In Sydney, less than 50% of properties will be owner occupied in the future..

I think it will be the haves and have nots... My Gen Y sister who owns in Chatswood only owns it due to an inheritance. No way they could have bought it. Booyah...

 

Repayments at 7% interest for a loan of 200k and you were finding it hard on a 70k pa. Geez i think i might as well dig my own grave now if i'm borrowing 400k on a 90k pa. Your repayments would have been $666 per fortnight as compared to mine being $955 on 4%.

Not taking in to consideration any personal circumstances, on 70k pa you would clear $2086 a fortnight aftertax and your repayment would be 31% of your income which is close to the recommended australian mortage repayment of 30%. As compared to mine being $2585 aftertax being 36% of my income in repayments.

Just some interesting figures thats all

 

It was a case of the principal barely decreasing!
Plus water, electricity, strata, council... lots of bills.

 

The figures are daunting when you have limited weekly or fortnightly cashflow.

 

30% is considered to be the point at which mortgage stress becomes a problem, not the level at which they're recommended to be at.

Incidentally, if mortgage rates rise to 7%, which isn't entirely unlikely, your $400K mortgage would eat half of your salary.

 

And for some reason i expect the interest rate to creep up to close to 6% for investment loans sooner or later in the coming few years

 

The age-old "elephant in the room"....increasing population via immigration. No-one ever wants to mention this as a possible issue and solution (certainly not anyone in Govt).

(Before all the SJW's start up with the racist rubbish; I am for immigration...as long as they can be a direct contributor to our Economy - must come to Aus with a job already in place), and it has to be a figure based on economic viability; not just some arbitrary figure based on a moral viewpoint and that has no finite amount....don't get me started on the unemployment and welfare issue from our own existing population...that is another argument.

For as long as I can remember in my 56 years of life; three things have been a constant;
1. Whining about the cost of housing,
2. Never-ending increases in yearly immigration numbers,
3. Ever-increasing Government costs of buying/selling/building/owning a property - stamp duty, GST, Rates and Utilities costs etc. But the purchasing costs alone are the significant issue.

From my memory; the Govt has never addressed (reductions) of points 2 and 3.

(Add to that; allowing foreign ownership from non-residents increases prices).

Here's a few simple ways to stop fueling the demand for property; hence the increases in prices
1. Stop (or significantly decrease) immigration...outside of Capital cities such as Sydney and Melb the issue is far less. But the vast majority of immigrants gravitate to the Cities.
2. Significantly reduce foreign ownership.

And third; significantly reduce Govt charges for purchases of PPoRs. (but less discounts for IP's).

 

With you on that. We have enough dead weight - no more please.

 

For the obvious reason if you observe the list of eligible occupations for skilled migration. This path is not easy and most people whose taking the skilled migration path would have paid thousands before they're even in Australia. When I signed my PR years ago there's a clear rule that you can't ask for hands out for at least 2 years. For those who come through this visa I think it's a fallacy to say that they don't contribute to the economy. I do expect them to be part of the culture and respect the laws.

 

Easy to say - but by doing this you will have enormous affects on the economy overall and in-fact probably cause the economy to go backwards. And by doing that there will be huge job losses and whatever else comes with a failing economy. No one is going to care about house prices when no one has jobs or the economy is in reverse.

 

this is correct. Limiting immigration will have a very nasty affect on the economy. As you mentioned, job losses, no growth, certainly no growth in wages etc...
As mentioned in a previous post, i would rather have high house prices and a job rather than lower house prices and no job.

 

I'd doubt it.

Everyone assumes that increasing the population automatically equates to improved lifestyle, improved job opportunities and so on....anyone who has lived in the USA in the last 20 years (as I have) will know that this is nowhere near the reality for many, many people.

Currently we have a Deficit that costs us many millions of dollars PER DAY in interest to service it...which could be better spent on much needed other services, and there has been no hint of any reduction for years - and indeed the current Govt wants to and will increase this debt even further.

australian debt clock - Google Search

Also; over 50% (almost 60%) of all Australians currently earn their "income" from various sources from the Govt - either via welfare, or Public Service.

Also; we have a yearly immigration total of 200,000 people - I seriously doubt there are that many - or even half that many - full-time jobs being created each year which pay enough to allow anyone to live even a modest lifestyle or higher. Add to that; 200,000 school leavers each year as well.....

How do you arrive at less people available for existing jobs resulting in increased job losses?

A glut of cheap unskilled (or skilled) labour will force wages down - not up....supply and demand.

