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I've not really been looking. I have thought for a long time that prices are high, but the housing market is cyclical so they'll come down eventually.
And then they double. Again. :o
The trouble in Australia is that there hasn't been a crash in recent memory. Unlike (say) the US or Ireland, prices didn't fall significantly after the Global Financial Crisis in 2008, so there's a belief that property is a one way bet. Plus the government pumps the market up with incentives whenever it starts to slide.
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I hope you're well @Graeme with all the things going on down under.
It really saddens me to see the housing markets the way they are. Historically the US has had about 60% home ownership, and I feel like that will be taking a dramatic dip in the coming years. It really can be such a great tool for building personal wealth and stability, and I'd like it to be broadly available as possible to responsible homeowners.
Perhaps it's a bit of a conspiracy theory, but when the financial services industry lured homeowners into refinancing, and the homeowners could not pay when the variable rates spiked on them, those bad mortgages had been bundled into instruments that were traded on Wall Street. When those instruments, comprised of toxic mortgates that started defaulting, failed, it created the 2008 financial crisis. Wall Street should have been left holding the bag, but ultimately we taxpayers bailed them out. We see none of their gains, but we provide a safety net for their losses. My conspiracy theory is that the financial sector has figured out it's better for them to own the houses and lease them out than it is to predate on mortgages. So I believe we will continue to see more and more financial interests such as hedge funds buying up real estate to rent it out, because they can simply kick out residents who can't pay the rent, which they can raise at will. This along with short term rentals is perverting residential markets and denying homeownership to many deserving people.
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@mclaincausey we're okay here, though I'm expecting Godzilla to stomp Sydney or Melbourne this weekend the way things are going.
In Australia, I believe that around a third of households are property investors, with most owning one rental. It's much more Mom and Pop than Wall Street. The tax system provides incentives, such as negative gearing (any interest losses can be written off against your total income), depreciation (wear and tear on a new build can be claimed), and capital gains (if an asset is held for more than a year, gains are taxed at half the rate of earnings).
The combination of negative gearing and capital gains means that a lot of investors are willing to eat a loss in the short term to make it back (and then some) as values appreciate. For example, I saw a townhouse in the best suburb of Melbourne to rent. It costs $750 per week, which would equate to repayments on a mortgage of $800K. It probably sold for twice that, the sales data hasn't made it onto the online system yet.
My back of the envelope calculations suggest that at current rates, interest payments will be about $40K a year, the rent will be a similar amount, and there would be agency fees, property taxes, and maintenance, let's call it $20K a year. The investment would lose $20K, but (I think) negative gearing would reduce that to around $10K for a top rate taxpayer.
The investor is probably thinking that if they hold it for a decade, their after tax loss will be $100K, but the property will have doubled in value. So they might have made $1.6 million in profit, which would attract $400K in taxes (the top rate of around 50% is halved for capital gains), which nets out at $1.1 million after their losses over the decade.
So investment becomes speculation on rising property prices, rather than trying to secure an income from an asset, and I think that's part of what's driving the Australian market.
At the same time, neither the government, central bank (RBA) or financial regulator (APRA) want to take responsibility for the boom. The RBA says it's not a part of their charter, APRA says that they are policing institutions, and have the politicians own investment properties, so they're not going to kill the golden goose.
The net result is that there's been a collapse in home ownership in the under fifties, and this is more pronounced in younger age groups. The obvious way to fix this would be to allow prices to fall, but every time they slip, a scheme is introduced to prop them up!
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I got 2 x 10M and 1 x 15M, Arkochic…...I'm thinking where else I can use them......
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Hmmm, I may have to install some of these when Julie is out of town. Then I can try them out one night when I'm out of town and she's at home alone with the kids, for maximum freak out results.
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My job today was installing new wiring and lights above and below the kitchen units…..Infinitely controllable colours from my phone, plus disco shit etc........USD45 from Amazon
The blue hue make it look like it could be a porno set for a feature titled “RAW denim gets SOAKED for the first time”
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Hmmm, I may have to install some of these when Julie is out of town. Then I can try them out one night when I'm out of town and she's at home alone with the kids, for maximum freak out results.
I am pretty sure if you put it on full disco light show mode, you may never see her again…..
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I still feel like I’m living in chaos months after the move, but we did put in a custom wine station in this little nook in the dining room. Will be adding storage to hand glasses under the bottom shelf and a marble surface on the service area. Next project will be a wet bar downstairs in a similar, but larger nook. Then a linen closet downstairs in yet another nook.
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We moved like five months ago and are just now getting around to shots for a “we’ve moved” card for friends and family. I like this shot which my pal sent as a preview as he digs in and works on photos from Sunday.
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That is such a lovely shot of you and your family @mclaincausey. Do your dogs have pom pom ponytails or is that just how fluffy their ears are? congrats on the new place, btw
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Thanks @RoxRocks86 !
They are just fluffy and we don't brush them enough. They are bouviers des Flandres but we don't do the traditional grooming and haircuts on them.
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The new place looks great, congrats!
Sent from my iPhone using Tapatalk
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First major snow in the new home. I can’t believe it took so long. Never been so grateful to pick up a shovel!
Boudoir…Boom Chicka Wow Wow 
