🌏 **“Surely this isn’t sustainable…”** is the question on everyone’s lips these days, especially with cities like Brisbane and Perth seeing a staggering **20%+ increase in median home prices** over just the past year! 🏡 How can anyone hoping to enter the housing market keep up with such rapid changes?
It’s mind-boggling to consider that a $600k home in Perth has jumped to around **$750k** in just 12 months. What’s going on here? 🤔
Here are a few pain points we’re seeing:
- **Inaccessible housing**: Young people and first-time buyers are feeling completely priced out of the market. It’s become nearly impossible to save enough for a home while prices skyrocket.
- **Investor frenzy**: The market seems to be driven more by speculation and investors outbidding one another rather than genuine demand for homes to live in. It feels like a game of Monopoly gone wrong! 🎲
- **Basic needs at risk**: We’ve allowed the cost of **shelter**, a fundamental need, to inflate disproportionately. It’s scary to think that we could face the same issues with food and water prices if we continue down this path.
The big question is: what comes next? 🚦
- Could we see a **market correction** when investors finally realize that these inflated prices mean poor value for money?
- Will more young people be forced to flee to **regional areas** or even out of the country in search of affordable living? 🏞️
- And what about the policies being enacted? With many politicians being older property owners, are they really inclined to change a system that’s working in their favor?
I don’t see a clear path where “everyone wins” in this scenario. But what if we pushed for a few solutions?
- **Increase affordable housing initiatives**: We need to advocate for policies that promote more affordable housing projects.
- **Regulate investor activity**: Perhaps phasing in more stringent regulations on investors could help stabilize the market.
- **Community-focused living**: Encouraging mixed-use developments that integrate community needs could be beneficial.
💬 **What do you think? How can we navigate these challenges? Have you experienced similar issues in your city?** Let’s share strategies, experiences, or even stories from our journeys in the housing market. Together, we can brainstorm potential solutions! 💡
#HousingMarket #RealEstate #AffordableHousing #Investors #SustainableLiving #PropertyPrices
Perth and Brisbane are just playing catch-up.
Prior to COVID, Brisbane moved sideways for a decade and Perth did the same except it even went down in many places.
House values I will assume will slowly drop as investors are only pouring in the potential in growth.
If you significantly slow-down the capital growth, investors will move onto things with better ROI, I have seen a lot of people start moving into stocks because of that reason.
I believe we will still some growth in housing prices, but I don’t think we will keep seeing 2x-4x whatever we are seeing right now in the short-term.
>Major cities like Brisbane and Perth have had record 20%+ increases in median home prices over the last 12 months.
Sydney for the past 20 years:
First time?
It is sustainable as long as the population is trending up and new money arrives via immigration. It can go on for much longer, look at places like London.
Eventually though, when enough people come, Australia will become as undesirable as the countries from which most immigrants are running away from. Then, it will reach some sort of equilibrium. It’s happening in Canada already where good, quality immigrants are turning back and unit prices in immigrant-heavy cities are dropping.
Yeah it’s going to continue for a long time yet. Doesn’t matter if most people can’t afford them as long as a small few can afford lots of them.
Median in my suburb has increased 25%
My property has dropped 20+%
Surely this isn’t sustainable
It isn’t sustainable. It’s my opinion property will underperform for the next decade. Expect Australian stocks to perform significantly better.
This will be the lost 20’s for property. Relatively flat.
What happens is that property markets go through huge spurts over a few years then basically plateau for quite awhile until the next spurt. Remember Perth went up for a bit about a decade or more ago, and before 2020 actually went down quite a bit and is now jumping back up. Similarly for Brisbane, was just trickling along for about 15 years, about 50% to 60% of Sydney prices and has now jumped back up to like the typical 80% of Sydney prices, it’s just the cycle. The savvy people trade up during a cycle, borrow the same or more money and go up to the next level. Hence, one needs to get into the cycle and trade through the cycles as has been done over at least the last 50 years in Australia.
You are underestimating what covid did to the wealth distribution. The wealthy are so stupidly rich right now. There is still a lot of cash on the sidelines. Just wait till rates come down…
Its depressing af but I think we havent seen anything yet
Perth’s 10 year CAGR is like 3% which is abysmal.
