14 December 2016

House sale in Dickson – a surprise for the neighbourhood

14 December 2016 | Paul Costigan

A curious thing happened in the Dickson neighbourhood when a house went up for auction late last month.

This was an ordinary enough house. It had been owned for decades by the one owner and had been successfully rented out in recent times to string of good student tenants. The house is an unrenovated original AV Jennings design. It remains a model house of the late 1960s.

The owners had taken the real estate agent’s advice and spent quite a bit of money repainting it inside, adding new guttering and a new gate etc. The garden was given a big clean-up and new furniture was installed.

The word on the street was that the owners were looking for about $750,000. Some thought this might be too high given the basics of the old-style house – the almost original kitchen and bathroom etc.

On the day of auction, Saturday November 19, there was the usual largish crowd of the neighbours – and a few interested research buyers who attend just to observe how prices go. It turned out that there were about five real buyers.

What happened next was the surprise and you heard the reactions as the price went up. $750,000 was soon left in the dust as we headed for $850,000. There were loads of animated conversations.

But alas, just as it was a breath away from being completed, off we went again. The final price for this very basic and original styled house was $905,000.

The neighbourhood went home in the various directions to re-evaluate their own situations given that most had similar houses but with many extensions and most had modernized – along with much better gardens in many cases.

But I wonder just what this was all about. For one thing that side of the street happens to be zoned for apartments even though till now there has been only the one.

Most house owners think of these things from a perspective of a house is a home. There are now a growing number of interstate people appearing at these sales who are thinking pure investment. They are in their 30s or 40s and are monied up ready to make that large investment. But to what end?

The speculation is that this quiet little house could be bulldozed for apartments or even a set of three townhouses – or maybe a McMansion (there are now several close by).

No matter what the reason for the buyer coming forth with such a huge amount for this smallish and very unfashionable house, the neighbourhood is in shock.

I had stated that $750,000 plus was probably likely given the number of families now moving into the area for schools, amenities etc. But I could not have predicted this outcome.

On another point. There is much in the media about the older generations having the houses and keeping the next generations out of the market. Not quite.

The evidence based on recent sales around Dickson shows that many people in their 30s or 40s do not stand a chance of even bidding as the price goes high straight away. But within that same age range, there are plenty of people who are doing very well and are ready and able to push the price up to get their house or investments.

There is a house close by that has been put out to auction twice in recent years and on both occasions someone in that same age bracket paid the high price and acquired the house before it went to auction.

I am sure the scene will be alive and well for a while yet given that houses that come onto the market in Dickson continue to go very quickly – and the ACT Government has been pushing apartments at the cost of new standalone houses.

There are many other house sales stories from this suburb.

Dickson residents will be watching the next auction with interest.

It would be good to hear from others who watch the property sales in their suburb.

Was this a one off? Is it now normal for the inner north? Or is it the trend across all more established suburbs?

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Chris Mordd Richards1:43 am 15 Jan 17

I only have 1 thing to add to this: we need more small plots of land and tiny/mini/micro houses for singles / couples with no children / single parent with 1-2 kids to live in. Only way a lot of us will ever afford our own home instead of renting. This movement has taken off overseas, it’s time to make it happen locally in Canberra now too!

American sources but give you an idea to start at if not familiar:
1. http://thetinylife.com/what-is-the-tiny-house-movement/
2. https://tinyhousecommunity.com/
3. http://www.treehugger.com/tiny-houses/

