Interesting! Meantime I should probably elaborate on the 'new is bad' sentiments of the buyer in this country. It's not all new houses. EG many would appreciate this: It's the following which aren't popular. McMansions. As you can see, they're the fodder of much mockery!
And it's not just that they're builder quality (ie, crap), it's the fact that they're not even designed. No architect has ever been near any of the blueprints. One look at those hideous monstrosities tells you that in an instant. And their floorplans are always terrible - absolutely impractical and poorly considered. Very poor energy efficiency, and loads of wasted space. There's a reason they're mocked all over the world!
It's not in the city, it's in the suburbs. And it will be pulled down to build a new house .. for sure. A family home. Yes it's in Australia. That's the kind of money we have to spend to live in the fancy parts of our Big Coastal Cities, if we want a house on land. Having said that, in the same city you can still buy a house on land for $1mil, but you would have to go to the roughest, poorest, and furthest suburbs (over an hour driving time). The sooner we buy, the sooner we can pay down a mortgage. How quickly you do that, is up to you. Even if you foolishly pay it down over 30 years and thus pay maximum interest, you'll still be way WAY ahead of what the mortgage cost you. That mortgage will have been a license to print money, in effect. You will exploit the banks, more than they will exploit you. Better yet, buy for cash. Given real estate in America is so cheap, that should be possible for average citizens.
You people are bat **** crazy! What are the average salaries in Australia, $50 000 per month? Otherwise I cannot fathom how one would save $ 6 millions for a tiny old house in the suburbs. That's just ridiculous. Right, now I believe you. Congratulations, you have tricked the banksters! Or may be not.
Real estate prices are affected by supply/demand and interest rates. Not much you can do about it as a home seller or buyer.
We earn more than Americans, but not by as much as you're assuming. In US dollars, the average income in Australia is $70k, whereas in America it's about $45k. What you're missing is that urban Australians don't value 'new' or 'big' when it comes to housing. They value location. Since the high value locations were built out generations ago, there isn't any new housing even if people wanted it - and most don't. Keep in mind also, that most urban/suburban families are never going to buy a $6mil house. Most are only ever going to spend about $1 - 2mil. It's also important to remember that only those who can afford it are going to be buying property in the capital cities where these prices exist. Which means either they earn much more than $70k, or they've been sensible investors - with capital growth on earlier properties funding later big ticket properties. It's probably an even split on those two. Lots of people earn more than $70k, but just as many earn less yet can still afford to buy a $2mil house. As in so many things ... it's not what you earn, it's what you do with it. We don't use banksters. We paid down my last mortgage in the space of ten years, because we couldn't afford to pay back an extra $200k in interest. We've only bought property for cash since then, and will continue to do so. BUT, it was our first mortgage which allowed us to do that. That was the leverage we needed to get into the market in the first instance.
It's not about tricking, it's about exploiting their service to leverage yourself into high capital growth. When you do it right, that growth exceeds the cost of the service.
How about buying a normal house for 200-300K in a ranch nearby the city and spending the remaining 5.5 million on fancy cars and gas? Heck, you can buy a helicopter with that much money. How on Earth - $70K per year and a $2M house? I can't do the math. Are you even question those RE prices and have any suspicion the market is rigged?
The $1-2m houses are an hour's driving time from city. We can buy a 'normal' house for $300k, but it will be at least three hours from the city. Too far to commute, IOW. Easily. If you bought a place (cheaply) in one of these expensives cities 20+ years ago, its value today is far beyond your income level, and you would already have paid it off. And that's even if you just stayed put in that first cheap house. If you upgraded throughout that 20+ years, you could now be earning virtually nothing, and live in a fully owned home worth many millions. They key is starting young. Buying whatever and wherever you can afford, as soon as you land your first full time job. I don't question the prices in the sense you probably mean. As is, they're a benefit to all the mom & dad investors and ordinary working and middle class owner-occupiers out there. The people who sacrifice a lot of blood, sweat, and tears to own their little piece of the nation. And I don't think the prices are 'rigged', beyond the influx of corporate investors buying up an ever-increasing number of properties - the same properties ordinary folk used to buy in the 20thC.
Real estate prices....especially of properties fifty to a hundred miles outside the major cities..... are very, very, very, very very low!!!!!!! When BMI comes to both Canada and the USA..... financed in an intelligent manner as Lincoln and /or Kennedy and / or P. M. MacKenzie King might have done........ the real estate market WILL SURGE!!!! Wow... I am the only "very low" vote so far.... ? What do you think about real estate prices? * Very low 1 vote(s) 5.6% Low 0 vote(s) 0.0% About right 1 vote(s) 5.6% High 2 vote(s) 11.1% Very high 6 vote(s) 33.3% It's madness! 5 vote(s) 27.8% Not my problem 1 vote(s) 5.6% Other 2 vote(s) 11.1%
https://dqydj.com/historical-home-prices/ It appears a major correction isn't to far off in the future. Perhaps down to the $225K level. If one draws a trend line across the bottom of the blue line.
Yeah but where do we get the money to buy it all from, Dennis? Money don't grow on trees you know. Except for the banksters that is.
My theory is that a portion of the power that the "banisters" have kept to themselves for centuries..... is about to be taken from them and given to Canadians and Americans and the idea will transform the entire world economy....
Since I own my house outright, one of those retirement goals, the prices only effect me with insurance replacement cost/premiums (when I hit 65 my property tax amount was frozen). Same thing back in 2008. I didn't own my home outright but had a fixed rate mortgage on it. My wife at the time wanted to go out and buy a new house, all our friends were, but when we went looking I refused, caused quite a rift between us too, because I could see that houses were so overly inflated. Sure enough the bottom fell out and had we had purchased a new one we would have lost about 12 years or equity we had built up. We saw lots of people who had gone in head first and even took out home equities on their primaries to buy second homes and ended up losing both. My now ex never ever said to me "well you were right" .
The magic 100 mile limit applies here too. Everything at 50 miles a family home on a suburban lot will still be a minimum of $1mil. But if you want a few acres between 50 and 100 miles out, you'll be back to paying at least $2mil, and up to around $20 mil. You need to travel beyond 100 miles to start finding affordable acreage. Generally it would have to be at least three hours driving time out.
You get it from the equity in that first cheap place you bought, back in your 20's. Time + real estate is a powerful money maker.
