SA Footy

Check out the on-line brawl....

http://www.news.com.au/adelaidenow/comm ... 01,00.html

Plenty of pertinent points made.

I was one of the lucky ones. I bought in 2001 for $79,000, 7 years later I've just had it re-valued and it's worth 3 x that much (2 bed unit) and I'm 10 -15mins from town in a prime position. Although I've added some reno's and a new car to that amount, my mortgage is still affordable..

I do feel sorry for those trying to enter the market now though..

& you'd probably still be allright if/when the bubble bursts.

Those who've recently (last 2 years) mortgaged themselves to the hilt are most at risk, as interest rates go up, they won't have the option of re-financing & using the equity in their homes, as it won't be there.
They'l get a rude shock when it's valued at less than what they've paid for it.

apparently the syd market has levelled out

im not too sure if we have hit the peak yet or not..........

House prices are never going to drop by 50% though - they will level out for sure.

You are right PR, those people who have no room to move will be most at risk. Anyone who entered the market around when FC did will be fine - as long as they have been smart about things.

Prices have dropped 15% in the UK according to an article in The Spectator recently. Of course it may be regional.

Housing prices will never drop...they will level but won't drop. I don't know this for sure, but have housing prices EVER dropped?

MW wrote:Housing prices will never drop...they will level but won't drop. I don't know this for sure, but have housing prices EVER dropped?

Yes, Adelaide had a slump in 1995-6 and I would not have recovered my money on a house I had on Delfin Island at the time if I hadn't been able to wait it out.

Similarly, I bought a house in Barker Rd, Prospect for $60,000 in 1977 and during the early 1980s couldn't get an offer over $52,000. In 1984 I got $137,000. Before I bought in Prospect someone turned down my offer of $57,000 for a house in outer Beaumont, and only got $52,000 when they finally had to sell two years later.

The Adelaide market has always zig-zagged - I had family connections in the industry.

Falcon Chick wrote:I was one of the lucky ones. I bought in 2001 for $79,000, 7 years later I've just had it re-valued and it's worth 3 x that much (2 bed unit) and I'm 10 -15mins from town in a prime position.

We were also lucky, bought a house 1/2 way between the city and beach in 1998, paid $105K, spent about $20K on rennos (still a work in progress) council valuation is now $365K, a friend in real estate reckons if we were to sell, we'd get at least $415K, only down side, rates, water etc. through the roof

I'd hate to be starting out now, but I'm sure there were plenty of home owners saying the same when we first entered the market.

Ian wrote:I'd hate to be starting out now, but I'm sure there were plenty of home owners saying the same when we first entered the market.

That's spot on Ian ..

In 2011 there'll be a thread on SAFooty where people will be saying how lucky they were that they bought in 2008. And ditto, 3 years after that.

The Adelaide housing market boom is still on and the Australian economy shows no signs of going backwards ... don't let the interest rate rises put a doom and gloom on things. As the labour skills shortage gets worse as baby boomers retire, wages growth could be even higher than this year forecast of 7%.

PS - some of those people on AdelaideNow are WAY too angry, time for a chill pill. I know what my late grandparents went without their whole lives just to own a modest home, ditto my parents for the 1st 10 years of their mortgage in the 70s. How about they talk to the people suffering on 18% interest rates during a recession in 1990? No, its only now that its hard to buy a home

My father bought a 30 year old house in Adelaide's western suburbs [Croydon] for 5400 Pounds when his annual wage was 990 Pounds.

Ratio 5.454545 recurring.
Apply that to the median wage in 2002-3 of $40,213 [Gov't statistics]
Equivalent house price $219,344 in 2002-3.

Now I suspect my father's wage may have been less that the median, so the equivalent price would be higher.

I also don't know what average house prices were in Adelaide in 2002-3.

Does anyone have figure to complete the comparison?
Are houses dearer now relative to income?

http://www.abelrealty.com.au/archive/include_MarketAug03.htm

Psyber according to this the median house price in Adelaide around March 2003 was $200,000

By June it was around $221K. So that comparison holds from 30 years earlier.

Looks like the median house value now is around $320K. For the ratio to hold, average wages would have to be around $58,000. I couldn't find the latest wages stats but IIRC its not that far off $58K .... maybe $53-55K?

MW wrote:Housing prices will never drop...they will level but won't drop. I don't know this for sure, but have housing prices EVER dropped?

