Why is Australia's property market so out of control? 

Nice explanation of supply and demand 👌. What is life without money ? I think it's irrelevant. When you live, always try to invest for future moments like this to ensure profits and growth.

I sold a couple of homes in the canberra area for pretty good cash and I'm thinking to just leave it in stocks while waiting for a house crash to happen and as well avoid inflation, but is this really a good time to buy stocks? I hear it's a madhouse right now and I still hear folks are raking in huge 6figure profits by the weeks and I'd love to know how.

The path we traveled to get here over the last 25 years, - introduced negative gearing - deregulated bank lending practices(easy money) - foreign ownership up to 60% of developments - increased migration - government handouts to buy homes - painfully slow council planner's - and now material price increases all poorly managed by government.

Pricing most young people out of basic necessities (food, water, and affordable shelter) and by extension having children of their own always leads to horrible outcomes for society.

Nice explanation of supply and demand. Unfortunately it is irrelevant for has the current boom where government property welfare and money printing inflated the market while the population was stagnent (or shrinking in Melbourne). These tax payer funded property market stimuli are also a major cause of the current inflation issue.

Yes,yes,yes .....the bubble started in 2003,house prices doubled overnight, why? It actually occurred in a few countries, this supply and demand bs is meaningless...could it be govt allowing people from anywhere in the world to buy houses and speculate like a stock market also caused this? Anything for stamp duty taxes?

Its very unfair. Baby Boomers were able to buy a house 30 yrs ago for $100,000 - and now that house is worth $2 million. But wages have not increased anywhere near that rate. Its very unfair for younger people who have to pay these high prices.

I have no interest in buying home, but this rental market won’t let me. It’s crazy difficult living in Australia at the moment

Similar situation in Canada , how shameful is that Canada and Australia are one of the largest countries in the world by size and still have housing issues

Yet everytime the government steps in to "help" it just drives the property prices up. Increase supply of you want lower prices.

This was awful reporting on a crisis that is way worse than reported. A House was never meant to be an asset it was always meant to be a place to live. Every government intervention so far has done nothing else but increase house prices. They way this will be fixed is get rid of all investor related tax breaks and force them out of buying up homes and turn them into ROI’s. I once told an investor that they are effectively stealing a home from the pool of properties and turning it into an ROI they didn’t have an answer to that one.

There are more than enough homes in Australia (there are 1,000,000 empty homes currently), the problem is the tax incentives designed to help the rich while the "support programs" "designed" to help first home buyers simply push prices up even further. Its all fun and games now, but the Australian economy has transformed into selling rocks to China and selling houses to each other. While this is great when Chinese demand for resources is high and global interest rates have been dropping (allowing $3tn of "wealth" to be created in 12 months), in the even Chinese demand drops (EG their population is now decreasing while they have 80 million extra empty homes) and global interest rates rise, the Australian economy could be in for some difficult years. Our housing market is now more overvauled than the japanese market in 1989, which then suffered price drops of over 40% in the following decade and still haven't fully recovered. The major problem.... Government policies that raise housing prices is popular and wins you government, even if its the wrong long term decision for the country as a whole.

The Labor gov should start imposing a temporary home hoarder’s tax for people who own more than 3 homes. Starting from an extra 20% land tax for every extra house rising to 100%. With the rising interest rates that should help to alleviate a little of the current supply problem

Surprised no-one touched on this: Investment properties should not be allowed. It should either be illegal to own more than one property or, the less direct alternative is to have laws that punish having investment properties and make it so unprofitable that no-one will do it (same outcome either way). Unfortunately, the opposite is what has happened; there have been laws made to make investment properties very lucrative because, surprise, surprise, most of the people responsible for passing those laws own one or more investment properties. A prime example of corruption.

I am an Asian refugee.. I never understand about assets and liabilities.. At church ⛪ time every Sunday I hate it so much and sitting outside near a property boundary of an old man rose 🌹 garden near riverside drive.. and one day on Sunday, the Oldman somehow talked to me and ask me to buy his block and explain to me about houses and cars and what is the difference when you buy them.. and yeah I have a nice flash 📸 Holden at that time and this is almost thirty years ago... and naturally I was thinking yeah right old dude..😅 And later in life my memory and reality kinda clicked and I remember his advice and yeah I bought a house 🏡 in the 90th and bought another one later when the mortgage of the first home relived.. hmmmm.. thanks you old man.. I may not bought your luxurious huge block of land near the Swan River but I remember you and took your advice.. 🙂.. hmmmm

Been in Australia for 28 years everything is so expensive No more stress and repayments Thank you

Remove or reduce negative gearing and prices will drop immediately.

