16 March 2010

Canberra Housing Prices, as good as it gets?

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Housing prices in Canberra continue to soar, as evident today by the sale of a three bedroom house in Canberra’s inner North for almost $700,000. This begs the question – will Canberra’s property prices become affordable to the hundreds of first home buyers in the region? If not, how can this be achieved?

In the short term, its anyone’s guess as to whether prices will fall or continue to rise. What is certain is that $700,000 can buy you a two bedroom ocean front property on the NSW north coast; a beautiful three bedroom unit on Melbourne’s North Bank Yarra, or a high level, two bedroom unit overlooking the Brisbane river and a stone’s throw to the CBD.

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Clown Killer10:26 am 19 May 10

And you lot thought Canberra was expensive!

Whilst $1.3m might seem like a lot consider the return. I wouldn’t be surprised if the 10% quoted was after costs like property management, insurance and maintenence. You’d get half a dozen mine workers in at $3000 a week ($500 per person per week is pretty standard for Port Hedland) and laugh all the way to the bank.

merlin bodega said :

People talk about home ownership when they mean secure housing. What is it with this country that it’s impossible to get a lease longer than 12 months and landlords can throw you out any time they feel like it?

Kill all the property managers! (No not literally!! Just put them in a cupboard or give them great jobs as bus drivers or something.)

My modest townhouse is rented privately, suits me perfectly, hosts my business, and I intend to stay there for 5-10 years. My landlord wants me to stay in his house for a long, long time and treat it with care as if it was my own house.

By renting privately to the “right person” rather than through a property manager to some cashed up chump, he’s secure that his house is being cared for, I’m secure that I don’t have to lose my house (and business) soon, I take care of the simple repairs, he takes care of the plumbing and other stuff I can’t do, and he doesn’t raise the rent whenever property managers decide they deserve more money.

Most landlords and most renters would be happy with this kind of arrangement. If anything is killing housing in Canberra it’s property managers!

Clown Killer9:14 am 19 May 10

Looking at the price of houses in Canberra, I just about fell over. What are the prices like if one paid cash for the property they want

No different. If I’m selling a house for $650,000 I’m still going to get my $650k whether you pay for it with a bank cheque or a wheel barrow full of cash – although if it was payment in cash I’d slug you an additional 10% to count it and for the inconvenience.

To say nothing of the watch lists you’d end up on once the red flags went up.

Looking at the price of houses in Canberra, I just about fell over. What are the prices like if one paid cash for the property they want .

DeadlySchnauzer said :

And something to make you cry… the $1.33m for 13 Yapunyah was after it last sold in 2005 for $430k.

$1.33m to live in a dive like O’Connor? LOL. Fools and their money are soon parted.

If you want a way to stop yourself ever accumulating any real wealth, splashing out on a bigger and better primary residence every few years is a great way to go about it.

DeadlySchnauzer3:19 pm 29 Mar 10

And this is for pretty much original houses with only kitchen/bathroom renovations! Admittedly both those million plus O’Connor sales were houses with nice panoramic views… that’s always been something that makes Canberra buyers froth at the mouth because its relatively rare to find in the inner city suburbs.

And something to make you cry… the $1.33m for 13 Yapunyah was after it last sold in 2005 for $430k.

Holden Caulfield1:54 pm 27 Mar 10

House prices look set to rise for a while yet if today’s auction result for 13 Yapunyah St, O’Connor is anything to go by. It just sold for $1.33m.

Two weeks ago the nearby 1 Nardoo Crs sold for $1.265m.

I know the Nardoo Crs result was comfortably over the vendor’s expectations and I would expect the same would apply for the Yapunyah sellers as well.

The GFC came and went pretty quick, didn’t it!

Investors don’t typically bother defending themselves either. They have other things to do.

wycx said :

Merlin,
How about rewriting the laws so that negative gearing only applies to newly constructed dwellings, and then only applying for the first 5 years after construction. Property investors then have five years to get the investment positively geared. If not, then too bad, you paid too much. Prices and rents might make more sense relative to each other under that regime.

So tell me then what heppens when investors stop buying properties and offering them for rent? Rental properties become even more scare and rental rates do what? They go up even more (simple supply and demand).
There should be more incentives for investors, not less. It seems everyone loves blaming investors for the current prices.

Holden Caulfield12:13 pm 25 Mar 10

@74 – I think that’s a good point, rental prices are high and it probably wouldn’t hurt to try and address that.

However, if you make it less attractive for people to invest in property, where are the people who don’t want or are unable to purchase a house going to live? Surely if there are less investors, and therefore less rental stock, then that will only drive rental pricing up.

Merlin,
How about rewriting the laws so that negative gearing only applies to newly constructed dwellings, and then only applying for the first 5 years after construction. Property investors then have five years to get the investment positively geared. If not, then too bad, you paid too much. Prices and rents might make more sense relative to each other under that regime.

merlin bodega10:34 am 20 Mar 10

People talk about home ownership when they mean secure housing. What is it with this country that it’s impossible to get a lease longer than 12 months and landlords can throw you out any time they feel like it? There is almost no publicly owned housing and what there is has got it in the neck with this ludicrous National Housing Rental Affordability Scheme, destroying their security of tenure and a gentrification by stealth of the last areas where the poor can live.

Canberra housing is so high because there is too little competition in building, the quality of housing is very high and the mugs buying the houses are richer than anyone else in the country. The real scandal (yes the real one) is the rental rip off. People its not too hard. All the Government needs to do is to impose some conditions on all those rental losses they allow to be used as tax deductions each year. What about delaying until sale of the rental property any losses arising (including those beautiful building investment allowances) until the property is sold if the rental term is less than 5 years? That’s just a starter.

Is it too tragic to impose a condition or two on something that is a bigger item in the Federal Budget than Defence spending?

Watch the money roll in or watch people get secure housing instead of being pinned down to places where there are no jobs. Home ownership pins people down. I bet the home owners from the closed abattoirs in Young are wishing they could move at the moment. The renters are already heading out of town to where the work is.

Hrm… since 1985, how many families have become dual income?

@Tetranitrate: during the period of 1985 to 1995, the interest rates were certainly above 10%, and that graph doesn’t show the wide range of interest rates that were being charged at the time. I remember one bank advertising 18% variable rates during that time.

There is more money to spend due to dual income families, loans are cheaper due to lower interest rates, there are more financial institutions trying to get your business, and I’m sure that in the interval some new rules about negative gearing made property investment a much more attractive option.

