- April 28, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Predictions for the Future
What do people anticipate in the near future? The rate of growth we have experienced so far has been nothing short of remarkable. Currently, the median price of homes in Adelaide has surpassed 900k, a significant increase considering it was previously considered one of the more affordable cities in Australia.
With the soaring prices of real estate, what lies ahead for the younger generations? Will the government step in to implement measures to stabilize prices and make homeownership more accessible to the younger population?
## Increasing Wealth Disparities
The wealth gap in the country is becoming increasingly pronounced, and the situation is only deteriorating. This growing disparity is likely to have far-reaching negative consequences. What implications might this have for the future of our society?
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We have a severe lack of mid sized affordable towns and cities to live in compared to most countries. In the UK and US London, New York and San Francisco may be unaffordable but there are plenty of other options in or close to decent sized cities or towns to choose from. Most of Western Europe has many smaller cities to choose from.
I think it’ll go the way of Sydney where housing anywhere near the CBD is unaffordable for the non-wealthy.
Like the current reality of hong kong, most people don’t own property; majority rent and some of the poorest spend their whole salary renting a literal cage to live in.
Truly, the landlords’ sweetest dreams come true.
Apartment living. Build to rent. The have and the have nots.
I’d like to think that rental laws will change to make renting much much more appealing for the long term. Like in Europe, basically you can rent something for 20-30 year leases and have full autonomy over things like painting walls, putting nails in; etc. It will basically mean that you’re either paying $X in rent or $X in a mortgage and the only difference is the equity/accumulation of wealth, but not living standards, housing security or happiness
I wouldn’t hold my breath for the government to do anything other than tinker around the edges as long as the majority of voters are homeowners. (Appealing to “how will your kids afford to live here” won’t cut it, because we already live in a highly mobile society where young people move around all the time, plus plenty of boomers and Gen Xers have – not incorrectly – come to think of their very valuable homes as their primary nest egg not just for their own retirement but to leave to their kids.)
Predictions that I think are almost certain:
1. Australia will become much less fair and egalitarian; whether you own a home (or maybe even whether you struggle to make rent) will depend far more on whether your parents owned a home than what your occupation is. This has been true in a lot of the world for most of history and it’s a shame for Australia to lose what was a fairer and juster society, but there you have it.
2. Eastern Sydney and to a lesser extent Melbourne and western Sydney will become like NYC/London: a concentration of wealth and capital where all the jobs are, where young people go to live in their 20s in semi-voluntary semi-poverty sharehousing to build their careers, before eventually moving elsewhere once they’re raising a family and have more power in their career options.
Predictions I think are possible but not necessarily likely:
1. State governments strip back heritage protection (as NSW is doing) and permit more high density. Apartment living, even with families, becomes more commonplace and socially acceptable by the time the zoomers are raising kids (at least in Sydney and Melbourne).
2. Home working full-time becomes far more acceptable for a number of factors, and having a workforce dispersed around the state or the country in smaller towns with much more affordable housing becomes more common.
Whatever happens I think it’s fair to say Australia in 2050 will not look like Australia now. This housing market is unsustainable but I genuinely think it will force a permanent shift in how we live and work before it shifts a break in the concentration of capital.
I predict the both number of renters and the number of rentals to increase as a proportion of all households.
We’re becoming Canada…. It’s really thst simple. Decades of policies designed to benefit boomers and institutional corruption from politicians and property developers. We will all end up living in rented 1bdrm units. We will pay 40% of our wages for the privelidge. These units will be designed to be as small as possible and not built according to any standards for livability just built to rent to maximise profits.
It’s bleak
Check the other 4,000 threads for various answers. Keep scrolling until you find one you agree with.
Getting tougher and tougher to even rent now. At least moving outer suburbs where median prices are at 1.2-1.5mn for a townhouse. For younger generations heavy dependency on mom and pop banks for sure. Inheriting property seems to be best bet. Or go too rural
A 2 bedroom apartment will be 2+ million.
Melbourne has negotiable growth. Adelaide and Brisbane median prices have almost caught up to Melbourne. Crazy!
Will Melbourne catch up? And if so, when?
Currently investors are depending on fast capital growth that is significantly higher than financing costs, which works fine when growth is 10% and financing is 4%. This allows prices to grow beyond their value based on earnings, rents may be high but they are still too low to justify buying properties as investments. They are not value assets they are speculative growth assets.
The problem is that financing costs have increased, and rents are running out of road, they are massively stretching renters as a proportion of income. So there is very little room for earnings growth, while financing costs are higher, eg > 6%.
What this now means is that there is now very little room for growth based on value, so the only avenue for price growth is pure speculation. And earnings don’t justify holding properties based on their current price/earnings levels, you would be better off selling a property and putting the funds in a MMF or short term bonds for low risk and zero effort. And to add to that, many investors have negative cash flow, which means they are losing cash from holding it, and depending on price growth.
More and more investors will gradually realise they are holding bad investments when the price growth they need doesn’t materialise. It is inevitable at the current rate settings, and they are not coming down any time soon. There’s a lot of true believers that hooms only go up, who will keep holding on until they can’t meet repayments, but that will come sooner than later when price growth is limited.
