# House crunch in Australia



## mpgrewal (Feb 22, 2009)

As migrants are pouring in, houses in Aus are getting occupied whereas the rate of new house construction is far more slower than migrant influx. Apparently, this is leading to higher rents and plight for home searchers..

I wonder, if Aus has so much land available in the suburbs and there is no dearth of wood and mineral resources - then why are they not able to construct new colonies quicker?

If you see this giant continent has just 5 or 6 big cities..why can't they convert other neighbouring towns to big cities.


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## phat-dave (Nov 19, 2008)

mpgrewal said:


> As migrants are pouring in, houses in Aus are getting occupied whereas the rate of new house construction is far more slower than migrant influx. Apparently, this is leading to higher rents and plight for home searchers..
> 
> I wonder, if Aus has so much land available in the suburbs and there is no dearth of wood and mineral resources - then why are they not able to construct new colonies quicker?
> 
> If you see this giant continent has just 5 or 6 big cities..why can't they convert other neighbouring towns to big cities.


firstly, we have too small a population and have major skill shortages. secondly, there just isn't the demand. sure we're a large country but the majority want to live in coastal areas and there rely upon infrastructure in capital cities - again the popluation and vast size of the country do not warrant construction of infrastructure to link capital's together to make super cities or satellite cities.


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## mpgrewal (Feb 22, 2009)

So Dave you mean to say that demand for affordable housing isn't much. But I wonder what is driving rents upwards, people pay $2000USD in sydney's suburbs..Here our fellow forumers tell their plights when they go for hunting houses... Australian govt is telling migrants not to call their parents and dependents saying their are no houses here...

Why not build a lot of homes so that immigrants can easily settle..If we like coastal areas, why not build few cities between Adelaide and Perth.. I am a total newbie to Australian lifestyle and economics..so kindly bear my ignorance...but want to learn how things go there..


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## matjones (Jan 30, 2009)

Rents are sky high in Sydney because the city is desirable. There are a limited number of houses one can squeeze in to a particular area, so it is simple supply and demand. Also remember affordable to one person is not always affordable for everyone else. I live in San Francisco, and $2000/m sounds reasonable to me.



> Why not build a lot of homes so that immigrants can easily settle


Who's building these homes? the government? that would never happen. Any immigrant with a good job and a down payment can get their own home. There are tons of new housing estate developments within reasonable proximity to the major cities. One could argue that if you can't afford to live in a big city, don't try to move there. Hence I do not live in New York 

.


> If we like coastal areas, why not build few cities between Adelaide and Perth.


.

The growth of cities if very organic and can be affected by a myriad of factors. Sydney started its life as a penal colony. Melbourne took off during the gold rush, growing to match Sydney in size & population 50 years later. You can't just say "lets start a city" and it will appear. There are thousands of small towns scattered across the coastline of AU witting there waiting to explode and become a major city. Its just going to take something big to make people want to move there in masses. Gold, Oil, the fountain of youth.. who knows?


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## kaz101 (Nov 29, 2007)

mpgrewal said:


> If we like coastal areas, why not build few cities between Adelaide and Perth.. I am a total newbie to Australian lifestyle and economics..so kindly bear my ignorance...but want to learn how things go there..


There are towns between Adelaide and Perth and even between Melbourne and Adelaide (I live in one of them) but people want jobs, infrastructure, theatres, cinemas etc. and some of these are only available in the cities. 

As Mat mentioned the growth of a city is very organic. 

When you move further from the larger cities there is less transport available other than roads, the jobs become less (if someone is in IT for example it still makes sense to go where there are more opportunities which is a larger city).

City growth (outside the state capitals) is often driven by jobs and with this current economy businesses are cutting back, bank are not lending as readily (to businesses as well as individuals). 

The government have set up a grant so that when people buy a house and land package (to build a new house) they do get a cash back to help them and I've heard that this is helping the industry. 

If you want to live somewhere other than a capital city just do some research since there are towns and cities there and some of them even have houses being built. I know I live in one of them - but if I hadn't travelled around Australia first I wouldn't have found it 

Regards,
Karen


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## Sono (Feb 1, 2009)

Is it difficult to find housing in the Sunshine Coast/ Noosa area?


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## amaslam (Sep 25, 2008)

Rents are driving up because investors are not investing in new housing. This means existing dwellings need to provide rentals. In most capital cities this in the 2-3% vacancy rate level (say within 25 kms of the CBD). This is what is driving rents up.