matthewoyangseng9:58 pm 14 Jan 17

I would suggest people to read the following article “ACT government must take responsibility for pricing many Canberrans out of the housing market”
Driving property price up is the biggest achievement of ACT government. It is not hard to figure out the very intension of the ACT government manipulating the land price -driven by getting money only for making up their reckless spending. The interests of people (especially for young people) who are waiting for building their dreamed home are not in the equation of this government. Many people told me that ACT government manipulates the land price of new suburb Domain Prospect, Lawson and Throsby and setting the price at record high (more than 1000 dollars/square meter) irresponsibly with the aims at increasing the land price at suburbs Moncrieff and Taylor (800 dollars/ square meter). This situation has not only driven most young people out of the market; but also poses a number of threats to ACT economy:
• More and more people give up their plan to build houses as it is too expensive to build a house for them or to profit anything for investment. This had significant impact on the local building industry. This can be seen from the significant drop of the number of approved building contracts.
• The house affordability drops significantly. This will increase the house renting price which will have significant impact on the welfare of local workers and people in ACT.
• Manipulation of land price has driven the house price increases significantly over the last three years in the ACT metropolitan area. This, in turn, increases chance of the burst of the real-estate bubbles in ACT.
There is still some time for ACT government to act responsively. By the time the market starting to correct the property price, it will be too late. The house bubble will burst and ACT will be set to recession. My advices to the ACT government are:
1. Focus on developing diversified local economy
2. Encourage innovation and development of small businesses
3. Do more homework; understand the relationships between land, real-estate markets and other components of economy.

dungfungus5:57 pm 20 Dec 16

devils_advocate said :

Masquara said :

I said “on a par with O’Connor and close to Griffith prices”. Where did you get that I was saying Ainslie prices will go any where near Forrest?

I wasn’t referring to specific suburbs. You can include Griffith, Kingston, Barton, etc in my list of examples if it helps or makes a difference. My point was, like for like, the inner north is unlikely to get close to the prices in the inner south in our lifetimes. But hey maybe the tram will change everything.

It already has. More public art.

http://www.watoday.com.au/act-news/act-government-considers-public-art-river-resnagging-for-northbourne-avenue-trees-20161212-gt9065.html

bringontheevidence5:25 pm 20 Dec 16

Holden Caulfield said :

What about singles, or at least singles incomes? Forget it, haha.

It’s an inner suburb of a wealthy city. By my estimate there’s no more than 15,000 detached blocks across the entirety of the inner north and inner south of Canberra, against probably 200,000 dwellings across the whole city. When there is only so much land to go around, of course not everyone is going to be able to afford it.

At least the planners are actively trying to encourage townhouse and apartment developments in inner areas which single income households can afford. Of course they’re having to fight every step of the way against NIMBYs who are lucky enough to be part of the 8 per cent of Canberra households living in a detached house in an inner suburb.

devils_advocate12:45 pm 20 Dec 16

Masquara said :

I said “on a par with O’Connor and close to Griffith prices”. Where did you get that I was saying Ainslie prices will go any where near Forrest?

I wasn’t referring to specific suburbs. You can include Griffith, Kingston, Barton, etc in my list of examples if it helps or makes a difference. My point was, like for like, the inner north is unlikely to get close to the prices in the inner south in our lifetimes. But hey maybe the tram will change everything.

dungfungus11:49 am 20 Dec 16

Maya123 said :

dungfungus said :

devils_advocate said :

Masquara said :

People looking for places to live rather than build blocks of flats should pay up for Ainslie properties, as their eventual value will be on par with O’Connor and close to Griffith prices.

You forgot the prestige value. The inner south dress circle locations are sought after for a reason. It’s hard to observe the price changes because they don’t sell very often, and when they do they are rarely detached homes.
The inner north will become more popular and therefore expensive with the ACT government’s planned public housing project, to knock down the flats and replace them with better housing stock. But I still don’t see it catching up with the inner south (Forrest, Yarralumla, Deakin, etc).

The “inner south” areas of Canberra are highly overrated.

I lived in Griffith for 10 years when I moved to Canberra in the 1980’s and every house in the street was robbed at least once.

It was so bad that every time friends visited their cars were broken into while they were parked in the driveways.

The reason was well known to everyone but I won’t say what it was for risk of offending social equity advocates.

I couldn’t wait to abandon the prestige address and head for the badlands of Tuggeranong.

dungfungus wrote, “The reason was well known to everyone but I won’t say what it was for risk of offending social equity advocates.”

I think you might mean neighbouring ‘Narrabundah’.

