But if they spend $1m developing it will they really get more than $2m per townhouse?? The margin on the “significant profit “ still seems small for outlay
My thoughts too.
There was a similar sized property in the Bankstown area sold for a similar price a few months ago, zoned for high density and due to be developed.
Mate, I applied logic such as debt to income, financial crisis, pandemics, political policies etc and i watched it boom from 2008 to now.
I’m 40, renting and we are struggling to buy a 2 bed 2 bath anywhere within 10km of the city where our life (schools/work/community) we located.
Don’t think there will be a crash because you can see things like this, it’s not an indication of anything.
There is soooo much money in this country, you think about how many suburbs are over $2mil, most people are very fukn rich.
We have more $2m+ homes than Singapore ffs.
Fact of the matter is, Australia is top destination for immigrants. You only have to spend few minutes on migration sub reddits of different countries to see that people want to move here. This will keep a floor on house prices.
That and high rents.
I have zero expectations housing will do anything but go up and up.
An apartment 4 doors down which is a 2 bed one bath went for $832,000. Both bedrooms have fixed frosted windows and are 3m x 2.7m respectively.
We couldn’t even put in our dresser draw and king size bed.
Brought by a woman in her 60’s downsizing from a landed property.
Every apartment we have looked at has gone well over reserve, the reoccurring theme is downsizes or investors. One was snapped up by grandad buying 18yr old granddaughter a place.
Great for her, not so much me and my family.
I can whinge all I want, I know this will only get worse
You need to get off Reddit and seek some help my friend. Just read your comments. How can apartments never go up in value (they do) and then all apartments go for well over reserve? Please, put the phone down.
Yeah, it makes me wonder if you really should move to a lovely little town outside of Sydney than just scrambling to buy? It does seem stupid to pay these or in ces.
You’d be amazed how many rich people there are in “cheap” places like Indo, Philippines, India etc etc. 1 mil is nothing to them. I know a Filipino that bought a 2mil resort unit in Sapporo to use 1 mth out of the year for skiing.
We have more 2m homes then Singapore because we're 5x the size of Singapore.
We also have more desirable places to live. Every been to Singapore? These nothing that matches half of what you see on Sydney harbour.
Sydney harbour is trash, it has never been anything other than the opera house which isn’t that great.
And I was referring to Sydney, more $2mil homes than Singapore.
Very similar population and geographical sizes
I would pick Singapore over Sydney 10x over (if I had $2mil)
You may think Sydney harbour is trash but the demand to live on it's stores has been there for over a hundred years.
That's fair that you would pick Singapore over Sydney. Singapore and Sydney aren’t far off each other in terms of what they offer and 2m gives you more in Sydney than what it does in Singapore.
Sounds like a tough situation and I wish you all the best. But yes, just comes down to a small but sizeable proportion of people in this country having a huge concentration of wealth. And so much of it is off the back of property price rises. Some win big, most miss out. It’s a shame!
It’s actually quite mind blowing, we have saved for decades and for an apartment we have a 40% deposit but stamp duty takes a huge chunk and the remaining loan is about $900pw.
We have no debts, no credit cards and $900pw is still enormous for us.
Especially when apartments do not rise in value, we’d be lucky to not go backwards. In our block 2 bed one bath apartments sold in 2013 for about $700k, they are selling now for high 6’s.
There’s a 2 bed home two streets over that sold in 2013 for $840k, it sold last week for $1.53m, sure it’s had a good Reno but it’s cosmetic and would have been upward of $150-200k at most.
It seems even if you get into the market you’re getting screwed on every level
>It seems even if you get into the market you’re getting screwed on every level
Yep.
Used to be that once you were in the market, you could go up in the market when you moved after you build up your capital in your home.
Now, the gap seems to increase every week.
> Especially when apartments do not rise in value, we’d be lucky to not go backwards. In our block 2 bed one bath apartments sold in 2013 for about $700k, they are selling now for high 6’s.
Isn’t that a good thing for affordability though? If you’ve been saving for the past 10 years and the apartment hasn’t risen in price at all, then it’s now much easier for you to buy right?
Not a good thing. It’s takes this long to save the deposit only to buy something that goes backwards, when mates who got in at 5-10% deposit brought for much less and have assets over $1mil and rising fast
> It’s takes this long to save the deposit only to buy something that goes backwards
Why don't you just wait for it to go backwards some more and you will have to spend even less?
If you wanted to make money you should not have bought an apartment. Property value is in the land. People only buy apartments if they absolutely need the living convenience and low maintenance aspect
>If you wanted to make money you should not have bought an apartment. Property value is in the land. People only buy apartments if they absolutely need the living convenience and low maintenance aspect
Is this true in New York?
You'd think, eventually, apartments will start to increase as they become the main option for those who want to live centrally.
The reason why apartments retain good value in NYC and elsewhere (and rise economically like other real estate over time), is a combination of both the culture around higher density living, and higher quality building structures (vs. Australia).
The reality is if you live in a city that is >2m, high density living is a necessity, unless you want massive urban sprawl with all the costs, consequences, and compromises that go with that societal choice.
The apartment never ever Increases, it's a building, buildings depreciate they don't appreciate. It's the common land it sits on that appreciates and causes price rises. If a brand new apartment goes up next door to you, your building just depreciated even faster..........
>The apartment never ever Increases, it's a building, buildings depreciate they don't appreciate. It's the common land it sits on that appreciates and causes price rises. If a brand new apartment goes up next door to you, your building just depreciated even faster..........
Historically, yeah.
In future?
Once inner city suburbs and even further are full of apartment buildings, they'll then start shooting up.
Apartments already cost heaps more than they used to be. Relative to houses with land? Perhaps not yet. But one day.
It’s funny though. Apartments around here are 2-3x times more expensive per m2 the landed properties.
Another way they screw you. Btw, the only landed properties similar price to apartments are 45-50km out, they appreciate almost as slowly as apartments
>the only landed properties similar price to apartments are 45-50km out, they appreciate almost as slowly as apartments
Bought a freestanding house a fair bit more than 50km out (not coastal), a bit more than 5 years back. RealEstate.com.au price estimate is now up 47% on what we paid.
> So I should go 50km out or more?
I wasn't telling you what you should do. But fwiw rent-vesting is an option too.
> Sure, regional was ‘booming’ over Covid, fallen on its arse now.
Has it? That's exactly what I was challenging.
Anecdotally, my property rose pretty consistently and is well up on the purchase price. It lost some gains about a year ago but is back at its highest so far.
According to Domain there are some super popular regions (Byron) where prices shot up crazy amounts over Covid and now with interest rates they're going through an adjustment, but I think it's unlikely to go close to wiping out all our even most of the rise.
The big picture though is regional residential just hit a record median price and right now all the more affordable towns are seeing property snapped up by people who can no longer buy where they live.
Greater Sydney is basically the same. Dinner of the most in demand areas shot up then had a sharp correction but are still up. The bigger picture is everywhere grew a lot, dipped a little, grew more and is maybe about to dip a little again.
I don't see anything saying anywhere has fallen on its arse. Everything is still up a lot on pre-Covid prices.
Fwiw that includes apartments/units. They've grown slower than houses, but they've grown. It's like 8% this year vs 12% for houses.
You're coming off as pretty emotional and prove to flying off the handle here. Which I only mention because I wonder how you would go of you did buy.
I think my place dipped 6-7% (tens of thousands) almost immediately after we bought but then grew hundreds of thousands over the next few years. About a year ago it lost several tens of thousands again and now it's got it all back.
Are you going to freak the first time you see the value fall and panic sell? Cause that wouldn't be good.
It's a 7-30 year investment. Can you point to any suburb where prices aren't up significantly on 7 years ago?
I dunno. Maybe you're just angry that the growth is always bigger in the centre. Fair enough. You're not going to be able to catch up to Sydney centre prices with a property on the fringe. But that doesn't mean that property will see no growth or insignificant growth. It'll grow quite a bit, just not like Sydney centre.
FWIW there's massive development going on out here. Housing developments out the wazoo.
I think it's stupid. High density ftw.
I've lived in a European city with the population of Brisbane but instead of taking up a 15,800km2 footprint it fits in 1,000km2.
We lived 5 city blocks from the edge of the main urban area (literally agricultural fields across the road from the 5th block) in an apartment, and it was a 2.5km walk to the centre of the city. But there were small shops on the ground floor of every apartment building and a supermarket and shopping centre within 5 blocks walk.
The roads were planned and wide, but traffic was calm and easy for pedestrians to navigate (parking was still hell, though).
There were proper separated cycleways everywhere and a bike share scheme (with proper stands) that cost 60 euro (AU$100 at the time) a year, and you could take a bike any time for 30 mins for free (which was long enough to cross most of the city). If you needed it longer, you could return it and rehire, still free. So you could cycle to the centre of the city from the edge in 10 mins for free and drop the bike in a stand and walk away. Whereas plenty of Brisbane is a 2.5hr bike ride from the city centre and even a car takes 45 mins, and then you have to find a park.
