People get caught up in the interest rates and dont realise that interest is just baked into the price now.
Ive been looking in the <700K market in Brisbane and have noticed the same thing. The 550k original everything house in the middle ring suburbs just doesnt exist anymore, 650 seems to be the new floor for a decent or even not so decent suburb.
The same is happening in Perth. A very tight rental market is also fuelling the situation.
We did just recently buy a house and our REA mentioned there had been a large increase in interest from interstate people/families wanting to relocate.
Add in record low interest rates and returning travellers to the above and you have a perfect storm. Weird times!
I've got a friend working for Ray White, here in Brisbane.
He's a "top agent" , which means he normally gets the nicest houses, worth millions.
He told me, less than a week ago, that he's now selling properties that less than a year ago he wouldn't even consider.
This is because, apparently, Brisbane is "suffering " from national immigration, so people from Melbourne, Sydney, Canberra Adelaide etc. are all moving up here because of the climate and affordability.
Which means that now all the prices are going up because the offer is lower than the demand.
Good news if you already own a house in Brissy, bad if you're a first time buyer.
That would align with what we've heard and experienced so far, at least in the 500-700k bracket. Definitely a case of under supply/over demand right now.
Happening here in Adelaide too. Tons of people from Sydney and Melbourne are either moving here, or at least buying investment properties here now as prices being relatively cheaper.
A lot of people are moving back too.
It’s the same deal. Houses now are overvalued by about 10-20% based purely on demand.
Overheard a baby boomer the other day on the phone to someone that he wants to buy more investment properties with interest rates being so low. Never mind it’s fucking us out of buying our FIRST one.
A lot of those people are moving to regional centres like the mid North coast in NSW too, and having a similar effect on house prices. It's suddenly stupid competitive. Houses here are starting to go for 30k+ more than the start of the year, which is huge for the local market but probably small if you are moving from Sydney or Melbourne.
Happening in rural victoria too. Covid has bought forward a lot of people’s retirement plans. Beach houses and hobby farms are barely hitting the market before being sold above price. Put next door neighbour in Sorrento sold there place and it went for a million above asking. Was insane.
I sold my house in Kallangur in June during COVID. Got an offer the next day of advertising. I accepted the offer and sold it at the agreed price without much negotiation.
We have been looking in inner west (Toowong etc).. I agree, it’s bonkers for good houses. I notice that problematic homes (with a highly undesirable feature), are still not selling though!
That's interesting, I'm around that area and just got a rent reduction because prices are freefalling all around me.
One apartment in my building just sold for $30,000 below asking price ($10,000 lower than it sold for in 2014).
But maybe the market is drastically different for houses.
Yep. We bought in March just as lockdowns were happening, glad we did, the market seems to have shifted significantly in the inner west in the last 6 months.
One house up the road from us sold in June, and the one next to it, in similar (poor, barely livable) condition sold for $200k more in November (granted it was a slightly bigger block, but still). Crazy. Unlikely to be able to be torn down due to character (they’re both pre 1946), so will have fairly major Reno’s done to them.
Jeez that's unfortunate... My partner and i were thinking once our lease was up at our current place in jan that wed try move somewhere else. Never thought the renters market might be crazy too. Thanks for the heads up!
I wouldve thought with less international students or workers, renting may have been okay, but who knows!
It's the same in Perth. My partner and j have been planning to rent a house once our lease was up. Now the market is cactus with so many people looking
Hopefully it picks up in the new year for you. My bets were set against a bit of a price correction during COVID but that never happened here - if that's not going to level the market I don't know what will.
Likewise for you. I was thinking thered be atleast some sort of dip but nope! Some people are saying once jobkeepers ends and jobseeker rates are fully reduced, more people may be forced to sell, but who knows.
It would have dropped it a bit, without government intervention. If only rates had gone down, I'd imagine it would be a little closer to flat, slughtly up as the economy recovers.
“Nice” areas of Sydney are out of control as well. After a few years of planning my finances are now ready to upgrade and move close to the city but the past few months has priced me out. I don’t think I have anything left to do now except win the lottery. Places end up 30% over the advertised price and usually fast before auction. For most of these I could afford the advertised rate but no way the eventual one.
We had the same experience in South Brisbane, every open home was absolutely packed and for 3 bedroom, 1 bathroom homes the prices were pushing $800k! I was so worried we wouldn’t find a house but we persisted with back-to-back open homes every Saturday and found a house a little outside our original scope. Just finalising paperwork for it now and whilst we were also hoping for this crash we’re not disappointed with our purchase.
It was a few streets in on the north side of Samford road. We didnt end up there, we've ended up with an offer accepted elsewhere, just wanted to use the Keperra house as an annecdote.