 

Oh there we go again
Immigrants the cause of all our worries

Please

 

I know its ABC, but I agree with the Bigger pie, but more mouths eating from it

.... and yes, don't look any further than US

High immigration masks Australian economic decline

Bigger pie, but more mouths eating from it
The reason why many people feel that they haven't benefitted from the Australia's long stretch of economic expansion, is quite simply because they haven't.

Their pay packets haven't gotten bigger while the cost of essential goods like shelter have risen.

High migration makes it nearly impossible for Australia to fall into recession.

The economy keeps getting bigger just because there are more people operating in it.

It's great for business, because it keeps wages low and there's more people to buy stuff from them.

It's great for governments because it means economic growth looks better than it otherwise would.

But it isn't necessarily good for ordinary workers.

As new Reserve Bank governor Philip Lowe has noted, the role of good economic policy should be to "raise living standards" - not just make the population, and therefore economy, bigger.

 

I'm actually all for more immigration. Much more. I am all for a lot more skilled coming in.

Australia needs a much larger economy to be super charged and become even wealthier. I am all for it. as long as the people we bring in are compatible with our way of life.

 

We agree on most things, but not this one.....

More heads means SOME folks will get a lot wealthier, for sure - but again I refer back to the USA - they have generated an enormous amount of wealth on a National level - can fund massive armies, space programs and the like, but if you travel around their Country and see how the vast majority of people live; it has not helped them to have more, and more and more heads in the Country....Govt has gotten bigger, and so has their debt.

 

Not at all; the Govt policies are the cause of our problems - and an ever-increasing "hand-out" class that they continually want to appease.

But; pumping enormous volumes of immigrants into the Country (any Country) when it cannot support them - and they cannot support the Country - is completely nonsensical.

The USA currently allow 1 million a year, and the latest Bill is to cut this number in half...and there are loads of folks who are screaming about this...."inhuman", racist, and all this rot (I fail to see how stopping white, English speaking people, Jews, Christians....everyone - who would be part of the total volume cut-back - is racist).

Yet; in 1986 their immigration level was about the same; some years before that it was only 250,000.

So; here they are; currently allowing 1 million per year, want to cut it back to 500,000 - still way above historical totals per year - and folks are up in arms? ridiculous.

And; their standard of living is/has been going backwards....does this make economic sense, and where is the evidence that allowing even more per year actually improves standards of living?

 

I wouldn't want to be as big as the states, but I'd like more people. But having said that, who knows how it would turn out if we actually did have a lot more people. Perhaps don't rock the boat , Australia is pretty darn great already

 

Why? what is the economic benefit? Everyone already whinges about clogged roads, waiting times for everything, housing costs, etc - another 30 million people will not improve that at all - immigrants typically do not move out the boondocks; they congregate around Cities and jobs.

The answer is found in the USA, and other enormous population Countries with similar or worse lifestyles than ours.

With the exclusion of perhaps China - which was mostly Third world until they began to industrialise their Country. But; we already have a well-industrialised economy; we would only be saturating the acreage with more of the same....if the extra heads resulted in better Hospitals, and other infrastructure - then yes; maybe a valid reason.

My point exactly.

It is arguable that the unrestricted volume and quality of immigration - all Govt policy - over the last 30 years or so - has created a decrease in our standards of living and other issues - despite the increased volume of heads.

 

The opposite is true when the market declines, it is the people that didn't buy or who sold at the top that are in a better position to buy. Those that already own end up having huge debt and little equity and cannot purchase more at lower prices, this is what happened in hundreds of cities in the GFC. Sure the owners could buy more in a rising market with easy credit, but then they got clobbered when things went pear shaped, and those that were cashed up with little debt were able to take advantage of it.

May or may not happen in Sydney but I would expect more likely than not given the crazy prices being paid. I sold out a little early in Sydney, missed out on maybe 200K more but cash flow improved a lot and I wasn´t comfortable with the high risk anymore, having seen first hand what happened in Spain and the UK after a boom.

 

My suspicion is that the immigration intake will fall sharply in the coming years. There have already been changes, such as eliminating the pathway from a 457 to permanent residence for new grants, and I suspect that it'll get tighter.

The mood music in the press has changed too. I've seen a few comment pieces in The Age and The Australian bemoaning the number of immigrants, particularly with regards to Melbourne and Sydney's infrastructure. There was a similar shift in the UK during the noughties, and it was one of the contributing causes to Brexit.

Incidentally I agree with you on what happens when property markets turn, though in parts of the UK there wasn't that much of a slump.