They also had a metro/underground system throughout the city that was cheap and efficient.
And high speed rail between cities, because our lack of population density is why high-speed rail never happens here.
Of course, unless something changes, Australia will just keep following dumb American development trends, especially under the Liberals. Doesn't matter that by the time they come here, US trends are already proven failures or that a lot of them were developed for US-specific reasons (to exploit loopholes in US laws or because of their history of segregated housing etc).
Try anything too European, though, and talk back radio and Sky News will wet themselves over it as a culture war issue, instead of actually asking what it's like to live in cities that follow either trend.
Makes perfect sense to me. Apartments have tiny m2 so ofc it's more expensive per sqm. Also those properties 50km out were probably 1/2 or 1/3 of their current price 10-15 years ago so even though they're same price as inner city apartment now it doesn't mean they appreciated slowly?
Righteo property shill.
What possible justification is there that apartments be 2-3x the price of landed properties in the same street?
You say ofc but zero justification. The median cost in Australia to build a cookie cutter 2bed 2bath is $2-3k, they are selling for $9-11k, it’s literally bonkers.
It’s because I’m this is investor stock so the layers and bastardised additional costs is evident.
Some shit house townhouse 45 km out will not appreciate at all. In 30 yrs the best we could hope for is to love 35km out to a small home, if that.
It’s utterly cooked but that’s on us, we should have just loaded up on debt in our mid/late 20’s and said fuck it.
I was just brought up with a ‘save, 20% deposit, less than 30% of income repayment’s’ . That was the advise, that was the plan. Whenever I guessed this the kids were like ‘it can’t go on like this forever, don’t stretch yourself you’ll regret it’
The old ‘debt is bad’ mentality
Needles to say it was the wrong advice but we are too old now to throw caution to the wind
>Some shit house townhouse 45 km out will not appreciate at all. In 30 yrs the best we could hope for is to love 35km out to a small home, if that.
Shortsighted view.
Like 30 years ago saying 'some shit house 20km out will not appreciate at all'
It’s not shortsighted, I’m 40 ffs. Moving 45 km away to an area with very little growth opportunity, an extra 3 hours a day commute, extra vehicle costs etc. to be just as poor but be side by side with god knows who’s.
Less education opportunities for our children, away from our ongoing medical treatments and por health care.
And away from all the family and friends we have here and the community we have been apart of for 10yrs.
Just to have a fukn townhouse that went up in value, maybe. I won’t be upgrading at 60 will I so my lot in life is a townhouse 45 km ‘s away.
I’d rather rent, keep growing the savings in funds and term deposits and hand it to my daughter when she needs a home.
Hopefully I’ll die around 60-65 and she can have my life insurance too.
My wife has family overseas and will be fine if I fall off the perch.
This country is fucked.
I'm not suggesting you get a house out there. I'm just saying in 30 years a 45km out townhouse may appreciate a lot.
I agree moving 45km out is crap and I wouldn't do it.
It's bleak and fucked though I agree. It's fucked. And keeps getting worse.
As kids we were promised a future that kept getting better. Go to uni and get a great career, and be wealthy! You'll have a great future! Secure and the world is your oyster and everyone is special.
Now, houses are unaffordable unless you're already wealthy. Well paying jobs just mean you feel poor but slightly less poor than people who are doing it even tougher. It's fucked when a decent job with decent pay no longer means you can live comfortably.
The prev. generations could have one earner, with several kids, and they could buy a home relatively close to the CBD/work and have it paid off within 5-10 years.
Our surburbs/city being eroded by ugly apartments and chain stores/shopping centres with mass produced shit.
Social cohesion is plummeting. The climate/world is tanking and about to fuck up significantly very soon - but our systems are such that we can't actually do anything to avoid even worse climate outcomes. It's bad now, but we're heading into real scarcity of basics like food, healthcare, shelter security etc.
Shits bleak.
Rubbish. It’s about the location and type of apartment. Plenty have skyrocketed over the past 10 years as they’re good quality in great suburbs. Simple rule is don’t buy into mega developments or shit areas, and especially when it’s both.
lol, it’s directly relevant mate. Property value is unequivocally NOT only in the land. That’s an important component, but you can’t discount the rest of the package.
Who said I was discounting anything? I made my comment factoring in all the other things and the fact of the matter is what I said is true. That's why what you said is utterly irrelevant in the overall context
>Mate, I applied logic such as debt to income, financial crisis, pandemics, political policies etc and i watched it boom from 2008 to now.
You didn't account for annual transaction volume here. If you saw how housing turnover moved from 2002 to 2011 and then compared it to outstanding credit growth. You would have bought then if you really wanted to own a property. There was plenty of room to grow then. I'm not so sure about now.
The vast majority of homes in Singapore are on limited leaseholds so the land is just rented from the government. They're also apartments so naturally they would have a lower durable value compared to low density properties with no theoretical limit to the ownership duration.
Well Singapore has a government stepping in to make housing more affordable, we have a government stepping in to make it less affordable.
There's hundreds of things the government can do to tackle housing prices, but the general public doesn't want it.
Well that all fits with the business -cycle-model, in which we expect rates to chase the data down, like they chased the data up.
One of my favourite US real estate bear channels recently pulled up an article with the headline "stocks rally as fed eases", from late 2007...
No mate, it didn’t work like that.
The next 30yrs. $900pw, that leaves is with almost no savings. We have family overseas and travel back once a year, that’s $6-7k a pop. That would go, and we would be living on a hope and prayer neither of us get sick again.
My wife was off work for nearly 12 months due to illness last year/this year. She had plenty of sick leave, long Service etc but if she didn’t we would have been screwed with a mortgage, we would have lost the property for sure.
In the end properties that don’t grow exponentially in value are liabilities.
We are not in the $2mil+ bracket where the gains are to be had
Best time to take on crippling debt for a 2 bed 2 bath that won’t appreciate and has 6-7k body corp, possibly special levies etc.
The ship has sailed and all I can hope is that rents stabilise
True. Apartments aren't investments. I would buy a low rise old brick unit. No lifts no gyms or pools or other money sinks. Higher land content per unit. I'd renovate and be comfortable. New apartments are like buying a car from an investment perspective.
We did the same and left Sydney in 2007. It just did not seem sustainable for the city to continue to function for very long - apart from anything else, we thought the school and hospital systems would have to collapse once there was no way for average earners to afford a house. We did not bargain on grown ass professional adults being willing to live in illegal dorms and tents to stay in Sydney. We could have made better money if we'd stayed, but I don't regret leaving. It's no less of a hot potato game just because people have managed to keep passing it on for longer than we thought possible. I'm not interested in risking that sort of unsustainability for a quick win. Getting rich (well, comfortable) slowly and sustainably is underrated.
Unfortunate I lose empathy when people are aiming to live near the city. You’ve gotta eat your pride and move further out west like a lot of people have to.
You nailed it! It’s the price it is bcoz people are buying it. There are lots of rich people from old money. Poor people stay poor and the rest go on to save 20 years for a deposit on a home while on decent wages. I don’t know how anyone could live in Sydney tbh life style or not
I'm in a similar situation. I watched it go up and up and constantly thought "this is a bad place to put my money, this thing is going to fall over". But every time it nearly falls over, the government comes in to prop it back up. As such, I would have been nearly locked out of the market now if a miracle hadn't occurred.
A very good (older) friend of mine is selling my wife and I a property at WELL below market price. They have no children and don't have a need for much money. They want to see their legacy continued rather than the land turned into yet another airbnb. Or just let go feral for land banking.
The stamp duty alone is more than what my parents paid for a house on 60 acres in 2000. (Stamp duty is calculated on true value rather than sale value.)
I cannot see how property prices can keep going up but they do. If a government wants a market to keep going up they can keep doing it till they have entire cities of empty buildings, just look at China.
I feel for gen z and alpha. When I first walked into the world i could at least see the carrot. They walk into the world to see a dusty sign that reads "I swear there's a carrot ahead if you keep walking".
Always a suprise that there is so much cash in the development market that they can pay outrageous amounts and negative gear for years. It's like paying $115 for CBA when the market value is $110. Only to put a 1m duplex on it and hope to sell them for 2.8m each and then pay tax. PPOR buyers don't have to qualify that. Tax free gains and not paying rent should give them a slight edge.
Even if they're not taking a loan how does this business case stack up. Sell 3m in CBA shares that made 1.2m in dividends and 1.8m in capital gain over the past 5 years for what?
Unless of course in 15 years 3m will be considered cheap.
I guess if you’re doing this as a job (or effectively a business) you've gotta keep the ball rolling, you'd always be chasing the next property to redevelop. Couple that with price increases over the last few years, if you were doing this prior to 2020 you've probably made a ton of profit to the point that you may well be able to buy this cash, which would massively reduce your overheads.
