How much you need to earn to buy property in Canberra

dungfungus said :

chewy14 said :

dungfungus said :

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

Who said anything about dying rich, I thought they were all SKI’s?

But either way, I think most younger people would swap having to rely on their parents potentially maybe giving them an inheritance for a fair system any day of the week.

The media says babyboomers are evil people who accumulate wealth through rental properties thus denying the current crop of young people the “right” to buy a home at a cheap price. That is cr*p.
At a certain stage, we seniors stop spending on anything but essentials as that is all we need so there is usually something left to pass on to the offspring (or the RSPCA).
Most babyboomers struggled to get their first house and there were no “leg-ups” like conessional stamp duty of FHOGs. It was a less “fairer” system than today.
Doing it the way babyboomers did it is a life lesson about the value of money.

Dungfungus, your portrayal of older “frugal” babyboomers living off nothing to maintain an inheritance for their children is nothing but a fiction. If it was true, you wouldn’t be arguing with me because the effect on baby boomers of redressing the policy imbalance in their favour would be zero. Their lifestyles wouldn’t be affected in the slightest.

And you do realise that not everyone has wealthy parents who are going to provide them with a windfall benefit. If you support working for your money, you would be against artificial intergenerational wealth transfers to a minority, simply so they can pass that wealth on to their own offspring.

As for Leg ups?

More like hand up’s, to existing owners. Things like FHOG’s and the like did nothing except increase existing house prices propping up the market for existing owners. Nearly every government action in this space in recent decades has been to ensure that existing owners have their property prices maintained/raised. The system is geared towards increasing existing owners wealth at the expense of younger generations.

And I say all that as an owner of a house that is well above the Canberra median, any change in this space would cost me money. But it would make for a fairer system and would actually improve the overall Australian economy. The fixation on property investing in this country is detrimental to the economy.

If you really want to go all out, next time tell us how back in your day you had to walk 20 miles to school barefoot and worked in coal mines for a decade just to afford a tiny one bedroom house.

arescarti42 said :

Whilst the overall rate of home ownership may not have fallen all that much, the aggregate figure masks a collapse in home ownership rates of young people, and unchanged or rising levels of older cohorts.

Quite true. But bear in mins that young people are also studying longer, marrying later, having children later, traveling young, and generally extending adolescence into their late 20’s. They also buy houses later. No doubt part of this is due to higher costs, but not all of it.

chewy14 said :

dungfungus said :

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

Who said anything about dying rich, I thought they were all SKI’s?

But either way, I think most younger people would swap having to rely on their parents potentially maybe giving them an inheritance for a fair system any day of the week.

The media says babyboomers are evil people who accumulate wealth through rental properties thus denying the current crop of young people the “right” to buy a home at a cheap price. That is cr*p.
At a certain stage, we seniors stop spending on anything but essentials as that is all we need so there is usually something left to pass on to the offspring (or the RSPCA).
Most babyboomers struggled to get their first house and there were no “leg-ups” like conessional stamp duty of FHOGs. It was a less “fairer” system than today.
Doing it the way babyboomers did it is a life lesson about the value of money.

Masquara said :

Maya123 said :

I managed to buy my first house, by renting out the two spare bedrooms for several years. I would have struggled otherwise, as my income was not that high. Doing that I even managed to pay off the home loan years earlier. That was in the years before land tax, so now someone doing that might find it is not so easy, because land tax is (wrongly) not based on rental income, but land value, ie. two houses side by side; one house getting twice the rent of the other, but they both pay the same land tax.

Weren’t you in a guvvie? Or is that another Maya on this site?

Ex guvvie, I bought.

dungfungus said :

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

Who said anything about dying rich, I thought they were all SKI’s?

But either way, I think most younger people would swap having to rely on their parents potentially maybe giving them an inheritance for a fair system any day of the week.

wildturkeycanoe said :

VYBerlinaV8_is_back said :

Canberra property has been getting cheaper in real terms for several years.

The blocks are small, expensive, and typically poorly located.