AU for years has had any undersupply of new housing, meaning demand for housing always > than number of houses being built.

As for building homes do you notice that AU as country has just 21 million people and the number of builders are already building to their capacity, who else would build these houses?

And it's not just houses that need to be built, you'd new utilities (Electric, water, sewerage, telecom), then you'd need jobs for those people to go to, and finally public transport and roads for those people to get to the jobs and shops. And that sort of investment is much much greater than the cost of a house. For the next 3-5 yrs expect upward pressure on rents. New home buyers have started buying so some supply in rental vacancy is there but still not sufficient to cover for all the new migration to AU. 



mpgrewal said:


> So Dave you mean to say that demand for affordable housing isn't much. But I wonder what is driving rents upwards, people pay $2000USD in sydney's suburbs..Here our fellow forumers tell their plights when they go for hunting houses... Australian govt is telling migrants not to call their parents and dependents saying their are no houses here...
> 
> Why not build a lot of homes so that immigrants can easily settle..If we like coastal areas, why not build few cities between Adelaide and Perth.. I am a total newbie to Australian lifestyle and economics..so kindly bear my ignorance...but want to learn how things go there..


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## Halo (May 8, 2008)

Please crunch on - Daddy needs to by a home.


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## mpgrewal (Feb 22, 2009)

So the crux of the thread is that Aus will be in serious shortage of houses, if immigration keeps on continuing like this. House workers and infrastructure developers should always be on Criticial Shortage List in AU, Hope Mr. Evans is listening


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## scottishcelts (Aug 5, 2007)

Halo said:


> Please crunch on - Daddy needs to by a home.


Ditto 

p.s you downloaded Lost yet?


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## Halo (May 8, 2008)

scottishcelts said:


> Ditto
> 
> p.s you downloaded Lost yet?


You kidding, with Australia's draconian policy on downloads...... not yet. Season 1 will be down by the end of the month.


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## anj1976 (Apr 24, 2008)

u mean u can not download stuff?? torrent works oor not?


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## scottishcelts (Aug 5, 2007)

Halo said:


> You kidding, with Australia's draconian policy on downloads...... not yet. Season 1 will be down by the end of the month.


Mm...that is a problem Halo isn't it. I'll find out how my hubby manages it and i'll get back to you.


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## anj1976 (Apr 24, 2008)

if torrents dont work, i will hv to reconsider my move


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## mpgrewal (Feb 22, 2009)

what policy Halo? Isn't everything open there? Are there some restrictions on webistes, downloads?


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## anj1976 (Apr 24, 2008)

wow this restriction bit is making people worried.. i wonder how many downloads ppl will miss


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## amaslam (Sep 25, 2008)

Don't worry Anj Torrents work great (AU #3 most pirating nation / capita).

No Halo is talking about download limits (i.e. 4 GB data, 20 GB data) that unfortunately exists in AU. But by using uTorrent with an off peak scheduler I find my 40 GB/110GB plan quite sufficient for my monthly "Internet backups" 



anj1976 said:


> wow this restriction bit is making people worried.. i wonder how many downloads ppl will miss


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## anj1976 (Apr 24, 2008)

number one must be India. 
and how much do u pay for the 40 GB/110GB plan? we have slower connections here but no limits attached. just the thought of living in limits specially when it comes to internet isnt sounding too good 
but 40/110 gb is too much to doanload in a month. i mean its way too much.


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## amaslam (Sep 25, 2008)

You'd be surprised how easy it is to go through 40 GB in one month. Remember this is for all data downloading, not just torrents. But I use TPG and it's $70/month. I also telecommute 2 days a week and that adds some data usage too. I get fairly decent speed (sync about 12 Mbit) so about 1.2 MB/s downloads and 100 KB/s uploads. If you want to research broadband definitely go to Whirlpool Broadband News



anj1976 said:


> number one must be India.
> and how much do u pay for the 40 GB/110GB plan? we have slower connections here but no limits attached. just the thought of living in limits specially when it comes to internet isnt sounding too good
> but 40/110 gb is too much to doanload in a month. i mean its way too much.


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## anj1976 (Apr 24, 2008)

yeah sure will check the link.. I know it is the total data transfer but yeah talking of the speed that u get, it wont be difficult to reach the limit. we have a 512 connection at home (which is slow as per the standards there) but we r happy with it. kind of used to the slow download. we get a max of 300 kbps download (if lucky) else normal is 50-80 kbps download and we dont really bother much with upload speed.