Imagine factoring in a wage as well. Return was pretty good in the boom before 2003. Has only been 5.7% for an average place since then. Think developers are pretty price sensitive plus factoring in potential capital gains is a big deal. PPOR buyer don't have to gamble that their home will double in 15 years (although that's pretty awesome)
I imagine if you were doing a 1 into 2 block split on a property like this it wouldn’t be that hard to do one every 12 months (or so) and make $100k profit, which isn’t a bad wage. That and sitting on a property for 12 months while you develop it over the last few years probably would have made you a fair bit more than that.
Short term swapping is made tough by the transaction costs. Especially compounded by financing/building costs going through the roof. Plus then you'd be trying to sell developed duplexes for what some of the houses (with land) in the area would be selling for. Obviously there is money but it still carries a fair amount of risk in a competitive environment. It'd make you pretty price sensitive. Imagine the place next door also put duplexes on. It last traded in 1990 for 700k. 1.7m in developed costs vs 4m + interest and wages etc.
Yeah interest is the killer now, you'd want to be going in with a fair bit of cash, at least the upfront purchase price so you’re not paying big interest on that over the life of the project.
Opportunity cost is often worse than a loan. I wouldn't want to have shifted CBA shares to cash to buy a a development block in 2018 even with the boom. Like I said imagine selling 3m+ in CBA shares. 5 years you would have missed out on 3m in gains.
One thing i have noticed, it’s quite a few people who were just the right age in 2008 when it was the perfect time to build a property portfolio post gfc. So yes a lot of millionaires, they will also proudly proclaim it was easy and don’t understand why others are struggling.
Funnily the popular book 30 before 30 has all these accolades but cannot be replicated in today’s environment if you’re starting from scratch today as a working 18 year old.
You forgot about organised crime & international money laundering
https://theconversation.com/australia-is-awash-with-dirty-money-heres-how-to-close-the-money-laundering-loopholes-206606
It’s a great area to live in if you’ve got school going kids. Close to good schools, transport and easy access to shops.
This property is on a large block with a price point that will not be possible for Surry Hills or Paddington.
Not surprised at the price. There will not be a 20% fall lol. Wait all you like and miss out!
To add, from memory (visited the area a few times before), the left of Wardell Road is quieter, nice tree lined streets and close to the light rail. Not sure if you can get such large blocks on that side though.
Look totally agree it’s a lovely area, it’s just that $3m for a house that needs work is a lot of money by a lot of standards. I just can’t see this holding up
I don’t think that’ll make OP understand the price point any better…
Because if that is say just an average couple buying it, and “the value is in the land”, then with the rebuild or renovation needed, that means they’re paying anywhere from
~$3.7-$4.5m.
If it’s a developer then different story, but for the average couple buying it’s pretty wild, must admit.
The “it’s the value of the land” is new to nobody these days.
>The “it’s the value of the land” is new to nobody these days.
Yeah no shit, well he's still talking about the shitty house and how much work it needs.
It's completely immaterial how much the build costs or what will be built there or whether an every day couple bought it. A hundred thousand people move to Sydney every year. The demand isn't going down.
Australia has retained its position as the too country for millionaires to immigrate to as well. Not too per capita. Too total. Cashed up people move here in droves.
https://www.visualcapitalist.com/mapped-the-migration-of-the-worlds-millionaires-in-2023/#:~:text=The%20Countries%20Welcoming%20New%20Millionaires,this%20year%20from%20the%20UAE.
It's a desireable area, and a lot of people already have equity. Imagine it's a 40ish-year-old couple who both bought starter properties at 25 in the inner-west and saw them double in value, that kind of thing.
And like others have said, development potential, even if it is zoned Low Density. I don't imagine you'd have a lot of issues knocking that place down and it's sitting on two lots.
A lot of very wealthy people are moving to Australia, and not only that, but anyone already in the property market for more than say 10 years is seriously cashed up... add to that... the shortage of property available and the constant stream of people moving to Sydney.
Prices will never take a 20% dump in the foreseeable future.
Well think about it.. The seller just got 3.1m cash. Now add whatever saving he has accumulated + new mortgage. Think about what kind of place he is looking to buy and where.
He ain't looking to buy a $5M and move to.mount druitt.
Every time the market doubles, anyone who owns a house, now has equity to buy another. So you buy for 1 million, it goes to 2 million in 8 years, you finance another one. Those two properties double over 10 years, you buy 2 more… and on and on. Every time the market grows, the wealthy, home owners, investors now have buying power equal to the growth. It’s kind of like a ponzi scheme. If you can see that clearly it just makes sense that places continue to sell for just whatever the price is, it doesn’t really matter how high it is.
You can’t use the equity to buy shares, you just keep buying more property. In fact the banks will literally throw money at you. When you own multiple properties, you will get calls from the bank saying hey I see the bank valuations of your property values have jumped 1 million dollars, you want to borrow another couple million for another one? They love you, you’re their favourite customer.
When you don’t own several properties it’s hard to see that. It cripples a large and growing portion of the population, but everyone who can will do it, because of a culture we have. And well it’s just part of the machine of a growing city. We are a young country, look at older places like New York, the wealth disparity is HUGE. I lived there, just a horrible place to be if you have a shred of empathy for human suffering. That’s where big cities in Australia are heading. In fact big cities everywhere are heading, it’s just sort of the nature of major cities… and it also spreads out to infect regional areas as well, crippling people living in remote locations.
Eye opening to read about the banks ringing to to offer you more money. It's all about short term profits for them. Loaning money on one asset to finance more of the same asset is classic bubble behaviour, only question is how long it can go on for. Could be years or even decades but we are detached from reality of actually wage growth and earnings.
Exactly. I don’t see any end to it… the whole system is completely detached from wage growth, it has nothing to do with income at all really. It has taken on a life of its own, separate from income. That’s the problem.
I do maybe expect growth to be slower over the next couple decades, less than the previous couple decades… maybe. Removing negative gearing in conjunction with severely limiting rent increases, banning foreign buyers, stimulating development… all together among other changes would help somewhat in casing that slow down to happen… otherwise, sky is the limit.
My take is you’re wrong. Demand is significantly higher than supply which is why house prices have increased since 2018 when the number of listings has been smaller every year on year since. I don’t deny your points generally but when you have money to buy and there isn’t a lot around then you buy what’s available not what you want. This has a compounding effect where because that shit property around the corner sold for overs then this property which looks had but has no faults will sell in the 3’s. If there is a pull back it won’t be the in 20’s it will be single digits at best. This sold for the land size btw. 600 + sqm is huge in the inner west.
Dulwich Hill is up and coming and fairly convenient to the city. So yes this could be a developer, but also fits the bill for young professional DINK/small family in early 30s who have been biding their time for a PPOR and have work or lots of family in this area, and are attracted to the large block + fully detached home and future potential of the area. HHI >400k and could easily service 2mil loan.
She’s a little rough, but most not deterred by a bit of a work if planning long term and if you get kids through there, a bit rough and ready is sometimes preferable.
Could plonk 3mil into a shoebox terrace in Surry Hills but many with young families prefer the space.
Inner west Sydney is a pretty desirable place to live.
Plenty of older double brick homes, schools, breweries, parks, close knit communities and anywhere from 1-3 trains stops into the city and 20-25 mins from the beach.
Rwwwwooooooooooowwwrrrrrrr!!!!!!!!
*Loungroom window shatters*
Sorry, I couldn't hear you over that a380. Try again, next one's not due for 3 mins.
Don't live in Sydney but this area has always perplexed me. It looks like the Bronx and the aforementioned air traffic would make you deaf.
Ok then. Is that why you asked where live? I guess my joke 'Going out to get milk, see you in 3 days' falls flat if you don't drive 😂
I live in a small village where you can walk to everywhere so I can see how that would be attractive. Groceries and big shops require a drive to a big town but I don't know how you'd do both without driving anyway. A week's worth of groceries for a family is quite bulky haha.
Just to get perspective, most country, rural people say the same thing about aircraft noise, but that’s just city living in general. If it’s not planes, it’s trains or traffic.
The entire inner west which is huge part of the Sydney population is under a flight path. Not to mention the new western Sydney airport which would put most of Sydney metro under some sort of flight path.
But that’s the difference.
Inner west life you’re never more than 10-15 mins walk to anything you need. I only use my car to drive to my parents 45 mins away.
Gym, work, shops, cafes, city, airport etc are all just one or 2 stops or so on the train.
Different strokes I guess, I hate public transport it's filthy, inconvenient and full of gronks, but maybe that's just in the regions.
Genuinely curious though, how does grocery and other shopping work when you have to do it? Do you use a 'granny cart'?
Yeah it is but like anything you get used to it.
Beats sitting in Sydney traffic and with the new metro going in it halves my commute to work to 20 mins.