To your first comment, no, land has not become cheaper. Rates notice shows increases every year. The apparent drop in prices is due to your second comment. They are simply making the blocks tiny and charging a bit less than before for full sized 600m2 blocks. Developers must be raking it in, while new home buyers get slugged with massive building costs. Why can’t we drop transportables onto land here, they are much cheaper? Oh right, builders have their hands in the government’s pocket.

Land is definitely more expensive, but the real value is not necessarily what appears on your rates notice, it includes the utility of the property that sits on it (I suspect the accountants amongst us will disagree, but that’s the reality of buying, in my opinion). People buy land value either for new builds, or knock down and rebuilds. For everything else (the majority), it’s the market value of the property and land that is paid.

Yes, the new blocks are small, but the developers probably aren’t doing as well as you’d think, given the cost of local labour and materials, not to mention the taxes and government charges that are levied on new property.

Given the cuts to the PS are largely finished, and many private firms are hiring, and government spending is increasing, I’d suggest the worst of this cycle is probably behind us. I’m not expecting prices to the moon, but once the current stagnation finishes we’ll definitely see some price rises.

VYBerlinaV8_is_back said :

Considering a third of Australians live in rented accommodation, and this hasn’t really changed for several decades, I’d say that yes, this is fairly normal.

Whilst the overall rate of home ownership may not have fallen all that much, the aggregate figure masks a collapse in home ownership rates of young people, and unchanged or rising levels of older cohorts.

For example, between 1982 and 2011, the rate of home ownership for those aged 65+ years increased from 75% to 81%, while for those 25-34 years old, it fell from 56% to 34%.

The housing hyperinflation of the last 20 years is a social and economic disaster in the making.

VYBerlinaV8_is_back said :

Canberra property has been getting cheaper in real terms for several years.

The blocks are small, expensive, and typically poorly located.

To your first comment, no, land has not become cheaper. Rates notice shows increases every year. The apparent drop in prices is due to your second comment. They are simply making the blocks tiny and charging a bit less than before for full sized 600m2 blocks. Developers must be raking it in, while new home buyers get slugged with massive building costs. Why can’t we drop transportables onto land here, they are much cheaper? Oh right, builders have their hands in the government’s pocket.

Maya123 said :

I managed to buy my first house, by renting out the two spare bedrooms for several years. I would have struggled otherwise, as my income was not that high. Doing that I even managed to pay off the home loan years earlier. That was in the years before land tax, so now someone doing that might find it is not so easy, because land tax is (wrongly) not based on rental income, but land value, ie. two houses side by side; one house getting twice the rent of the other, but they both pay the same land tax.

Weren’t you in a guvvie? Or is that another Maya on this site?

arescarti42 said :

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

And when they get rich and die who gets their wealth?
Without working for it, too!

VYBerlinaV8_is_back said :

Considering a third of Australians live in rented accommodation, and this hasn’t really changed for several decades, I’d say that yes, this is fairly normal.

Whilst the overall rate of home ownership may not have fallen all that much, the aggregate figure masks a collapse in the home ownership rates of young people, and unchanged or rising levels of older cohorts.

For example, between 1982 and 2011, the rate of home ownership for those aged 65 years and older increased from 75% to 81%, while for those 25-34 years old, it fell from 56% to 34%.

The housing hyperinflation of the last 20 years is a social and economic disaster in the making.

I managed to buy my first house, by renting out the two spare bedrooms for several years. I would have struggled otherwise, as my income was not that high. Doing that I even managed to pay off the home loan years earlier. That was in the years before land tax, so now someone doing that might find it is not so easy, because land tax is (wrongly) not based on rental income, but land value, ie. two houses side by side; one house getting twice the rent of the other, but they both pay the same land tax.

arescarti42 said :

So to buy a middle of the road house in Canberra, you need to be on an above average wage, devote ~60% of your income to your mortgage, live on the poverty line, and don’t even think about what happens when interest rates rise from record low levels.

Riiiiiiiiiight, no problem here!