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## Halo (May 8, 2008)

Best provider at the mo (IMHO) is TPG Internet if you live in the Metropol.
I pay $50 for 25/25 with a static IP (important to me) and thats with 18000 down and 1000 up 

You have to download here as TV is utter $hite.


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## anj1976 (Apr 24, 2008)

tht link that amaslam posted has everything in it, i guess tpg as well. and from my reading, 40gb transfer would close to 70$/month and 100 gb is 100$/month


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## Halo (May 8, 2008)

anj1976 said:


> tht link that amaslam posted has everything in it, i guess tpg as well. and from my reading, 40gb transfer would close to 70$/month and 100 gb is 100$/month


Remember that most ISP's quote as such -> 50GB = 25/25 (peak/off-peak)


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## anj1976 (Apr 24, 2008)

thats what u hv i believe. 25 off peak and 25 peak hrs.


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## phat-dave (Nov 19, 2008)

i pay $50/m for 60gb on peak and between 2am & 10am its half price - so you download 10gb in that period, it only counts as 5gb.... static ip - i sync'd at 22mbps down .... love it.

every gig thereafter is $3/gb

viva la australia!


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## anj1976 (Apr 24, 2008)

phat-dave said:


> i pay $50/m for 60gb on peak and between 2am & 10am its half price - so you download 10gb in that period, it only counts as 5gb.... static ip - i sync'd at 22mbps down .... love it.
> 
> every gig thereafter is $3/gb
> 
> viva la australia!


not bad.. which one is it that u r using?


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## scottishcelts (Aug 5, 2007)

phat-dave said:


> i pay $50/m for 60gb on peak and between 2am & 10am its half price - so you download 10gb in that period, it only counts as 5gb.... static ip - i sync'd at 22mbps down .... love it.
> 
> every gig thereafter is $3/gb
> 
> viva la australia!


says he who is moving to Canada


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## epidaetia (Nov 15, 2008)

Ouch.. No unlimited download.. What'll happen to staying updated with every movie being released?
Esp that Australia has same problem as India about movies being released in later months..


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## amaslam (Sep 25, 2008)

Not that hard, make sure you maximize your use of the off-peak (usually AM hours during the night). This can be easily done with software that runs on a schedule.

i.e. I've used 35 GB this month but only 8 GB of that is from my peak, the rest is off peak, I still have 83 GB on the off-peak available and 31 GB of the peak available. I reset in 8 days so am doing well this month (~22% of my quota used), some months I have hit 90% plus.

Here's what will use up quota really quick:
1. Youtube
2. Torrents
3. Downloading LINUX ISOs

Most other activities are much lighter on usage. I would recommend one start with a 25/25 plan (50 GB total) and then reset up or down after 4 months of use so you know what you'd typically use. 



epidaetia said:


> Ouch.. No unlimited download.. What'll happen to staying updated with every movie being released?
> Esp that Australia has same problem as India about movies being released in later months..


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## anj1976 (Apr 24, 2008)

coming to think of it, since one would be working in the day time, i dont see much being used anyways during the peak hrs.


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## scottishcelts (Aug 5, 2007)

Halo said:


> Remember that most ISP's quote as such -> 50GB = 25/25 (peak/off-peak)


We have the 25/25 too on a 1.5 mb download....... utter $h!t3 as you say Halo. one of my main criteri when buying a house will be ADSL2+ reasonably close to an exchange so that i can get about 13-16 (24mb thoretical max but you can only get that by slaughtering every neighbour within a 3 mile radius -given what you say about the TV (and i concur) then that slaughter may in fact not be too high a price for the locals to pay). However, given that the interweb here is mince and the connection limits are draconian, and torrents are pretty much crap everywhere then there is an alternative........................use binary downloads. You will all have heard about usenext and newsgroups etc. Well you can download from these at the maximum bandwidth allowed. I have used this myself  for educational purposes only you understand you can subscribe to a provider for roughly US$11 and download to your heart is content (well untill you bust your download limit and they 'shape' your data - nice fluffy word for 'ban your @55 until next month'). You will need a couple of 'free' tools to help you on your way but you can PM me for any info if you need it


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## epidaetia (Nov 15, 2008)

Well Coupla torrent sites are pretty good and You get max speed as well.. Of course you need to open up ports for most of the ISPs or put some hack in your torrent client.
Compared to usenext and nzbs, I would rather go for Direct Downloads from sites like Rapidshare, netload..