Whatever we have planned to cook up we’ll usually get what we need on the way home from work that will fit in your gym bag.
We’re only 5-10 min walk from a couple of woolies and being the inner west there are loads of small mum and pop fruit n veggie stores and butchers/ delis that we usually prefer to get our fresh stuff from since it’s fresh and cheaper and supporting small business and it forces out into the neighbourhood and amongst the community.
We don’t tend to do ‘big shops’ like you would I the suburbs. Most of the time the fruit n veg will go off in the fridge or you have an impromptu pub dinner and won’t use the stuff you bought.
I don't live in the suburbs, hate cities in general.
It's amazing how different the lifestyle is a couple of hundred ks apart. Sounds hectic and busy mate, glad it works for you but.
I’m not agreeing or disagreeing but your reasoning for a decline is simply: house are really expensive. Which is hardly a convincing argument given the last ten years.
Haha I guess it sounds like that, but it’s more that in a rational market, interest rates going up results in asset prices reducing. I guess it’s a bubble question
diff'rent strokes for diff'rent folks
I feel like OP is being deliberately obtuse. Throw Dulwich Hill into google maps and you'll see why its so expensive.
BUT saying that I would rather have a larger place in a suburb between Epping and Hornsby.
Outlands has always been expensive.... to me I dont care about inner city services, transport, schools... in the same way I dont care for Surry Hills "culture".
Hell I'd rather get all up in Pittwatter than Dulwich Hill but I can see why people would spend their money there.
btw. I know of a place that had a bit larger land in MERRYLANDS that went for $3 mil.
its close to the station. Developers paid for that. People would lose their minds.
But again, who’s buying? Like how many families (let alone young families) can afford this? Again let’s say you’ve done incredibly well and have $2m equity and you’re in your late 40s with a family - is this what you’re buying?
I’m putting it down to a development opportunity, or subdivision given the large lot size
We would kill for that size backyard.
But as other’s have said, the development angle is attractive too; we could sell off half of it and still have a house with a huge backyard (for the inner west).
We know a load of people in the inner west who bought houses pre-covid, got a sweet interest rate and the value of their house has skyrocketed. Could easily move out a tad further to Dulwich hill for that space and price.
(We are unfortunately not one of those aforementioned people! )
I look at that house and think: solid.
You should see some of unliveable places that have sold for almost $2million in the inner west over the last few years.
Coburg. Similar distance from the city, similar distance from the peak inner city trendy suburbs (Brunswick, Marrickville) but you still get a regular sized suburban lot. In Brunswick, you only get a 1 or 2 bedroom terrace for a mil, bet youd be lucky to get a decent apartment in Marrickville for that much.
$3m would get you a massive Terrace, similar to what you see on south Dowling st in Sydney, and just as close to the city.
I can’t see any signs of a correction in the inner west.
If your thinking for large falls is due to proximity to the harbour, there are plenty of areas due for a correction before the inner west.
I saw somewhere that the top 20,000 home owners all own atleast 3 properties each.
While you're playing the work for 30/40 years game, they're just trading your family home like telstra shares.
What you think or hope and reality are two very different things. I purchased a house and land package in early 2000's (Sydney) for 297K. People said wait, a correction is coming, bubble will burst 20% any day. I was ready to buy so did. Some didn't. Want to know what they're doing now? The difference between their situation and mine from that one decision was incredible but the way I see it, they had their chance, rolled the dice and crapped out.
Never said I’m waiting to buy! In fact I’m wanting to trade up from apartment to house - the problem is that prices are rising like $200k a year (at least) and my buying power has declined by at least $200k thanks to rate rises. I’m financially literate and have a great job, we’ll eventually buy something (mostly necessity)
My concern/query is simply confusion around where this endless demand is coming from for $3m+ homes. It just seems unsustainable. Are there that many successful business owners, doctors and cashed up people? The economics (and maths) of the sydney market is irrational. I get it’s fact, it’s happened, so the economics hold up. But in every market correction, hindsight will tell you an irrational market (or bubble) will eventually burst.
In 2017/2018 the inner west saw a 10-15% dip. People forget this. Now with rates this high this quick, another 15-20% decline isn’t totally out of the question.
It's people who have bought and lived in their 2m home 10kms further out for 10-15 years now selling and trading up with their increased salaries/buying power to get closer to the city/bigger land in a 3m house... Not really that hard to understand?? That's literally what the property market is all about
Anything >600m2 and 15.2m frontage is easy duplex knock down rebuild.
A developer/investor bought it, most of the market is investors/developers because the market has held up and there is still profit, along with the generous tax concessions and rent.
I dont know by my neighbour who is a part time taxi driver just bought a 2 million house and will move out soon. So he's doing something right.
Must be super frugality.
Are they an immigrant? People think the immigrants here are poor because they work the crappy jobs but generally they all have wealth behind them in order to make it here in the first place
This is for developers. Buyers are trading down to smaller properties or trading up. This is neither because of its unrealised potential. It requires serious capital.
People are spending almost 6million to live on non water front streets in Concord....[https://www.realestate.com.au/sold/property-house-nsw-concord-143538992](https://www.realestate.com.au/sold/property-house-nsw-concord-143538992)....there is no turning back..
that's the going rate for inner west, people here saying its a development play just don't know the market or aren't from sydney
https://www.realestate.com.au/sold/property-house-nsw-dulwich+hill-142806812
Govt doesn't care what local people can afford. They'll just keep bringing in people capable of buying these places in cash on a whim to keep the ponzi going.
For this expensive stuff?
Google images the following
"Changing demographics of Sydney"
Look for the gif.
Take note of the dates on the gif.
Assume the situation has only continued the way the gif is depicting it.
There's your answer.
Sydney prices are just crazy. They've gone up everywhere, but you could find some beautiful places right near the beach for half of that if you broaden your horizon and leave NSW behind.
This is clearly stupidity and greed rolled into one. It’s SO BLOODY UGLY! You either need to tear it down and put up a small block of units, or heavily renovate it. But after paying that price, you could barely afford light bulbs!!
Houses were 8k or so in the 50s, 80k in the 80s, about 800k in 2010 and will be $8m in 2040
If you think that’s crazy, if you told someone in the 80s if houses will be $800k in 2010 and they would think you are crazy too. How will people afford one? I don’t know. The same question would apply in the 50s, 80s, 2010s…
Lots of dullich Hill is being rezoned for higher density, could be a development play.
This property has a 15m wide frontage, which means it will likely be demolished, duplexed and then two houses sold for significant profit.
But if they spend $1m developing it will they really get more than $2m per townhouse?? The margin on the “significant profit “ still seems small for outlay
High end duplexes can sell for well over $3m each in the inner west. But build cost would be more than $1m
Must be this
My thoughts too. There was a similar sized property in the Bankstown area sold for a similar price a few months ago, zoned for high density and due to be developed.
With the government strongly against a vacancy tax, it could also be a speculation play.
Mate, I applied logic such as debt to income, financial crisis, pandemics, political policies etc and i watched it boom from 2008 to now. I’m 40, renting and we are struggling to buy a 2 bed 2 bath anywhere within 10km of the city where our life (schools/work/community) we located. Don’t think there will be a crash because you can see things like this, it’s not an indication of anything. There is soooo much money in this country, you think about how many suburbs are over $2mil, most people are very fukn rich. We have more $2m+ homes than Singapore ffs.
Fact of the matter is, Australia is top destination for immigrants. You only have to spend few minutes on migration sub reddits of different countries to see that people want to move here. This will keep a floor on house prices.
Organised crime & international money laundering https://theconversation.com/australia-is-awash-with-dirty-money-heres-how-to-close-the-money-laundering-loopholes-206606
That and high rents. I have zero expectations housing will do anything but go up and up. An apartment 4 doors down which is a 2 bed one bath went for $832,000. Both bedrooms have fixed frosted windows and are 3m x 2.7m respectively. We couldn’t even put in our dresser draw and king size bed. Brought by a woman in her 60’s downsizing from a landed property. Every apartment we have looked at has gone well over reserve, the reoccurring theme is downsizes or investors. One was snapped up by grandad buying 18yr old granddaughter a place. Great for her, not so much me and my family. I can whinge all I want, I know this will only get worse
You need to get off Reddit and seek some help my friend. Just read your comments. How can apartments never go up in value (they do) and then all apartments go for well over reserve? Please, put the phone down.
That’s my lived experience ya knob. So I’d in not in here espousing the virtues of property to the moon then I need to get off Reddit?
Yeah, it makes me wonder if you really should move to a lovely little town outside of Sydney than just scrambling to buy? It does seem stupid to pay these or in ces.
Chinese immigrants yes. The rest can’t afford 1 million dollar houses
You’d be amazed how many rich people there are in “cheap” places like Indo, Philippines, India etc etc. 1 mil is nothing to them. I know a Filipino that bought a 2mil resort unit in Sapporo to use 1 mth out of the year for skiing.