Releasing more land isn’t going to solve the problem, building more houses isn’t going to solve the problem, though perhaps reducing the working population (or average incomes) by about 50% will help bring house prices down.

@DavoDavo – I have a 2nd hand Wii that my sister gave me for free, I do not own a plasma – I play my Wii on my parents television, I do not drink beer, or other alcohol for that matter unless it is a speial occasion, I do not go out partying, clubbing, dinner, movies unless it is a special occasion.

I have many wants, but hardly any of them are fulfilled becaus my main want (& need) – a house – is my priority, and I am willing to put my social life on hold to save up for a deposit.

@Vg – Yes a whole 18 months of all of the above, plus no shopping sprees, no new clothes unless needed, no music festivals or concerts, no new car, no holidays, the list goes on.

But I am not complaining about that, because as I said above, I am willing to sacrifice that for a house deposit.
It is just hard to get into the market these days.

And I do not expect any help from the government, although $14,000 – $21,000 would have been nice.

Clown Killer9:48 am 19 Mar 10

The first home buyers grant was simply a shrewed politiccal response by the Howard government – Gen Y’ers were leaving school and moving into the big world – Howard recognised that a policy that continued the spoon feeding they demanded was going to be a vote winner.

Tetranitrate11:56 pm 18 Mar 10

15% is cherry-picking and nothing more.
http://www.loansense.com.au/historical-rates.html

Rates were most certainly not 15% for most of the 70s and 80s. Utter bull.

Secondly, throughout the 70s and 80s central banks struggled to bring inflation that originated with the oil crisis(arab oil embargo following the yom kippur war) under control – the tool they used of course was higher interest rates. Acting as though the rates that existed at that time are somehow an example of ‘normal’ long term rates is patently absurd.

As usual baby boomers twist the truth past breaking point to justify what they’ve done and continue to do to younger generations.

Tetranitrate said :

Surely you aren’t so silly to think that the first home buyers grant actually makes housing more affordable…

All that it’s done is bump up the average price by several times the size of the grant –
give people $7000 dollars, they take it to the bank to put on top of their deposit and borrow another 60k or more.
Even outside of that, it should be blatantly obvious that subsidizing the demand for something simply increases the price – it should be called the first home *sellers* grant.

Maybe its the ignorance in me, having never bought a house before, but I was under the impression the first home buyers grant was brought in around the same time as GST or stamp duty or somesuch tax, as when you sell a house you recover that fee/tax, but if youre buying without selling, you get a one-off help with the tax?

Why would you want to bump up the price by ‘several times the size of the grant’, just because a small minority of people who look at your house, might be eligible for government assistance? That instantly puts off a majority of potential buyers who dont get the grant and will buy the house next door who didnt jack the price up so much.

arescarti42 said :

VYBerlinaV8_the_one_they_all_copy said :

DeadlySchnauzer said :

One thing people need to remember when making
Very plausible point. Consider also that incomes have been growing faster than inflation, so people potentially can afford to pay more.

Very plausible points, the only problem with them is that they are all wrong–as I showed using real numbers and real data on the previous page (instead of basing my conclusions solely on smugness).

repayments, even including inflation, are around 33% higher than they were 15 years ago. There is a much greater chance of rates going up than down at this stage and, going by predicted rate rises, one can expect repayments to be at least 50% higher than 15 years ago. Houses are bigger… but houses depreciate. Land is what grows in value and land in new releases… is smaller! You wouldn’t know it by the price though because the price/m2 is considerably higher than in surrounding older suburbs. why not just build a smaller house? good question! why doesn’t the gov’t give individual owner occupiers first cut at the land release pie when selling new land instead of funnelling the lion’s share to developers who hoard it and sell it in drips and drabs but only on the condition…. you guessed it! that you build a honking big house with “stone counters and splashbacks” etc., etc. because in doing so they maximise their profits.

old boys networks are screwing over younger generations and driving them into enormous debt, but that’s ok I’m sure people buying playstations and plasma tvs is by far the bigger cause (when did you last try to buy a CRT TV from a store? good luck finding one)..

as far as wages growing faster than inflation… have you data for that? how about wage growth vs. house prices? that would appear to be the more relevant comparison, wouldn’t it? I doubt very much that you will find wages have tripled over the past 10 years, but housing prices have come quite close to it…

VYBerlinaV8_the_one_they_all_copy said :

DeadlySchnauzer said :

One thing people need to remember when making these “oh back in the 90s i could buy 23 houses for the cost of a postage stamp” comparisons. This was before full de-regulation of interest rates… in the 70s, 80s and 90s the average interest rate was 14-15%. From 2000 onwards we have seen the first sustained period of low interest rates in decades (order of 6-7%).

To put it in perspective:
– a 150k loan 15 years ago at 15% has loan repayments of $881
– a 450k loan now at 6% has loan repayments of $1,332

Now lets factor in inflation (~3%pa for 15 years). Those repayments of $881 inflation adjusted come out at $1372 in todays dollars.

Hey what do you know, it costs me the same to pay back a house now as it did 15 years ago. Get over it whingers.

This is a good point. Consider also that the average size of a new dwelling is 50% bigger than 20 years ago.

Very plausible point. Consider also that incomes have been growing faster than inflation, so people potentially can afford to pay more.

Tetranitrate7:51 pm 18 Mar 10

DavoDavo said :

I never got any ‘first home buyers’ help for any of those houses, I just worked damned hard and got stuck into it. I paid the Kambah house off some years back and it was a great feeling, I’m still in that house today.

Surely you aren’t so silly to think that the first home buyers grant actually makes housing more affordable…

All that it’s done is bump up the average price by several times the size of the grant –
give people $7000 dollars, they take it to the bank to put on top of their deposit and borrow another 60k or more.
Even outside of that, it should be blatantly obvious that subsidizing the demand for something simply increases the price – it should be called the first home *sellers* grant.

rb said :

vg said :

Prospective first home owners can cry me a river. Do you all expect a mansion for your first joint?

You only say that because you ‘gots you a house’

I am currently trying to be a first home buyer.

Me and my partner have been saving for the last year and a half, are looking at spending no more than $350,000 and are still struggling to buy a house.

If I was 25 years older, I could have an inner suburb 4 bedroom house on a large block which would have been paid off in 20 years.
Now, if I want to get a loan for a 3 bedroom house on a small block, I will be paying it off for the next 50 years of my life.

