All Topics / General Property / Property in Australia in still VERY cheap

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  • Profile photo of god_of_moneygod_of_money
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    House Price To Income Ratio, Country

    67.5 Morocco
    40.6 Pakistan
    40.0 Belarus
    30.0 Montenegro
    28.6 Russia
    24.3 Romania
    20.8 Lithuania
    18.8 Serbia
    18.3 Latvia
    17.4 Ukraine
    17.1 China
    16.7 Spain
    16.5 Hungary
    16.3 South Korea
    16.0 Thailand
    15.8 Indonesia
    15.6 Paraguay
    15.4 Albania
    15.3 Bosnia And Herzegovina
    15.1 Slovakia
    14.9 Czech Republic
    14.6 Iran
    14.4 Singapore
    14.3 Italy
    14.1 Estonia
    13.9 Bulgaria
    13.6 Japan
    13.6 Poland
    12.7 Croatia
    12.7 France
    12.2 Greece
    12.0 United Kingdom
    11.8 Argentina
    11.6 Portugal
    11.3 Malaysia
    11.0 India
    10.9 Jordan
    10.9 Israel
    9.8 Sri Lanka
    9.5 Colombia
    8.6 United Arab Emirates
    8.1 Norway
    8.0 Denmark
    7.7 Ireland
    7.6 Venezuela
    7.4 Mexico
    7.2 Kyrgyzstan
    6.7 Peru
    6.5 Netherlands
    6.3 Australia
    6.3 Brazil
    6.2 Finland
    6.2 Canada
    5.8 Ecuador
    5.7 Bahrain
    5.6 Turkey
    5.4 Switzerland
    5.2 Austria
    5.1 Cyprus
    5.1 South Africa
    5.0 Bangladesh
    4.8 Honduras
    4.3 Germany
    4.3 Belgium
    4.2 Sweden
    4.1 Chile
    3.5 Dominican Republic
    2.7 United States

    Source:http://www.numbeo.com/property-investment/rankings_by_country.jsp

    I strongly believe that property in Sydney is very cheap despite 20% increase in price. BUY BUY BUY

    Profile photo of House CallHouse Call
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    interesting.

    I wonder is that due to Aust average earinings being high or due to house prices being low?  I would be hardpressed to think house prices were high in Morocco.

     There's a lot of rich countries down the bottom end (though what is bangladesh doing there?)

    Profile photo of reddahaydnreddahaydn
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    The rich countries have the high income, thus low property price to income ratio. The countries up the top have a lot of people who don’t work at all, thus no earnings, thus a high property price to income ratio. Sure, our prices might be higher, but we earn more so should be able to afford more. There are still plenty of affordable properties in Australia, the problem is people are to fussy and think they deserve the best without having to work for it!

    Profile photo of House CallHouse Call
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    god_of_money wrote:

    I strongly believe that property in Sydney is very cheap despite 20% increase in price. BUY BUY BUY

    is anyone out there worried about a "bubble"? 

    When I see things like the 20% increase, I think 3 things:

    1 damn why haven't I got more properties by now.

    2. Is this all a big 'bubble that is going to burst and leave me trapped if I buy in now?

    3. Does this 20% increase represent a "growth spurt" (biggest since 1989, apparently) that will then be followed by flat-lining for the next 10 years, so what's the point if I've missed the boat?

    Profile photo of DWolfeDWolfe
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    What like the flat lining that happened after 2003 and took this long to get going again?

     I have to say that yes property will look cheap (GOM I am playing devils advocate here BTW) compared with Pakistan but the average wage there is like $15 a week.

    Look it is great that we can afford property and all have jobs (mostly) to repay loans for 30 years. But that is the whole point. We are basically signing up for indentured slavery to pay off somewhere to live for 30 years. 30 years.

    30 years! It is a long time. That means that the whole country HAS to work to pay for their PPOR. This is great for the govt. They have a whole country of people that have to work and pay tax because they have to pay off their house.

    Just putting a different perspective on this whole affordability thing.

    Property is nice and affordable in USA………….shame it is because their country is in the toilet.

