There is no link..... It depends which State you are in, but the previous 12 months have seen explosive increases. 10 years.
I guess no one wants to live in the Northern Territory. I assume New South Wales is the domain of the asset gatherers & upper middle class? I remember in 2006 I visited the Gold Coast (my friends in laws) and it was expensive even back then. Nice place.
Northern Territory, namely Darwin city is where you go if you love travelling 4x4. Tropical bush in the top end, definitely can't swim in sea (unless brave or have local knowledge) other than city beaches due to crocs, sharks, stinger jellyfish and other weird creatures. Winter time is dry and warm, summer time hot and wet. They say you go 'troppo' in NT, insane from heat and wet unless you can run airconditioners. I lived and worked there for a few months.
Politics Federal Australia votes https://www.smh.com.au/politics/fed...t-of-living-top-priority-20220419-p5aeih.html Young voters believe homeownership out of reach, name cost of living top priority By David Crowe April 20, 2022 Surging property prices have ended the homeownership dream for two-thirds of young Australians in a powerful sign of frustration in an age group that also names the cost of living as the top priority at the federal election. With experts warning of a housing crisis, younger voters are giving up on the idea of buying their first home despite assurances from Prime Minister Scott Morrison and Labor leader Anthony Albanese about policies to make housing more affordable. The survey found 67 per cent of young voters believe younger Australians who do not already own their own home will never be able to do so in their area.Creditaul Jeffers The exclusive findings show that 67 per cent of voters aged from 18 to 34 believe younger Australians who do not already own their own home will never be able to do so in their area. Only 13 per cent of the same group believe younger voters will be able to buy their first homes in the area where they live, with the remainder undecided. The exclusive survey, conducted for The Sydney Morning Herald and The Age by research company Resolve Strategic, heightens the debate over housing policy at a time when experts believe neither side has a solution to the crisis over prices, rents and affordability. “Unless you have access to inherited wealth or an astronomically high income, you face hurdles that just didn’t exist even a decade ago,” said Nicole Gurran, a University of Sydney professor of urban planning whose research work has included affordable housing supply. “Owning your own home has become much more difficult and all of the research evidence shows that, particularly in the major cities but increasingly in regional areas as well. “The really unfortunate thing in the lead-up to the election is that neither side of politics has anything serious on the table at all that would correct the structural barriers to first-home ownership for moderate or even high-income earners.” The Resolve Political Monitor asked 1404 eligible voters their views online from Monday to Saturday and found 59 per cent of respondents believed young people would not be able to buy their first homes but that this rose to 67 per cent among those aged 18 to 34. The findings also highlighted the dominant concerns for a key voting group at the May 21 election, with 25 per cent naming the cost of living, 15 per cent naming climate change and 9 per cent naming health and aged care as the priorities in deciding their votes. Concerns about jobs and wages were also stronger in the younger age group compared to many older voters, with 8 per cent naming the workplace issue as a priority at a time when Albanese is promising to crack down on insecure work and Morrison hints at industrial relations reform in the next term of Parliament. The survey asked: “Some people have said that many younger people who have not already bought a home will never be able to do so. Do you agree or disagree that this is the case for younger people in your area?” The margin of error for the national response was 2.6 percentage points, but the findings for each age group have higher margins of error. Morrison campaigned on housing affordability this week after announcing on Sunday night he would expand the government’s Home Guarantee Scheme to 50,000 places each year so first-home buyers could buy their properties with a smaller deposit. In some cases the deposit could be as low as 5 per cent of the purchase price because the Commonwealth would guarantee part of the loan. The government also increased the price caps on the scheme to acknowledge the impact of rising prices. The scheme only applies to a property in Sydney worth up to $800,000 this year but the cap rises to $900,000 next year. The Melbourne cap rises from $700,000 to $800,000. The caps are lower in other cities