and pricing structures i like delving back into reality rather than realty. At the moment the rough building cost per square metre piles out at about $8500 per square and goes upward from there for premium finishes .. or down from there for wholesale costings. So thats your calculation you use for building a house on a block of land.
The other ingredient is the block of land. Now unless you are buying in the cow country, a block of land has a barest minimum of 150k for a 700m2 block. No matter where you go.
So plug these two together, and you get a 25 sq house (212.5k) and a block of land at 150k … thats 362k. Allow for a premium for position .. allow for a discount for older houses … and i think … thats roughly what the market is .. at the moment.
Where can you discount? since it costs about 40k to organise full facilities to the block of land .. there isnt much room there. And I believe the $8500 is looking very cheap since expenses have crept up around it .. where to cut back … on the workers?
xdrew wrote:When people start talking about costs and pricing structures i like delving back into reality rather than realty. At the moment the rough building cost per square metre piles out at about $8500 per square and goes upward from there for premium finishes .. or down from there for wholesale costings. So thats your calculation you use for building a house on a block of land.The other ingredient is the block of land. Now unless you are buying in the cow country, a block of land has a barest minimum of 150k for a 700m2 block. No matter where you go.
So plug these two together, and you get a 25 sq house (212.5k) and a block of land at 150k … thats 362k. Allow for a premium for position .. allow for a discount for older houses … and i think … thats roughly what the market is .. at the moment.
Where can you discount? since it costs about 40k to organise full facilities to the block of land .. there isnt much room there. And I believe the $8500 is looking very cheap since expenses have crept up around it .. where to cut back … on the workers?
It's quite possible that land and all wages connected to the REI are also in a bubble.
ummester wrote:True, there have been other hard times. But there have also been much easier times. 80's, early 90's.
Early 90's = unemployment rate +10% and home repossessions @ the highest rate in last 30 years. Early 90s was also the recession we had to have (apparently)
Late 80's Interest rates 17% + articles in daily papers stating 'our kids will never afford their own home'
There is a lot of psychology in the affordability debate. Sure there are some people who truly cannot their own home. There always has been and always will be. Then there are others who have their financial priorities all out of wack and are not prepared to make some sacrifices for the greater good and then of course their are others who want to live in a McMansion.
Priorities people.
Derek wrote:…are others who want to live in a McMansion.More to the point. There are people on average and below average salaries who want to live in a McMansion in the inner city.
Get real, folks. If you want it, EARN IT!
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