Brisbane’s is a little stronger despite moving sideways for a decade. There’s every chance that both markets were undervalued for over a decade and they could be approaching fair value now or they could be overvalued or they could be undervalued, the property market is hard to predict but the compound growth rates over a longer term aren’t that crazy.
I feel that Perth at least still has a long way to go. Median incomes there are similar to those in Sydney and Melbourne, while house prices are still significantly lower.
It’s what happens when the government hands out 1.5 million visas in a two year window.
Property price increases have been rather tiny compared to rent increases. Landlords are simply using their vastly increased rental incomes to fund the purchase of more property.
We probably need a good recession, but thus far the RBA is quite comfortable with 4-5% inflation and doesn’t want to hike rates enough to bring it under control.
On the other hand, the federal government is wasting money like it’s going out of fashion on the NDIS + tax cuts promised some ~6 years in advance, current economic circumstances be damned, whilst granting almost two Canberra’s worth of visas per year into a national housing market with no excess capacity.
At least they’ve now decided to be a student in Australia you should at least be able to somewhat understand English, so the visa numbers will be down going forward.
Not sure you want it to go the other way either. In NZ (Auckland particularly) house prices have dropped significantly. For example houses in my parents area were selling for 1.5 mil 5 years ago. Now they are selling for 700k
Because people don’t want to lose out they aren’t selling. They’re holding on to properties in the hopes prices will go up. So the houses that are on the market are people who are desperate- relationship breakdowns, foreclosures, cost of living pressure. Plus there are less people buying due to cost of living and strident lending criteria so those houses are staying on the market longer than we’d seen before
I want to know what happens when all the boomers drop off? Do their kids offload their inherited properties at whatever price they can get so they can get ahead with their own mortgages? What does this do to the market given the boomers are huge real estate demographic?
you must not have gotten the memo from Sydney siders.
it’s sustainable because your meant to
1, buy further out in a different location
2, buy in a different city.
the people buying in bris are Sydney siders
so for bris people to afford real estate..
they need to follow Sydney people and go pick out a town with cheaper real estate and go buy there.
so maybe Brisbane people need to go buy in Adelaide.
then it prices out Adelaide people and Adelaide people go buy more rural.
that’s how it works.
rince and repeat until the entire of Australia catches up to Sydney.
that’s how you do it. 😂
A house was LISTED for 600k and it SOLD for 750k. Eastern states investors are buying up property at an alarming rate and putting it up for rent at stupid rates(for WA at least). What’s sustaining it is the lack of property, land and skilled people to keep up with the demand. The state government realistically needs to step in and stem the bleeding of residential property being taken out of the hands of west Aussie and into the hands of people who’ve never set foot in the state.
A lot of comments are pushing this aside and saying it’s been normal in Sydney for years and now the smaller cities are just catching up, but honestly it is worrying.
It’s not the Australia that I grew up in, and at the risk of sounding like an old man it just makes me wonder what the end goal is? We used to pride ourselves in being a country that was about a fair go for everyone, that if you work hard you can get ahead, afford a decent home on an average income.
We were proud of being a country of the middle class but now we’re a country that laughs off having some of the most unaffordable housing markets in the world, despite our small population?
I’d love to hear some honest opinions on where people think this leads us? People with young kids, do you worry about the situation they will face in 20 years when they start planning for their futures?
Property ownership caps.
Come to Melbourne, our house prices are stuck in 2017 😅🤟
I had a mate telling me about his property in Perth, plans in Brisbane etc. All done on the equity from his house in Sydney. So all the Syd speculators are branching out.
Until the incentives for investors drop off it will just be FOMO investors, a self fulfilling prophecy bubble.
Just wait until interest rates start coming down. Median house price will easily be $1.5m in Australia 💰💰💰💰💰💰💰💰
The ponzi will eventually burst.. mining is already taking a big hit.
Bring in more cash rich immigrants. No problem.
I also want to post, despite the Perth market ‘exploding’ I bought a block 2 years ago, and due to circumstances have just sold the block for exactly the same price (despite everyone telling us we’ll sell for 80-100k more).
The market isn’t exactly as is advertised.
Additionally, 2 years ago when we went walking through properties, there were 50+ groups walking through.
