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Strangely, all the constructions workers we know in Sydney are working already, generally long and hard. Our new neighbour is a tradie, his hours are long and I imagine that is why he has paid $2million for a knockdown two bedroom house at the age of about thirty. Ditto our next door neighbour who is a plumber, the other side is a structural engineer, about to start building.
Where we are the buyers of real estate are nearly all locals, including the mystery buyer of a $13 million apartment a couple of weeks ago at the local beach. Not imported Chinese money. We have an unemployment rate of 2% so actually most young people are working and saving and buying properties.
Strangely, all the constructions workers we know in Sydney are working already, generally long and hard. Our new neighbour is a tradie, his hours are long and I imagine that is why he has paid $2million for a knockdown two bedroom house at the age of about thirty. Ditto our next door neighbour who is a plumber, the other side is a structural engineer, about to start building.
Where we are the buyers of real estate are nearly all locals, including the mystery buyer of a $13 million apartment a couple of weeks ago at the local beach. Not imported Chinese money. We have an unemployment rate of 2% so actually most young people are working and saving and buying properties.
I do not think an average Sydney tradesperson would be in a position to buy a $2 Million house. I know tradies earn good money , but unless having own business I doubt very much that would be possible, especially with interest rate rises over recent times.
We have loads of new buildings going on around my locality. A lot of drug money (we are after all the Ice capital of the world along with Adelaide, something barely mentioned anymore but highly evident) and/or foreign buyers , one demographic, has become very visible over recent eighteen months .
But Sydney, has long been home to Chinese 'money' in housing. Newer to Perth , as not as 'exciting' until recently. I don't believe there was checks on if money was laundered either.
We have a low unemployment rate as well. Doesn't mean a thing. The question is if it is possible to get into the market now, unless very far out, without getting involved in the 'tax free' market (I'll call it)
I do not think an average Sydney tradesperson would be in a position to buy a $2 Million house. I know tradies earn good money , but unless having own business I doubt very much that would be possible, especially with interest rate rises over recent times.
We have loads of new buildings going on around my locality. A lot of drug money (we are after all the Ice capital of the world along with Adelaide, something barely mentioned anymore but highly evident) and/or foreign buyers , one demographic, has become very visible over recent eighteen months .
But Sydney, has long been home to Chinese 'money' in housing. Newer to Perth , as not as 'exciting' until recently. I don't believe there was checks on if money was laundered either.
We have a low unemployment rate as well. Doesn't mean a thing. The question is if it is possible to get into the market now, unless very far out, without getting involved in the 'tax free' market (I'll call it)
Well a lot of tradies have partners who earn an income and many do have their own businesses. The Sutherland Shire and the Northern Beaches have a demographic of well off tradies. The tax free market they are most likely to involve themselves in are cash jobs, tradie jobs. I used to have a repairer, who before mobiles, would always turn up on time, was prepared to come out of hours and always fixed the appliances well. He built up a well run extensive business and bought a local deep waterfront, now worth about $7million.
You really paint a bleak picture of Perth. My friends there seem happy, two working as academics but one married to a tradie and about to move into their new home in a northern suburb.
There's plenty of money in Sydney, the idea the housing market is being propped up by Chinese is a myth. I'd say it's really being propped up by vast amounts of wealth in property. So you can work out which breaks first the chicken or the egg.
I don't agree with the notion that most young people are buying properties. At least not in Sydney they aren't. To be quite honest, I think we need to stop pretending home ownership is a viable goal for most people living in Sydney. It's just not possible for the vast majority unless they plan on buying a shoebox the other side of Lithgow.
I just think of all the other things the nation's savings could be invested in and shake my head that people are spending $2m to buy a falling down, fibro cottage in a suburb out west you wouldn't want to walk around at night in. The 10 year bond rate is 4% and Sydney property is yielding 2.x%. Ridiculous. I guess the trade there is as long as Sydney is growing at 3%-4% a year, with it's natural geographical limitations, rising land value will keep everyone well fed on capital growth. If it ever unwinds it will be swift and savage.
There's plenty of money in Sydney, the idea the housing market is being propped up by Chinese is a myth. I'd say it's really being propped up by vast amounts of wealth in property. So you can work out which breaks first the chicken or the egg.
I don't agree with the notion that most young people are buying properties. At least not in Sydney they aren't. To be quite honest, I think we need to stop pretending home ownership is a viable goal for most people living in Sydney. It's just not possible for the vast majority unless they plan on buying a shoebox the other side of Lithgow.
I just think of all the other things the nation's savings could be invested in and shake my head that people are spending $2m to buy a falling down, fibro cottage in a suburb out west you wouldn't want to walk around at night in. The 10 year bond rate is 4% and Sydney property is yielding 2.x%. Ridiculous. I guess the trade there is as long as Sydney is growing at 3%-4% a year, with it's natural geographical limitations, rising land value will keep everyone well fed on capital growth. If it ever unwinds it will be swift and savage.
It’s not quite as bad out of the city as you might think. We are very excited for our daughter as on the weekend they managed to buy a house at auction to upgrade, after three years looking. In the eastern Shire, walking distance to train, bus shops and schools, four bedrooms, four bathrooms large pool, level north facing yard. A little over that $2million mark. He works ten minutes away and she mostly still is WFH.
I well know the difference in your general area, my other kid and family are out there. Lots more money for lots less space. Out here we also have parks, beaches, much the same shops. We don’t have to pay for parking either!
Well a lot of tradies have partners who earn an income and many do have their own businesses. The Sutherland Shire and the Northern Beaches have a demographic of well off tradies. The tax free market they are most likely to involve themselves in are cash jobs, tradie jobs. I used to have a repairer, who before mobiles, would always turn up on time, was prepared to come out of hours and always fixed the appliances well. He built up a well run extensive business and bought a local deep waterfront, now worth about $7million.