But the property market can’t run flat, it has to grow fast (> financing) or it will be forced to collapse to a lower price level. And the environment for that is here already. As for what happens next, take a look at China currently, or US post 2008.
The only thing that could keep the house market up is if inflation comes down really soon and rate cuts follow, which would let the can get kicked down the road. But there’s all kinds of reasons why inflation isn’t coming down, so expect higher for longer rates, and possibly more increases. And a large property price correction. I’d say the flat line will start appearing in the next few months (thanks to the current round of Treasury rate increases), with capitulation starting to show by the start of next year
We have the highest intake of millionaires in the world. Educated migrants will become the elite class and Australian children will grow up to be the working poor
Australia has been growing for 200 years.
Future will just be higher density housing with towns/cities getting bigger
More investment in working hubs being decentralised from CBDs, upwards to 60-100kms away would be great to make the most of sprawl (I’m being Sydney centric), banking and technology sectors following that would be great. Continued upgrading of public transport, business supportive frameworks for industries already in these hubs.
Reset of expectations of what the Australian dream is. Does everyone really want a house on a large block? I’m happy out west with a townhouse surrounded by great public outdoor and indoor facilities.
A culture shift towards communal living (or a proportion of housing development geared towards this).
I don’t see regional centres ever becoming equivalent to the major cities in Australia due to distances, infrastructure, perception, environmental risk factors.
Inequality keeps increasing has been my successful investment thesis for the last decade or so. I don’t see this changing in the near future.
Don’t you know property doubles every 7 years ? $2milliom properties the norm by 2030
Interest rates will go down one day, and prices will go even higher?
I’m no expert but unfortunately there’s too much demand on housing and living in Australia for prices to go down anytime soon.. if ever.. buying will soon no longer be an option for most people.
The same as every other. It will either burst or slowly move back in line with median wage to price ratios. When the balance of owners to disenfranchised voters hits a critical point then policies will change
It looks like broke people being broke they will never get out will be crushed
Middle class will disappear to Semi quasi broke
Elites will rent out their homes to peasants
Japan model. Deregulate zoning completely and remove local governments to affect zoning. This gets rid of bribes as incentives for local councilors which is a benefit.
New arrivals are fine with current prices. Those who had earned in non AuD will be be benefitting from the price reduction rather than rise in many cases.
The balloon will keep inflating until it (eventually) pops.
I assume 3 in 10 households will own, they will rent out to 7 in 10 households and the tenants will pay in rent what most families currently pay in mortgage payments.
“… to be fearful when others are greedy and to be greedy only when others are fearful” said someone about irrational exhuberance.
Major cities become like Hong Kong and New York. High density and wealth needed, this will then make other Australians sprawl further away from the major city centers. Lifelong renting to increase and those with low SES are mostly unable to get out of it due to education, needing to working.
Big thing I think we will see us multi generational living.
I think if housing costs continue as they are the government is going to need to significantly intervene in some way to ensure huge numbers of people don’t end up homeless. They are probably not going to want to directly lower housing prices so imagine they might decide to build public housing at a much larger scale then they have been doing in recent decades and open it up to middle income earners as well.
With our population growth from migration and births outstripping new builds I can’t see how it will go down.
Super rich trading homes back and forth.
There will be an element that the free market has always ignored. Housing based on need, rather than massive profits
Property prices have been going up by about 7% per year for about 30 years running
On average.
No reason to suspect this will stop in the next ten years.
On average.
Australia’s future is in apartment living. Better economically and for the environment. Free standing houses will just become more and more unaffordable.
The government has done too much intervention to attract property buying for first home buyers which only raised the price even more. Giving 20k for each first home buyers will raise the price for the bottom end of market.
The banks have a Prudential responsibility to provide loans on assets that holds value in medium to long term. This is the best way to hold the property price as developers and individual purchasers need credit.
Average prices in 20 years will be $3.5m-$5m in every city and the first $1 billion property will be on the market.
As the climate gets warmer, many parts of Australia will be totally uninsurable. There is one place in Australia where RE prices have fallen. NE NSW and in particular around Lismore. There is no way the banks will lend money unless the property can be insured. . Other places with a bullseye are Cairns, Western Sydney around the Nepean, and the Gold Coast low lands. So, cheaper houses will come, you just need cash only, and a boat.
Tbh this post gets made every weekend lmao
https://media1.tenor.com/m/8_OVZcBbxH4AAAAC/gattuso-sometimes-maybe-good-sometimes-maybe-shit-gattuso.gif
Land will continue to increase in value within the more desirable locations, but there will be a flood of high density in the coming years. Expect apartments etc to decline in value and probably significantly.
Everyone wants the same gains and just a tiny bit more each time. So now there has been like 20% gains over a 24 month period, those some people who bought now, are going to want 21% over 24 months and then those people are going to want 22% over 24 months, and it’s just going to continue like that now.
Rosy and everything is perfect.
Funny you fail to mention Melbourne is almost same price as Adelaide, to paint a biased picture.
On the basis of your stat, I’d say Melbourne will go up 30% more soon