and regional areas. Grattan Institute chief economist Brendan Coates said the expansion of the scheme would add to demand and Barrenjoey chief economist Jo Masters also warned that “just stoking demand” would not deal with the pressures in the market. Labor housing spokesman Jason Clare has backed the government scheme and called for the caps to be lifted higher so more people could gain help in the big cities. “The cost of housing in Australia is through the roof,” he said on Monday. “We would immediately review these caps, and lift them, to make sure they’re set at the levels they need to be to make it easier for young Aussies to buy their first home.” Labor also has a policy to put $10 billion in a new Housing Australia Future Fund to build 30,000 social and affordable housing properties in its first five years. Gurran said demand-side measures like the Home Loan Guarantee could leave young Australians with higher debt without doing anything to increase supply. While economists forecast an increase in official interest rates later this year and cooling of demand for property, Gurran said the guarantee policy could “fan the flames” in the market when other policy options could do more to help. She cited options such as shared equity models in which the state can help fund the home or “key worker housing” to ensure homes for police, nurses and others who provide essential services. Research by the University of NSW warned last year that the property market was a “triple threat” because the surge in prices created economic instability and diverted money from more productive pursuits while also having an impact on the major banks. “A system that raises housing costs for all Australians, that raises instability and lowers productivity does not serve the nation well,” said the researchers, headed by the university’s City Futures Research Centre’s Duncan Maclennan and Hal Pawson. Voters aged 18 to 34 have drifted away from the Coalition in a trend that cut their support from 28 per cent at the last election to 23 per cent in a quarterly analysis of the Resolve Political Monitor from January to the end of March. Their support for Labor has risen from 38 to 41 per cent over the same period. The age group has kept its support for the Greens relatively steady, at 21 per cent at the election and 20 per cent in the Resolve analysis. Like other voters, this age group has increased its support for independents from 4 per cent at the election to 8 per cent in the analysis. The most recent quarterly analysis was based on responses from 4544 voters including 1331 in the 18 to 34 age group. It was conducted before Morrison called the election on April 10 and reflects views before the formal campaign.
My opinion, the size of this fiasco, the fact fuel is continually added to the fire, seems to indicate a high level of government corruption.
Opinion Why negative gearing has gone the way of the dinosaur Noel Whittaker Money columnist April 19, 2022 https://www.smh.com.au/money/borrow...-the-way-of-the-dinosaur-20220419-p5aecg.html For years the term negative gearing has been synonymous with federal elections. Labor, to its detriment, promised to clamp down on it in its last election campaign, and the Greens policy for the coming election is to “phase out negative gearing for people with two or more investment properties, and prohibit negative gearing for all new house purchases”. Negative gearing was all the rage in the 1980s when borrowing rates were high.Credit:Kerrie Leishman The problem is the term negative gearing is now effectively obsolete, as is the rationale for trying to restrict it. Gearing means borrowing. When you borrow to buy an asset and the outgoings exceed the income from that asset, you have a negative cash flow from the asset. Hence, the term negative gearing. Now for a bit of a history lesson. Negative gearing was all the rage in the 1980s. Interest rates on loans were 14 per cent, inflation was 10 per cent and the top marginal tax rate was 60 per cent, which cut in when income reached $35,001. Our tax system then was great for property and bad for shares. There was no capital gains tax, but dividends on shares were effectively taxed twice. Companies paid tax at 46 per cent, and then the shareholders paid tax again, at up to the top rate of 60 per cent, on dividends that had already been taxed. There was also an undistributed profits tax that penalised private companies that tried to retain profits for expansion. Back then, anybody who wanted to create wealth faced a dilemma. If you put money in the bank you lost up to 60 per cent in tax. If you worked overtime, you lost the same amount in tax. If you tried to expand your business, or invest in shares, you got hit twice – up to 60 per cent in personal tax on top of the 46 per cent company tax. However, if you invested in property using negative