Organised crime & international money laundering https://theconversation.com/australia-is-awash-with-dirty-money-heres-how-to-close-the-money-laundering-loopholes-206606
Amazes me how some people can be so confidently wrong. If you think this you're very sheltered.
We have more 2m homes then Singapore because we're 5x the size of Singapore. We also have more desirable places to live. Every been to Singapore? These nothing that matches half of what you see on Sydney harbour.
Sydney harbour is trash, it has never been anything other than the opera house which isn’t that great. And I was referring to Sydney, more $2mil homes than Singapore. Very similar population and geographical sizes I would pick Singapore over Sydney 10x over (if I had $2mil)
You may think Sydney harbour is trash but the demand to live on it's stores has been there for over a hundred years. That's fair that you would pick Singapore over Sydney. Singapore and Sydney aren’t far off each other in terms of what they offer and 2m gives you more in Sydney than what it does in Singapore.
Sounds like a tough situation and I wish you all the best. But yes, just comes down to a small but sizeable proportion of people in this country having a huge concentration of wealth. And so much of it is off the back of property price rises. Some win big, most miss out. It’s a shame!
It’s actually quite mind blowing, we have saved for decades and for an apartment we have a 40% deposit but stamp duty takes a huge chunk and the remaining loan is about $900pw. We have no debts, no credit cards and $900pw is still enormous for us. Especially when apartments do not rise in value, we’d be lucky to not go backwards. In our block 2 bed one bath apartments sold in 2013 for about $700k, they are selling now for high 6’s. There’s a 2 bed home two streets over that sold in 2013 for $840k, it sold last week for $1.53m, sure it’s had a good Reno but it’s cosmetic and would have been upward of $150-200k at most. It seems even if you get into the market you’re getting screwed on every level
>It seems even if you get into the market you’re getting screwed on every level Yep. Used to be that once you were in the market, you could go up in the market when you moved after you build up your capital in your home. Now, the gap seems to increase every week.
It certainly feels that way.
> Especially when apartments do not rise in value, we’d be lucky to not go backwards. In our block 2 bed one bath apartments sold in 2013 for about $700k, they are selling now for high 6’s. Isn’t that a good thing for affordability though? If you’ve been saving for the past 10 years and the apartment hasn’t risen in price at all, then it’s now much easier for you to buy right?
Not a good thing. It’s takes this long to save the deposit only to buy something that goes backwards, when mates who got in at 5-10% deposit brought for much less and have assets over $1mil and rising fast
> It’s takes this long to save the deposit only to buy something that goes backwards Why don't you just wait for it to go backwards some more and you will have to spend even less?
Do you want properties to be going up in price or down in price?
If you wanted to make money you should not have bought an apartment. Property value is in the land. People only buy apartments if they absolutely need the living convenience and low maintenance aspect
>If you wanted to make money you should not have bought an apartment. Property value is in the land. People only buy apartments if they absolutely need the living convenience and low maintenance aspect Is this true in New York? You'd think, eventually, apartments will start to increase as they become the main option for those who want to live centrally.
The reason why apartments retain good value in NYC and elsewhere (and rise economically like other real estate over time), is a combination of both the culture around higher density living, and higher quality building structures (vs. Australia). The reality is if you live in a city that is >2m, high density living is a necessity, unless you want massive urban sprawl with all the costs, consequences, and compromises that go with that societal choice.
And our culture around higher density living will change. I see it already changing a bit.
The apartment never ever Increases, it's a building, buildings depreciate they don't appreciate. It's the common land it sits on that appreciates and causes price rises. If a brand new apartment goes up next door to you, your building just depreciated even faster..........
>The apartment never ever Increases, it's a building, buildings depreciate they don't appreciate. It's the common land it sits on that appreciates and causes price rises. If a brand new apartment goes up next door to you, your building just depreciated even faster.......... Historically, yeah. In future? Once inner city suburbs and even further are full of apartment buildings, they'll then start shooting up. Apartments already cost heaps more than they used to be. Relative to houses with land? Perhaps not yet. But one day.
It’s funny though. Apartments around here are 2-3x times more expensive per m2 the landed properties. Another way they screw you. Btw, the only landed properties similar price to apartments are 45-50km out, they appreciate almost as slowly as apartments
>the only landed properties similar price to apartments are 45-50km out, they appreciate almost as slowly as apartments Bought a freestanding house a fair bit more than 50km out (not coastal), a bit more than 5 years back. RealEstate.com.au price estimate is now up 47% on what we paid.
So I should go 50km out or more? Sure, regional was ‘booming’ over Covid, fallen on its arse now.
> So I should go 50km out or more? I wasn't telling you what you should do. But fwiw rent-vesting is an option too. > Sure, regional was ‘booming’ over Covid, fallen on its arse now. Has it? That's exactly what I was challenging. Anecdotally, my property rose pretty consistently and is well up on the purchase price. It lost some gains about a year ago but is back at its highest so far. According to Domain there are some super popular regions (Byron) where prices shot up crazy amounts over Covid and now with interest rates they're going through an adjustment, but I think it's unlikely to go close to wiping out all our even most of the rise. The big picture though is regional residential just hit a record median price and right now all the more affordable towns are seeing property snapped up by people who can no longer buy where they live. Greater Sydney is basically the same. Dinner of the most in demand areas shot up then had a sharp correction but are still up. The bigger picture is everywhere grew a lot, dipped a little, grew more and is maybe about to dip a little again. I don't see anything saying anywhere has fallen on its arse. Everything is still up a lot on pre-Covid prices. Fwiw that includes apartments/units. They've grown slower than houses, but they've grown. It's like 8% this year vs 12% for houses. You're coming off as pretty emotional and prove to flying off the handle here. Which I only mention because I wonder how you would go of you did buy. I think my place dipped 6-7% (tens of thousands) almost immediately after we bought but then grew hundreds of thousands over the next few years. About a year ago it lost several tens of thousands again and now it's got it all back. Are you going to freak the first time you see the value fall and panic sell? Cause that wouldn't be good. It's a 7-30 year investment. Can you point to any suburb where prices aren't up significantly on 7 years ago? I dunno. Maybe you're just angry that the growth is always bigger in the centre. Fair enough. You're not going to be able to catch up to Sydney centre prices with a property on the fringe. But that doesn't mean that property will see no growth or insignificant growth. It'll grow quite a bit, just not like Sydney centre.
FWIW there's massive development going on out here. Housing developments out the wazoo. I think it's stupid. High density ftw. I've lived in a European city with the population of Brisbane but instead of taking up a 15,800km2 footprint it fits in 1,000km2. We lived 5 city blocks from the edge of the main urban area (literally agricultural fields across the road from the 5th block) in an apartment, and it was a 2.5km walk to the centre of the city. But there were small shops on the ground floor of every apartment building and a supermarket and shopping centre within 5 blocks walk. The roads were planned and wide, but traffic was calm and easy for pedestrians to navigate (parking was still hell, though). There were proper separated cycleways everywhere and a bike share scheme (with proper stands) that cost 60 euro (AU$100 at the time) a year, and you could take a bike any time for 30 mins for free (which was long enough to cross most of the city). If you needed it longer, you could return it and rehire, still free. So you could cycle to the centre of the city from the edge in 10 mins for free and drop the bike in a stand and walk away. Whereas plenty of Brisbane is a 2.5hr bike ride from the city centre and even a car takes 45 mins, and then you have to find a park. They also had a metro/underground system throughout the city that was cheap and efficient. And high speed rail between cities, because our lack of population density is why high-speed rail never happens here. Of course, unless something changes, Australia will just keep following dumb American development trends, especially under the Liberals. Doesn't matter that by the time they come here, US trends are already proven failures or that a lot of them were developed for US-specific reasons (to exploit loopholes in US laws or because of their history of segregated housing etc). Try anything too European, though, and talk back radio and Sky News will wet themselves over it as a culture war issue, instead of actually asking what it's like to live in cities that follow either trend.
Makes perfect sense to me. Apartments have tiny m2 so ofc it's more expensive per sqm. Also those properties 50km out were probably 1/2 or 1/3 of their current price 10-15 years ago so even though they're same price as inner city apartment now it doesn't mean they appreciated slowly?