Regarding Off/On peak usage.. Depends.. I usually leave my downloads on at home, so when I get back, I've got something new to watch


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## epidaetia (Nov 15, 2008)

amaslam said:


> Not that hard, make sure you maximize your use of the off-peak (usually AM hours during the night). This can be easily done with software that runs on a schedule.
> 
> i.e. I've used 35 GB this month but only 8 GB of that is from my peak, the rest is off peak, I still have 83 GB on the off-peak available and 31 GB of the peak available. I reset in 8 days so am doing well this month (~22% of my quota used), some months I have hit 90% plus.
> 
> ...


You forgot Games.. They eat up HD space and bandwidths as well..


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## Halo (May 8, 2008)

anj1976 said:


> coming to think of it, since one would be working in the day time, i dont see much being used anyways during the peak hrs.


Evening? / Weekends????
Are you planning to work until 1am?


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## anj1976 (Apr 24, 2008)

nopes but what about household.. who will do all that??


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## Halo (May 8, 2008)

What about it? - Its not like it takes 5 hours


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## anj1976 (Apr 24, 2008)

yeah but i cant find another justification


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## scottishcelts (Aug 5, 2007)

anj1976 said:


> nopes but what about household.. who will do all that??


hey - thot u had a cleaner!!!


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## anj1976 (Apr 24, 2008)

yeah i do here  but wont have one there.. cant afford the luxury


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## scottishcelts (Aug 5, 2007)

anj1976 said:


> yeah i do here  but wont have one there.. cant afford the luxury


Well that's no good - we'll have to do something bout that! - we can all have a whip round or something hee hee


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## anj1976 (Apr 24, 2008)

hehehehe yeah sure


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## mpgrewal (Feb 22, 2009)

anj1976 said:


> yeah i do here  but wont have one there.. cant afford the luxury



That's the difference Anj. Here I pay $ AUD 6 / month to my car cleaner and $10 /month to my house cleaner.. There nobody will agree in even $600 per month  .. I love Services in India


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## scottishcelts (Aug 5, 2007)

mpgrewal said:


> That's the difference Anj. Here I pay $ AUD 6 / month to my car cleaner and $10 /month to my house cleaner.. There nobody will agree in even $600 per month  .. I love Services in India


What  - why u leavin lol


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## anj1976 (Apr 24, 2008)

i pay total of 30A$ to get my disheslaundry and car plus house cleaned


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## scottishcelts (Aug 5, 2007)

anj1976 said:


> i pay total of 30A$ to get my disheslaundry and car plus house cleaned


You're in for a rude awakening when you move here then


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## mpgrewal (Feb 22, 2009)

scottishcelts said:


> What  - why u leavin lol


To add to that hair cut in India costs between 50 cents to 1$ (for posh cut).. 

I'm coming to Aus, coz I don't want myself to be addicted to such cheap luxury


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## anj1976 (Apr 24, 2008)

mp, where do u get a hair cut? 35 bux for a hair cut..this is insane. i pay 500 inr for a hair cut. and that would be A$15(more or less).

and trust me, the list is long. in delhi we get a bottle of beer(and mind it not a pint) for a dollar.


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## mpgrewal (Feb 22, 2009)

anj1976 said:


> mp, where do u get a hair cut? 35 bux for a hair cut..this is insane. i pay 500 inr for a hair cut. and that would be A$15(more or less).
> 
> and trust me, the list is long. in delhi we get a bottle of beer(and mind it not a pint) for a dollar.


This is normal rate for male haircut in all salons. I know for women it is $10-$15.. Don't you know that in Delhi they offer you 15 cents UMT hair cut.. UMT means Under the Mango Tree ... lol .. I never did it.. lol..


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## anj1976 (Apr 24, 2008)

nopes.. we call it italian.. if u ask me what tht wud mean.. what is a brick called in hindi? int.. so basically italian salon ..