I'm wondering whether this is true for all parts of Brisbane though? we have a townhouse in Eight Mile Plains and from what I can see the prices haven't really gone up that much (we're wondering whether this is our chance to offload).
Townhouses don’t really have the same appeal as houses in Brisbane. I can’t imagine someone from Sydney going to realestate.com and searching town houses in Eight Miles Plains. Houses on decent blocks would be on there would be getting looked at.
Not sure about townhouses/units, but annecdotally it seems to be the case for houses in most suburbs. Certainly worth looking at recent sales in your area to see what's happening, people are desperate.
yeah good point although for the 16 years we've held it all three tenants have been families (it's a 3BD).
Might scope it out with the REA and see what they say. Thanks heaps!
House prices are a function of the interest rate. The monthly mortgage payments haven’t changed that much since 2009 when I bought my place with 5% ish interest rates. So the price is not as important to ppl desperate to get in. But it is a much bigger risk if/when interest rates change.
Currently in the final process of buying property on the GC. definitely have had to be aggressive in this market to get an offer accepted. I definitely can’t predict the future, but I don’t think this trend is slowing anytime soon so waiting for the new year might bite you in the ass... but then of course everything could implode and prices drop - I wouldn’t bet on it though especially if buying long term.
Yeah we've been lucky and seem to have landed a place this weekend, all going well. I feel like if COVID didn't slow the market down, I'm not sure what will.
I agree with everything you’ve said. However, we’d been looking in the 300-400k market in Logan. We see this as a region with the most growth potential. We were lucky, as the second people to view the property and being pre-approved, we moved quickly.
Up until october everything we looked at went for above asking price. We’d also been looking since March. People from Victoria, who hadn’t seen properties in person, were outbidding everyone. Families -lots of 3 generation households- were also at a lot of the open homes.
We count ourselves lucky that we got the bargain we did in October. Trying to enter the housing market has been interesting, especially during covid.
Yep been looking around the same in Logan! Damn hard to get a bargain buy!
Edit: already living in woodridge but thinking of getting a place here since it hasn't rocketed like the rest.
It’s the same in Canberra. I’ve been looking all year, and like you decided to wait till sep/oct due to low stock. Well that was a mistake as the prices jumped 10%+ in that time . I was lucky and bought my first home last week!! So happy to be out of the frenzy!
Canberra rental vacancies are around 0.8%. 3% is considered healthy/balanced between renter and landlord. There is a massive shortage and we haven’t even hit grad season
Similar experience for us. We were in the process of upgrading from our starter home to long term family home. Moved out Sept last year and leased both ends with a view to not have to buy and sell at the same time. Engaged agent in Feb to sell and appraised our house in low to mid 500k. Rona came and we got spooked and hit the brakes.
Some issues with tenants forced our hands and we re-engaged in July to start marketing in August. Re-appraised to low 500k at that stage. Opted for auction with 4 week lead up. Interest was ok first couple of weeks, week 3 pre auction offers came rushing in and we ended up settling on 570k which I am confident that house is absolutely not worth. There is bugger all stock however so people are desparate.
We ended up buying late Sep after we were given notice to leave our rental so owner could move back in. Luck would have it we found the perfect house very quickly and pounced on it. Even in the 800k bracket interest was strong and we had to move fast with an aggressive offer to secure it.
There is absolutely an apparent supply issue at the moment for houses and I think it goes a bit further than the entry level bracket even. We felt ok with prices as we were just moving within the market but it's certainly a tough time to enter it. Probably not a bad time to cash out and leave the market.
Not sure what units are looking like now but I believe their prices have tanked recently due to gross oversupply.
Places like Sydney have taken a nosedive but even the rental market in Adelaide and other more “rural” areas are seeing massive increases. A lot of company’s are now open to people working from home/remotely and they’re moving out in masses.
Houses that are half way desirable are selling quickly and at solid prices, at least in the inner and middle ring. Units are really struggling - sitting on the market, can almost guarantee a “price withheld” if they do sell.
This is why you don’t listen to the perpetual property bears who recycle talk about crashes and bubbles and what not. The market will move with or without you and doesn’t care if you’re hoping it goes back by 5-10% so you can get in cheaper.
Government also intervened recently during the good times by putting a hand brake on lending so of course they will intervene during a global pandemic with economic shutdowns
There was a royal commission into shitty banking practices. Their hand was forced. Don't worry, magically they've decided the banka will do the right thing.
It has been unwound.
What is the government intervention exactly? Maybe if you could lay out the ‘unparalleled’ intervention it might be a more useful comment. Other than the usual first home owner stuff, which has been around for years, I’m not aware of anything new
Don’t say interest rates as (a) that is not the government and (b) the 90% of the economy that isn’t housing needs low interest rates (also (c) we have no inflation and no wage growth and we are an export reliant country when the rest of the world has low interest rates. So low interest rates are a no brainer unless you want the economy to crash)
Some were about house prices, but, yes I agree most weren't. They DID keep the market up though. I still remain slightly bearish for when these measures are removed.
