There was a unit i loved (price & location) and was going to make a deposit but the realtor said it's already sold and long story short it's still in the market for 30k higher. I On one hand i can see job cuts everywhere and on the other hand i can see the housing price is on record high & unaffordable for the middle class. No matter who i ask people say it's because of the Chinese. How far its true ? do they really have 1% interest from their bank ? Does someone actually link me a source ? Is there a housing bubble ? I am so nervous now, it's my first home. The possibility of loosing the house and hard earned money is scary when you see what happened in US and Europe. Just added a poll to gauge how many actually think there is a bubble.
1% interest in China and housing bubble
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not sure about the 1% interest they get or the buble??
but just read a related article that may be of interest to youFears Chinese investors are pricing first-home buyers out of the market will be investigated by parliament
http://www.dailytelegraph.com.au/news/nsw/fears-chinese-inve…I'm not sure about the Chinese. I've heard heaps of rumors online of them making large appearances at auctions in Sydney. The 1% thing may be true because I know in Japan they have home loans at that rate, and that you can purchase overseas with it as I wanted my partner who is Japanese to look into it…
Be careful with exchange rates. If the $AU falls at any time over the term you'll still have to pay in Yen. And vice versa of course.
Units have always been one of the cheapest options, I don't see the unaffordable factor in it. Some flats have rent as high as houses, despite having 2/3 of the property value of the house next door.
It isn't just the Chinese. Its the Brits, Yanks and Canucks.
While buyers from China do have an impact, it's only a small portion of the total foreign ownership and makes up a tiny investment overall.
From Crikey:
Chinese buyers are the biggest foreign real estate investors: in 2012-13 they purchased just under $6 billion in real estate — but that includes commercial real estate, which is twice as large a target for foreign investment as residential real estate. But Canada and the United States aren’t far behind the Chinese; Canadians invested just under $5 billion in Australian real estate, and Americans $4.4 billion. Singapore was next with $2 billion, then Malaysia with $1.6 billion; in between were the British, on $1.7 billion.
If you lump China, Singapore, Malyasia and Hong Kong as one ethnic group as the author from Crikey did that makes up less than 3% in all property (commercial and residential). I've found when bidding in the housing market, its been against property investors rather than owner occupiers. I suppose you can blame this on tax incentives such as negative gearing. Good luck ever getting those laws changed as both spectrum of politics are heavily involved in property.
If there is a such a huge investment by foreigners , Isn't the gov't worried ? Do they have plan B ? Well this worries me more, cuz housing is now susceptible to speculation and speculation can lead to investors pulling out fast and the prices will come crashing down just like shares. Not sure if they buy houses for investment purposes or to actually live in.
If there is a such a huge investment by foreigners
Well, the stats show foreign investment is a tiny proportion of all real estate buyers. Then you'd have to believe that the government really cares. The Abbott government just opened up the loophole in the 457 visa so they seem pro foreign labour and investment. However, it was the Rudd government who loosened the restrictions on foreign investment.
I'm no economist but it's a free market economy. Just because everyone else buys a property, gets married, and has kids doesn't mean every has to. Buying a property is an investment and shouldn't be a right (e.g. healthcare, education). I'm a bit hesitant when the government gets involved in trying to affect the economy.
EDIT: LOL at some of the ads appearing on this page. OK, let's blame Obama.
Maybe housing shouldn't be a right, but it certainly shouldn't be unobtainable in someone's lifetime either.
I do agree that housing is not a right but it shouldn't be so vulnerable for speculation ( maybe its not reached that level in oz) just like its immoral to speculate food commodities/market but banks continue to so and i think banks and corporates dictate the policies.
Well, housing (shelter, not owning) is one of the basic human rights. So pro human policy would be to help first home buyers and would make it difficult for someone to own numerous investment property.
But that would probably be dreaming too much.
The government don't 'worry' about anything. Their nests and those of their children are already feathered with everyone else's stolen tax dollars. They only do what benefits other Australians, when it also benefits them.