There’s no way you could afford those properties on those wages without extreme difficulty coming up with the deposit and then extreme risk of defaulting on the loan.

arescarti42 said :

So to buy a middle of the road house in Canberra, you need to be on an above average wage, devote ~60% of your income to your mortgage, live on the poverty line, and don’t even think about what happens when interest rates rise from record low levels.

Riiiiiiiiiight, no problem here!

Considering a third of Australians live in rented accomodation, and this hasn’t really changed for several decades, I’d say that yes, this is fairly normal.

Of course housing is more expensive than in times past, but people also have more disposable income and standards of living are much higher. Interest rates are also lower, and the price of many other things is lower too.

I’m not suggesting it’s a good or bad thing, it’s simply how it is at the moment. Over time, it will likely change.

watto23 said :

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

+1

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

It goes to show how greedy and selfish Australians are. Most are more than happy to sell out their children’s’ future, and deny them the opportunities they enjoyed if it means they can get rich without actually having to work for it.

So to buy a middle of the road house in Canberra, you need to be on an above average wage, devote ~60% of your income to your mortgage, live on the poverty line, and don’t even think about what happens when interest rates rise from record low levels.

Riiiiiiiiiight, no problem here!

VYBerlinaV8_is_back said :

Ezy said :

VYBerlinaV8_is_back said :

The thing that surprises me is people building new in ACT. The blocks are small, expensive, and typically poorly located.

Exactly. For the last two weeks we have been looking at land to build simply because we aren’t finding the right house at the moment. We did some sums on buying land, then building, then looking at how much yard we would be left with on a block where the house next door would cut most of the north facing light out – no thanks.

Depending on your finances, you might find the best result is to purchase an older home then do some renovating, resulting in a modernised property in a good location at an acceptable price. Good luck!

Thats what we have decided on – just that right home that will respond well to the renovations we have planned is hard to find. It will come along one day.

This is what happens when government policies at a local and federal level favor maintaining property prices over affordability. When I bought my place, I earnt per annum a third of the houses value. Now its closer to wage being 1/8 of the houses value.

I could not afford to buy a house now, but it was easily manageable on my salary fresh out of uni 15 odd years ago. No government is going to actually make changes necessary because far too many people will lose out. Investors, superannuation funds and even home owners really don’t want to see a drop in the value of their home and property. You can’t hand out first home owner grants because it puts upward pressure on prices, so the houses are just more expensive.

I can only think of two things, either high interest rates or a recession will lower houses. It would also be good if at least some laws making changes to negative gearing are made, even if it is grandfathered and changed to neutral gearing (ie only claim expenses against income earnt from the property).

Ezy said :

VYBerlinaV8_is_back said :

The thing that surprises me is people building new in ACT. The blocks are small, expensive, and typically poorly located.

Exactly. For the last two weeks we have been looking at land to build simply because we aren’t finding the right house at the moment. We did some sums on buying land, then building, then looking at how much yard we would be left with on a block where the house next door would cut most of the north facing light out – no thanks.

Depending on your finances, you might find the best result is to purchase an older home then do some renovating, resulting in a modernised property in a good location at an acceptable price. Good luck!

VYBerlinaV8_is_back said :

The thing that surprises me is people building new in ACT. The blocks are small, expensive, and typically poorly located.

Exactly. For the last two weeks we have been looking at land to build simply because we aren’t finding the right house at the moment. We did some sums on buying land, then building, then looking at how much yard we would be left with on a block where the house next door would cut most of the north facing light out – no thanks.

Canberra property has been getting cheaper in real terms for several years. I’d say we’re within 2 years of the bottom of this cycle, after which you can expect another price rise. Some suburbs are already starting to increase, and more property is selling now compared with last year. Of course, if you want a unit in a new development, some low-balling could yield a good result.

The thing that surprises me is people building new in ACT. The blocks are small, expensive, and typically poorly located.

That Wright figure is completely misleading because of the number of homes advertised there that don’t include land. Jump on allhomes and take a look at the ~450k ads that are for house only. These sellers all push the government’s ‘land rent’, and these houses are actually closer to 850-900k when land is included.