    GOM how many have you bought this year? (if you don't mind me asking?)

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of fWordfWord
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    Interesting info…even more interesting is Singapore at 14.4. Considering the vast majority of relatives my age are earning somewhere around $3K a month (on average, meaning that my bro and another cousin for example, are just on $2500), and a crap semi-d pricing in at least $1.2 mil, the multiple is more like 33 (assuming single income, and half that if double income). So I guess it really depends on what kind of housing we're talking about. If we're referring to gov't housing however, which is a high-rise shoebox at $250K, then the multiple is around 7, and a miserly 3.5 assuming double income.

    Obviously nobody knows where ppty prices are headed. The rising interest rates have been much more predictable. I should have bet $50 (the approximate rise in mortgage payments I would need to make given 25 basis pts rise) on each of the RBA's meetings and I would be several hundred dollars on top by now, with odds of 3:1.  And if I lost each time, no biggie, because I'd be no worse off.

    Who thinks the RBA will raise rates again today? They think that raising rates will control house prices. Wrong? Well, consider that an article I read states that with negative gearing, investors typically feel only half the pinch of an interest rate rise. So if the RBA went crazy with a 100 basis point rise that would send FHB into a crying fit, investors will take it like a bump to the thigh and just keep walking anyway.

    So, is raising rates really justified in an environment that is dominated by investors, not FHB? Honestly I don't care, because I'm about to rent my house out anyway and move back with my parents. Haha! So there you go, RBA, in ya face!!

    If none of the regulations changed, I think we can't be wrong with property. It's back to the simple equation of supply and demand. It's not as easy as with shares where a company can decide on a split as they wish. Subdividing or building units takes a heck of a lot longer. So if you have an increasing number of people clamoring for the same asset, prices are sure to rise. Is Australia likely to curb immigration rates? I dare them to, for they'll stupidly reduce the numbers of people who'll pay for the bloody pension as the baby boomers stop work. Let's face it: which govt will settle for LESS tax money? They still need to fill the coffers, and line their pockets. It's in THEIR interest to maintain immigration rates. Why would they care about housing? They probably have a few properties each.

    Question is, will it still be profitable after factoring all your expenses? Only time will tell. Or even better, just sit in front of the calculator, punch some numbers and see for yourself.

    Profile photo of DWolfeDWolfe
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    Up, up, up today. That's my vote. So FWord does that mean you are going to buy again soon?

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of fWordfWord
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    DWolfe wrote:
    Up, up, up today. That's my vote. So FWord does that mean you are going to buy again soon?

    D

    Sadly, there's plenty I want to buy but just don't have enough money to do so yet. The target is to get another before the end of this year and that would be achievable unless interest rates go into the high double digits. The seriousness of my intent sometimes raises a few eyebrows amongst relatives and friends. Obviously it'd be an uphill climb, trying to go very far and in such a short period of time, but if I want to retire at 40, that's the way it's gonna be!

    Profile photo of god_of_moneygod_of_money
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    DWolfe.. I bought ONLY ONE in SYDNEY this year..,
    not the cheapie in the small rural town though
    To be honest… I don't think property in Sydney is cheap if you compare historical price. But  with international peers, it is still reasonable.

    No doubt that I am also afraid of housing buble.. but what to do with $$$ sitting in the banks. Give it to charity??

    FWord.. the HDB in Singapore is not that cheap 250k..My auntie just bought 1bed+1study apartment in Singapore behind Orchard rd for 800+k. If you want to buy a house (with land title), it will cost at least 3-4 millions

    Profile photo of kum yin laukum yin lau
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    Hi, I was interested enough to play with the numbers for Singapore. I came in at 16x my salary for the kind of apt I'd qualify to buy.

    My godson on less than half my salary came in at 8x.

    For Malaysia, I came in at 12.6x, my nephew to buy at crap cement box low cost flat would be only 2.5x

    Incidentally, Singapore has a lot of restrictions on housing. I know people who camped overnight to sign up for apts. and people who sold their queue numbers for thousands of dollars. My ex colleague's brother in law was a professional queuer and made a lot of money selling his queue number for apts and also for country club membership.

