Is Sydney unaffordable? Reality or expectations.....

Discussion in 'Property Market Economics' started by Illusivedreams, 22nd May, 2018.

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  1. MWI

    MWI Well-Known Member

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    I agree, many don't realise it was hard then and different too, I cannot even understand how can anyone compare....?
    I have asked all family and friends since 1989 when we bought when they were buying, was it much easier then when you were buying? Not one person said it was, it was hard then and it took sacrifices!
    Some bought further out, some bought smaller and older, some bought units, and only upgraded 3 or 4 times in their life time, some added renovations after many years, most needed two incomes, most lived very simple life, most needed higher deposits too, most paid higher interest rates, most earned less, most were migrants in not so professional jobs...I can go on and on and on what it took to get there!
    Its like people see us now and they assume we always we so fortunate, we did not win, we just planned, lived simply and executed delayed gratification where % of money earned went regularly into investing, simple, yet many will not understand or do that today! The secret is not to spend all that you earn, to save some, then to automatically and regularly invest over long time!
    I think the expectations of the new generations just changed, where they are living in greatest place at the greatest times and where consumption and consumerism is the norm...property investing takes sacrifices and perhaps if they are taught that they may understand (although I doubt that as I have similar debates with my adult children). Hence IMHO my conclusion it is the expectation!
     
  2. Sackie

    Sackie Well-Known Member

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    Either people get that or they don't. From my dad's time to now, its never been easy. Never will be easy to own a home, especially in the highest demand areas in our capital cities. I learnt long ago its pointless to 'argue' with anyone. Just smile and move on. Preferably to your next deal ;)
     
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  3. marmot

    marmot Well-Known Member

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    I must have been born on a completely different planet, because if I was born 10 years later the bank would have never ever given me the money to buy my first place when I was single , and that was a pretty basic sort of place in the outer suburbs.
    And that was after 10 years of seeing the world.
    There is no way in the world I would swap places with the young kids of today.
     
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  4. TAJ

    TAJ Well-Known Member

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    Having a stab at Missabotti or are you further north at Valla?
     
  5. Illusivedreams

    Illusivedreams Well-Known Member

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    Kids have an amazing quality of life in Australia. Im currently raising a few.
    Government is not allowed to build as school without AC as they get just now were abused.


    The amount of activities and life afforded to our childrent .The freedom of international travel.

    All these things were impossible in 80s when I was my childrens age.

    We went to Gosford for holidays with the family.

    I think we all agree . That every ones opinion is not the same. I strongly believe the current gen needs a spoon of cement.
     
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  6. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    In real terms, Sydney peaked in 2004 and has been correcting ever since. Currently, Sydney is at fair value. With artificially low interest rates and 3 rounds of QE, we have an everything bubble. So it is unwise to look at Sydney prices in isolation.

    Great time to buy in Sydney.

    Check out a recent article I wrote:

    Sydney Property Prices Peaked in 2004 - Bridge to Bricks
     
  7. Phar Lap

    Phar Lap Well-Known Member

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    Thats all Im saying sorry, internet security and all, you know....
     
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  8. marmot

    marmot Well-Known Member

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    You can say that about any generation.
    My dad was about 40 when I was born , and he was born into a middle class family in the U.K in the mid 1920s that had their own business , by late 1929 it all started going downhill very fast, as anyone carrying debt virtually lost everything.
    For a 18th birthday present he was fighting in one of the bloodiest conflicts of the 20th centuty.
    How do you think that compared to our life growing up in Australia in the 70s and 80s.
     
    Last edited: 30th May, 2018
  9. Phar Lap

    Phar Lap Well-Known Member

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    The smart thing to do is pick the next "Sydney" that is affordable to you (anyone) and get on for the ride. New cities will pop-up as immigration increases, well, should pop-up anyway.
    Sydney has to, and is, spreading north and south. Already got Newcastle and Wollongong either side which are easily accessible and will take on some of the "work-load" from Syd in the future and there will be the spread up and down the coast.
    Actually, its been happening for years now and I can't see it stopping anytime soon.
    Plenty of work in those areas. The more that come there the more work is created.

