# Is there still long-term value in the Australian housing market?



## Editor

Over the last few years the Australian housing market has performed admirably compared to its peers in the US, Europe, etc. While there have been some difficult periods over the last few years there is no doubt that an investment in Australian property would have maintained more value than a similar investment in Europe or the United States of America.

However, as the Australian economy continues to defy gravity, showing yet more growth during 2012 and is expected to grow at a slower rate in 2013, is there still long-term value in the Australian housing market?

What experiences have you had in the Australian property sector? What direction do you think property prices will take in the short, medium and longer term?


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## Dexter

There is always long term value in property market. Even in US where prices went through major correction in 2008 - 2009. Despite some specialists (like prof. Keen) who anticipate huge crash on the market I don't think it will happen. Careful observers will see that in large cities there are new areas of growth where properties are a lot cheaper than in the older parts. For example - Liverpool, Fairfield and Campbelltown are a lot cheaper than suburbs closer to CBD and well affordable for young people. Same about Dandenong in Melbourne. 

On the other hand I think that growth will be slow - not rapid like it was in 2008 - 2009 period.


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## Burrows

*There is value*

Hello,

Indeed, compared to the overall global growth slowing in Europe and the US, the Australian property market has performed significantly better. The Government's decisions to encourage property development and property investment have visibly contributed to the constant increase in real estate market activity. By offering Build Boost Bonuses, First Home Owner Bonuses, No Land Tax stipulations in NT, and high depreciation benefits, the Government actively supports the local and foreign business and investment.

The economy will inevitably slow down at some point, but due to Australia's strategic positioning and abundance of natural resources, our country will always offer one of the most favourable environments for investments.

Cheers,
Emil
Sunbuild Invest


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## Editor

The truth is that property markets, and indeed an investment market, are dominated by fear and greed. In the good times people push prices higher and higher because they think they are missing out and in the bad times we see people selling at any price for fear of prices falling further.

There are very few times when we will find a sensible balance between over bought and over sold positions in any asset category and perhaps property more than any other. 

Fear and greed are the emotions which control and dictate the movement of stockmarkets - how many times have you heard people say, for example, technology companies are over valued only to see people continue to buy. Then something happens, totally unrelated, which prompts some to take a profit. This takes the froth off the market, others follow and very quickly it becomes a rush for the exit door. Investors are very fickle and as much as we pretend otherwise, human emotion is a major fact in ANY investment market.

Mark


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## Troy

How can anyone try and debate long term property values? 

Then try to compare Oz with other countries? 

If you are moving to Oz then you should not consider what other countries are doing relative to the land of the Southern Cross - but you should understand what is happening Down Under and why and what affects that area.

Often people discover a tanzanite in the diamond that is Australia - if they ask the right questions...


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## Jay_Cheung

As i heard, the pricre of housing had been increasing from 2011.


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## Troy

Hi 

Yes some areas have been increasing in value while others have remained stagnant and even other areas have lessened in value. There is NO SUCH THING as an Australian property market. 

Anyone moving to Oz to live should do them self a favour and discover the benefits of purchasing an investment property BEFORE they arrive - just be careful of where get your info. 

Happy to share some of the benefits if you like?

Cheers
Troy


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## chicken999

I believe u have to be Aussie citizen or have your pr or be partner of same to purchase in Australia. Or u can apply for specific approval to purchase a property through the F I R B google that name and they have heaps of info Or sometimes the government allows 50 % of a new development to be sold to foreigners. Always check the firb site before u buy and put a special condition in your contract making it subject to u getting firb approval. Takes about 30 days to get approval. Brisbane is booming at the moment and very cheap compared to Sydney or Melbourne. I work for conveyances lawyers in Brisbane if anyone needs assistance in Queensland. All states have different laws so always seek legal advice in the state u are buying in.


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## Troy

Hi

Only stipulation is folks that do not have PR (Permanent Residency) can only by new - be it house, apartment or townhouse. FIRB process is actually quicker on line and can take a matter of days for approval - the 50% limit no longer applies. 

Also make any contract also subject to finance. The finance approvals can be tricky as an overseas investor unless you know who to go to. You will need a local solicitor to act as your power of attorney as well. You will also need a working bank account. 

Our business speciality is assisting international investors to purchase a performing and safe property before they arrive - our services include walking people through each step and making sure they are in contact with the right people that have a thorough understanding of international investment laws and regulations. 

Certain parts of Brisbane is currently an area we recommend - be careful of where you invest and the advice you receive.


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## Glenn Sherman

Hi,
As with inflation and rents, housing prices have also outstripped incomes as well. Unfortunately, the ABS does not provide a long-term median household disposable income (HDI) series, so the denominator is derived by dividing aggregate real gross household income by the number of occupied households on an annual basis. This results in an unusually high HDI as averages are typically greater than medians, and is further amplified as the HDI is stacked with artefacts like superannuation which cannot be drawn upon to finance debt repayments. While the outcome is a rather low ratio, it keeps in line with that developed in Stapledon’s 2012 housing paper and shows a substantial increase from 1996 onwards.


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## Troy

Glenn Sherman said:


> Hi,
> As with inflation and rents, housing prices have also outstripped incomes as well. Unfortunately, the ABS does not provide a long-term median household disposable income (HDI) series, so the denominator is derived by dividing aggregate real gross household income by the number of occupied households on an annual basis. This results in an unusually high HDI as averages are typically greater than medians, and is further amplified as the HDI is stacked with artefacts like superannuation which cannot be drawn upon to finance debt repayments. While the outcome is a rather low ratio, it keeps in line with that developed in Stapledon's 2012 housing paper and shows a substantial increase from 1996 onwards.


Ummm - in English????

You obviously know what you are talking about because I have no idea what you just said means.

Question - is there still long term value in the Australian housing market?
Answer A- There NO SUCH THING AS AN AUSTRALIAN HOUSING MARKET
Answer B - YES


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## banyuwangi

For a long term investment I would invest in property market buying three bedrooms home or even four bedrooms home is all good...


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## Move Migration

It's simple supply and demand - is there going to be enough housing supply to meet the increasing demand in the long term? If no, then the property values will increase. So I think the answer to your question would be yes there will be long term value...depending on how the demand shifts and where the demand moves to (eg Sydney vs Melbourne)


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