First Time Homebuyers Priced Out of the Market, 90% Can't Afford

People buying above would be the second, third, fourth home buyers who have built equity and earned more money due to working longer.

Forever is a very long time, I wont be around to see it but in my lifetime I would say yes. If you can come back and post each year forever about what is happening be greatly appreciated.

In 50 years time I can guarantee you that the Sydney property market would of increased as long as it isn't blown up and uninhabitable.

 

Depending on which way you are going, if you are upsizing you actually best to buy in the buyers market as you might get 10% less for your place (500->450k) but if the house you were looking at buying also was 10% less at 1M you get it for 900k meaning you are 50k better off. Obviously if you are downsizing you are better off waiting for the next boom as 10% more means you get 1.1m compared to 550k.

 

That's possible but I don't think they're the ones driving the market

Forever was a poor adjective. Will the market be composed of the same buyers in the next 5, 10 or 15 years?

Yes I would agree with you on this point. But there will be corrections along the way which will present themselves as the most opportune time to enter.

 

Sydney 'corrected' itself in 2011. Why didn't you purchase at that time?

 

THX do you really truly believe that upsizers, downsizers and relocators were responsible for the 20%+ p.a growth that Sydney has experienced over the past 2-3 years???

I am not sure as to the actual number of FHBers in the Sydney market, but I think it is fair to say that they were the main drivers during the 2003-2010ish era, considering government policy was specifically targetted at stimulating their demand.

 

They played their part. I think you are making the mistake of thinking there is one driver of this current boom when it is a complex interplay occurring of demand/supply/low interest rates/foreign investment etc that has driven it.

They weren't.

 

The way Western Sydney is behaving these days - it's on the cards.

 

I actually purchased in Sydney after the 1890 'correction'. I hope you did too!

Except that the demand/supply variables have been the same for quite some time. They didn't precipitously worsen post-2012. In fact there are currently moves to reverse supply constraints.
The only thing that has changed is the movement of foreign capital and the fall in interest rates.

So who was?

 

Given that much of the property value rises must have been well over $1mill to get the median up near that figure; I'd say not FHB's, and mostly 2nd/3rd homes as PPoR's, a few higher-end investors and O/S buyers.

A good number will also be development blocks which go for a premium to would-be developers for sub-divs, no doubt.

 

I'm just a simpleton. Why are arguing over this?

 

Price rises cannot outstrip wage increases forever or we end up with mortgages requiring 100% of income to pay.

Currently the driver is credit expansion. Virtually unlimited lending by banks to people who then plow it into the housing market.

Don't believe it? A thought experiment: APRA decrees 30% deposits for owner-occupiers and investors.

Do prices rise, stagnate, fall?

The answer tells you the main force driving Sydney et al.

 

Prices will continue to rise.

Prices will level off in many areas.

Prices will stagnate for awhile

Then the sun will come out again and prices will rise again.

If time proves me wrong then I will happily resign from the forum.

you might have to wait a couple of years for proof though but save this thread.

 

1 more thing.

The brave, courageous people who are giving it ago to try and build wealth and a better future for themselves - they have a chance to achieve financial freedom.

The naysayers chance is 0%.

 

How long does everyone think the guesstimated number of 1.8 million Australian Property Investors blows out to say 3 million?

 

Perhaps you should seek out some of the brave courageous people of Ireland who lost everything on the back of rampart speculation and see what they think.

It isn't giving it a go to buy a nonproductive asset with debt on an I/O loan and live through reckless credit expansion.

 

Know quite a few of these, in debt for the rest of their lives with highly overvalued property because of pure greed/FOMO.
Fortunately I felt it in my waters and sold up before we got smashed.

Prices have started recovering recently so there's some hope yet for those that lost big time.

 

Unlimited?

Try to borrow $300k with a job that pays $30k per year, and you have $1k in savings, a car loan for $2k, and CC debt of $1.5k, and pay $200p/w rent..

Try to borrow $50k for your business for some new equipment or repairs etc, with only the business as security.

Banks have been "more relaxed" with their lending in past years for sure; LoDocs etc - but they are definitely less friendly since the GFC.

Far from unlimited.

 

Right, that's why APRA decided to suddenly crack down on investor lending - because they weren't lending enough, right?
That's why the RBA had been hesitant about dropping interest rates for the past year - because house prices weren't rising fast enough, right?

 

First of all australia is not Ireland. It's not USA, it's not Iran, it's not Istanbul. Australia is Australia. Each country has their own unique parameters.

Now more importantly, even in Australian if you have limited understanding of investment principles and little to no knowledge of property investing then your going to be increasing your risk.

It all comes down to giving yourself enough of a property investment education. It's not rocket science eigher.

There are no risk-free positions in life. Doing nothing has huge consequences too my friend. You just won't experience the brunt of it until you want to retire.

 

The idea "nothing can be learned from other countries" is utterly absurd.