NSW Home builders going bust - housing shortage to worsen

Tropo , you're so correct.

The average worker in the whole of Europe earns 1600 Euro and the average 35m2 flat cost 700K Euro.

/sarcasm off/*


Anyone else want to offer a gold dust = saw dust comparison?


Apart from Paris and a few concentrated wealth locations , France is dead cheap when compared to Oz.

 

02bsure

I doubt it.
Do you care to give us some examples of cheap properties in Paris or other western cities and we will do a comparison with similar ones here?

I also believe that interest rates have always been lower in the EU so they will be able to afford a bigger mortgage than us?

cheers

 

Smack bang in the middle of Germanys most expensive city Munich -

Wohnung Kauf, München, "für Schäppchenjäger"

95m2 flat, was the actual house that Albert Einstein grew up in, 258K Euro (asking price of course).

This is located amongst the most expensve land in Germany.

Heres the rest of the list for that location -
Immobilien Altstadt, Wohnungen Altstadt, (Bayern, München)

Where 'Mietobjekte' starts is the list of the rental for the same location. (Prices are per month as per the rest of the world not per week ...how logical).

Try this little holiday getaway overlooking the Gardasee

Italien Rustico Immobilien | Italien Immobilien | Landhaus Italien - EA Improved :: Villa Allegra Gardasee

730K Euro ...er not 35m2 either.


German Castles ...

($920K AUD)

Schloß an kleinem See Nähe Nördlingen bei eBay.de: (endet 17.02.09 17:08:07 MEZ)


(2.4mill AUD)

including 10 ha land

Kauf Luxus Immobilie: Schloss-Herrenhaus / EfG 5741-WI bei eBay.de: (endet 11.03.09 10:10:37 MEZ)


($980K AUD)
790m2 living area , 24,000m2 land

Schloss mit großem Park und Teich bei Schwerin bei eBay.de: (endet 18.03.09 11:04:03 MEZ)

alternatively you could buy this little gem (cough)
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007593259

These examples should help dispel the myth that Europeans all pay 700K Euro for 35m2 bedsits.
Needlesstosay, the properties I've shown here are expensive and well beyond the reach of average folk.
I simply used them to give some idea of what 700K Euro can buy in areas that have not been swept up in the bubble.

There is no question that most cities in Europe are heavily enveloped in the global house bubble, namely Paris, London, Amsterdam but the long trek back has started.


Cheap interest rates do make the idea of buying property more attractive but in many cases its still not enough to inspire the couples I know to buy. Futhermore the ones that have bought, have bought property up to the equivalent of 2 times their income on interest rates of between 3.5 and 5%. Inspite of this they still think they've taken on a heavy burden. Personally, I expect to negotiate a new fixed rate at
just under 3% this year.

 

You're right, my response wasn't worded well.

What I was trying to say was, if you notice that the market has supply constraints, in this case they are unnatural supply constraints imposed by the government, and you are noticing that complimenting these supply constraints is a growing level of credit in a market, and there is no reason to suspect these conditions would change in the near future then you'd be foolish NOT to buy given that buying into the market earlier when prices are more affordable is vastly cheaper than waiting to buy, plus it carries less risk compared to buying in later.

Basically what I'm saying is the old real estate line of "buy in now or forever be priced out" prompted many Australians to own rather than rent, because they feared the repercussions of not owning property. Plus property prices have grown relatively quickly for the last 15 years now giving good justification to the statement.

So those who weren't students of history (which the vast majority of the population aren't) could easily be convinced this trend would continue. Of course if you look past the last 20 years of history you will see there are big flaws in the theory, and reflection on the past 50 - 100 years paints a completely different picture.

You're kidding right. I'll vomit if I read another REI sponsored report on the future prospects of growth. I mean come on - who has a vested interest in seeing property prices fall? Not many. Hell even I own property and don't really want to see it fall.

On the other hand I can give you a long list of people who have a vested interest in seeing property prices remain high. The list starts with the obvious, the real estate industry, but quickly moves to banks, government, RBA, and creshendos at the 70% of property owners in Australia who presently sit around their BBQ's, which they bought on credit against the equity in their homes I might add, and boast of their genius investment strategy of buying property, and how the latest figures show they are $XX,XXX richer than they were last year!

So don't confuse yourself over which side the progranda is supporting and who stands to gain from it.

I fully expect the government to throw everything, including the kitchen sink at propping up property prices - and I mean it would be political suicide to suggest that the government should stop propping prices up with FHOG's, FHB Savings Programs, and the big feather in their cap when it comes to market manipulation - the regulated shortage of housing. You don't see the media sticking the boot into the government about loosening regulations or reducing property development taxes to stimulate development to reduce the housing shortage problem, but they'll gladly throw another $7,000 to lift the market temporarily...

No land shortage, taxes are to blame - March 07 - realestate.com.au

Low unemployment rates don't drive housing price growth, increasing incomes drive housing price growth. Stable employment just keep prices stable. Of course low unemployment might stimulate income growth given increase competition for labour.