I do know that many years ago someone told me (very gossipy neighbourhood in those days) that some of the local robbers who lived in Narrabundah had a visit from some other young locals and were told to leave Narrabundah alone or else. Then next month at the Neighbourhood Watch meeting (which I attended) the police officer who attended said the robbery numbers had dropped the previous month in Narrabundah, but gone up in Griffith, but they didn’t know why. Coincident or not I don’t know,
I moved into Narrabundah about 30 years ago and it was a different place than it is now. I had two known households of robbers in my street for instance, and every third house in the street was robbed. Fortunately my house was not one of them. In fact, one of the robbers houses got ‘cleaned out’ (his words) and when he knocked on my door to ask if I had seen anyone doing this (I hadn’t) it was all I could do not to laugh at the justness of it.

Thank you for the peer review. I don’t things have changed much actually.

This should now be recorded in the official Canberra annals.

Maya12311:11 am 20 Dec 16

dungfungus said :

devils_advocate said :

Masquara said :

People looking for places to live rather than build blocks of flats should pay up for Ainslie properties, as their eventual value will be on par with O’Connor and close to Griffith prices.

You forgot the prestige value. The inner south dress circle locations are sought after for a reason. It’s hard to observe the price changes because they don’t sell very often, and when they do they are rarely detached homes.
The inner north will become more popular and therefore expensive with the ACT government’s planned public housing project, to knock down the flats and replace them with better housing stock. But I still don’t see it catching up with the inner south (Forrest, Yarralumla, Deakin, etc).

The “inner south” areas of Canberra are highly overrated.

I lived in Griffith for 10 years when I moved to Canberra in the 1980’s and every house in the street was robbed at least once.

It was so bad that every time friends visited their cars were broken into while they were parked in the driveways.

The reason was well known to everyone but I won’t say what it was for risk of offending social equity advocates.

I couldn’t wait to abandon the prestige address and head for the badlands of Tuggeranong.

dungfungus wrote, “The reason was well known to everyone but I won’t say what it was for risk of offending social equity advocates.”

I think you might mean neighbouring ‘Narrabundah’.

I do know that many years ago someone told me (very gossipy neighbourhood in those days) that some of the local robbers who lived in Narrabundah had a visit from some other young locals and were told to leave Narrabundah alone or else. Then next month at the Neighbourhood Watch meeting (which I attended) the police officer who attended said the robbery numbers had dropped the previous month in Narrabundah, but gone up in Griffith, but they didn’t know why. Coincident or not I don’t know,
I moved into Narrabundah about 30 years ago and it was a different place than it is now. I had two known households of robbers in my street for instance, and every third house in the street was robbed. Fortunately my house was not one of them. In fact, one of the robbers houses got ‘cleaned out’ (his words) and when he knocked on my door to ask if I had seen anyone doing this (I hadn’t) it was all I could do not to laugh at the justness of it.

dungfungus9:33 pm 19 Dec 16

devils_advocate said :

Masquara said :

People looking for places to live rather than build blocks of flats should pay up for Ainslie properties, as their eventual value will be on par with O’Connor and close to Griffith prices.

You forgot the prestige value. The inner south dress circle locations are sought after for a reason. It’s hard to observe the price changes because they don’t sell very often, and when they do they are rarely detached homes.
The inner north will become more popular and therefore expensive with the ACT government’s planned public housing project, to knock down the flats and replace them with better housing stock. But I still don’t see it catching up with the inner south (Forrest, Yarralumla, Deakin, etc).

The “inner south” areas of Canberra are highly overrated.

I lived in Griffith for 10 years when I moved to Canberra in the 1980’s and every house in the street was robbed at least once.

It was so bad that every time friends visited their cars were broken into while they were parked in the driveways.

The reason was well known to everyone but I won’t say what it was for risk of offending social equity advocates.

I couldn’t wait to abandon the prestige address and head for the badlands of Tuggeranong.

Masquara5:45 pm 19 Dec 16

devils_advocate said :

Masquara said :

People looking for places to live rather than build blocks of flats should pay up for Ainslie properties, as their eventual value will be on par with O’Connor and close to Griffith prices.