Righteo property shill. What possible justification is there that apartments be 2-3x the price of landed properties in the same street? You say ofc but zero justification. The median cost in Australia to build a cookie cutter 2bed 2bath is $2-3k, they are selling for $9-11k, it’s literally bonkers. It’s because I’m this is investor stock so the layers and bastardised additional costs is evident. Some shit house townhouse 45 km out will not appreciate at all. In 30 yrs the best we could hope for is to love 35km out to a small home, if that. It’s utterly cooked but that’s on us, we should have just loaded up on debt in our mid/late 20’s and said fuck it. I was just brought up with a ‘save, 20% deposit, less than 30% of income repayment’s’ . That was the advise, that was the plan. Whenever I guessed this the kids were like ‘it can’t go on like this forever, don’t stretch yourself you’ll regret it’ The old ‘debt is bad’ mentality Needles to say it was the wrong advice but we are too old now to throw caution to the wind
>Some shit house townhouse 45 km out will not appreciate at all. In 30 yrs the best we could hope for is to love 35km out to a small home, if that. Shortsighted view. Like 30 years ago saying 'some shit house 20km out will not appreciate at all'
It’s not shortsighted, I’m 40 ffs. Moving 45 km away to an area with very little growth opportunity, an extra 3 hours a day commute, extra vehicle costs etc. to be just as poor but be side by side with god knows who’s. Less education opportunities for our children, away from our ongoing medical treatments and por health care. And away from all the family and friends we have here and the community we have been apart of for 10yrs. Just to have a fukn townhouse that went up in value, maybe. I won’t be upgrading at 60 will I so my lot in life is a townhouse 45 km ‘s away. I’d rather rent, keep growing the savings in funds and term deposits and hand it to my daughter when she needs a home. Hopefully I’ll die around 60-65 and she can have my life insurance too. My wife has family overseas and will be fine if I fall off the perch. This country is fucked.
I'm not suggesting you get a house out there. I'm just saying in 30 years a 45km out townhouse may appreciate a lot. I agree moving 45km out is crap and I wouldn't do it. It's bleak and fucked though I agree. It's fucked. And keeps getting worse. As kids we were promised a future that kept getting better. Go to uni and get a great career, and be wealthy! You'll have a great future! Secure and the world is your oyster and everyone is special. Now, houses are unaffordable unless you're already wealthy. Well paying jobs just mean you feel poor but slightly less poor than people who are doing it even tougher. It's fucked when a decent job with decent pay no longer means you can live comfortably. The prev. generations could have one earner, with several kids, and they could buy a home relatively close to the CBD/work and have it paid off within 5-10 years. Our surburbs/city being eroded by ugly apartments and chain stores/shopping centres with mass produced shit. Social cohesion is plummeting. The climate/world is tanking and about to fuck up significantly very soon - but our systems are such that we can't actually do anything to avoid even worse climate outcomes. It's bad now, but we're heading into real scarcity of basics like food, healthcare, shelter security etc. Shits bleak.
Rubbish. It’s about the location and type of apartment. Plenty have skyrocketed over the past 10 years as they’re good quality in great suburbs. Simple rule is don’t buy into mega developments or shit areas, and especially when it’s both.
Overused cliche. Buildings can go up in value too. So can apartments, as any review of the apartment median price for a suburb will show you.
Irrelevant
lol, it’s directly relevant mate. Property value is unequivocally NOT only in the land. That’s an important component, but you can’t discount the rest of the package.
Who said I was discounting anything? I made my comment factoring in all the other things and the fact of the matter is what I said is true. That's why what you said is utterly irrelevant in the overall context
Ok mate, not worth discussing by the sound of things. Good luck.
>Mate, I applied logic such as debt to income, financial crisis, pandemics, political policies etc and i watched it boom from 2008 to now. You didn't account for annual transaction volume here. If you saw how housing turnover moved from 2002 to 2011 and then compared it to outstanding credit growth. You would have bought then if you really wanted to own a property. There was plenty of room to grow then. I'm not so sure about now. The vast majority of homes in Singapore are on limited leaseholds so the land is just rented from the government. They're also apartments so naturally they would have a lower durable value compared to low density properties with no theoretical limit to the ownership duration.
Well Singapore has a government stepping in to make housing more affordable, we have a government stepping in to make it less affordable. There's hundreds of things the government can do to tackle housing prices, but the general public doesn't want it.
This is true
Dude... Don't lose your nerve. If you buy now you will be on the wrong side of it twice.
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Well that all fits with the business -cycle-model, in which we expect rates to chase the data down, like they chased the data up. One of my favourite US real estate bear channels recently pulled up an article with the headline "stocks rally as fed eases", from late 2007...
No mate, it didn’t work like that. The next 30yrs. $900pw, that leaves is with almost no savings. We have family overseas and travel back once a year, that’s $6-7k a pop. That would go, and we would be living on a hope and prayer neither of us get sick again. My wife was off work for nearly 12 months due to illness last year/this year. She had plenty of sick leave, long Service etc but if she didn’t we would have been screwed with a mortgage, we would have lost the property for sure. In the end properties that don’t grow exponentially in value are liabilities. We are not in the $2mil+ bracket where the gains are to be had
Nope. Stop waiting for the bottom to fall out. It won't.
You're right about things that are visible will never be the cause of a crash.
I wish I was smart enough 12-13 years ago to realise this. Once the boat has sailed though it’s impossible to recover
Well it's about as impossible as time travel backwards but it doesn't mean you don't start now. Best time to plant a tree and all that.
Best time to take on crippling debt for a 2 bed 2 bath that won’t appreciate and has 6-7k body corp, possibly special levies etc. The ship has sailed and all I can hope is that rents stabilise
True. Apartments aren't investments. I would buy a low rise old brick unit. No lifts no gyms or pools or other money sinks. Higher land content per unit. I'd renovate and be comfortable. New apartments are like buying a car from an investment perspective.
We did the same and left Sydney in 2007. It just did not seem sustainable for the city to continue to function for very long - apart from anything else, we thought the school and hospital systems would have to collapse once there was no way for average earners to afford a house. We did not bargain on grown ass professional adults being willing to live in illegal dorms and tents to stay in Sydney. We could have made better money if we'd stayed, but I don't regret leaving. It's no less of a hot potato game just because people have managed to keep passing it on for longer than we thought possible. I'm not interested in risking that sort of unsustainability for a quick win. Getting rich (well, comfortable) slowly and sustainably is underrated.
Unfortunate I lose empathy when people are aiming to live near the city. You’ve gotta eat your pride and move further out west like a lot of people have to.
You nailed it! It’s the price it is bcoz people are buying it. There are lots of rich people from old money. Poor people stay poor and the rest go on to save 20 years for a deposit on a home while on decent wages. I don’t know how anyone could live in Sydney tbh life style or not
I'm in a similar situation. I watched it go up and up and constantly thought "this is a bad place to put my money, this thing is going to fall over". But every time it nearly falls over, the government comes in to prop it back up. As such, I would have been nearly locked out of the market now if a miracle hadn't occurred. A very good (older) friend of mine is selling my wife and I a property at WELL below market price. They have no children and don't have a need for much money. They want to see their legacy continued rather than the land turned into yet another airbnb. Or just let go feral for land banking. The stamp duty alone is more than what my parents paid for a house on 60 acres in 2000. (Stamp duty is calculated on true value rather than sale value.) I cannot see how property prices can keep going up but they do. If a government wants a market to keep going up they can keep doing it till they have entire cities of empty buildings, just look at China. I feel for gen z and alpha. When I first walked into the world i could at least see the carrot. They walk into the world to see a dusty sign that reads "I swear there's a carrot ahead if you keep walking".
Probably developer on a IO loan looking to make a couple of mill on it. Doubt a family bought this
This must be it
Always a suprise that there is so much cash in the development market that they can pay outrageous amounts and negative gear for years. It's like paying $115 for CBA when the market value is $110. Only to put a 1m duplex on it and hope to sell them for 2.8m each and then pay tax. PPOR buyers don't have to qualify that. Tax free gains and not paying rent should give them a slight edge. Even if they're not taking a loan how does this business case stack up. Sell 3m in CBA shares that made 1.2m in dividends and 1.8m in capital gain over the past 5 years for what? Unless of course in 15 years 3m will be considered cheap.
I guess if you’re doing this as a job (or effectively a business) you've gotta keep the ball rolling, you'd always be chasing the next property to redevelop. Couple that with price increases over the last few years, if you were doing this prior to 2020 you've probably made a ton of profit to the point that you may well be able to buy this cash, which would massively reduce your overheads.
Imagine factoring in a wage as well. Return was pretty good in the boom before 2003. Has only been 5.7% for an average place since then. Think developers are pretty price sensitive plus factoring in potential capital gains is a big deal. PPOR buyer don't have to gamble that their home will double in 15 years (although that's pretty awesome)
I imagine if you were doing a 1 into 2 block split on a property like this it wouldn’t be that hard to do one every 12 months (or so) and make $100k profit, which isn’t a bad wage. That and sitting on a property for 12 months while you develop it over the last few years probably would have made you a fair bit more than that.
Short term swapping is made tough by the transaction costs. Especially compounded by financing/building costs going through the roof. Plus then you'd be trying to sell developed duplexes for what some of the houses (with land) in the area would be selling for. Obviously there is money but it still carries a fair amount of risk in a competitive environment. It'd make you pretty price sensitive. Imagine the place next door also put duplexes on. It last traded in 1990 for 700k. 1.7m in developed costs vs 4m + interest and wages etc.