Saving for a whole 18 months?

Holden Caulfield5:28 pm 18 Mar 10

Who’d have thought thirty year ago we’d all be sittin’ here discussing house prices, eh?

screaming banshee5:24 pm 18 Mar 10

rb said :

Me and my partner have been saving for the last year and a half, are looking at spending no more than $350,000 and are still struggling to buy a house.

I understand you WANT to buy a house, are you unwilling to consider a unit or townhouse?

rb said :

vg said :

Prospective first home owners can cry me a river. Do you all expect a mansion for your first joint?

You only say that because you ‘gots you a house’

I am currently trying to be a first home buyer.

Me and my partner have been saving for the last year and a half, are looking at spending no more than $350,000 and are still struggling to buy a house.

If I was 25 years older, I could have an inner suburb 4 bedroom house on a large block which would have been paid off in 20 years.
Now, if I want to get a loan for a 3 bedroom house on a small block, I will be paying it off for the next 50 years of my life.

Well, consider this:
When I came to Australia in 1972 I had to get two mortgages and a personal loan! Yes, you read it correctly – TWO mortgages AND a personal loan. That first house (in Emu Plains, near Penrith, NSW) cost $18,000 and my wife wasn’t working and I wasn’t all that highly paid (and I had to commute to Sydney by train for work – two hours a day on the train, standing up and no airconditioning). Interest rates at the time were god knows how many times more what they are now. I came to Canberra in 1975 (I think it was) and managed to sell the Emu Plains house for enough to settle the mortgages/loan and put a deposit on a house in Chapman that was on the market for $36,000, again interest rates were extremely high compared to nowadays.
Due to a divorce, the Chapman house was sold in 1982 and I just had enough for a modest deposit for an ex-guvvy in Kambah with a mortgage at an interest rate of 17%.

I never got any ‘first home buyers’ help for any of those houses, I just worked damned hard and got stuck into it. I paid the Kambah house off some years back and it was a great feeling, I’m still in that house today.

It’s been said before on this forum, people these days want everything now, and they want it all. Playstations/plasmas/beer/cigarettes/partying/etc/etc… wants all seem to come before needs.

Don’t cry poor – just get on with it.

Build a 100+ storey apartment building near civic.
Plenty of people would want to live there, and no need to sprawl out into open spaces. A few more down the track, and we might even start looking like a real city!

(oh I forgot.. people complain loudly at anything over 2 storeys)

sloppery said :

Confusedwouldwe said :

I would certainly not discourage people from partying and traveling in their 20’s.

I guess it depends on what you expect to do in your 30’s, 40’s, 50’s, 60’s, 70’s and maybe 80’s or 90’s, and whether you think you can support all that.

Let me clarify – partying and travel are fine, just try not to make them the only things you do…

vg said :

Prospective first home owners can cry me a river. Do you all expect a mansion for your first joint?

You only say that because you ‘gots you a house’

I am currently trying to be a first home buyer.

Me and my partner have been saving for the last year and a half, are looking at spending no more than $350,000 and are still struggling to buy a house.

If I was 25 years older, I could have an inner suburb 4 bedroom house on a large block which would have been paid off in 20 years.
Now, if I want to get a loan for a 3 bedroom house on a small block, I will be paying it off for the next 50 years of my life.

Confusedwouldwe said :

I would certainly not discourage people from partying and traveling in their 20’s.

I guess it depends on what you expect to do in your 30’s, 40’s, 50’s, 60’s, 70’s and maybe 80’s or 90’s, and whether you think you can support all that.

“will Canberra’s property prices become affordable to the hundreds of first home buyers in the region?”

I gots me a house. I don’t care.

If you’re looking at a $700K place as your first home then you ain’t got problems. There’s units down the road from me for sale for under $300K. Prospective first home owners can cry me a river. Do you all expect a mansion for your first joint?

You don’t particularly need to be a do gooder hippy type to like open spaces.

Sydney/Melbourne don’t even rate as big cities on the grand scheme of things around the world and if you like urban infill head over to Germanys industrial area where about 8 cities all bigger than anything we have here have merged into each other due to space constraints. It’s lovely.

I like Canberras open spaces. I like Canberras housing/rental market. I should kick my tenants out and release at a much higher price but I like them. My advice is if you can get in do so. It’s time in not timing when it comes to property.

Confusedwouldwe1:25 pm 18 Mar 10

I did want a house with a large block until I bought a block and built a house. My back yard is about 9m x 17m and I now realise that it is plenty of space.

Most people I observe are too focused on acquiring land, houses, possessions, etc that just lead to them wanting more and their happiness becomes dependent on gaining more. I think this is very unhealthy. Why does it matter how much money you have when you will be dead in 30 to 70 years anyway? We just need enough to keep us healthy, sheltered and support our hobbies.

I would certainly not discourage people from partying and traveling in their 20’s.

spinact said :

luther_bendross said :

I couldn’t agree more with Stereo Henry @ #10. There is so much empty land (or pretty looking bush environs… whatever) around Canberra that could be opened up. There’s no reason for Gungahlinites to be living on top of each other when there’s so much space between them, Lyneham and Belco. Also, there’s no reason Crace should exist. There’s enough space here for everyone to have an acre of land and still drive max 40min Gungahlin to Tuggers. Until the preschool politics of the ACT grows up, I can’t see these draconian ideas moving forward.

You agree with the ‘urban infill’ idea but also want everyone to be able to have an acre of land? Lots of problems with that theory including a rising population and the limited size of the ACT. Plus all the do good hippies would have a fit if the Government tried to develop Canberra’s precious wide open spaces!

Woow! I live in Wollongong!

Canberra is our national capital, I was led to believe!

So what do I read here? Real estate nazis who want to turn our capital’s bushlands & buffer zones into housing blocks

All to help their greed and the greed of real estate agents to make a profit!

Housing prices will crumble & so will our economy. We are on the precipice of another huge World recession! Have a look, electricity prices will go up 60% in NSW starting June, none of this folly > real estate is sustainable!

Australians have been conditioned to believe that their self worth is reflected in their houses! Pathetic really

screaming banshee10:34 pm 17 Mar 10

Tetranitrate said :

go for your life.

Come see me in 10 years time when they are releasing land in Williamsdale, I’ll sort you out with a nice little rental closer to civic and your weekly rent can more than adequately pay off my home loan.

Wait a minute, that means I’ll be paying more taxes which will help put Whythelongface’s kids through Uni so they can jump ship like the old man.