gearing, you had it made. The top tax rate of 60 per cent meant that your interest got an effective government subsidy of 60 per cent and, when you eventually sold, the profit was usually tax-free. Best of all, capital gains were almost guaranteed, as the population was growing and cities were expanding. The tax system almost compelled people to invest in housing. However, it favoured high-income earners, and contributed to house price increases. In July 1985, in an attempt to level the playing field, the Hawke government took the bold step of placing some restrictions on borrowing for investment. For all properties bought after that date, they disallowed a tax deduction for interest that exceeded the rents for the year, net of rates and maintenance deductions. So, if a rental house returned $5000 gross and allowable deductions other than interest and depreciation came to $2000, only $3000 of the interest would be tax-deductible. If the interest cost was $4000, the undeducted portion ($1000) could only be claimed against net income from the property in the future. However, the property industry did some intense lobbying, claiming that the changes to negative gearing had caused investment in rental accommodation to dry up and rents to rise. In September 1987, the government restored the old rules, once again permitting the deduction of interest and other rental property costs from other income sources. It is an entirely different world today. With record-low interest rates and reasonably high property investment yields, negative gearing is all but impossible. For example, think about a person earning between $45,000 and $120,000 a year. If they borrowed $500,000 at 3 per cent to buy a residential property for $550,000 with a net yield of 4 per cent, the cash surplus would be $7000 a year (ignoring depreciation allowances, which depend on the property purchased and are clawed back on sale anyway). There is no tax advantage. There is no tax deduction – the investor has positive cashflow from day one. Housing affordability remains a massive problem in most developed countries, but there is no easy solution. Central banks helped create the trouble by slashing interest rates to record lows, which effectively reduced the price of housing by enabling a surplus of buyers into the market. Once house prices started rising fast, fear of missing out kicked in and fuelled a property boom. Governments have further exacerbated the problem with a series of incentives for buyers to purchase their first home, which have pushed prices even higher. Coming rises in official interest rates will likely make house prices fall but, one thing I know for certain: any measures introduced to discourage borrowing for investment won’t make one scrap of difference.
This is about China..... Australians are benefiting from the latest surge in property prices, but policymakers should take note of the International Monetary Fund’s China warning..... Typically, property developers have relied heavily on presales of unfinished apartments for funding. But home sales have slowed sharply as people worry that developers don’t have sufficient funding to finish presold homes. The IMF report argues that as a result, property developers have been left sitting on a huge portfolio of presold housing. “Property developers’ large stock of presold, but unfinished, housing has grown rapidly and is nearly equivalent to the size of all private housing completed since 2015.” The report says this huge number of unsold apartments could depress the prices of apartments in neighbouring developments, as well as reducing the value of the inventory held by property developers. More broadly, the IMF report warns that “prolonged dislocations in new home sales could trigger a correction in property prices due to high valuations and oversupply in some cities”. Hefty house price falls could make banks more wary of lending for real estate “as a large share of loans are collateralised by real estate assets”. Local government pressures The woes of property developers will also add to the financial pressures of local governments, as some could be forced to pick up the cost of completing unfinished housing projects. At the same time, land sales, which make up a sizeable share of local government revenues, are falling “as liquidity-strapped property developers pull back on purchases”. The IMF warns that rising defaults by property developers could choke bank lending, which would slow Chinese economic activity. https://www.afr.com/companies/financial-services/the-grim-imf-news-for-australia-20220420-p5aepz