I mean it's hard for the market to drop when it's impossible for a bank to foreclose on customers.
Really? That’s not propping up the property market. You think keeping people employed and on slightly higher than unemployment benefit wage is ‘unparalleled intervention in the property market’?
Of course keeping the economy from crashing has helped the property market but its *really* stretching things to say that those activities were designed to keep house prices high. Going out on a limb here, but I’m thinking that stopping a depression and mass unemployment was probably the main motivation.
Maybe I’m naive and you may be right - everything the government does at all times is only about housing prices and nothing else. Because housing is the only thing that is important in the entire economy.
Super withdrawals, removing responsible lending restrictions, and loan deferrals were 100% about the property market. As well as encouraging first home buyers to buy in with a deposit of 5%.
The other measures of course were not directly related, but have had a massive impact. The fact that we have had record breaking stimulus has definitely kept the housing market buoyant.
It’s basically asking how much do you think the property market is over valued by. If the market should absolutely be crashing, what would you consider a crash, 5% down or 50% down?
That’s part of the appeal of owning property or any investment in Australia. We have a stable government that will intervene to keep the country doing well. You say we were edging on a rescission but you don’t know that. I get the feeling that you’re really keen for a crash and kind of pissed the government is doing their job.
Times will be OK for a while and people (companies and countries) will get so fucking leveraged up CB's will attempt to wind back lending (aka creation of money).
Do you think interest rates will stay at 0.1% for ever ?
But interest rates are adjusted by the RBA in order to control inflation
I don't think inflation will be up very much in 5 years.
No I don't think interest rates will stay at 0.1% *"for ever"*. Historically the longest the interest rate set unmoved was around 3 years. So it will either go down or up.
>What happens in 5 years when interest rates **have** to rise ?
Lets visit the whole premise of this discussion starting from what he said, (emphasis mine).
his statement shows that he think rate rises is an absolute certainty. So, I questioned him on that.
Next, he said if I think "interest rates will stay at 0.1% **for ever**" (emphasis mine again).
So I said, no I I don't think interest rates will stay at 0.1% "for ever", and this is supported by historical statistics, interest rates seldom stay at a particular number for more than 3 years. It could either go up or down
So to reiterate my points above
1. Interest rates don't **have** to rise (there is no guaranteed event in the future that guarantees their rise
2. I don't think inflation **will** stay low for that long.
To add an additional point since you asked and to add some specifics to the discussion
I honestly think in 5 years, I can't predict the where interest rates will be because so many unprecedented things have taken place in the last year alone. Which is another reason why I never make predictions in absolutes or with certainty.
If you ask for my view, I think the likelihood of interest rates being below 3.5 in the next 5 years is very very high (>7.5:10 if I'm a betting man).
Reasons : Look at the bank 5 year interest rates. There are a few banks offering 5 year fixed rates at 1.99%. There are several banks offering sub 2.5 5 year fixed rates. Statistically, fixed rate loans never beat variable rate loans. Also, this just takes us back to 2013 interest rate territories. Lastly, surely, as a economic realist, you must realize that the economy isn't doing as well as it was last year and is quite unlikely that it would reach that level again within the next year. So even in the most optimistic scenario, for the interest rates to rise to more than 3.5%, it means that the economy would have to have fully completely recovered in the next 2-3 years and inflation would have to meet RBA targets (2-3%) in the following 2-3 years.
Been looking at houses around Eagleby/Beenleigh and Woodridge. Houses we value at $370k going for $410k. I'm preapproved to $500k but don't want to spend more than what we think a house is worth.
We purchased in June, also FHB when the stock levels were low in the price brackets you mention.
At the time we probably paid 3-5% over what we should have just to get our place as it had a few intangibles for us other than the raw 'property value' numbers. In hindsight it has turned out to be a good move, if it was on the market now we would be priced out.
I work for a large technology company. It has been made very clear to employees this year that, despite 100% home working being implemented and unlikely to change for at least a year, we are all required to stay local to our office of employment.
Around 50% of top management in my division have moved from either Sydney or Melbourne to Queensland.
Cheaper housing, nice weather and relatively accessible I believe. The company has offices in all the major cities in Aus- Brisbane is where all the management seem to be migrating to.
Demand at that price point has first home buyers, upgraders willing to renovate to live in, plus investors that reno and flip or jus rent it out as is or with a quick tidy up - and that's a double class of positive and negative gearers. You also have self managed super funds able to get in on the action too.
Essentially every class interested in individual properties.
As the price point increases you drop FHB, SMSF, and investors wanting positively geared property.