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## phat-dave (Nov 19, 2008)

anj1976 said:


> not bad.. which one is it that u r using?


hi anj,

i use a company called aanet which is owned by the publically listed provider eftel. they were originally a brisbane based provider (capalaba) who were bought out by the big boys.

ive been with them for four years without any hiccups (touch wood).

cheers


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## ozziland (Oct 10, 2010)

mpgrewal said:


> As migrants are pouring in, houses in Aus are getting occupied whereas the rate of new house construction is far more slower than migrant influx. Apparently, this is leading to higher rents and plight for home searchers..
> 
> I wonder, if Aus has so much land available in the suburbs and there is no dearth of wood and mineral resources - then why are they not able to construct new colonies quicker?
> 
> If you see this giant continent has just 5 or 6 big cities..why can't they convert other neighbouring towns to big cities.


theres a scheme here called called affordable housing, yet the repayments are still way more than the average wage earner/s could afford. 
home ownership is a past dream and a present nightmare. The future looks bright for Australia and Australians.... they say . They say but a lot of aussies dont


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## The Brit in Aus (Apr 25, 2009)

ozziland said:


> home ownership is a past dream


RBA figures for new first home buyers seems to indicate differently:
Aug-10	7,460 new first home mortgages issued
Sep-10	7,708 new first home mortgages issued
Oct-10	7,353 new first home mortgages issued
Nov-10	8,435 new first home mortgages issued


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## Halo (May 8, 2008)

You just have to suck it up (as they say here ) in a crapper area..... Simple as.


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## ozziland (Oct 10, 2010)

Halo said:


> You just have to suck it up (as they say here ) in a crapper area..... Simple as.


not simple as. depending on your particular situation n finances


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## kaz101 (Nov 29, 2007)

ozziland said:


> home ownership is a past dream and a present nightmare.


I disagree about the home ownership. I know a lot of investors (like myself) who are helping people buy their own home. The buyers don't even need a mortgage for the first few years since we'll help with that too and usually it's cheaper than getting a mortgage from a high street bank. 

Sometimes people simply have to look outside the square and be a little more creative. Did you know that most of Sydney was bought without deposit and that the system is still legal today? It's now known as rent to buy or rent to own (or other variations). 

Regards,
Karen


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## Halo (May 8, 2008)

Lower your standards........ or live in the sticks.


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## ozziland (Oct 10, 2010)

kaz101 said:


> I disagree about the home ownership. I know a lot of investors (like myself) who are helping people buy their own home. The buyers don't even need a mortgage for the first few years since we'll help with that too and usually it's cheaper than getting a mortgage from a high street bank.
> 
> Sometimes people simply have to look outside the square and be a little more creative. Did you know that most of Sydney was bought without deposit and that the system is still legal today? It's now known as rent to buy or rent to own (or other variations).
> 
> ...


Ive looked at rental purchase but the weekly rents are phenomenal.


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## kaz101 (Nov 29, 2007)

ozziland said:


> Ive looked at rental purchase but the weekly rents are phenomenal.


Remember that people are not putting in big deposits and so that money is spread out over the term of the payments. We have a property on the market at the moment that is less than the usual mortgage rate by $70 per week! 

You simply need to contact the people that are doing these deals all the time to see if they have anything suitable. We know investors who have lists of people waiting for rent to buy properties because it's the only way they can get on the property ladder. 

Regards,
Karen


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## ozziland (Oct 10, 2010)

kaz101 said:


> Remember that people are not putting in big deposits and so that money is spread out over the term of the payments. We have a property on the market at the moment that is less than the usual mortgage rate by $70 per week!
> 
> You simply need to contact the people that are doing these deals all the time to see if they have anything suitable. We know investors who have lists of people waiting for rent to buy properties because it's the only way they can get on the property ladder.
> 
> ...


a lot are exempt from the rental purchase market as they are from the ordinary bank loan system etc because they dont earn enough regardless of anything else like carers etc. even with a long history of reliable rent paying n no debts etc. you have to earn a minimum amount to get into the property market regardless.


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## kaz101 (Nov 29, 2007)

ozziland said:


> a lot are exempt from the rental purchase market as they are from the ordinary bank loan system etc because they dont earn enough regardless of anything else like carers etc. even with a long history of reliable rent paying n no debts etc. you have to earn a minimum amount to get into the property market regardless.


True about the minimum amount but I thought we were talking about average incomes and not below average incomes.


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## sfmike (Mar 31, 2010)

Well according to a study reviewed in the Age yesterday, Sydney and Melbourne rank near the bottom of affordability among a survey of 325 markets (Sydney trails only Hong Kong). 

"Perhaps most remarkable has been the shift in Australia, once the exemplar of modestly priced, high-quality middle-class housing, to now the most unaffordable housing market in the English-speaking world," said Mr Kotkin."