I really feel sometimes that I just can’t get a break 😉

grunge_hippy10:22 pm 17 Mar 10

all i know is that my teeny tiny little place that we bought 3 years ago is woefully inadequate for our expanded family and we cant afford the move up… not here or in melbourne (where we looked due to hubby’s job moving- decided to stay here)

but i am glad its mine and I am not like my still renting friends who get kicked out of their rentals every 2 or so years because it gets sold (happened to one friend at least 3 times) or like another friend who has applied for well over 20 rentals and now has to live with whoever will have her, her hubby 3 kids and the dog because they cant seem to be approved for rental.

it’s crazy.

WhyTheLongFace said :

Or do what I did, move OS.

I could stay in Canberra, pay my massive HECS debt, take out a mortgage I will never repay (or not till I’m in my 80’s), put all my income into hecs and mortgage rather than Superannuation etc. etc.

v’s

Move OS, never repay my uni fees, buy a house that is affordable and have a well paid job.

I believe they call it a ‘brain drain’.

Everything that has been done in the last 15 years or so in Australia has been an encouragement to leave Australia. Crazy!

I don’t know who they expect to pay the baby boomers pensions but it won’t be me.

No, don’t pay society back for support you have received in gaining your education – lovely Gen Y attitude – it’s all about ME! Do you know how much a university education costs in the US? But, I would also be reluctant to pay a “massive” HECS debt, if my university education didn’t teach me the appropriate use of apostrophes (see quote). OS might be a good place to escape an inadequate education, but I wouldn’t call it a ‘brain drain’. A ‘brain drain’ is properly educated people leaving for OS and taking their skills with them – and that is something Australia should be worried about….

Tony said :

First home buyers needs to realign their expectations and build their way up to their dream home. I’m in my first house and have been here for 5 years; starting low is not that bad.

It kind of reminds me of a Ponzi scheme. The folk over here( http://bubblepedia.net.au/tiki-index.php )have been talking about the cost of housing for years. There are some interesting observations about the housing price bubble; I find it re assuring that im not the only person who thinks the cost of housing is out of control.

Tetranitrate5:20 pm 17 Mar 10

and make that “if the rental yield exceeds the after tax cost of financing.
…I’m too tired for this.

Tetranitrate5:19 pm 17 Mar 10

oops – 3.42% per year is GDP per capita, not real wages

Tetranitrate5:18 pm 17 Mar 10

screaming banshee said :

@Tetranite, Re rental income, its simple short term loss for long term gain. If it cost the same to rent a house as to buy one, then almost no-one would rent. The benefit is only realised after several years of growth when the rental income yields more than the loan repayments. Those that can dedicate sufficient funds to the process will always win, its only the length of time that varies.

Rubbish.
If the (after tax) rental yield exceeds the cost of financing, you lose.
If you’re borrowing at 6% to buy an asset that generates 4%, you lose.
Rents don’t justify the prices, people are chasing capital gains.

screaming banshee said :

“As for demands for goods and services falling away, thats the role the cash rate plays in controlling consumer spending.
With all the recent increases have people stopped throwing their money at retailers, no, and in the event we have another global financial hissy fit our reserve bank have taken steps to ensure that we have room to move to ease the pressure on the australian economy should we need to.”

They could drop the cash rate to 0% and it still wouldn’t allow house prices to increase forever.
I didn’t say it was a problem now, I said it meant that it was 100% impossible for house prices to increase faster than income forever. And when it does, that is certain to become a problem because as pointed out, a significant proportion of current prices is speculative.

screaming banshee said :

“Its the same actions previously that saved us some of the pain last time around, and from memory its actions taken by the hawke/keating govt during periods of around 16% (thats not a typo for those that don’t remember – sixteen percent) interest that had a stabilising effect on the australian economy. The house price boom we all know of is a direct result of the combination of an end to the extended period of stagnation brought about by those sustained high rates and the sharp rise in average earnings pushed along by the resources boom, it was more of a catchup then a bubble.”

Compared to median income Australian housing is among the most expensive in the world and has been that way for several years.
What about Australia justifies this? how is Australia so special? It isn’t there aren’t other resource rich countries.

screaming banshee said :

“Will house prices stagnate – for a while, perhaps

Will house prices go backwards – in horrible economic times, by no more than 10%

Will the value of real estate rise – you bet, and around 40% every 10 years on average is a fairly safe bet”

Maybe in nominal terms, but that’s meaningless. To sustainably increase by 40% ever 10 years in real terms, real wages have to be doing the same thing – ~3.42% a year.
Not impossible for a specific 10 year period, but a little implausible in perpetuity, particularly with an aging population.
For the last 15 years, we’ve averages 3.6% GDP growth, but that isn’t per capita and a lot of it comes down to population growth.

“Would I buy property at today’s prices – as much as the bank will let me get my hands on

My ONLY regret is not buying my first property sooner”

go for your life.

Long Face @ #19 got it right.
And those of us who can are preparing to do just that.

gun street girl3:57 pm 17 Mar 10

Funky1 said :

But it does have certain aspects of a “big city” that affects the housing market.

For example, how many large country towns house 2 major universities and the related demand for house of it’s students that no one was mentioned yet.

I haven’t mentioned it, because the UC and the ANU were also around when house prices, rentals and the general cost of living in Canberra were rock-bottom.

urchin said :

VYBerlinaV8_the_one_they_all_copy said :

This is a good point. Consider also that the average size of a new dwelling is 50% bigger than 20 years ago.

And what is the average size of the land that goes with that new dwelling? As I recall buildings depreciate, houses appreciate.

D’oh! Should read “land appreciates” not houses… i blame it on the cold medicine.

Don’t forget that 30 year loans were a lot less common 15 years ago than they are now, although offsetting that is that more deposit was required.

I wasn’t very clear above… when searching for 3 bedroom houses in Inner North and Belconnen, heaps come up for around $400k .. IN BELCONNEN. Inner North comes in at $615k.

Just say no.

Prices in the Inner North are massively inflated. As far as I can tell it is because lemmings who went to Uni 10-20 years ago and always lived in the Inner North now must must must live there, or they’ll DIE.

Guess what. They won’t.

A search of allhomes for 3 beddies in Inner North and Belconnen throws up any number that are high 300s, low 400s. Is living in Dickson worth $300K!? Not in my book. Clearly is is important for a lot of people, otherwise the price wouldn’t be so high.