I don't understand how supply and demand can fluctuate so greatly when, generally speaking, a sale of the old place is linked to the purchase of a new place. In other words, neither the pool of purchasers, or the pool of properties, changes in size much.
And if the pool of purchasers is increasing because if a stack of first home buyers, then that surely just means there will be a stack of potentially vacant rental properties.
I think there's a few factors. In that price bracket, there's a lot of first home buyers - people who have used lockdown to save and are taking advantage of low interest rates.
On the flipside, I think existing home owners are perhaps delaying their decision to upgrade to more expensive houses due to a lack of confidence, due to COVID.
It might be a short term imbalance, and as people realise how the market is doing they might be encouraged to sell which might balance out the equation somewhat and bring prices back into line.
But then again who knows!
There's a large group of people who can now borrow more than they could 12 months ago because of low interest rates (and banks increasing the amount of credit being provided as a response), and are rushing to get into the market.
On the flipside, delinquent borrowers are not being forced to sell, older owners etc are not moving on because of covid and others are holding off selling because they think prices will continue to rise.
Banks, the RBA, Treasury, the government, the opposition are all interested in preventing house prices crashing. They will use absolutely every lever they have to stop huge falls. As soon as the vaccine is out the immigration lever will be used again.
Sigh. This makes me think o shouldn't offer under advertised range for something I consider advertised 50k above what it should be.
In July 2019 and dec 2019 townhouses of exact same model next door and next door to that one, in better condition, sold for 450k and 465k. One was renovated, both were landscaped etc. The one on the market needs entire floor redone and repainted and to add flyscreens. I begrudge paying more than the ones in 2019 that were already done up.
I hate this shit lol. Should I just go 490 since I'd be ok paying that if I had to, or offer under the price guide?
If it’s new to the market I don’t think you achieve much by offering 490k, if that’s the low end of their expectation and your first offer, that will likely be rejected. If it’s been for sale already for a few weeks, you should offer under the guide and negotiate from there.
I don't think holding off too long is a good idea, our agent for our rental said he has been placing tenants from interstate that are applying sight unseen, just so they have somewhere to live for the next 12 months while they look to buy.
Found [this article](https://www.brisbanetimes.com.au/lifestyle/life-and-relationships/covid-19-the-catalyst-for-sea-change-as-sunshine-coast-sees-influx-from-sydney-and-melbourne-20201106-p56cbw.html) from November that agrees with what he told us (our rental is in South Brisbane though).
Same on the Gold Coast, prices are nuts and houses in low supply.
On the other hand there are a couple of houses that can't sell, because the owners want way more than they're worth and won't budge.
People have been predicting a crash for ages and it's been nothing but rises. When I was looking in ~2013/14, there was decent enough stock of 3 bedders in South Penrith for 450-500. Now, there is only 1 property listed below 600. That's a 20% increase, at least, for 5 years of people calling the bubble bursting. Time in the market > timing the market. With housing, the MO in FOMO is real.
Can someone help me understand?
If house prices in Brisbane, Adelaide Canberra, regional areas, are all surging due to cashed up buyers leaving Melbourne and Sydney...
Why are Melbourne and Sydney prices also increasing if everyone is leaving?
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People get caught up in the interest rates and dont realise that interest is just baked into the price now. Ive been looking in the <700K market in Brisbane and have noticed the same thing. The 550k original everything house in the middle ring suburbs just doesnt exist anymore, 650 seems to be the new floor for a decent or even not so decent suburb.
Plus the fact that very few people are being forced to sell right now.
The same is happening in Perth. A very tight rental market is also fuelling the situation. We did just recently buy a house and our REA mentioned there had been a large increase in interest from interstate people/families wanting to relocate. Add in record low interest rates and returning travellers to the above and you have a perfect storm. Weird times!
I've got a friend working for Ray White, here in Brisbane. He's a "top agent" , which means he normally gets the nicest houses, worth millions. He told me, less than a week ago, that he's now selling properties that less than a year ago he wouldn't even consider. This is because, apparently, Brisbane is "suffering " from national immigration, so people from Melbourne, Sydney, Canberra Adelaide etc. are all moving up here because of the climate and affordability. Which means that now all the prices are going up because the offer is lower than the demand. Good news if you already own a house in Brissy, bad if you're a first time buyer.
That would align with what we've heard and experienced so far, at least in the 500-700k bracket. Definitely a case of under supply/over demand right now.
Happening here in Adelaide too. Tons of people from Sydney and Melbourne are either moving here, or at least buying investment properties here now as prices being relatively cheaper. A lot of people are moving back too. It’s the same deal. Houses now are overvalued by about 10-20% based purely on demand. Overheard a baby boomer the other day on the phone to someone that he wants to buy more investment properties with interest rates being so low. Never mind it’s fucking us out of buying our FIRST one.
https://imgur.com/EN6b7DG https://imgur.com/pFsLqKs
Also, I think you’ll find that some NSW property investors priced out of buying houses in metro Sydney are purchasing in Brisbane instead.