Got some recent data on that? Or is this just more of your personal experience because I don't think educated discussion can be centered around opinions alone, facts have to enter the argument.

Don't get me wrong I'm not saying real estate can't go up. I'm just saying, I'm of the opinion it SHOULDN'T go up.

I personally can think of perfectly plausible situations where real estate could rebound and boom over the next 2 - 5 years. They obviously center around us digging ourselves into more debt through this period of very low interest rates. Though ultimately this will just further inflate the bubble and real house prices will need to fall at some point unless the levels of debt in the system can be grown or maintained, and I have yet to hear or read a plausible argument as to how this is beneficial in anyway other than preserving the status quo.

I can completely appreciate why so many people argue that in a year or two property will be at the beginning of a boom cycle again - we will have low rates, an economy coming out of recession, Asia resuming strong growth and wanting our resources to do it, incomes might even be relatively unaffected, we we will still more than likely have a government allowing the housing shortage, it will also continue to prop up the industry with its bonuses and tax breaks and our population growth is likely to continue. So all the traditional drivers of property booms that people normally focus on look great.

That is, until you read history, and look at the figures over a longer time frame. When you do that you realise that credit growth over the last couple of decades, particularly the last one, is massive, its unprecedented! It's big enough to make me question if the system can even survive, and you don't need me to tell you that things are dire? When was the last time the Australian stock market lost 50% in the space of a year? With most people still saying we are on the way down. When was the last time most of the major central bank around the world had their cash rates set at 0%?

As I have mentioned in other posts, there is still a way out, we can still return the previous system of growth, all we need to do return to our state of ignorance and borrow like our assets will always appreciate and that we will never need to pay the debt back. The fact is that for the last couple of years the biggest stimulus to world growth has centered around the expansion of credit, debts which we are increasingly unlikely to be able to pay back, and unfortunately someone needs to cop the loses for these malinvesments.

So I'm of the opinion that the penny has dropped. Now I don't know what levels the fall needs to be to restore confidence that the world is at an "acceptable level of debt", it could just a few more percent, it could be another 50 - 80%. I just know that this ain't Kansas anymore.

 

OB2Sure,

What happens if my TV is slightly larger than in the Padstow gem? (pic 2)



lol

 

ASX , then you need a still bigger tv, lol

 

02bscure

Munich...wages.

Software engineer = 41 000 euro.
Project Manager (IT) = 55 495 euro.
Management consultant = 67 000 euro.
Very “impressive”...
If you compare RE prices and wages in Munich do you still claim that OZ is expensive ?
Oh yes....English teachers in France (incl.Paris) are getting approx. 20 euro/h gross (do not forget to subtract tax and 20% for social services).
On the other hand, RE in Ukraine is dead cheap when comparing to OZ, but who would like to live over there....

PS - I am in France almost every year and nobody incl. you is going to convince me that France is cheaper than OZ.
Also do not forget that for example in France you must have at least 80% deposit to buy a house/apartment + good references from your boss and government does not give any handouts..

 

02bsure

I checked out a few of these properties and they are not cheap...

Hard to make a comparison though because my German is limited so I can't read all the text and I don't know the area so I can't determine where they are exactly.

The castle looks cheap though but you'll need the wages of 5 German presidents combined to be able to maintain it.....

Thanks for the try anyway

cheers

 

Typical IT contractor earns 70-90Euro hr.

Typical IT project manager (varies hugely) but roughly 70-150K

Management consultant (not much of a market for individuals, they're usually McKensie or KPMG etc)

Find Jobs in germany with jobserve.com.au

Rents are cheap in Germany as are most things compared to oz. eg clothing, food, cars, flying.

 

Bill, of course they're not cheap. I gave you a list of the most expensive location in the whole country. It like showing you a list of flats in Notre Damn or Circular Key, that was the point.

 

Now, that is absolutely NOT true!!! You are not going to tell me clothing is cheaper. Yes I agree better quality and bigger variaty but not cheaper.

 

1) “All the the couples I know earn between 400K AUD and 1mil AUD a year.
While I'm sure there are people who earn the sums you've quoted, of the IT
I know none would get of of bed for that and I find it hard to believe they are Munich salaries.”


2) “Typical IT contractor earns 70-90Euro hr.
Typical IT project manager (varies hugely) but roughly 70-150K
Management consultant (not much of a market for individuals, they're usually McKensie or KPMG etc)
Rents are cheap in Germany as are most things compared to oz. eg clothing, food, cars, flying.”

02bsure
So, which info is correct ??.
First or second ?.

 

I agree.

 

On the top of it people in Europe prefer to spend wages on clothes, travelling and going out. Getting own place is at the bottom of the "to do" list.

 

Clothes and shoes are cheaper and far better plus of course the selection is enormous.

Then again...the AUD has slipped alot lately hasn't it. On that basis, the gap may have closed to a degree.

Does cause me to wonder though where you do your shopping?

 

yes I agree but in Poland not Germany.

Macquarie shopping centre, I can’t stand Parramatta.

 

Well, who said profession 1) was related to profession 2)?
Thats why I deleted it.

So what kind of profession in 1) you are talking about