I just don’t get where the money comes from. There can’t be that many rich people in Melbourne. And we are not just talking about the absolute inner city here. The stupidly expensive housing goes out along way.
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Is it me or does the guy with the hammer look like a scared Bishop, the android from the Aliens movie?
Often the house is unimportant to the price.
An unprofitable 3 bedroom house is going to be knocked down for a nicely compressed collection of townhouses.
It boggles the melon. The neighborhood I lived in at Redwood city has quadrupled in ten years, and Portland is 2.5x.
thank you for your opinion. I disagree.
Her name is Becca >:)
And yes, she weilds a mighty Mjölnir.
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Ohh! 
Beware with such hammer. Combined with a chisel and a live wire, it can summon lightnings!
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My wife did exactly that one time. It exploded the tip of the chisel and blinded both of us for ~30 seconds. Guess what two people check wires now?
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Mom almost fell off a ladder after shorting the supposedly disconnected wires coming from the ceiling, when making sure they are really disconnected, with a neon tester. It had a nice crater on the side of its tip ever since.
I have somewhere a photograph from local criminalistics museum, of a specimen in a formaldehyde - an electrically burned hand still clutching a chisel.
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It comes from banks, who get to make 90%+ of it up on the spot when they give someone a mortgage.
It comes from tax breaks like negative gearing.
It comes from foreign investment.
It comes from the other side of a wealth gap most folks can’t even begin to conceive of.
It’s high time for Piketty enemas all round.
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The phrase, “that can’t Possibly be live” will never be uttered by me again.
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If you’ve never had a jolt, you’ve never really worked with electricity.
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My most recent mishap was not on flimsy household AC. It involved a fully charged 105-volt LiFePO4 battery capable of giving almost half kiloamp, and brushing a cable against the other-side terminal. The spark was rather underwhelming but the sound rivaled a gunshot.
There will be a lot of fun to be had with electric cars.
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Ahh I’ve seen the scary crisis of someone losing their job and owing the bank $500K.
Even, the dear wife getting pregnant and so you only have one income becomes a crisis.
People with usually good incomes living on the edge to pay off a house.
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It was twenty years ago when I decided it was getting too extortionate to contemplate… I’ve never seriously considered putting my balls in a bank manager’s vice so deep…
I hate renting, but it doesn’t feel like a choice.
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If Melbourne’s anything like Vancouver, then here is what’s going on:
- wealthy foreigners (mostly Asian) buy high end houses (often sight unseen)
- this pumps up the cost of the high end of the market, bringing all other prices up with it
- low interest rates make it easy to borrow lots of money cheaply
- those who are lucky enough to have parents retiring with a bit of a nest egg get a loan or gift for the down payment
I know that Australia has quite a bit more control over foreign ownership of real estate, but I also am pretty sure that there are ways around that.
Pretty similar deal here too.
The Chinese… and the tricky line between complaining about it and being accused of racism.
Also we have a bit of investment madness. People buying up investment properties and getting a bit hysterical to win the Auction bids. Prices keep flying up.
A million bucks invested in business would make jobs and industry. Dumped in houses is economic empty calories.
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I know. It’s a fine line. In my understanding the wealthy foreigners are mostly Chinese, but that’s not really the important part. The important thing for housing bubbles is how the money is invested, not who or where it’s coming from. Of course, my government doesn’t keep any statistics on this, so all we have is hearsay and fear-mongering.
In the UK, you’re not taxed on any capital gain in the value of the house you live in (your main residence). Inheritance tax rates mean most people can pass on the wealth/capital in their house to their children.
If you’ve got a property, then it’s a game of bridging the gap between the value of your current property and the next.
This pyramid of increasing values is sustained by:
(1) owners buying entry-level properties and renting them out. They can do this because they can get cheap finance based on their other property. Plus there are tax breaks for buy-to-let.
(2) First-time buyers supported by The Bank of Mum and Dad (which basically means getting cheap finance off their parents’ current property)
(3) Overseas buyers - Greeks, Russians, Chinese etc looking for a stable place to invest their money that is hard for governments to find/tax/freeze.
The solution would be to tax the paper-profit, capital gain, on all houses. However, that’s politically unacceptable (at the moment).
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I’m in Kirkland, WA, near Seattle. It’s basically a wasteland. My wife and I are both gainfully employed with no children and near 30, and there’s no way we could afford anything remotely close to where we both work - and the Seattle freeway system is so awful that living further away is a serious quality of life break. So we rent. :\
For topical context: 300k would get you a house with no roof, or a condo. Maybe. Or a ‘fixer-upper’ that’s essentially been soaked in dog urine and termites.
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