Interestingly, one of "bloggers" in that article mentions the 1890's and 1930's depressions as when times prices have dropped significantly, when debt was about half the factor it is now. Obviously, though, society and financial structures are a lot more complex now than they were then.

A questions for those in the know - If an "investor" has a company of some sort set up, and can claim GST for transactions, can they claim the GST on the purchase of an "investment" property?

FlyingHigh wrote:A questions for those in the know - If an "investor" has a company of some sort set up, and can claim GST for transactions, can they claim the GST on the purchase of an "investment" property?

In most cases GST does not apply to the sale price of existing residential real estate, including the family home, irrespective of whether it is a family home or an investment property.

GST does however apply to the sale price of newly constructed homes, including investment properties, which are sold by a developer who is registered for GST. I think an investor can claim the GST back in this circumstance as long as they are registered for GST and have an ABN and lodge a Business Activity Statement. That means, the normal mum & dad investor couldn't claim it would have to be a proper business in its own right.

So, in most cases, the answer is there is no GST in first place and, if there is, most standard investors can't claim it back anyway.

If you can't claim the GST back it would form part of your cost of investment and some of it may be able to be written off your tax over lots of years (along with the purchase price).

Cheers Hondo, thanks for that.

hondo71 wrote:http://www.abelrealty.com.au/archive/include_MarketAug03.htm

Psyber according to this the median house price in Adelaide around March 2003 was $200,000

By June it was around $221K. So that comparison holds from 30 years earlier.

Looks like the median house value now is around $320K. For the ratio to hold, average wages would have to be around $58,000. I couldn't find the latest wages stats but IIRC its not that far off $58K .... maybe $53-55K?

Thanks Hondo - it looks like parity was overall fairly even over the period 1956 to 2003. Adelaide has always had speculative ups and downs that don't show in the averages.
[I meant the house my father bought was 30 years old in 1956.]

After that period you quoted, we were in Adelaide renting in Wayville for 6 months in late 2003 and there was a blip then. Prices had risen just before we got there and as we were thinking of staying we looked at a few houses - one down the road from where we rented [Davenport Tce] was advertised at $750,000 + and the agent said he was confident we would get it if we offered $825,000. I said it was not worth that as the market was about to drop, and would not offer above $700,000. Four months later when we were about to return to Melbourne the same agent rang and said his vendors would look at $675,000. By then we had resolved the family issues and arranged to return to Melbourne.

the parity may be fairly even over-all, but I'm pretty sure there'd be anomalies along the way

Punk Rooster wrote:the parity may be fairly even over-all, but I'm pretty sure there'd be anomalies along the way

Yes, see my comment earlier in this thread about fluctuations in the 1970s and 1990s, as well as the one just above yours about a recent quick up and down anomaly.

House prices are like the share market - there are a lot more fluctuations than show up in average figures - you have to work out when to buy in or stay out, or just get in and see out the long haul if there is a drop.

It just doesn't pay to get in at your absolute limit while interest rates are low because they will fluctuate too.

Psyber wrote:

Punk Rooster wrote:the parity may be fairly even over-all, but I'm pretty sure there'd be anomalies along the way

Yes, see my comment earlier in this thread about fluctuations in the 1970s and 1990s, as well as the one just above yours about a recent quick up and down anomaly.

House prices are like the share market - there are a lot more fluctuations than show up in average figures - you have to work out when to buy in or stay out, or just get in and see out the long haul if there is a drop.

It just doesn't pay to get in at your absolute limit while interest rates are low because they will fluctuate too.

I was more referring to the median house price-to-wage ratio.
Sometimes housing would be more affordable than others, even though the figure provided show it's the same over 30 odd years.
Apologies if that's what you were saying.

Punky there's definitely some ups and downs from time to time - as well as specific areas that move more than others. But the trend is not too out of whack yet however if Adelaide continues to boom affordability will be pushed down.

What has also changed over the last 30 years is our expectations of where we would like to live and how new the house should be. To some extent, that makes people feel that homes are less affordable because they are looking more up-market than our parents did.

For example, in Craigmore and Christies Beach you can buy perfectly nice, clean, decent houses for less than $250K. 30 years ago our parents would have happily bought there if that's all they could afford. Nowadays, people want to be closer to the city, etc and instead look at houses in the $350K range. Or they prefer to buy land and build their dream home first up.

Now that's not true of everyone but if you speak to an Agent that's what they will tell you is driving some of the perceptions about housing affordability.