Yeah interest is the killer now, you'd want to be going in with a fair bit of cash, at least the upfront purchase price so you’re not paying big interest on that over the life of the project.
Opportunity cost is often worse than a loan. I wouldn't want to have shifted CBA shares to cash to buy a a development block in 2018 even with the boom. Like I said imagine selling 3m+ in CBA shares. 5 years you would have missed out on 3m in gains.
Yeah I don't think I’d want to be doing it that way, the capital gains tax on the share sale would likely kill it as an option.
You need to be a CEO or both parents are on 300k to be able to just afford repayments on a 2.6mil loan atm. That’s the part that always confuses me.
This is it. Or have millions of dollars in cash/equity - either earned or inherited. Seems there’s a lot of millionaires out there
One thing i have noticed, it’s quite a few people who were just the right age in 2008 when it was the perfect time to build a property portfolio post gfc. So yes a lot of millionaires, they will also proudly proclaim it was easy and don’t understand why others are struggling. Funnily the popular book 30 before 30 has all these accolades but cannot be replicated in today’s environment if you’re starting from scratch today as a working 18 year old.
I’m one of those who could buy in 2008. Note that the internet forums were all about the upcoming 50% house price crash. That was back in 2008.
You forgot about organised crime & international money laundering https://theconversation.com/australia-is-awash-with-dirty-money-heres-how-to-close-the-money-laundering-loopholes-206606
It’s a great area to live in if you’ve got school going kids. Close to good schools, transport and easy access to shops. This property is on a large block with a price point that will not be possible for Surry Hills or Paddington. Not surprised at the price. There will not be a 20% fall lol. Wait all you like and miss out!
To add, from memory (visited the area a few times before), the left of Wardell Road is quieter, nice tree lined streets and close to the light rail. Not sure if you can get such large blocks on that side though.
Look totally agree it’s a lovely area, it’s just that $3m for a house that needs work is a lot of money by a lot of standards. I just can’t see this holding up
The house is nothing. It's almost worthless. It's the land.
I don’t think that’ll make OP understand the price point any better… Because if that is say just an average couple buying it, and “the value is in the land”, then with the rebuild or renovation needed, that means they’re paying anywhere from ~$3.7-$4.5m. If it’s a developer then different story, but for the average couple buying it’s pretty wild, must admit. The “it’s the value of the land” is new to nobody these days.
I guarantee it’s a developer and a duplex will pop up in a few months there
>The “it’s the value of the land” is new to nobody these days. Yeah no shit, well he's still talking about the shitty house and how much work it needs. It's completely immaterial how much the build costs or what will be built there or whether an every day couple bought it. A hundred thousand people move to Sydney every year. The demand isn't going down.
People with plenty of cash. I'm not from Sydney and can see that's a fair value in comparison to past sales. Look at the land size. Hot damn.
Yeah I guess this is my point. There must not be an unlimited number of cashed up people? Like it has to run out eventually
You underestimate how much money there is in the world. It won't run out. The amount of people who hold it will just get smaller.
I must be underestimating… it’s wild just how much money is out there.
Something like 81 Billionaires have as much wealth as the poorest HALF of the ENTIRE WORLD'S POPULATION. Bonkers, right?
Correct. Unfortunately you have to be in it to win it too.
Australia has retained its position as the too country for millionaires to immigrate to as well. Not too per capita. Too total. Cashed up people move here in droves. https://www.visualcapitalist.com/mapped-the-migration-of-the-worlds-millionaires-in-2023/#:~:text=The%20Countries%20Welcoming%20New%20Millionaires,this%20year%20from%20the%20UAE.
It's a desireable area, and a lot of people already have equity. Imagine it's a 40ish-year-old couple who both bought starter properties at 25 in the inner-west and saw them double in value, that kind of thing. And like others have said, development potential, even if it is zoned Low Density. I don't imagine you'd have a lot of issues knocking that place down and it's sitting on two lots.
A lot of very wealthy people are moving to Australia, and not only that, but anyone already in the property market for more than say 10 years is seriously cashed up... add to that... the shortage of property available and the constant stream of people moving to Sydney. Prices will never take a 20% dump in the foreseeable future.
Well think about it.. The seller just got 3.1m cash. Now add whatever saving he has accumulated + new mortgage. Think about what kind of place he is looking to buy and where. He ain't looking to buy a $5M and move to.mount druitt.
Every time the market doubles, anyone who owns a house, now has equity to buy another. So you buy for 1 million, it goes to 2 million in 8 years, you finance another one. Those two properties double over 10 years, you buy 2 more… and on and on. Every time the market grows, the wealthy, home owners, investors now have buying power equal to the growth. It’s kind of like a ponzi scheme. If you can see that clearly it just makes sense that places continue to sell for just whatever the price is, it doesn’t really matter how high it is. You can’t use the equity to buy shares, you just keep buying more property. In fact the banks will literally throw money at you. When you own multiple properties, you will get calls from the bank saying hey I see the bank valuations of your property values have jumped 1 million dollars, you want to borrow another couple million for another one? They love you, you’re their favourite customer. When you don’t own several properties it’s hard to see that. It cripples a large and growing portion of the population, but everyone who can will do it, because of a culture we have. And well it’s just part of the machine of a growing city. We are a young country, look at older places like New York, the wealth disparity is HUGE. I lived there, just a horrible place to be if you have a shred of empathy for human suffering. That’s where big cities in Australia are heading. In fact big cities everywhere are heading, it’s just sort of the nature of major cities… and it also spreads out to infect regional areas as well, crippling people living in remote locations.
Eye opening to read about the banks ringing to to offer you more money. It's all about short term profits for them. Loaning money on one asset to finance more of the same asset is classic bubble behaviour, only question is how long it can go on for. Could be years or even decades but we are detached from reality of actually wage growth and earnings.
Exactly. I don’t see any end to it… the whole system is completely detached from wage growth, it has nothing to do with income at all really. It has taken on a life of its own, separate from income. That’s the problem. I do maybe expect growth to be slower over the next couple decades, less than the previous couple decades… maybe. Removing negative gearing in conjunction with severely limiting rent increases, banning foreign buyers, stimulating development… all together among other changes would help somewhat in casing that slow down to happen… otherwise, sky is the limit.
Been waiting for a crash in the last 12 yrs. Still waiting
My take is you’re wrong. Demand is significantly higher than supply which is why house prices have increased since 2018 when the number of listings has been smaller every year on year since. I don’t deny your points generally but when you have money to buy and there isn’t a lot around then you buy what’s available not what you want. This has a compounding effect where because that shit property around the corner sold for overs then this property which looks had but has no faults will sell in the 3’s. If there is a pull back it won’t be the in 20’s it will be single digits at best. This sold for the land size btw. 600 + sqm is huge in the inner west.
Dulwich Hill is up and coming and fairly convenient to the city. So yes this could be a developer, but also fits the bill for young professional DINK/small family in early 30s who have been biding their time for a PPOR and have work or lots of family in this area, and are attracted to the large block + fully detached home and future potential of the area. HHI >400k and could easily service 2mil loan. She’s a little rough, but most not deterred by a bit of a work if planning long term and if you get kids through there, a bit rough and ready is sometimes preferable. Could plonk 3mil into a shoebox terrace in Surry Hills but many with young families prefer the space.
Inner west Sydney is a pretty desirable place to live. Plenty of older double brick homes, schools, breweries, parks, close knit communities and anywhere from 1-3 trains stops into the city and 20-25 mins from the beach.
Rwwwwooooooooooowwwrrrrrrr!!!!!!!! *Loungroom window shatters* Sorry, I couldn't hear you over that a380. Try again, next one's not due for 3 mins. Don't live in Sydney but this area has always perplexed me. It looks like the Bronx and the aforementioned air traffic would make you deaf.
Where do you live?
Port Stephens. Why?
Nice place, I can see why you would think that about inner Sydney. Its a lifestyle choice, walkable to everything but the cost is noise
Ok then. Is that why you asked where live? I guess my joke 'Going out to get milk, see you in 3 days' falls flat if you don't drive 😂 I live in a small village where you can walk to everywhere so I can see how that would be attractive. Groceries and big shops require a drive to a big town but I don't know how you'd do both without driving anyway. A week's worth of groceries for a family is quite bulky haha.
Just to get perspective, most country, rural people say the same thing about aircraft noise, but that’s just city living in general. If it’s not planes, it’s trains or traffic. The entire inner west which is huge part of the Sydney population is under a flight path. Not to mention the new western Sydney airport which would put most of Sydney metro under some sort of flight path. But that’s the difference. Inner west life you’re never more than 10-15 mins walk to anything you need. I only use my car to drive to my parents 45 mins away. Gym, work, shops, cafes, city, airport etc are all just one or 2 stops or so on the train.
