Comparison between countries is not valid, as they have very different home ownership methods. The Laws around renting in most European countries would scare most property investors in Australia. Long terms leases are normal and I mean 20 years or more, where try and get longer than a 12 month lease here easily. In fact I think it may be illegal in some States.
I agree 100% that as a Nation we need to ensure that people are safely housed in quality housing. We have always endeavoured to make sure that any rents we charge are affordable and my experience is that when you get a reliable tenant you should support them.
Seriously if I was Emperor, I would fix our housing problems in six months. The fix is easy, it is just hard politically to implement.
Belgium, Netherlands Norway, Italy and Greece have all had flat population growth, or even declines, since 1980. Australia has nearly doubled in population. So clearly much higher demand side “pull” that would make it harder to own a property (albeit with arguably much better opportunity to supply housing, due to relatively less development overall, if the policies were adjusted right - and that includes housing supply away from cities rather than concentrating it all in the same few major cities).
Netherlands, which has experienced a growth in population over the last few years, has also been facing a housing crisis recently too (according to the papers).
Even in the most wfh-friendly industries, the number of people who work from home permanently is a tiny minority. Most companies that went wfh over the pandemic out of necessity are grimly intent on winding it back. Mandatory office attendance for a couple of days a week is kinda the white collar norm now, but from a housing market point of view, that’s functionally indistinguishable from no work from home at all.
The state govt got absolutely gifted a solution to a lot of intractable problems with the rise of wfh, pity they ■■■■■■ it up against the wall to keep the cbd commercial property mafia happy…
Yeah but does a “high speed rail” make property cheaper?
I don’t think so and I don’t think its fixing the problems of an affordable home.
It will cost you 700k+ to build a house in Sydney/Melbourne as it will in Ballarat.
But really the problem in Australian housing isnt price - that will self correct on demand.
The problem is WHO owns most of the homes. It is too heavily geared towards investors - namely existing property that isnt being improved to provide more.(ie a build of units)
Theres very limited social benefit in people owning more than one home.
Rent seeking behaviour hollows out the middle class of a country.
Mrs hambo’s work sold a $5M apartment in Sth Yarra. That much for an apartment is stupid money, unfortunately I don’t reckon they’ll get it because they sold it to this bloke:
Some media have put the housing crisis as the number one issue for US voters. IDK the comparative wages trend against housing affordability.
There is also a housing crisis in France.
I know this is a how long is a piece of string question but is the a general average / range of land value to house value?
I find the Melbourne property market easily the most interesting in the country at the moment.
The podcast Investopoly had a great episode on it a few months back.
Key points were melb property prices are typically 75% of Sydney but are currently tracking at 55% or something. Melbourne will overtake Sydney in terms of population, huge sprawl, but given budget constraints infrastructure is unlikely to catch up to meet the sprawl. Melbourne blue chip inner suburbs are relatively cheap compared to Sydney (as in should be higher multiples of an average dwelling).
So Melbourne is under valued and in particular the inner rung blue chip suburbs.
The noise against Melbourne is loud atm so really is probably the best time to get in. I’m trying to get my head around how much that land tax might actually be. Especially if you can negative gear it - I wonder whether it’s been overhyped vs the value Melbourne currently shows (relative to other states).
Melbourne has hit lows in price. We’re currently trying to sell Mums property and the market is dead, its definitely a buyers market. People looking at the property are looking for cheap prices. Land had hit $1,000 per square in the outer suburbs a while ago (during COVID), as always land size plays a huge factor. At that time the price of land probably exceeded the value of the house, but with the rise in building costs and low demand it isn’t necessarily the case now.
In the outer suburbs, the smaller the block of land, the more likely land/house ratio will be close to 50/50. The larger the block the land, the more likely it’ll be the larger portion of the property value.
As someone who bought a house as a family home in Melbourne and who then relocated to Sydney the Victorian land tax is killing the property as an investment. We are paying close to 20% of our rental income on land tax. The broke Victorian government is fleecing investors.
I say this as someone who only owns one property and can’t afford to own where we live in Sydney.
I’m backing it in.
Partly because it’s what the RBA wants and I figure I can make them blink before I do.
Partly because it’s clearly the worst time to sell in two decades.
Partly because of immigration/population expectations.
Partly because Melbourne seems to be irrationally low.
And partly because every time handypoint posts it makes me want to be a landlord even harder.
It’s going to hurt a little short term.
I think hold is the right play.
Yeah as ■■■■ as it is for someone like yourself its forcing others to sell to owner occupiers - putting more people into their own homes at more affordable prices. Perhaps an unexpected benefit.
Edit there as PPOR for CGT relief is a federal concern.
Theres some rule at state level in nsw I think for land tax. Might be worth asking a qualified tax accountant if the same exists in Victoria?
Ie land tax relief if your claiming your PPOR as somewhere else while your renting.
Victoria’s land tax is a killer. My sister, who is now in aged care rents her house to her daughter with the rent, admittedly at below market rates, theoretically going towards her aged care fees but she barely makes a profit thanks to land tax. Fair value rent for the rather tired, early '60s brick veneer home would be about $30,000 per year. Last year land tax was over $6,800 and next year it will rise to over $8,000 based on the latest council rates notice. Add in about $5,000 for rates and insurance and a few thousand more for maintenance and repairs and income tax and there is not that much left.
Not least because it kicks in at $50k . NSW it kicks in at just over $1m iirc. 50k barely buys you enough room for a letter box, FFS. That sort of disparity across states in what is effectively still a closed system is ridiculous imo.
And about to get potentially worse with the new vacant property cash grabs. Especially for anyone with an empty block somewhere. Maybe stick a sheep and olive tree on it and claim it as a primary producer block. It’s friggin madness.
Edit - got my tax done recently and my accountant said he’s not currently recommending investing in Vic property. Buy somewhere else.
There is an exemption for land tax for people that have been forced out to move out of their homes into aged care.
The only issue would be the “no income” requirement, which if your sister was to maybe stop charging rent but merely have the daughter pay some outgoings on her behalf may sneak through.