MINING TOWNS IN WESTERN AUSTRALIA Homelessness is high in the Pilbara region. Kari Gislason Credit: Supplied ‘Cruel’: COVID-hit WA family still homeless after 10 months Hamish Spence NCA NewsWire April 20, 2022 https://www.perthnow.com.au/news/co...mily-still-homeless-after-10-months-c-6509700 A mother of three has shared her family’s heartbreaking story after they lost their home in Western Australia nearly 10 months ago. Zakiesha, her partner and three children, all under 10, have been homeless in South Hedland since their lease was terminated due to COVID-19. “We had a private rental for six years and when COVID hit, we lost our place and got terminated in July,” Zakiesha told 6PR on Tuesday. “We had 60 days to move out and we’ve been homeless since. We’ve been trying to get another private rental, which has been unsuccessful.” Homelessness is high in the Pilbara region. Kari Gislason Credit: Supplied The family has been forced to sleep away from the town and in the bush for their own safety. “Because it’s unsafe to sleep on the streets inside of the town, we sleep on the outskirts of Port and South Hedland to be safe,” Zakiesha said. “In the bush, in the scrub, near the river. “Tents and swags, just a three-man tent between the whole five of us.” But danger is still present, with Zakiesha saying they are always worried about people stealing parts from their car, which regularly occurs in the area. They are in emergency accommodation until Friday after two of the children caught COVID. The whole family now has the virus and while a positive test would extend their stay by another week, Zakiesha pointed out it would only be for a “short amount of time”. South and Port Hedland are in a big mining area, making houses hard to come by. Supplied Credit: Supplied “Just (in emergency accommodation) for quarantine and then we’re back on the street, and possibly sharing the virus, since we’ve all caught it,” she said. “We’ve contracted COVID through our son … and we have to comfort him and give him cuddles, so we ended up catching it as well.” Zakiesha has unsuccessfully tried 15 times to get another private rental, while she has been “messed around” by authorities. The only option she has been given is to relocate from South Hedland to a refuge or hostel. She admitted the experience has been “extremely hard” and has taken a “toll” on their health. “We’re so angry. Sometimes we (Zakiesha and her partner) take it out on each other and we don’t want to,” she said. “We’re just angry with the world and government. “How hard is it to give us a home? How cruel can they be to my children; they need to look into my kids’ eyes and tell them they can’t have a home.” But Zakiesha’s struggle is not an isolated incident, with 740 families on the housing waitlist in the wealthy Pilbara region. WA Council of Social Services chief executive Louise Giolitto said it is “a story we’re hearing all too often” with continual issues of high rental prices and housing shortages in the area. WACOSS CEO Louise Giolitto said many other families are going through what Zakiesha is experiencing. Supplied Credit: Supplied “We’re so far behind in this state with the needs around social and affordable housing for families like Zakiesha’s,” she told 6PR. “This is a repeated story, we know these are mining towns … but the housing shortage is really extreme in the Pilbara area. “She (Zakiesha) and her family are simply cut out of the market; because the rent is so high they can’t compete with anyone else.”
First-home buyers spend $1.825 million on Darlington terrace at auction after saving for seven years By Tawar Razaghi April 23, 2022 https://www.smh.com.au/property/new...r-saving-for-seven-years-20220421-p5af2b.html Talking points A two-bedroom Darlington house sold for $1,825,000 to first-home buyers at auction. A local family bought a three-bedroom house in Concord for $2,951,000 to build their dream home. Kellyville investors bought a house in North Ryde for $1.45 million. First-home buyers bought a two-bedroom terrace in Darlington for $1,825,000 at auction on Saturday after saving for a deposit for at least seven years. They were among 15 registered bidders for the home at 45 Thomas Street, despite the auction being held on a long weekend. The succesful buyers of the two-bedroom house in Darlington.Credit:Renee Nowytarger It was one of 604 homes scheduled to go under the hammer in Sydney on Saturday. By evening, Domain Group recorded a preliminary clearance rate of 59.3 per cent from 430 reported results, while 129 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate. The auction started at $1.4 million, bang on the price guide, which had been adjusted from $1.3 million to $1.4 million due to the amount of interest in the property. But selling agent Moira Verheijen, of Ray White Surry Hills, said drawing bids from buyers was “like pulling teeth” until it reached $1,625,000, when things began to move with some ease. Then three buyers battled it out from $1.75 million and it sold for $1,825,000. The reserve was $1.6 million. The home was one of 604 properties scheduled to go