This time when we went walking through again, they’re empty.
So it’s definitely not the same sort of market that had the COVID fomo of 2 years ago.
The rich are getting richer and the poor are getting poorer..
Why is no one buying in Melbourne over Brisbane/Perth if they are being priced out of Sydney?
The prices can be sustained as long as immigration props it up. The gov only has capped student visas, who probably won’t have the resources to buy anyways, but has done much with the rest of the migration system.
The government is pretending to try to fix the housing shortage, which they’ll never actually do, and at the same time increasing immigration. Most politicians own real-estate, so they won’t be shooting themselves in the foot anytime soon. One example of the gov try to increase house prices is introducing more regulations that new houses have to comply with, making them more expensive to build. So as long as demand is outpacing supply significantly, the prices will just continue to rise.
There maybe times where housing prices will plateau, but I doubt they’ll fall in the next 20 years.
I guess the trick is young people have to look for run down places that are selling “cheap”.
I predict a big increase in homelessness, making Australia more like the USA. A larger divide between rich and poor.
Adelaide has entered the chat…
“…imagine if we did the same thing with food and water prices…”
*ColesWorth chuckles hesitantly. Attempts to contain it but instead causing a sort of knee-slapping wheeze laughter. Qantas and Telstra frantically trying to distance themselves.*
Nothing a million people cant fix
It’s not meant to be sustainable. Quarter acre blocks cannot continue.
My house in the southern beachside suburbs of Perth was laughed at by the Real Estate agent when I had home estimate it’s value in 2021..
It’s more than doubled in value, i haven’t done anything to it in this time…
My mother -in – laws house 4 km away has also more than doubled..
For us inparticularly, house prices were undervalued. Really close to the great , safe beaches. It’s a really cool place to live.. We are 45 km from Perth, for most Perth people, that’s too far away.. but for people who live in the bigger cities over East, who are used to commuting longer distances, it’s still actually cheap to live here on a national scale..
We bought a 3b house on 350sq m in 2019 for 300k, every house in the nearby streets has sold for at least 600 lately. This includes a 2b house on 210 sq m which sold today for 680k. I feel a lot of pain for people trying to buy now, I remember thinking our 280k mortgage was crazy high.
I think the worst is yet to come unfortunately.
Nobody talks about the new working from home culture,
It enables people from these cities to continue getting their high paid job that is great for outside of sydney and move wherever they please. If people were made to go into work then they wouldnt be able to flood the markets outside of the place they need to commute to.
China has its own issues about to mandate a 3 child policy to replace their ageing work force and keep the military fed.
If house prices grow 20% per annum, inflation is 4% (so 16% real growth), and Perth/Brisbane houses cost $750k (all numbers as per OP).
Then after 45 years a house will be worth about $1 billion (in real, 2024 dollars).
So yes, it is literally unsustainable.
Honestly I saw Perth prices go crazy and a shortage of rentals in the mid-2000s. Then it crashed. I know people who were in the situation where they were forced to sell at a loss.
What will happen after this boom. I wouldn’t want to speculate. But just because it’s crazy now, doesn’t mean it will last.
Honestly I saw Perth prices go crazy and a shortage of rentals in the mid-2000s. Then it crashed. I know people who were in the situation where they were forced to sell at a loss.
What will happen after this boom. I wouldn’t want to speculate. But just because it’s crazy now, doesn’t mean it will last.
Sydney sellers aren’t getting the prices they wanted or could get a few months ago. Prices have pulled back ever so slightly, given prices are sky high atm PLUS expectation that the RBA might be hiking rates again in August.
That’s not to say prices won’t continue climbing. Especially once rates eventually come down. I think majority capital cities will have higher prices as soon as rates start falling.
I think adding supply significantly is one of the major ways to make prices taper down – amongst other measures.
I’ve owned in Perth for the last 15 years:
From 2010 – 2019 my property declined in value by 10%. When you consider inflation the loss is even greater.
From 2020-present the value has gone up about 70%.
So in 14 years there’s been about a 60% growth. That’s about 4.2% year on year (which is slightly higher than inflation).
My point is that the last 5 years has simply corrected the previous 10 years’ negative growth. I still think house prices are stupidly high either way though…