Housing prices skyrocketing, but not just in Australia.

We have heard in the press and TV media that foreigners with money or with cheap interest rates available are buying up in our market and forcing up prices and making the Australian Dream of owning ones own home almost a fairy tale.

Realistically it's quite possible that this is indeed the case as we've just gone through a few of the fastest growth years for house building, immigration and availability of finance.

Young people trying to get into their first home took advantage recently of a boosted First home owners grant which when it first came out could be the total deposit for the purchase of an owner occupied first home.

That is not the case now, and even as the boost to the grant was cut down to half and then no boost at all numbers of applicants were becoming lower as house prices spiralled upwards and out of the reach of those young buyers due to inability to service the higher loan amount as well as lenders getting twitchy and mortgage insurers almost point blank refusing to guarantee more than 95% of the loan amount (in traditional loan scenarios)

Funny though, sales have been doing OK and they seem to be pushing auctions and there are usually some phone bidders pushing the prices up until local interest wains, . . . .so what's going on?


Today, a very small news item has appeared, and I recalled reading a while ago that China's richest woman has made her wealth from (apart from the inherited money from her father; millions) by buying up as much property as she possibly can and then reselling it at a marked profit.

Beijing city limits home buyers to one new apartment

THE city of Beijing has issued rules limiting families to one new apartment purchase as authorities try to rein in rampant property speculation and soaring prices, China's state media reported today.
The order by the capital's authority is the latest in a series of moves it has taken as it tries to reduce the risk of the red-hot real estate market overheating and derailing the booming economy

Ok I know this blog has ended up being a bit of a mixed bag, but I wanted to make a point that while we are constantly being told that our interest rates need to go much higher to control spending which increases inflation, what seems to have happened is that it has revealed our market to a buyer who can access money at a far cheaper interest rate that we can.

Further, if buyers in other countries cannot get property in their own country, they will quite probably look elsewhere, you can never have enough money , can you?


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