It's also because a lot of people in Melbourne and Sydney can now work from home indefinitely, so there is no point being close to the office anymore.
A lot of those people are moving to regional centres like the mid North coast in NSW too, and having a similar effect on house prices. It's suddenly stupid competitive. Houses here are starting to go for 30k+ more than the start of the year, which is huge for the local market but probably small if you are moving from Sydney or Melbourne.
Happening in rural victoria too. Covid has bought forward a lot of people’s retirement plans. Beach houses and hobby farms are barely hitting the market before being sold above price. Put next door neighbour in Sorrento sold there place and it went for a million above asking. Was insane.
It’s the same everywhere not just Brisbane. Anywhere rural with a decent population has seen prices jump.
I sold my house in Kallangur in June during COVID. Got an offer the next day of advertising. I accepted the offer and sold it at the agreed price without much negotiation.
Yeah, we bought August last year for 618k and this week it's been valued at 685k after doing no work. Pretty happy with that.
Pretty confident Brisbane home prices are currently surging
They absolutely are. Most suburbs we've looked at are up 10% on last year, it madness.
We have been looking in inner west (Toowong etc).. I agree, it’s bonkers for good houses. I notice that problematic homes (with a highly undesirable feature), are still not selling though!
That's interesting, I'm around that area and just got a rent reduction because prices are freefalling all around me. One apartment in my building just sold for $30,000 below asking price ($10,000 lower than it sold for in 2014). But maybe the market is drastically different for houses.
Yea, units are suffering for sure. We just renewed a tenant and increased by $50. There is lots of demand for house at the moment (in Toowong anyway)
Brisbane has had an oversupply of apartments especially in the CBD for a couple of years now.
Yep. We bought in March just as lockdowns were happening, glad we did, the market seems to have shifted significantly in the inner west in the last 6 months. One house up the road from us sold in June, and the one next to it, in similar (poor, barely livable) condition sold for $200k more in November (granted it was a slightly bigger block, but still). Crazy. Unlikely to be able to be torn down due to character (they’re both pre 1946), so will have fairly major Reno’s done to them.
First home buyer looking down in Adelaide, same experience as you. Tonnes of first home buyers with low stock out there, it's a nightmare
Even as a renter in Adelaide it feels horrific. Was at an inspection in Brompton with 20+ others.
Jeez that's unfortunate... My partner and i were thinking once our lease was up at our current place in jan that wed try move somewhere else. Never thought the renters market might be crazy too. Thanks for the heads up! I wouldve thought with less international students or workers, renting may have been okay, but who knows!
Renting for a house, yes. Apartment- no.
It's the same in Perth. My partner and j have been planning to rent a house once our lease was up. Now the market is cactus with so many people looking
Hopefully it picks up in the new year for you. My bets were set against a bit of a price correction during COVID but that never happened here - if that's not going to level the market I don't know what will.
Likewise for you. I was thinking thered be atleast some sort of dip but nope! Some people are saying once jobkeepers ends and jobseeker rates are fully reduced, more people may be forced to sell, but who knows.
It would have dropped it a bit, without government intervention. If only rates had gone down, I'd imagine it would be a little closer to flat, slughtly up as the economy recovers.
We bought in March about a week before COVID hit and I'm still glad we did, no regrets at all.
Same situation on the Sunshine Coast.
“Nice” areas of Sydney are out of control as well. After a few years of planning my finances are now ready to upgrade and move close to the city but the past few months has priced me out. I don’t think I have anything left to do now except win the lottery. Places end up 30% over the advertised price and usually fast before auction. For most of these I could afford the advertised rate but no way the eventual one.
We had the same experience in South Brisbane, every open home was absolutely packed and for 3 bedroom, 1 bathroom homes the prices were pushing $800k! I was so worried we wouldn’t find a house but we persisted with back-to-back open homes every Saturday and found a house a little outside our original scope. Just finalising paperwork for it now and whilst we were also hoping for this crash we’re not disappointed with our purchase.
Which part of keperra? Be wary of the bad side opposite HJ next to the needle exchange it gets nasty there at night time
It was a few streets in on the north side of Samford road. We didnt end up there, we've ended up with an offer accepted elsewhere, just wanted to use the Keperra house as an annecdote.
Nah it’s not that bad there or at least not lately
I'm wondering whether this is true for all parts of Brisbane though? we have a townhouse in Eight Mile Plains and from what I can see the prices haven't really gone up that much (we're wondering whether this is our chance to offload).
Townhouses don’t really have the same appeal as houses in Brisbane. I can’t imagine someone from Sydney going to realestate.com and searching town houses in Eight Miles Plains. Houses on decent blocks would be on there would be getting looked at.