The forces that apply to “inner” housing in Sydney and Melbourne (terrible traffic, long commutes etc) just don’t apply in Canberra. But we already now that people don’t make rational decisions when it comes to housing.

Prices will rise at least 10% in the ACT in 2010

gun street girl said :

harvyk1 said :

luther_bendross said :

Are you freaking serious?! I can think of so many things that even writing one would turn this from a post to an encyclopaedia volume.

Well then don’t write the full encyclopaedic version, such paraphrase in a few dot points.

Sydney has a harbour, Melbourne has trams. Neither of these things make me think that either of those cities are better or worse than Canberra.

For all of those rushing in to sing the praises of Canberra – you’re missing the point and preaching to the choir. This isn’t a discussion about what’s better in the ACT or another city – it’s about whether Canberra is an analogous “big city” akin to Sydney, London or whatever. I choose to live here because it’s a really just large country town, with all the benefits of a large country town. It shouldn’t be compared to a large city, and indeed, much of the Canberra bashing that goes on in the press occurs because people unfairly expect it to live up to big town expectations – it’s a contextual error. A “big city” it ain’t – but it’s demanding the price of big city living, regardless.

But it does have certain aspects of a “big city” that affects the housing market.

For example, how many large country towns house 2 major universities and the related demand for house of it’s students that no one was mentioned yet.

Nor has anyone really delved into the other side of the rental market – the investor.
If everyone decides that housing prices are too high to buy-to-live-in and decide to rent instead, where will they rent if there are no rental properties on the market due to no investors?

And there is a lot of blame put onto investors as being the driving force behind rising housing prices. This blame is probably coming from the same people who are renting these investors’ properties in the first place.

It’s a fine balancing act that the housing market must play out. If the returns aren’t there, then investors won’t have properties available to rent, but if the prices are too high, it is assumed that people won’t buy properties to live in (but where will they rent?).

What is certain is that housing is a necessity and the majority of people will always find a way if being able to afford a roof over their heads.

VYBerlinaV8_the_one_they_all_copy said :

This is a good point. Consider also that the average size of a new dwelling is 50% bigger than 20 years ago.

And what is the average size of the land that goes with that new dwelling? As I recall buildings depreciate, houses appreciate. So we have bigger, more expensive depreciating assets on smaller, more expensive appreciating assets. And for that privilege we pay only 30-50% more than we did 15 years ago. sounds fantastic!

DeadlySchnauzer said :

To put it in perspective:
– a 150k loan 15 years ago at 15% has loan repayments of $881
– a 450k loan now at 6% has loan repayments of $1,332

Now lets factor in inflation (~3%pa for 15 years). Those repayments of $881 inflation adjusted come out at $1372 in todays dollars.

Hey what do you know, it costs me the same to pay back a house now as it did 15 years ago. Get over it whingers.

in 1995 the RBA cash rate was 7.5%, putting mortgage rates probably somewhere around 10-11% (http://www.loansense.com.au/historical-rates.html). Today OCR is 4.0% & NAB offers variable mortgage rates at about 6.75%. but i will give you 6% as one can probably get better deals with other lenders.

So 150k at 10.5% for 30 years = 316.49 per week
450k at 6% for 30 years = 622.18 per week.

using real inflation numbers (not your made up ones) between 1995 and 2010 (from http://www.rateinflation.com/) that gives a repayment of $466.73. So repayments today are roughly 33% higher than in 1995. Furthermore, it is clearly much more difficult to burn down the principal of the loan through overpayments when the principal is 3 times bigger.

Mind you, this is at a time of near record low interest rates in an environment when rates are climbing. The OCR is predicted to be at around 5% in a year. If banks don’t tack on extra boosts (one can dream) that makes payments for that 450k loan $690/wk or nearly 50% higher than 15 years ago (inflation adjusted)

Yeah, people are just whinging.

VYBerlinaV8_the_one_they_all_copy11:58 am 17 Mar 10

DeadlySchnauzer said :

One thing people need to remember when making these “oh back in the 90s i could buy 23 houses for the cost of a postage stamp” comparisons. This was before full de-regulation of interest rates… in the 70s, 80s and 90s the average interest rate was 14-15%. From 2000 onwards we have seen the first sustained period of low interest rates in decades (order of 6-7%).

To put it in perspective:
– a 150k loan 15 years ago at 15% has loan repayments of $881
– a 450k loan now at 6% has loan repayments of $1,332

Now lets factor in inflation (~3%pa for 15 years). Those repayments of $881 inflation adjusted come out at $1372 in todays dollars.

Hey what do you know, it costs me the same to pay back a house now as it did 15 years ago. Get over it whingers.

This is a good point. Consider also that the average size of a new dwelling is 50% bigger than 20 years ago.

VYBerlinaV8_the_one_they_all_copy11:51 am 17 Mar 10

Was lurking here and saw this story, and just couldn’t let it go…

Housing has become more expensive in Canberra for several reasons:
1) People have more money to spend
2) There’s not enough supply (especially in the more desirable areas)
3) Interest rates are lower than they used to be
4) Lending criteria is softer than it used to be
5) People have higher expectations than they used to

Now, let’s look at some interesting points:
1) The ‘average’ family is, these days, more likely to have 2 incomes than one
2) Disposable income has increased, and many consumer services and items (including cars, electronics and travel to name a few) have decreased in cost in real terms
3) During the 1990’s, which is when people seem to love comparing current prices to, property was actually pretty cheap (it was a low point in the cycle)

As a property investor, I don’t realistically expect all properties to magically double in price every 7 years. That said, if I buy in the right area, and at a good time, the continued growth of the outer suburbs combined with growing population makes the inner suburbs relatively more scarce, and desirable to a larger number of people, whilst supply is severely constrained. And guess what – those with the most $$ set the price.

So, going forward… I think we have a bit more growth left yet (several years at a modest rate), but after that will have a period of stagnation as more people start to genuinely run out of housing options, and as the govt finally realises supply is the only answer (although they’ll have to ship in more tradies, who will also need somewhere to live). Then, in perhaps 12 or 15 years, when housing has become relatively cheaper again, Gen X will hit its peak spend years, and we’ll have another housing boom.

In the meantime, it’s still possible to find good value properties with a decent yield, if you look hard and move quickly when you find one. If you’re a young first home buyer, I’d encourage you to buy something at the cheaper end of the spectrum, and then renovate to add value and perhaps upgrade as you have the means. If you’re 30 or older, and have spent your entire 20’s partying and traveling and have nothing material to show for it, either get used to renting or start making some serious lifestyle cutbacks, cos you missed your chance big time.