I am struck in Sydney by the number of properties I have seen go for large sums at auction, then are turned around and rented at a figure that cannot possibly cover the expenses. The explanation is "negative gearing" wherein investors are happy to offset other income in the near term, banking on capital appreciation to make it up in the long term. Example: saw a home in Annandale sell for $1.9m, now still looking for renters at $1250 / week. 

Everyone here says it can't possibly do down, which I think is a pretty good definition of 'bubble.'


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## kaz101 (Nov 29, 2007)

sfmike said:


> I am struck in Sydney by the number of properties I have seen go for large sums at auction, then are turned around and rented at a figure that cannot possibly cover the expenses. The explanation is "negative gearing" wherein investors are happy to offset other income in the near term, banking on capital appreciation to make it up in the long term. Example: saw a home in Annandale sell for $1.9m, now still looking for renters at $1250 / week.


Yep I've had long conversations with investors, accountants and real estate agents who all promote negative gearing. It's used to offset your taxes when you're in a very well paid job, but of course if you lose your job then you're saddled with a load of debt. We've talked to soooo many investors who still think this is the way to go rather than doing cash flow neutral or positive investments.....


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## Halo (May 8, 2008)

Aussie House Prices Hit the Tipping Point


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## The Brit in Aus (Apr 25, 2009)

sfmike said:


> I am struck in Sydney by the number of properties I have seen go for large sums at auction, then are turned around and rented at a figure that cannot possibly cover the expenses. The explanation is "negative gearing" wherein investors are happy to offset other income in the near term, banking on capital appreciation to make it up in the long term. Example: saw a home in Annandale sell for $1.9m, now still looking for renters at $1250 / week.
> 
> Everyone here says it can't possibly do down, which I think is a pretty good definition of 'bubble.'


With Sydney, I can understand many people *hoping* it can't go down again too much, after it it hasn't risen much recently, and prices did drop in 2007-2008.

I can't understand it if everyone is saying they can't go down, when they actually did... eg: 2008 saw these drops in Sydney:
Inner Sydney dropped from $905,000 in Mid 2007 to $880,000 in mid 2008
Middle Sydney dropped from $625,000 in Mid 2007 to $620,000 in mid 2008
Outer Sydney dropped from $399,000 in Mid 2007 to $380,000 in mid 2008
http://www.colliersresidential.com/files/inner_middle_outer_report_mar_09.pdf​

The 2010 overall Median House price in Sydney was quoted as $550,000 for all of Sydney, with a breakdown as follows:

$1,100,000	Inner Sydney	= up $195,000 in 3 years = 22% in 3 years.
$730,000	Middle Sydney = up $105,000 in 3 years = 17%
$425,000 Outer Sydney = up $26,000 in 3 years =7%
And these are for houses only, not units.


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## The Brit in Aus (Apr 25, 2009)

kaz101 said:


> Yep I've had long conversations with investors, accountants and real estate agents who all promote negative gearing. It's used to offset your taxes when you're in a very well paid job, but of course if you lose your job then you're saddled with a load of debt. We've talked to soooo many investors who still think this is the way to go rather than doing cash flow neutral or positive investments.....


Anyone who prefers negative gearing to positive gearing needs their head tested.

Unless of course there are near guaranteed capital growths, which is a thing of the past for some years to come.

Negative gearing is only a valid option if there are no positive geared properties available, and a person has a need to get involved in property.

An investor who would rather lose money, even after tax benefits, than make money, ... well, more fool them.


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## kaz101 (Nov 29, 2007)

The Brit in Aus said:


> Anyone who prefers negative gearing to positive gearing needs their head tested.


I agree but there are investor clubs that are formed on this basis .


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## The Brit in Aus (Apr 25, 2009)

kaz101 said:


> I agree but there are investor clubs that are formed on this basis .


I think that the idea is because there are so few cash flow positive properties, that the only way into the market is via negative gearing, and this has worked very well for many people, who are now positive geared, although starting as negative geared.

Looking at the figures carefully it actually still isn't too bad, although no-where near as good as it was some years ago.

What they rely on is the growth in rents over the years, rather than on the short term property values, and it is those rent increases that bring them out into positive gearing over a number of years.

If it is does right, and a person can buy a house for $25 per week, it can't be be too bad.. long term. 
After all, after about 3 years it becomes cash flow positive, but still technically negatively geared for tax relief on the depreciation aspect.

Cash Flow positive to begin with is still best though, if one can find them.


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