under the hammer on Saturday.Credit:Renee Nowytarger Ecstatic first-home buyer Christian Webb said he and his partner were very happy to have won at auction just two months into their search. The 31-year-old software engineer said he and his partner, a massage therapist, had been saving and investing for the past seven years while renting a share house in Alexandria. He said while potential interest rate rises and the looming election were considerations, they were ultimately buying a long-term home rather than an investment. “We had a very good deposit, which puts us in a position where we’re more insulated with interest rate changes than someone with a smaller deposit. We definitely took out a home less than the max the bank had approved,” Webb said. The Darlington reserve was $1.6 million.Credit:Renee Nowytarger “A dip in the market in the next year, or five, isn’t even relevant. You realise the dip or growth when you sell it.” He said if he could choose between a future where his property value grew or remained flat, he would pick the latter. “Staying flat means housing becomes more affordable for everyone in the country. I would be much happier to live in the Australia that has more affordable housing than to reap the windfall as a lucky investor. “It’s also easy to have that perspective when you don’t have financial stress. Maybe the intensity of the housing crisis will cause policy change.” He said one of the reasons they wanted to live in Darlington was because there were affordable housing options for others who were not in the same position as him and his partner: “It ends up being a diverse community.” The property last traded for $116,000 in 1992, records show, the price increasing 15-fold in close to three decades. In Concord, a three-bedroom house at 7 Trafalgar Parade sold for $2,951,000. Seven buyers – a mix of upgraders and investors – registered to bid on the property, including one online bidder who was on holiday on the Gold Coast. They were all looking to knock it down. There were 142 bids in total until the hammer fell at $2,951,000, selling $201,000 above reserve to a long-term Concord family who will build a new home. Cooleys Auction auctioneer Michael Garofolo said the result “stacks up”, with the local market proving resilient as it remains a desirable pocket in Sydney. It was sold through Paul Pettenon of Raine & Horne Concord and Strathfield. Concord’s median house price rose 24.4 per cent in 2021 to $2.4 million on Domain data. In Norwest, a four-bedroom house at 22 Peninsula Way sold for $2.26 million after 11 buyers registered. The auction started at $1.9 million and it took just 20 bids until the hammer fell. A woman was bidding on behalf of her parents, who were moving to be closer to her. Benson Auctions auctioneer Stu Benson said move-in ready homes were still in strong demand. “These homes present with nothing to do and nothing to spend. If a lot of people are borrowing to their limit, they can’t afford to buy something that needs work,” he said. It sold through Jane Booty of Stone Real Estate Castle Hill. The property last traded for $1.53 million in 2016, records show. Norwest’s median house price rose 6.4 per cent last year to $1,329,500. In North Ryde, a four-bedroom house at 175 Lane Cove Road sold for $1.45 million, right on the reserve, to Kellyville investors. Three out of the four registered buyers, including one online bidder, participated in the auction, which opened at $1.2 million. It took a total of 20 bids to get a deal done thanks to realistic vendors, said selling agent Catherine Murphy of The Agency North. “The market conditions aren’t anywhere near as strong as they have been and the owners sense that. It is a fair result … given down the track we may not have reached the figure we did today.” The home last traded for $165,000 in 1988, records show. North Ryde’s median house price rose 34.1 per cent to $2.2 million last year. In Merrylands, a newly finished duplex at 14a Yeend Street passed in at $1.37 million. The five-bedroom property drew in eight registered bidders, all owner-occupiers, and half of them participated. It opened at $1.2 million, rising in varying increments before buyers stopped bidding at $1.37 million, short of the vendor’s expectations. Laing+Simmons Oatlands and Carlingford selling agent Daniel Mourad said the owner, a builder, intends to sell. Merrylands’ median house price rose 14.9 per cent to $1 million in 2021.
That's a mere $900K/bedroom. These prices are similar to the San Francisco Bay Area where I live. So these people are using 10-20% down and getting a $1.4M loan? Are these no-recourse loans like here in California? That's one of the reason the banks were in dire straits after the housing collapse in 2008. The banks were on the hook for these over extended loans with properties no one could afford anymore.