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kcs

Australian / Melbourne Real Estate

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I wonder if anyone can explain the high level of the Melbourne domestic real estate market. Land is not that scarce in Victoria: and yet the high prices seem to extend way into the country. If this is a true “bubble,” how come it has lasted for so long? Any thoughts would be appreciated. KCS

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Land in Victoria IS very scarce where the jobs are..........Australia has a third of our population but an area 31 times ours.....making their population density a 93rd of ours!!!!!!!!!!

Hard to believe if you've never visited Oz.......but 90% of the jobs and people are in the state and territory capitals...........making aus effectively more densely populated than here :o:blink:

TTRTR will concur!...........but in contrast to this

if you compare HPs to rents Australia is more overvalued than here.......In Sydney away from the Western suburbs think London house prices and Newcastle or Hull or Sheffield rents!!!!!...Yields that would have TTRTR and PG and KOTC grimacing and sucking air through their teeth!

Edited by Michael

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The answer to Melbourne/Australian prices is quite simple, A few years ago the Austrailan house building industry was in the doldrums, the government decided to help the building industry by handing out $14,000 grants to first time buyers, this pump primed the building of new houses and also lead to a frenzy of house buying, everyone jumping in for their share of this free cash, this created demand for more housing and the laws of supply and demand took over. When the stock market sort of didnt look too good in 2000 investors decided that property looked good and started to invest heavily (Australia has the highest level of buy to let homes in the known world) to aid and abet this the press and TV production companys presented almost daily updates on the state of the realestate market and glossy programs on how to update a home and sell it for a fortune. At the same time as all of the above was happening the government was creating new money by dropping interest rates which in turn gave the banks more confidence to lend out more money on easier terms than ever before, ie smaller deposits, less proof of income etc etc etc, all this of course leads to now where we have a price bubble in housing which has spread beyond the city centres to further afield as investors seek out whats left worth buying for a possible return. What all of the above points to is inflation, the real meaning of inflation is not what the government would like us to think, ie the price of dvd's etc etc but the real meaning is that of money creation controlled by the government, ie there has been far too much money created in the last few years, its been a boom and whenever theres a boom there is a corresponding bust, either it can be inflated away as the government hopes or by defaltion as per the Japan experinece, which way it will go remains to be seen. I am currently waiting for both London and Melbourne prices to crash, which ever happens first (if ever) will be where I buy

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I am currently waiting for both London and Melbourne prices to crash, which ever happens first (if ever) will be where I buy

Aren't they both falling now?

Neither will "crash" overnight.

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"if you compare HPs to rents Australia is more overvalued than here.......In Sydney away from the Western suburbs think London house prices and Newcastle or Hull or Sheffield rents!!!!!...Yields that would have TTRTR and PG and KOTC grimacing and sucking air through their teeth!"

Not really: the tax situation is quite different on Australia (particularly for those who have a large marginal rate tax shielf) so after tax rental returns are comparable to those in the UK. That's why you often find people living in a crappy unit whilst renting our their place at the beach.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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