DeadlySchnauzer said :

Hey what do you know, it costs me the same to pay back a house now as it did 15 years ago. Get over it whingers.

Good point, well presnted. You rock Deadly Schnauzer!

gun street girl11:33 am 17 Mar 10

harvyk1 said :

luther_bendross said :

Are you freaking serious?! I can think of so many things that even writing one would turn this from a post to an encyclopaedia volume.

Well then don’t write the full encyclopaedic version, such paraphrase in a few dot points.

Sydney has a harbour, Melbourne has trams. Neither of these things make me think that either of those cities are better or worse than Canberra.

For all of those rushing in to sing the praises of Canberra – you’re missing the point and preaching to the choir. This isn’t a discussion about what’s better in the ACT or another city – it’s about whether Canberra is an analogous “big city” akin to Sydney, London or whatever. I choose to live here because it’s a really just large country town, with all the benefits of a large country town. It shouldn’t be compared to a large city, and indeed, much of the Canberra bashing that goes on in the press occurs because people unfairly expect it to live up to big town expectations – it’s a contextual error. A “big city” it ain’t – but it’s demanding the price of big city living, regardless.

DeadlySchnauzer11:14 am 17 Mar 10

One thing people need to remember when making these “oh back in the 90s i could buy 23 houses for the cost of a postage stamp” comparisons. This was before full de-regulation of interest rates… in the 70s, 80s and 90s the average interest rate was 14-15%. From 2000 onwards we have seen the first sustained period of low interest rates in decades (order of 6-7%).

To put it in perspective:
– a 150k loan 15 years ago at 15% has loan repayments of $881
– a 450k loan now at 6% has loan repayments of $1,332

Now lets factor in inflation (~3%pa for 15 years). Those repayments of $881 inflation adjusted come out at $1372 in todays dollars.

Hey what do you know, it costs me the same to pay back a house now as it did 15 years ago. Get over it whingers.

Woody Mann-Caruso11:12 am 17 Mar 10

A much greater size and population to start with, and the social options and infrastructure that comes with that.

I assume that by ‘social options and infrastructure’ you mean ‘catching a train’, because that’s pretty much the only thing Sydney, Melbourne, Paris, London, Tokyo and New York have that we don’t – urban rail transport. Well, that and Ikea, and I can get that delivered.

Clown Killer11:04 am 17 Mar 10

What is it exactly that Sydney and Melbourne have that we dont? Honest question …

Here’s a few things that come to mind:

1.An hour’s drive to a hospital with another four – five hours wait in emergency;
2.Traffic so bad it can take you over an hour to cover six kilometres;
3.Early-bird discount parking at the fire-sale price of $36 a day;
4.Public transport systems that make points two and three seem like viable alternatives;
5.Three layers of Government bureaucracy to deal with;

mistertim said :

[all it would take is one solid round of PS budget cuts (and subsequent layoffs) to bring the whole house of cards tumbling down.]

Historically when this happened (i.e. 1996) prices fell by only, I understand, 3% on average and the inner North didn’t fall – merely stagnated.

The other factor here is that Canberra has, I think, the highest average wages of any city in Australia. That means, proportionally, a whole lot more people than in Sydney or Melbourne who can afford higher priced houses.

What was the multiple of house prices vs. household disposable income in 1996 vs now?

In 1996 median gross household income in the ACT was $939/week (48,828/year according to ABS), median house price was $139,950 (according to allhomes) for a multiple of 2.87

In 2007-08 (latest data i could find on abs) median household income was $1762/week ($91624) and, averaging the medians on allhomes for 07-08, median house price was about $440,000, for a multiple of 4.8.

So in terms of multiples of price to household income houses are 1.67 times more expensive. Perhaps that’s why prices only dropped a little in 1996 but are more vulnerable now?

To those rah-rahing housing as the one and only investment ever guaranteed to go up ad infinitum, please explain why. We have new suburbs springing up faster than pimples on a teenager, new housing is (and has been) outpacing ACT population growth by a considerable margin, house prices have been outpacing household income growth for many years. At some point the party is going to have to stop. What will happen to attitudes about housing when the promise of extravagant capital gains goes away? Will people still be willing to pay such enormous premiums to own over renting?

We came pretty close to that scenario about 18 months ago, with the crisis diverted only by Rudd sacrificing FHBs to the cause of ever rising housing prices. Funny how short people’s memories are. 18 months ago a crash seemed frighteningly close and the sky was about to fall in, now people are dead certain it could never happen.

I think we have diverged a long, long way from the fundamentals of the market. buying to live in is not so bad (if you can find a place you can afford) as you can offset the outrageous cost of the house against the semi-outrageous cost of rent. as an investment i think the risk is understated and the returns overstated. to each his/her own.

luther_bendross said :

I couldn’t agree more with Stereo Henry @ #10. There is so much empty land (or pretty looking bush environs… whatever) around Canberra that could be opened up. There’s no reason for Gungahlinites to be living on top of each other when there’s so much space between them, Lyneham and Belco. Also, there’s no reason Crace should exist. There’s enough space here for everyone to have an acre of land and still drive max 40min Gungahlin to Tuggers. Until the preschool politics of the ACT grows up, I can’t see these draconian ideas moving forward.

You agree with the ‘urban infill’ idea but also want everyone to be able to have an acre of land? Lots of problems with that theory including a rising population and the limited size of the ACT. Plus all the do good hippies would have a fit if the Government tried to develop Canberra’s precious wide open spaces!

Something to peruse for those interested in housing affordability in Canberra relative to the rest of the world. Canberra gets a mention on page 4.

http://www.demographia.com/dhi.pdf

luther_bendross said :

Are you freaking serious?! I can think of so many things that even writing one would turn this from a post to an encyclopaedia volume.

Well then don’t write the full encyclopaedic version, such paraphrase in a few dot points.

Sydney has a harbour, Melbourne has trams. Neither of these things make me think that either of those cities are better or worse than Canberra.