    Its too easy to complain and not do anything about affording a home.
    Have a go I say.
     
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  10. Phar Lap

    Phar Lap Well-Known Member

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    To put into context what Im saying above, we are moving to the Mid North Coast, aprox 1/2 way between Coffs Harbour and Port Macquarie.
    2 decent sized cities that are on a growth tear and I can't see it stopping either.
    beautiful weather, location and plenty of room to grow.
    Australia is rather undeveloped IMO.

    Inland you have Tamworth, Dubbo and Wagga Wagga as the 3 big cities of the bush (west of the Divide) in NSW. They have never stopped growing.
    There are simply a percentage of folks who like living inland and away from the capital cities, quite happy to take a plane or train ride for their Big City kicks.

    Testament to this is many businesses moving to these inland cities as land and space is cheaper, along with the internet revolution, this will see the spreading of population being a sustained growth story replicated around Australia not only NSW.

    Bigger picture needed sometimes to bring sense to ones "predicaments",
     
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  11. BoatArrival

    BoatArrival Well-Known Member

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    The nice take on supply & demand:

    As UBS economists George Tharenou and Carlos Cacho reiterate: “It must be remembered that house prices are determined by the demand and supply of credit (not the demand for and supply of housing).”
     
  12. Drizzt Do'urden

    Drizzt Do'urden Well-Known Member

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    To answer the question, I propose a thought experiment. Imagine you're between the age of 22-24, have a HECS debt of between 20,000-60,000 dollars and can't rely on parent to help give you a kick start in life. Is Sydney unaffordable for you ?
     
  13. hieund85

    hieund85 Well-Known Member

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    Do people expect to buy a house in a major capital city like Sydney at the age of 22-24? Especially with HECS debt??? Show me an example of a big city in any country where a 22-24 yo person can buy a house while having debt and no support from parent.
     
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  14. Sackie

    Sackie Well-Known Member

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    Get a good job, rent, save money like mad and buy a unit according to your budget.

    If ppl want to study wishy washy, feel good things at uni then by all means go ahead . Just accept that you'll likely be renting for life . Can't have it all at the same time. Life rarely allows anyone to. At some point ppl gotta pay for their decisions in some way. It's only logical.
     
    Last edited: 1st Jun, 2018
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  15. Angel

    Angel Well-Known Member

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    Yes. That's why they would be total idiots to want to live in Sydney. Plenty of grad jobs in every other city across the country.
     
  16. hieund85

    hieund85 Well-Known Member

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    I will give you some opposite examples:
    1. Hanoi: normal salary for a grad is $600-700 AUD per month. A cheap 3bed 1bath apartment in the outer suburb is $100k AUD. Without parent support, forget about buying at 22-24yo. Interest rate is 8%.
    2. Singapore: grad salary is about $3k/m. Cheap HDB in outer suburbs is $300k. IR is around 2.4%
    3. Copenhagen: $550 USD per sqft for apartment so a 70sqm apartment will cost close to $400k USD. Fresh grad salary is around $3.5k-$4k usd gross per month (50% tax).
    Those are the cities I had lived and worked for few years. Are they affordable?
     
  17. Cia

    Cia Well-Known Member

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  18. radson

    radson Well-Known Member

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    Of course it is. There are some brain gymnastics going on to say that Sydney is not expensive. If median house to income ratios are 5 and above, then housing becomes relatively expensive. What did Sydney reach - 11? 9 ( 8.3 in this table at Sep 16)

    Its much harder now for young people in sydney to buy a home compared to previous generations.

    upload_2018-6-1_6-49-19.png
     
  19. radson

    radson Well-Known Member

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    Who gets paid in Gold? The gold standard was dropped last century.
     
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  20. Thedoc

    Thedoc Well-Known Member

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    Spot on. The older generations just don’t seem to be able to accept that it is harder now. Back in my day .....