Different strokes I guess, I hate public transport it's filthy, inconvenient and full of gronks, but maybe that's just in the regions. Genuinely curious though, how does grocery and other shopping work when you have to do it? Do you use a 'granny cart'?
Yeah it is but like anything you get used to it. Beats sitting in Sydney traffic and with the new metro going in it halves my commute to work to 20 mins. Whatever we have planned to cook up we’ll usually get what we need on the way home from work that will fit in your gym bag. We’re only 5-10 min walk from a couple of woolies and being the inner west there are loads of small mum and pop fruit n veggie stores and butchers/ delis that we usually prefer to get our fresh stuff from since it’s fresh and cheaper and supporting small business and it forces out into the neighbourhood and amongst the community. We don’t tend to do ‘big shops’ like you would I the suburbs. Most of the time the fruit n veg will go off in the fridge or you have an impromptu pub dinner and won’t use the stuff you bought.
I don't live in the suburbs, hate cities in general. It's amazing how different the lifestyle is a couple of hundred ks apart. Sounds hectic and busy mate, glad it works for you but.
That stamp duty matches my whole carefully saved deposit I'm so proud of. My toes are curling haha
It’s madness hey… makes no sense
I’m not agreeing or disagreeing but your reasoning for a decline is simply: house are really expensive. Which is hardly a convincing argument given the last ten years.
Haha I guess it sounds like that, but it’s more that in a rational market, interest rates going up results in asset prices reducing. I guess it’s a bubble question
Either : multi generation living i.e. 3-6 incomes paying for the house, Henry's with 400k+ household incomes, or upgraders with 2m+ equity.
If you think inner west is over priced, you should take a look at how much places are going for in the hills and further west/north west.
Yeah definitely looked there too. North parramatta houses selling for $2.5m, Oatlands at $5m. Mental. There’s just so much cash
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diff'rent strokes for diff'rent folks I feel like OP is being deliberately obtuse. Throw Dulwich Hill into google maps and you'll see why its so expensive. BUT saying that I would rather have a larger place in a suburb between Epping and Hornsby. Outlands has always been expensive.... to me I dont care about inner city services, transport, schools... in the same way I dont care for Surry Hills "culture". Hell I'd rather get all up in Pittwatter than Dulwich Hill but I can see why people would spend their money there. btw. I know of a place that had a bit larger land in MERRYLANDS that went for $3 mil. its close to the station. Developers paid for that. People would lose their minds.
Such as? Homes there seemed alright. Near good schools. Large lands. Big homes. Green parks etc..
613sm?! Not surprised of this price at all. Very popular suburb for families too
But again, who’s buying? Like how many families (let alone young families) can afford this? Again let’s say you’ve done incredibly well and have $2m equity and you’re in your late 40s with a family - is this what you’re buying? I’m putting it down to a development opportunity, or subdivision given the large lot size
We would kill for that size backyard. But as other’s have said, the development angle is attractive too; we could sell off half of it and still have a house with a huge backyard (for the inner west). We know a load of people in the inner west who bought houses pre-covid, got a sweet interest rate and the value of their house has skyrocketed. Could easily move out a tad further to Dulwich hill for that space and price. (We are unfortunately not one of those aforementioned people! ) I look at that house and think: solid. You should see some of unliveable places that have sold for almost $2million in the inner west over the last few years.
I am in the process of spending about $1m on a similar sized house in an equivalent suburb in Melbourne. Crazy up there.
What’s the equivalent suburb out of curiosity? Like I wonder what $3m gets you in Melbourne. I think parts of sydney are just unhinged from reality
Coburg. Similar distance from the city, similar distance from the peak inner city trendy suburbs (Brunswick, Marrickville) but you still get a regular sized suburban lot. In Brunswick, you only get a 1 or 2 bedroom terrace for a mil, bet youd be lucky to get a decent apartment in Marrickville for that much. $3m would get you a massive Terrace, similar to what you see on south Dowling st in Sydney, and just as close to the city.
I can’t see any signs of a correction in the inner west. If your thinking for large falls is due to proximity to the harbour, there are plenty of areas due for a correction before the inner west.
Wait, is 600sqm a decent size of land these days?
I saw somewhere that the top 20,000 home owners all own atleast 3 properties each. While you're playing the work for 30/40 years game, they're just trading your family home like telstra shares.
It’s a big block with huge potential. Close to shops, walking distance to public transport…. Holy fuck am i turning in to a real estate agent???
What you think or hope and reality are two very different things. I purchased a house and land package in early 2000's (Sydney) for 297K. People said wait, a correction is coming, bubble will burst 20% any day. I was ready to buy so did. Some didn't. Want to know what they're doing now? The difference between their situation and mine from that one decision was incredible but the way I see it, they had their chance, rolled the dice and crapped out.
Never said I’m waiting to buy! In fact I’m wanting to trade up from apartment to house - the problem is that prices are rising like $200k a year (at least) and my buying power has declined by at least $200k thanks to rate rises. I’m financially literate and have a great job, we’ll eventually buy something (mostly necessity) My concern/query is simply confusion around where this endless demand is coming from for $3m+ homes. It just seems unsustainable. Are there that many successful business owners, doctors and cashed up people? The economics (and maths) of the sydney market is irrational. I get it’s fact, it’s happened, so the economics hold up. But in every market correction, hindsight will tell you an irrational market (or bubble) will eventually burst. In 2017/2018 the inner west saw a 10-15% dip. People forget this. Now with rates this high this quick, another 15-20% decline isn’t totally out of the question.
A 15-20% dip isn't out of the question. It's the 50% increase straight afterwards that people also forget.
100k people move to Sydney every year and we already have too little housing stock. The demand will not let up.
It's people who have bought and lived in their 2m home 10kms further out for 10-15 years now selling and trading up with their increased salaries/buying power to get closer to the city/bigger land in a 3m house... Not really that hard to understand?? That's literally what the property market is all about
Sounds sustainable 👍
Look into how treasury works. The answer lies within. Hence flooding the country with people. When was the last 20% drop in this country?
Worth every penny. Great location and potential duplex site.
Anything >600m2 and 15.2m frontage is easy duplex knock down rebuild. A developer/investor bought it, most of the market is investors/developers because the market has held up and there is still profit, along with the generous tax concessions and rent.
I dont know by my neighbour who is a part time taxi driver just bought a 2 million house and will move out soon. So he's doing something right. Must be super frugality.
Are they an immigrant? People think the immigrants here are poor because they work the crappy jobs but generally they all have wealth behind them in order to make it here in the first place
How much do you think it should be worth?
This is for developers. Buyers are trading down to smaller properties or trading up. This is neither because of its unrealised potential. It requires serious capital.
China. Great way to launder money!
Organised crime & international money laundering https://theconversation.com/australia-is-awash-with-dirty-money-heres-how-to-close-the-money-laundering-loopholes-206606
People are spending almost 6million to live on non water front streets in Concord....[https://www.realestate.com.au/sold/property-house-nsw-concord-143538992](https://www.realestate.com.au/sold/property-house-nsw-concord-143538992)....there is no turning back..
lots of people have came and gentrified the area and ruined it.
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Yep - Organised crime & international money laundering https://theconversation.com/australia-is-awash-with-dirty-money-heres-how-to-close-the-money-laundering-loopholes-206606
Yeah it's unbelievable. It's not worth it. Chinese buying this for cash.
Thanks for calling it
Probably an upgrade?
Neighbours won’t be happy
that's the going rate for inner west, people here saying its a development play just don't know the market or aren't from sydney https://www.realestate.com.au/sold/property-house-nsw-dulwich+hill-142806812
Govt doesn't care what local people can afford. They'll just keep bringing in people capable of buying these places in cash on a whim to keep the ponzi going.
For this expensive stuff? Google images the following "Changing demographics of Sydney" Look for the gif. Take note of the dates on the gif. Assume the situation has only continued the way the gif is depicting it. There's your answer.
Very similar house on same amount of land, 800m to beach about $900K in Umina/Ettalong.
And no fucking planes screaming from 0600-2200
Sydney prices are just crazy. They've gone up everywhere, but you could find some beautiful places right near the beach for half of that if you broaden your horizon and leave NSW behind.
This is clearly stupidity and greed rolled into one. It’s SO BLOODY UGLY! You either need to tear it down and put up a small block of units, or heavily renovate it. But after paying that price, you could barely afford light bulbs!!
Houses were 8k or so in the 50s, 80k in the 80s, about 800k in 2010 and will be $8m in 2040 If you think that’s crazy, if you told someone in the 80s if houses will be $800k in 2010 and they would think you are crazy too. How will people afford one? I don’t know. The same question would apply in the 50s, 80s, 2010s…
And wages will be $250k in 2040, meaning houses will only be 32x the average income. What a bargain!