    And I'm not joking, it's all true.

    KY

    Profile photo of god_of_moneygod_of_money
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    KY,

    I totally agree with you. I have to camp outside once… CRAZYY!!! but REAL
    (see my previous post)

    Profile photo of DWolfeDWolfe
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    There is a documentary on people living in Lagos. There is about 1000 people living on top of the tip in houses made form scrap. There is 16 million people living in the city. The future where you can't afford to live in a house?

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of fWordfWord
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    god_of_money wrote:

    FWord.. the HDB in Singapore is not that cheap 250k..My auntie just bought 1bed+1study apartment in Singapore behind Orchard rd for 800+k. If you want to buy a house (with land title), it will cost at least 3-4 millions

    There are inexpensive ones available. Case in point is the 180K one that my cousin and his newly-wedded wife bought. There are stiff regulations there, and in order to qualify to buy these off the govt (ie. not the ones on open market, that usually fetch above 400K), you need to meet these regulations. One of them is to be married.

    If we're referring to the Orchard Rd variety, sure, my Grandparents living in seedy Orchard Towers were once offered 4 mil for their apartment as part of a proposed en bloc sale (which fell through in the end). To be fair, their apartment's floor area is bigger than that of my house and it was higher than the 20th storey, but damn, this is a freakin' apartment in a seedy area that we're talking about!

    In Melbourne 4 mil will buy a pretty sweet penthouse, or a mansion in Toorak or Brighton.

    Profile photo of god_of_moneygod_of_money
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    fWord… you answer your own question….
    conclusion.. still CHEAPIE property in Sydney and Melb
    But
    180k… yes HDB housing… crampy small same as housing department in Aussie (But  you can stay for free in Aussie)

    Profile photo of god_of_moneygod_of_money
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    Abu Dhabi, United Arab Emirates7.54
    Amsterdam, Netherlands6.24
    Bangkok, Thailand15.96
    Barcelona, Spain13.62
    Beijing, China22.29
    Chennai, India61.15
    Delhi, India19.57
    Dhaka, Bangladesh5.03
    Dubai, United Arab Emirates8.67
    Jakarta, Indonesia12.47
    Kuala Lumpur, Malaysia11.27
    London, United Kingdom14.73
    Madrid, Spain16.99
    Melbourne, Australia5.3
    Moscow, Russia27.69
    Paris, France16.45
    San Francisco, CA, United States8.24
    Seoul, South Korea16.29
    Sevilla, Spain16.88
    Shanghai, China20.68
    Singapore, Singapore14.35
    Sydney, Australia6.7
    Tokyo, Japan11.64
    Toronto, Canada6.03

    Profile photo of djjkdjjk
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    This is a great article. I thought property was not able to increase more in oz until I saw this.  Who knows where the top is.

    Interesting about the US though. 

    Profile photo of simplesimple
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    Dunno about you guys, but townhouse we own in Brisbane, Manly (good suburb) did not grow in value last 3 years. It sits pretty flat on $350-360K

    Profile photo of units4meunits4me
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    This link

    http://www.numbeo.com/cost-of-living/prices_by_city.jsp?currency=AUD&itemId=101

    is a realistic indicator of what property costs to buy, in per sq m terms, not 8sq apartment vs 35 sq house. 

    Look at the per sq m price MEL/SYD vs other big cities of the world. Also, note that this list is probably quite old and MEL/SYD curent price would now actually be a fair bit higher, while the rest of the GFC affected world has since taken a pounding. Therefore, MEL/SYD are now very far from cheap in my view.

    From what i've seen in Greece, property is rarely bought/sold. It is mainly passed down/inherited/fought over, so in some cases income is largely irrelevent to house prices. Probably the same in many other countries. 

    Profile photo of god_of_moneygod_of_money
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    units4me… you use AUS dollar for comparison… and aussie dollar has been very strong against other currencies..
    it is a basic statistic mistake… :)

    Profile photo of djjkdjjk
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    Not sure what you mean? The stats quote local currency incomes to local prices.  Forex issues dont even factor into these comparisons.

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