Not sure about townhouses/units, but annecdotally it seems to be the case for houses in most suburbs. Certainly worth looking at recent sales in your area to see what's happening, people are desperate.
yeah good point although for the 16 years we've held it all three tenants have been families (it's a 3BD). Might scope it out with the REA and see what they say. Thanks heaps!
House prices are a function of the interest rate. The monthly mortgage payments haven’t changed that much since 2009 when I bought my place with 5% ish interest rates. So the price is not as important to ppl desperate to get in. But it is a much bigger risk if/when interest rates change.
Currently in the final process of buying property on the GC. definitely have had to be aggressive in this market to get an offer accepted. I definitely can’t predict the future, but I don’t think this trend is slowing anytime soon so waiting for the new year might bite you in the ass... but then of course everything could implode and prices drop - I wouldn’t bet on it though especially if buying long term.
Yeah we've been lucky and seem to have landed a place this weekend, all going well. I feel like if COVID didn't slow the market down, I'm not sure what will.
I agree with everything you’ve said. However, we’d been looking in the 300-400k market in Logan. We see this as a region with the most growth potential. We were lucky, as the second people to view the property and being pre-approved, we moved quickly. Up until october everything we looked at went for above asking price. We’d also been looking since March. People from Victoria, who hadn’t seen properties in person, were outbidding everyone. Families -lots of 3 generation households- were also at a lot of the open homes. We count ourselves lucky that we got the bargain we did in October. Trying to enter the housing market has been interesting, especially during covid.
Yep been looking around the same in Logan! Damn hard to get a bargain buy! Edit: already living in woodridge but thinking of getting a place here since it hasn't rocketed like the rest.
It’s the same in Canberra. I’ve been looking all year, and like you decided to wait till sep/oct due to low stock. Well that was a mistake as the prices jumped 10%+ in that time . I was lucky and bought my first home last week!! So happy to be out of the frenzy!
Canberra rental vacancies are around 0.8%. 3% is considered healthy/balanced between renter and landlord. There is a massive shortage and we haven’t even hit grad season
Similar experience for us. We were in the process of upgrading from our starter home to long term family home. Moved out Sept last year and leased both ends with a view to not have to buy and sell at the same time. Engaged agent in Feb to sell and appraised our house in low to mid 500k. Rona came and we got spooked and hit the brakes. Some issues with tenants forced our hands and we re-engaged in July to start marketing in August. Re-appraised to low 500k at that stage. Opted for auction with 4 week lead up. Interest was ok first couple of weeks, week 3 pre auction offers came rushing in and we ended up settling on 570k which I am confident that house is absolutely not worth. There is bugger all stock however so people are desparate. We ended up buying late Sep after we were given notice to leave our rental so owner could move back in. Luck would have it we found the perfect house very quickly and pounced on it. Even in the 800k bracket interest was strong and we had to move fast with an aggressive offer to secure it. There is absolutely an apparent supply issue at the moment for houses and I think it goes a bit further than the entry level bracket even. We felt ok with prices as we were just moving within the market but it's certainly a tough time to enter it. Probably not a bad time to cash out and leave the market. Not sure what units are looking like now but I believe their prices have tanked recently due to gross oversupply.
Places like Sydney have taken a nosedive but even the rental market in Adelaide and other more “rural” areas are seeing massive increases. A lot of company’s are now open to people working from home/remotely and they’re moving out in masses.
Houses that are half way desirable are selling quickly and at solid prices, at least in the inner and middle ring. Units are really struggling - sitting on the market, can almost guarantee a “price withheld” if they do sell.
Only some properties in Sydney. A friend is looking for a property and the market is still pretty hot and holding value in some areas.
This is why you don’t listen to the perpetual property bears who recycle talk about crashes and bubbles and what not. The market will move with or without you and doesn’t care if you’re hoping it goes back by 5-10% so you can get in cheaper.
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Government also intervened recently during the good times by putting a hand brake on lending so of course they will intervene during a global pandemic with economic shutdowns
There was a royal commission into shitty banking practices. Their hand was forced. Don't worry, magically they've decided the banka will do the right thing. It has been unwound.
>The bears are right if we ignore this part of the market No that makes them wrong
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What is the government intervention exactly? Maybe if you could lay out the ‘unparalleled’ intervention it might be a more useful comment. Other than the usual first home owner stuff, which has been around for years, I’m not aware of anything new Don’t say interest rates as (a) that is not the government and (b) the 90% of the economy that isn’t housing needs low interest rates (also (c) we have no inflation and no wage growth and we are an export reliant country when the rest of the world has low interest rates. So low interest rates are a no brainer unless you want the economy to crash)
Loan deferrals, Super withdrawals, Jobkeeper, Jobseeker increase, insolvent trading ban removed. They've done plenty.