Yes as neil has suggested & if last week's ABC Q&A is to be believed, Chinese property investment is only a small portion of all foreign investment, although "Canadians buying up Australian properties & pushing up the price" probably won't make good clicky newspaper headline.
It's also mostly in Sydney. Moreover Chinese property buyers also seem to be pretty localised — Chatswood, Eastwood, Burwood, Hurstville, etc and surrounding areas.
They believe those areas have very good feng shui. I remember an agent told me that Epping and eastwood are believed to be the dragon's eyes/ head in some feng shui calculations…don't know if its true…can't afford the areas anyway
If good feng shui means close to Asian communities and Chinese grocery shops and close to good selective high schools — yeah great feng shui there!!
agreed, but I would still not take feng shui advice from a real estate agent, who is trying to sell it.
More importantly, you should look properly at your own career security. Do you have it - really? If that's genuinely a resounding 'yes', buy anything AFTER the bubble deflates (or even bursts!). There's a bubble in every 7-10 year r/e cycle regardless. That's how the artificial system works. So if you have fab future job security, buy something, and you can cash-flow it easily enough. If you struggle for future job security? Roll the dice.. But at some point - everyone needs a roof over their head.
Thankfully my job is secure as i am in health sector. I think i will wait for another year..see how the prices are.
I rent (shared as a carer) and i always have. It sucks big-time as you are at someone else's whim but thats the price of insecurity. I can move in theory every 6-12 months and im free to get a better deal, which is getting increasingly more impossible (a tent may well be my next move).
The rent assistance is a joke and a bad one if your on benefits too. Doesn't matter if you care for someone 24x7 for a few cents an hour (a nurse would earn about $40 an hour before overtime). Single, with no children $124.00 rent assistance a fortnight but rent is now around $270+ per WEEK for a small, single bed unit!
The god forbid you want to watch TV, need aircon to stay alive in the summer and eat hot food in winter as the state gov has made that a very expensive proposition as its used as a method of taxation on the populace.
Also the statistics mentioned are bogus, if you look at the ethnicity of Canadian and american buyers they are mostly Asian (Chinese) but the reportable statistics are country of origin only. They are all getting property in the safer southern hemisphere and sending their educated kids (mostly girls so they can try for a son at home) here just in case the northern hemisphere goes thermo nuclear or the great bubble at home goes crash and thye start hanging/shooting the thieves at home.
LOTS of the new property here they buy remains unused, the Chinese like to keep new places unused (no bad ghosts and jojoo) but they also like income so they buy commercial realestate for growth and to open biz for friends and family (like they do at home. Just checkout sunnybank as its 90+ asian shopping center, owned and operated)
I would do the same if i was them, no hard feelings on my part - you hang out the nation for sale shingle and you cant blame anyone else if you get applicants!
And its OK they can buy with worthless US$ our farmland, so when you can wipe your ass with it they will still own the meat, vegies, pork and poultry. The problem is were taking shit for real assets, its a monopoly game where its rigged against everyone until the music stops (like it almost did in 2008)…
The USA+EURO+BRITAIN+JAPAN have printed about 8 trillion since 2008, China in the same time has printed about twice that into their economy. That's where the wealth is coming from to buy here. Its worthless script called money for real assets.
Shit would change tomorrow if you had to settle in gold. Bet you would pay way more than $1300US an ounce then, if you indeed took script (dollars, euro or wan) at all in exchange… real for real exchanges in gold equivalent value and its game over for this insane experiment in insanity economics!