You forgot the prestige value. The inner south dress circle locations are sought after for a reason. It’s hard to observe the price changes because they don’t sell very often, and when they do they are rarely detached homes.
The inner north will become more popular and therefore expensive with the ACT government’s planned public housing project, to knock down the flats and replace them with better housing stock. But I still don’t see it catching up with the inner south (Forrest, Yarralumla, Deakin, etc).

I said “on a par with O’Connor and close to Griffith prices”. Where did you get that I was saying Ainslie prices will go any where near Forrest?

Holden Caulfield1:43 pm 19 Dec 16

Maryan said :

We’re in Ainslie. House up the road went for something around a million dollars. It wasn’t even on a big block. It had already been subdivided & turned into a dual occ. Small house on tiny block.
I felt really sorry for the couples trying to get into the market…

What about singles, or at least singles incomes? Forget it, haha.

dungfungus7:23 pm 14 Dec 16

JC said :

dungfungus said :

chewy14 said :

There’s no surprise here, this is the start of the ratepayer provided gift of tens of thousands of dollars to homeowners who live near the light rail. People who already on average have significant levels of assets and are now being gifted much more from their poorer outer suburban citizens. And to think we have supposed “left” wing parties in power, promoting this “equity”.

And as for the talk about the age of people buying these properties, one or two auctions does not make data. Older households still hold the significant bulk of housing stock in this country aided and abetted by successive government’s providing extremely generous tax treatment for them to invest heavily in the sector and reduce their tax bill.

I am one in those “older households” and I wasn’t aware there were generous tax benefits available for me when I had there jobs concurrently to save enough to buy my first house.

I paid tax on all three wages too. Now the government and opposition want to knock off my superannuation which I worked hard for and paid a lot of tax during accumulation.

I didn’t learn about this “negative gearing” thing until much later in life but reading up about it now it would be beneficial to the majority of Australian taxpayers and prospective first home buyers if negative gearing was totally banned and all tax concessions associated with it are withdrawn.

A lot of Australians are losing old age pensions/part pensions on 1/1/17 following a means-testing review of the government.
This was a rort for a lot of people too but no one seems to care so how about following through with withdrawing negative gearing?

I am sure no one will care about that either.

Are you saying you are agreeing with a Labor party policy? Re negative gearing?

I don’t think Labor wants to “go all the way” with abolishing negative gearing but if they did, yes I would definitely agree with that.

chewy141:12 pm 14 Dec 16

dungfungus said :

chewy14 said :

There’s no surprise here, this is the start of the ratepayer provided gift of tens of thousands of dollars to homeowners who live near the light rail. People who already on average have significant levels of assets and are now being gifted much more from their poorer outer suburban citizens. And to think we have supposed “left” wing parties in power, promoting this “equity”.

And as for the talk about the age of people buying these properties, one or two auctions does not make data. Older households still hold the significant bulk of housing stock in this country aided and abetted by successive government’s providing extremely generous tax treatment for them to invest heavily in the sector and reduce their tax bill.

I am one in those “older households” and I wasn’t aware there were generous tax benefits available for me when I had there jobs concurrently to save enough to buy my first house.

I paid tax on all three wages too. Now the government and opposition want to knock off my superannuation which I worked hard for and paid a lot of tax during accumulation.

I didn’t learn about this “negative gearing” thing until much later in life but reading up about it now it would be beneficial to the majority of Australian taxpayers and prospective first home buyers if negative gearing was totally banned and all tax concessions associated with it are withdrawn.

A lot of Australians are losing old age pensions/part pensions on 1/1/17 following a means-testing review of the government.
This was a rort for a lot of people too but no one seems to care so how about following through with withdrawing negative gearing?

I am sure no one will care about that either.

Thanks for outlining your personal circumstances Dungfungus, what they have to do with the facts stated in my comment I have no idea but anyway.

Just to clarify a few things, no government or opposition party has ever proposed trying to ” knock off” your superannuation. And as you say, the pension is still ridiculously open in it’s coverage with a person able to own a house (who’s value is not counted as an asset) and up to $800k in other assets, yet still receive a welfare payment.

Negative gearing should be removed/restricted but it isn’t mainly young people utilising it to reduce their tax bills, it’s those older wealthier households once again gaining the benefit.

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