I find it very interesting that during these times where housing is apparently very unaffordable, flat screen TV and international travel are still luxuries enjoyed by most employed people. The cold reality is that prices are not set by what investors can make in terms of rental yield, but by how high the expectations are of the lifestyle-wannabes (who typically seem to have money to waste on socialising and luxury items even when they are crying poor).

screaming banshee11:25 pm 16 Mar 10

@Urchin, aren’t they called first HOME buyers, since when does your first home have to be a house anyway, if people can’t afford a house ‘because they have a life’ perhaps they don’t need more than a place to rest their head and a simple flat in QBN would do. Or perhaps they should be re-assessing their priorities in life.

@gsg, Infrustructure, there’s a beauty. Would that be the infrastructure that so efficiently transports the population to their destinations in such a timely manner each and every day. As for social options, well thats always going to be speculative, but I think we have a fantastic array of cultural institutions and social & recreational venues, all within a stones throw and with easy access.

@Tetranite, Re rental income, its simple short term loss for long term gain. If it cost the same to rent a house as to buy one, then almost no-one would rent. The benefit is only realised after several years of growth when the rental income yields more than the loan repayments. Those that can dedicate sufficient funds to the process will always win, its only the length of time that varies.

As for demands for goods and services falling away, thats the role the cash rate plays in controlling consumer spending. With all the recent increases have people stopped throwing their money at retailers, no, and in the event we have another global financial hissy fit our reserve bank have taken steps to ensure that we have room to move to ease the pressure on the australian economy should we need to.

Its the same actions previously that saved us some of the pain last time around, and from memory its actions taken by the hawke/keating govt during periods of around 16% (thats not a typo for those that don’t remember – sixteen percent) interest that had a stabilising effect on the australian economy. The house price boom we all know of is a direct result of the combination of an end to the extended period of stagnation brought about by those sustained high rates and the sharp rise in average earnings pushed along by the resources boom, it was more of a catchup then a bubble.

Will house prices stagnate – for a while, perhaps

Will house prices go backwards – in horrible economic times, by no more than 10%

Will the value of real estate rise – you bet, and around 40% every 10 years on average is a fairly safe bet

Would I buy property at today’s prices – as much as the bank will let me get my hands on

My ONLY regret is not buying my first property sooner

luther_bendross10:55 pm 16 Mar 10

screaming banshee said :

gun street girl said :

Canberra is hardly a “major city”. It shouldn’t be compared to the likes of Sydney or Melbourne, because, well, it’s not Sydney or Melbourne.

What is it exactly that Sydney and Melbourne have that we dont? Honest question, what in you mind makes them a major city and Canberra not?

Are you freaking serious?! I can think of so many things that even writing one would turn this from a post to an encyclopaedia volume.

I couldn’t agree more with Stereo Henry @ #10. There is so much empty land (or pretty looking bush environs… whatever) around Canberra that could be opened up. There’s no reason for Gungahlinites to be living on top of each other when there’s so much space between them, Lyneham and Belco. Also, there’s no reason Crace should exist. There’s enough space here for everyone to have an acre of land and still drive max 40min Gungahlin to Tuggers. Until the preschool politics of the ACT grows up, I can’t see these draconian ideas moving forward.

housebound said :

OK then. Who here reckons that house prices will tumble, say, within a decade?

Some Interesting facts:

I was browsing through the ACT heritage library, and came across a photo of a house with the caption “Even at $67,900 these homes are located on large blocks with plenty of room for children and future extensions”, dated 1986. In 2009, the average house price in Chisholm was $395,000.

The ABS says that in 1986, the average weekly income for all employees in the ACT in 1986 was 422.4, so I deduce a yearly income of 21,964.8. In November 2009, the average weekly income for all employees in the ACT was $1126, or $58552 per year.

So, using these figures as a rough guide, incomes have grown 2.7 times since 1986, whilst house prices have grown by 5.8 times. Alternatively, the ratio of income to house price was 1:3.1 in 1986, and is now 1:6.7.

That rings alarm bells for me, the price of housing I believe can’t keep growing unless incomes rise dramatically, people simply wont be able to service the sort of debt needed to purchase a house otherwise. So, assuming that incomes don’t rise vastly in the near future, the housing market will plateau until incomes catch up, or the price of housing will drop to match current incomes.

WhyTheLongFace10:32 pm 16 Mar 10

Or do what I did, move OS.

I could stay in Canberra, pay my massive HECS debt, take out a mortgage I will never repay (or not till I’m in my 80’s), put all my income into hecs and mortgage rather than Superannuation etc. etc.

v’s

Move OS, never repay my uni fees, buy a house that is affordable and have a well paid job.

I believe they call it a ‘brain drain’.

Everything that has been done in the last 15 years or so in Australia has been an encouragement to leave Australia. Crazy!

I don’t know who they expect to pay the baby boomers pensions but it won’t be me.

$700k in the inner north is pretty much standard, the price is reflecting the location of the property. The closer to the CBD, the higher the land value. Most first home buyers don’t expect to buy a $700k home in inner Canberra, as seen in the popluarity of outer lying new suburbs.

The problem could have been partially addressed years ago, but Stanhope has never been a forward thinking man and likes until everything goes up the creek before taking action. I don’t expect the housing market to “crash”, but the market operates in a cycle where as interest rates become higher, more properties at the lower end of the market will become for sale. It will also help when the supply of new properties increase, not surprisingly there have not been any substantial new land releases in this city for a good 6-8 months.

Holden Caulfield9:23 pm 16 Mar 10

If you think real estate is expensive now, wait another 5-10 years. Chances are you’ll be thinking 700K for that Dickson place was cheap. Six years ago we paid mid 400s for a three bedroom original/unrenovated inner north property. Seemed a bit exxy at the time, but looks dirt cheap now.

The thing that continually amazes me is not the prices houses sell for, but the prices entry level apartments sell for. That really highlights just how high prices have risen in the last few years.

One bedroom apartments in Gungahlin are selling for 330K+. There’s your housing affordability crisis! And I’m not bagging Gungahlin, I lived there for seven years, and quite enjoyed it. But that’s a lot of money for an entry-level apartment out in the ‘burbs.

Tetranitrate9:19 pm 16 Mar 10

housebound said :

OK then. Who here reckons that house prices will tumble, say, within a decade?

Me.

In cases where rental income doesn’t more or less justify the market price, part of the price is based on expected capital gains. People aren’t just buying houses to live in now, nor to rent out. They’re buying them because they believe that the price is going to increase further.
It won’t ‘level off’ in the long term because once it becomes apparent that endless capital gains at the rates we’re used to (and the anticipation of which is built into prices) aren’t going to happen, paying far more for a property then it’s rental income justifies(for simplicity’s sake, negative gearing) no longer looks like such a good idea.