If you can print infinite amounts of money like they have decided to do in the USA then why not write me a billion dollar cheq for my share of planet earth? That's the game being played right now, its just we don't have anywhere to go so if your getting your cheq early (before me) then you buy something that's real now, so when the music stops you have something tangible to live on or off…
More mug us…
If TonyA, our leader was SMART instead of cunning he would do us a favor and print a few trillion dollars into our economy and give us an A1 NBN, roads and infrastructure. then with our printed wealth we could be prepared for the coming credit crash with real assets and even be buying stuff we will need overseas! I know its sounds stupid, but when you can print infinite money your nuts to pay off debt and be debt free. Come the crash, how smart with the Norwegian and Scandinavian wealth funds we worth then? ZIP NILL NAUGHT
The writing was on the wall back when Ronald Regan came to office and decided to bankrupt the USSR (I laugh when he is held up as the model of fiscal restraint by US conservatives!) It was game over the day he did they as the US was the reserve currency and they ran a surplus… Thoes days are long gone and the IOUs are now so big they defy close securinity… Its also why Putin is returning the favor now he has Eruope on the Russian oil energy drip… Fool me once, shame on you, fool me twice & shame on me!
what are you tripping on?
Obviously it's quite potent.
Ok so let me get this straight….
you make roughly $80,000 a year before any sort of overtime (calculated at $40/hr x 2000 working hours a year).
You also pay $208/week in rent after rent assistance. Which means rent is $10,816 a year.
Let's call phone, internet and other utilities $250 a month so that's $3,000 a year.
All up your expense of living (excluding food and other essentials) is roughly $14,000 a year….
How on earth can you not afford to live on a single income of $80,000 a year with no dependents?! The housing market has NOTHING to do with your equation!
In fairness, he never said he earned $40/hour, but that to get a nurse to do the caring he does would cost that. He said he earned "a few cents an hour". Redo your calculation at say $0.75/hr, and I'm sure the results are very different. Sorry to have to point this out, but failure at basic reading comprehension annoys me.
I believe he/she isn't a nurse but was simply comparing the amount of assistance the Government gives her compared to what a nurse would receive as pay for doing the same job. Obviously it's a terrible comparison because I'm going to go out on a limb here and guess that Srhardy isn't a qualified nurse ;)
The lending rates are around 10-20% interest… o_O
Deposit rates only pay around 5% interest, and so people take a punt with higher interest rates which can be gained from the shadow banking system. However, recently there have been many corporate bankruptcies where the government has decided not to step in and bail out the bond holders.
Most of the money coming into housing in Australia is from the upper class seeking to move their money out of China as there are often huge crackdowns on false trumped up charges.
For a long time housing has been rising at 20%, whilst interest rates are only 10%, so it has been affordable, but recently it has gone the other way around. Eventually the bubble will burst, but that has nothing to do with housing affordability in Australia.
As some posts have mentioned above first home buyers are not so much competing against foreign buyers but against property investors rather than other owner occupiers. Again this is due to tax incentives such as negative gearing which is essentially middle calss welfare.
I don't mind negative gearing only if it can be offset against progits from the SAME asset class, not across different income streams.
Overseas buyers (such as Chinese) can only buy new homes and/or apartments. They cannot buy established houses or apartments either as an investment or to live:-
http://www.firb.gov.au/content/guidance/downloads/gn3_jan201…
The reason for this is that when Chinese people fund new property construction they are adding to the housing pool, and not taking it away from local residents.
I read in the Australian that about 15% of new house and apartment sales are being made to overseas Chinese investors. Thats significant, but if you're not in the market for a new home specifically (ie you're looking for an older, cheaper home) then the Chinese are irrelevant. They cannot buy those types of home.
The FIRB rubber stamping process is fairly simple if your agent knows how to get it done. Got gazumped a few months ago by an overseas purchaser, I maxed out at $1.55m and they gone in at $1.58m. No hard feelings at all given it was a struggle to get a tenant for it.
DeY JoooKK My HoUSES!
I wouldn't be surprised if people are lumping in local Asians with the "Chinese" mantra.
Since the white Australia policy, the children of Asian migrants/refugees are adding 'colour' to Auctions.
My concerns is the baby boomer investors.
There is a bubble. And it has been growing steadily since the last decade:
http://en.wikipedia.org/wiki/Australian_property_bubble