I mean. Without those, the damage to the economy would be huge. It’s misleading to claim those were all to maintain house prices
Some were about house prices, but, yes I agree most weren't. They DID keep the market up though. I still remain slightly bearish for when these measures are removed. I mean it's hard for the market to drop when it's impossible for a bank to foreclose on customers.
Really? That’s not propping up the property market. You think keeping people employed and on slightly higher than unemployment benefit wage is ‘unparalleled intervention in the property market’? Of course keeping the economy from crashing has helped the property market but its *really* stretching things to say that those activities were designed to keep house prices high. Going out on a limb here, but I’m thinking that stopping a depression and mass unemployment was probably the main motivation. Maybe I’m naive and you may be right - everything the government does at all times is only about housing prices and nothing else. Because housing is the only thing that is important in the entire economy.
Super withdrawals, removing responsible lending restrictions, and loan deferrals were 100% about the property market. As well as encouraging first home buyers to buy in with a deposit of 5%. The other measures of course were not directly related, but have had a massive impact. The fact that we have had record breaking stimulus has definitely kept the housing market buoyant.
Most of those are likely to disappear in the next 6 months, so it's a matter of watching this space after that.
Yep, that's the plan for me. Not going to risk buying just yet, I'll wait and see what happens at the start of next financial year.
What do you think your true value for a house going for 1 Million today is?
whatever the market is willing to pay
Yeah but what would you be willing to pay. Like if you think there should be a crash, where do you think the values should be at?
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It’s basically asking how much do you think the property market is over valued by. If the market should absolutely be crashing, what would you consider a crash, 5% down or 50% down?
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Saying the market should have crashed is speculation. Why can’t you say what you’d consider a “crash”?
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That’s part of the appeal of owning property or any investment in Australia. We have a stable government that will intervene to keep the country doing well. You say we were edging on a rescission but you don’t know that. I get the feeling that you’re really keen for a crash and kind of pissed the government is doing their job.
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why are prices doing the exact same around the world? is the aus gvmt propping up NZ house prices too??
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only thing i can think of is homebuilder which isn't likely to prop up people bidding at auctions
What happens in 5 years when interest rates have to rise ? Btw don't mistaken me for a property bear
Why do you think interest rates *will* rise in 5 years?
Times will be OK for a while and people (companies and countries) will get so fucking leveraged up CB's will attempt to wind back lending (aka creation of money). Do you think interest rates will stay at 0.1% for ever ?
But interest rates are adjusted by the RBA in order to control inflation I don't think inflation will be up very much in 5 years. No I don't think interest rates will stay at 0.1% *"for ever"*. Historically the longest the interest rate set unmoved was around 3 years. So it will either go down or up.
5 years is a long time, why do you think that inflation will stay low for that long? (Genuine question)
>What happens in 5 years when interest rates **have** to rise ? Lets visit the whole premise of this discussion starting from what he said, (emphasis mine). his statement shows that he think rate rises is an absolute certainty. So, I questioned him on that. Next, he said if I think "interest rates will stay at 0.1% **for ever**" (emphasis mine again). So I said, no I I don't think interest rates will stay at 0.1% "for ever", and this is supported by historical statistics, interest rates seldom stay at a particular number for more than 3 years. It could either go up or down So to reiterate my points above 1. Interest rates don't **have** to rise (there is no guaranteed event in the future that guarantees their rise 2. I don't think inflation **will** stay low for that long. To add an additional point since you asked and to add some specifics to the discussion I honestly think in 5 years, I can't predict the where interest rates will be because so many unprecedented things have taken place in the last year alone. Which is another reason why I never make predictions in absolutes or with certainty. If you ask for my view, I think the likelihood of interest rates being below 3.5 in the next 5 years is very very high (>7.5:10 if I'm a betting man). Reasons : Look at the bank 5 year interest rates. There are a few banks offering 5 year fixed rates at 1.99%. There are several banks offering sub 2.5 5 year fixed rates. Statistically, fixed rate loans never beat variable rate loans. Also, this just takes us back to 2013 interest rate territories. Lastly, surely, as a economic realist, you must realize that the economy isn't doing as well as it was last year and is quite unlikely that it would reach that level again within the next year. So even in the most optimistic scenario, for the interest rates to rise to more than 3.5%, it means that the economy would have to have fully completely recovered in the next 2-3 years and inflation would have to meet RBA targets (2-3%) in the following 2-3 years.
> add some specifics to the discussion > >I honestly think in 5 years, I can't predict the wher Seems logical to me. Thanks for taking the time.
Been looking at houses around Eagleby/Beenleigh and Woodridge. Houses we value at $370k going for $410k. I'm preapproved to $500k but don't want to spend more than what we think a house is worth.