You really paint a bleak picture of Perth. My friends there seem happy, two working as academics but one married to a tradie and about to move into their new home in a northern suburb.
I am fully aware of possibilities with regards to tax free money and possible working partner, just as I'm aware of the great potential in earning tax free money in the drug business.
We are a land of 'chancers' , many not too bothered how they acquire the wealth, or at best play 'at the edges'. Sydney has a massive drug problem, of long standing. Just further escalated by the growth of the cocaine trade, making it among the biggest centres for that in the world. So fair to say illegal earnings would be making an impact on the market there.
Sadly yes. Perth has a massive Ice industry, among the biggest in the world, (not my opinion, but stated fact, easy to find) which obviously attracts International cartels. Very visible and increasingly, which obviously infers a lot of tax free cash floating around. , quite possibly in the world (clearly stated in reports in 2017 it was a $2 Billion plus industry)
The obsession with what others are worth seems to have become well entrenched. Very California, shallowness, but sadly very evident in the culture.
My take would be what 'crime' was committed to allow such ostentatious displays of wealth.
There's plenty of money in Sydney, the idea the housing market is being propped up by Chinese is a myth. I'd say it's really being propped up by vast amounts of wealth in property. So you can work out which breaks first the chicken or the egg.
I don't agree with the notion that most young people are buying properties. At least not in Sydney they aren't. To be quite honest, I think we need to stop pretending home ownership is a viable goal for most people living in Sydney. It's just not possible for the vast majority unless they plan on buying a shoebox the other side of Lithgow.
I just think of all the other things the nation's savings could be invested in and shake my head that people are spending $2m to buy a falling down, fibro cottage in a suburb out west you wouldn't want to walk around at night in. The 10 year bond rate is 4% and Sydney property is yielding 2.x%. Ridiculous. I guess the trade there is as long as Sydney is growing at 3%-4% a year, with it's natural geographical limitations, rising land value will keep everyone well fed on capital growth. If it ever unwinds it will be swift and savage.
It is not 'propped up' by the Chinese market, but greatly assisted in maintaining prices. There was sound reasons the Canadians and New Zealanders put a stop to it.
With the Chinese economy in decline and their housing market depreciating, ever more money will be looking for buying into the Australian and UK and USA housing markets. It simply cannot on so many levels be on any benefit for locals of those places, apart I suppose from rising prices for those with an interest in such ever increasing prices.
As real estate comes as close as possible to having a religion in Australia, or a faith, it is hardly surprising that Australians maintain that belief.
It is lazy. It doesn't do anything for the economy of benefit and the industry and government continue to go out of their way, not to 'shake that faith'.
I think 'If ' is the word. I suspect an ever smaller number will be those that benefit. Ever more money will be laundered into the market by especially Overseas Chinese and increasing ever more wealth channeled into housing through illegal drug means.
I'm in no way sure this can be turned around. My observations in Perth is that it is getting worse but less overt.
The big danger is that the situation arrives, if not already here, that anyone without very substantial wealth, will miss out if not joining the mob doing illegal activity. I seem to recall a top police spokesman in Sydney a few months ago saying much the same thing. Couldn't seem to find it again though.
It’s not quite as bad out of the city as you might think. We are very excited for our daughter as on the weekend they managed to buy a house at auction to upgrade, after three years looking. In the eastern Shire, walking distance to train, bus shops and schools, four bedrooms, four bathrooms large pool, level north facing yard. A little over that $2million mark. He works ten minutes away and she mostly still is WFH.
I well know the difference in your general area, my other kid and family are out there. Lots more money for lots less space. Out here we also have parks, beaches, much the same shops. We don’t have to pay for parking either!
A little over $2 million? First Home Buyers? A fixer up? You would require a massive deposit and massive salary to be able to afford such a house. Not forgetting all the costs and taxes around that.
Just a further pointer to the insane state of the Australian property market. The mind boggles as to the direction this nation is going.
A little over $2 million? First Home Buyers? A fixer up? You would require a massive deposit and massive salary to be able to afford such a house. Not forgetting all the costs and taxes around that.
Just a further pointer to the insane state of the Australian property market. The mind boggles as to the direction this nation is going.
No, second home buyers, who have systematically paid off the home they bought ten years ago.
You certainly live in a different world to us. Our kids went to public schools, retain many of their high school friends, all of whom own decent Sydney houses.
Maybe they can afford the houses as they don’t trade in illegal substances!
It’s not quite as bad out of the city as you might think. We are very excited for our daughter as on the weekend they managed to buy a house at auction to upgrade, after three years looking. In the eastern Shire, walking distance to train, bus shops and schools, four bedrooms, four bathrooms large pool, level north facing yard. A little over that $2million mark. He works ten minutes away and she mostly still is WFH.
Congrats to your daughter! Sounds like she found a great spot.
The median house price in Sydney is ~$1.3m and the median income is ~$80k. Let's say a young married couple, both working, both earning the median income, no kids. They are going to have ~$120k/year in after-tax income. Let's say they want to buy a home in outer-Sydney for $1m. They've got a 20% deposit. So they need to borrow $800k. Given where the 10 year bond rate is, I think we can expect mortgage rates going forward for the next few years to be about 5.5%-6%. So at 6%, they're going to be paying ~$75k a year in P&I.
Unlike in the 1990s interest rates are historically still very low and yet this hypothetical couple would need to be paying 62.5% of their after tax income toward servicing the mortgage on their pretty modest digs. OTOH, were they to rent this house the implied yield would be something like 2.5% ($25k/year in rent, or 20% of their income).
It's impossible for the majority of people to ever consider buying a home in Sydney.
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