And endless capital gains at the current rates simply can’t happen because incomes aren’t rising as quickly. Where is the demand for goods and services produced by industries that actually employ people going to come from if a sizable proportion of the population is sinking most of their income into their mortgages? Cause that’s what’s going to happen.
House prices getting higher and higher mean ever larger mortgages and ever larger repayments. It can’t grow at a higher rate then incomes forever.

I was at the auction referred to in the article. It may not have been big, but it was a nice house on a quite decent-sized block. It’s probably in the nicest street in its suburb.

all it would take is one solid round of PS budget cuts (and subsequent layoffs) to bring the whole house of cards tumbling down.

Historically when this happened (i.e. 1996) prices fell by only, I understand, 3% on average and the inner North didn’t fall – merely stagnated.

on a happier note, you can probably rent that 700k house for around 450 a week.

The real estate agent suggested $550 per week, but I think the buyer was actually looking to move in, not invest.

The other factor here is that Canberra has, I think, the highest average wages of any city in Australia. That means, proportionally, a whole lot more people than in Sydney or Melbourne who can afford higher priced houses.

gun street girl9:09 pm 16 Mar 10

screaming banshee said :

gun street girl said :

Canberra is hardly a “major city”. It shouldn’t be compared to the likes of Sydney or Melbourne, because, well, it’s not Sydney or Melbourne.

What is it exactly that Sydney and Melbourne have that we dont? Honest question, what in you mind makes them a major city and Canberra not?

A much greater size and population to start with, and the social options and infrastructure that comes with that. I’ve lived in both in the past; and really, comparing Canberra to a large city is like comparing apples with oranges. Similarly, I wouldn’t compare Canberra to Paris, Tokyo or London!

@ Tony, sure, realigning expectations is fine. However a search for 3 bedder houses from 0 to 350k gives a whopping… 0 results. one auction and two houses (no land to put em on).

so if you accept that FHBs should be looking at spending 400k plus, yeah there is a very small number of 3 bedroom houses available. if you want to have a life and a house, you have much fewer options.

It’s not about FHBs being spoiled brats – look at a chart of housing price growth in the ACT since 2000 – from a median of $175k in 2000 to 505k in 2010? Nearly tripling in 10 years? Nah, that’s perfectly normal and the people who complain about it being overpriced are just greedy, whinging gen x-ers who don’t know the meaning of the word save? I don’t think so.

OK then. Who here reckons that house prices will tumble, say, within a decade?

You have more money than sense.Go north you stupid public servant.looking at the ocean is heaps better than watching the neighbors washing dry!!!!!!!

stereo henry8:36 pm 16 Mar 10

It’s time to throw the Griffin legacy out the window and open up the tracts of land that separate the Canberra satellite cities. It’s absurd that each Canberra city is surrounded by bush when there are acute land shortages and a rental crisis.

Or $700k will buy you three large and modern houses in many major US cities. Next year you might even get 4 American houses for that money.
Tulips, the East India company, poseidon shares, Japan’s miracle economy, dot coms, and sub-primes all went one way, but this time it will be different for Aussie house prices.

screaming banshee8:34 pm 16 Mar 10

gun street girl said :

Canberra is hardly a “major city”. It shouldn’t be compared to the likes of Sydney or Melbourne, because, well, it’s not Sydney or Melbourne.

What is it exactly that Sydney and Melbourne have that we dont? Honest question, what in you mind makes them a major city and Canberra not?

gun street girl8:07 pm 16 Mar 10

screaming banshee said :

Seriously though, not really fair to make comparisons to coastal or unit properties. Perhaps you’d like to draw a comparison to a similarly aged free-standing property a similar distance from the CBD of other major cities.

Canberra is hardly a “major city”. It shouldn’t be compared to the likes of Sydney or Melbourne, because, well, it’s not Sydney or Melbourne.

georgesgenitals7:56 pm 16 Mar 10

This is really simple. Supply and demand. And right now we have the highest average incomes in the country, and a big supply problem.

canberra is absurdly overpriced. new builds have outpaced population increase by a considerable margin, meaning that there is–or ought to be–a lot of slack in the market. Certainly there has been no changes in the demand side of the market to justify the enormous jump in prices over the past year. i reckon we are seeing the effects of the fhog boost last year. people sold overpriced hovels to unwitting fhbs who had their deposit handed to them by the gov’t, and now those people are upgrading to less-hovel-like (but no less overpriced) houses in more central suburbs.

all it would take is one solid round of PS budget cuts (and subsequent layoffs) to bring the whole house of cards tumbling down. alas, as rudd is in charge & his idea of a “horror budget” and “razor gang” and taking a “meat axe” or “blow torch” to the budget is to simply borrow hundreds of billions, that ain’t gonna happen.

on a happier note, you can probably rent that 700k house for around 450 a week. and the lucky landlord can look to a gross return on his/her investment of 3.3% annually (deduct property management fees, repairs, rates, water connection etc from that). There is no logical reason for the recent upswing. if people are lucky we will be looking at an extended stagnation in prices. if they are unlucky things will fall apart.

A search on allhomes.com.au shows 98 house with atleast 3 bedrooms, between the price of $100,000 and $450,000.

First home buyers needs to realign their expectations and build their way up to their dream home. I’m in my first house and have been here for 5 years; starting low is not that bad.

Depends on what you mean by Canberra. If you’re including Canberra region, you can have a beautiful 3br house in Goulburn for $250K or less, and in Yass, the early $300s. I know not everyone likes to commute, but it is possible to work in Canberra and own an affordable home.

screaming banshee7:09 pm 16 Mar 10

Ooh ooh me first, “I’m going to wait until prices drop to half what they are now then I’ll buy a bargain and all you people buying houses at todays inflated prices are going to realise that you’ve been ripped off, and I’ll be soooo smart and you’re all sooo stupid” ROFPMLMAO

Seriously though, not really fair to make comparisons to coastal or unit properties. Perhaps you’d like to draw a comparison to a similarly aged free-standing property a similar distance from the CBD of other major cities.

Tetranitrate6:04 pm 16 Mar 10

On the whole Canberra’s prices aren’t as outright ridiculous as say, Sydney’s as they’re actually somewhat justified by the rents. If you look at the rental yields in Sydney they can be ridiculous low, especially when compared to the interest rates available on savings accounts.

Housing in Australia is some of the most expensive on the planet though.

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