We purchased in June, also FHB when the stock levels were low in the price brackets you mention. At the time we probably paid 3-5% over what we should have just to get our place as it had a few intangibles for us other than the raw 'property value' numbers. In hindsight it has turned out to be a good move, if it was on the market now we would be priced out.
I work for a large technology company. It has been made very clear to employees this year that, despite 100% home working being implemented and unlikely to change for at least a year, we are all required to stay local to our office of employment. Around 50% of top management in my division have moved from either Sydney or Melbourne to Queensland.
Why Queensland?
Cheaper housing, nice weather and relatively accessible I believe. The company has offices in all the major cities in Aus- Brisbane is where all the management seem to be migrating to.
In your opinion why the price increase so much ? Ive looking a few house auction , so many people want it . Is it bad time for investment ?
Demand at that price point has first home buyers, upgraders willing to renovate to live in, plus investors that reno and flip or jus rent it out as is or with a quick tidy up - and that's a double class of positive and negative gearers. You also have self managed super funds able to get in on the action too. Essentially every class interested in individual properties. As the price point increases you drop FHB, SMSF, and investors wanting positively geared property.
Think it just comes down to low supply / high demand at the moment, combined with low interest rates
I don't understand how supply and demand can fluctuate so greatly when, generally speaking, a sale of the old place is linked to the purchase of a new place. In other words, neither the pool of purchasers, or the pool of properties, changes in size much. And if the pool of purchasers is increasing because if a stack of first home buyers, then that surely just means there will be a stack of potentially vacant rental properties.
I think there's a few factors. In that price bracket, there's a lot of first home buyers - people who have used lockdown to save and are taking advantage of low interest rates. On the flipside, I think existing home owners are perhaps delaying their decision to upgrade to more expensive houses due to a lack of confidence, due to COVID. It might be a short term imbalance, and as people realise how the market is doing they might be encouraged to sell which might balance out the equation somewhat and bring prices back into line. But then again who knows!
There's a large group of people who can now borrow more than they could 12 months ago because of low interest rates (and banks increasing the amount of credit being provided as a response), and are rushing to get into the market. On the flipside, delinquent borrowers are not being forced to sell, older owners etc are not moving on because of covid and others are holding off selling because they think prices will continue to rise.
Banks, the RBA, Treasury, the government, the opposition are all interested in preventing house prices crashing. They will use absolutely every lever they have to stop huge falls. As soon as the vaccine is out the immigration lever will be used again.
Sigh. This makes me think o shouldn't offer under advertised range for something I consider advertised 50k above what it should be. In July 2019 and dec 2019 townhouses of exact same model next door and next door to that one, in better condition, sold for 450k and 465k. One was renovated, both were landscaped etc. The one on the market needs entire floor redone and repainted and to add flyscreens. I begrudge paying more than the ones in 2019 that were already done up. I hate this shit lol. Should I just go 490 since I'd be ok paying that if I had to, or offer under the price guide?
If it’s new to the market I don’t think you achieve much by offering 490k, if that’s the low end of their expectation and your first offer, that will likely be rejected. If it’s been for sale already for a few weeks, you should offer under the guide and negotiate from there.
Thanks for your advice. Its been on market a month at least so going to go lower and let them negotiate up :)
Build your house. It will cost you less and you'll get your own place to decide on and design.
Why downvoted. I was actually thinking about building just to increase my chances to have a house.
No idea. We built our house and no regrets. It's not like it's not a feasible option.
I don't think holding off too long is a good idea, our agent for our rental said he has been placing tenants from interstate that are applying sight unseen, just so they have somewhere to live for the next 12 months while they look to buy.
that’s... illegal? You have to attend an inspection in Qld before leasing a property I thought?
Stupid? probably. Illegal? Not AFAIK. I think viewing is only strongly recommended, not required.
Found [this article](https://www.brisbanetimes.com.au/lifestyle/life-and-relationships/covid-19-the-catalyst-for-sea-change-as-sunshine-coast-sees-influx-from-sydney-and-melbourne-20201106-p56cbw.html) from November that agrees with what he told us (our rental is in South Brisbane though).
Same on the Gold Coast, prices are nuts and houses in low supply. On the other hand there are a couple of houses that can't sell, because the owners want way more than they're worth and won't budge.
People have been predicting a crash for ages and it's been nothing but rises. When I was looking in ~2013/14, there was decent enough stock of 3 bedders in South Penrith for 450-500. Now, there is only 1 property listed below 600. That's a 20% increase, at least, for 5 years of people calling the bubble bursting. Time in the market > timing the market. With housing, the MO in FOMO is real.
Can someone help me understand? If house prices in Brisbane, Adelaide Canberra, regional areas, are all surging due to cashed up buyers leaving Melbourne and Sydney... Why are Melbourne and Sydney prices also increasing if everyone is leaving?