Responsible lending failed and thus why we got mortgage stress and rental stress. Banks know their customers are about to fail their mortgage repayments so instead of chasing their customers they recently dropped their interest rates. Banks don't need to wait for the American federal reserve or the Australian RBA for the rate changes each month. The banks and the government made this property bubble and should have let it crash back during the GFC but didn't wanna let it happen.

REMEMBER - we have a real estate site giving us a point of view. So keep questioning what's been shown here. Possible biasing in what's being presented.

It's because interest rates hit a record low of 0.1%.. Supply of CREDIT is the issue not supply of houses.. Houses are only worth what a bank is willing to lend people. History shows that the best time to buy when interest rates are at 17.5% and only going down for the next 30 years to 0.1% - the free ride is over

Times have changed, the great Aussie dream of homeownership is no longer a dream but a ball and chain liability. It’s not worth buying a house nowadays, it costs too much to maintain & its more of a liability nowadays. You pour all your hard earned money into it and are a slave to it most of your life. We’ve sold up and have no intention of ever buying again.

You know the country is in trouble when the average Australian person can not buy the average home. The key word here is "Australian". Obviously allowing overseas money to come here has caused this!

They didn't once address the impact of multiple property investments or multiple home ownership (holiday homes) as well as the market competition with international buyers/owners. Australia has enough supply of homes, and it has a good employment economy, what Australia lacks is a fairer tax system that supports social mobility & equal opportunity. There are too many investors using tax benefit schemes to minimise taxes on significant property portfolios (Significant = more than 5+ houses in a portfolio) such as under superannuation schemes. There is no problem generating portfolios & wealth, but the resulting wealth should be taxed fairly so as not to give an unfair advantage to those who can employ lawyers & accountants to siginificantly minimise their tax loss.

It is exactly the same in NZ, for years property has been over valued, and many have suffered as a result. In my parents generation, 60's- 70's, the home ownership rate was at 70-75 per cent. In my generation, 80's - 90's to early 2000's, home ownership was achievable even for those on a modest or moderate income. Currently home ownership is beyond the reach of many. Property prices have risen, but wages have not increased in line with house prices. To give you an example, I purchased a 1930's two bedroom stucco home in an average, but well established suburb in Auckland, for $90,000.00 NZ, in 1990. I eventually on sold the property to move up the ladder. The price represented just over three times my yearly salary. The bank were undecided as to whether they would give me the mortgage, they agreed fortunately. That same house sold in 2018 for $810,000.00 NZ. My wages have definitely not increased at the same rate as the housing market, and I probably would struggle to qualify for a mortgage at todays prices, if I were starting out. Then we had this diabolical situation, where investors/speculators would buy property and on sell them at a profit, even before the original purchased had settled. This created a buying frenzy for those who could afford it, and it was like there were those who used the property market as a casino. Sadly, successive governments allowed this practice to continue, in fact encouraged it. Thankfully, governments have taken steps to reign in that behaviour. I also believe that if property prices decrease or stabalise, then we should celebrate it, as this may just allow those who are locked out of the property market an opportunity to purchase.

Yep. Supply and demand. Thing is due to RE being tax deductible for investors they are willing to pay more (artificial demand), so also owner-occupiers have to pay more. Politicians being wealthier have no interest in changing this cash-cow effectively. An attempt for show was made in September 1985 but only applies to those purchased after this date, so what happened was these investors did not sell for fear of ending their tax deduction (less supply). This means owners aren't so interested in tenants as they are their tax deductions, for which they get more when the house is vacant and earns a low income. It should be the governments shame to place investors in competition with those wishing to put a roof over their heads.

Not just unaffordable for young generation, also for older people who weren't able to by their first house 10-20 years ago.

Starting in the mid-1940s babies were born in record numbers, and we baby boomers have lived better than most if not all previous generations and we are often living longer than our parents did. However, when we start to run out of money and become less able in our 80's (early baby boomers are now in their middle 70's) and sell their houses in order to downsize plus as we also start to die in growing numbers as we continue to age, I suspect that the volume of large and expensive houses (that many young people can't afford to buy) which will come onto the market, will tend to depress prices significantly. So young people need to be very careful when deciding to take on huge mortgages over the next few years as they could potentially be buying into a falling market.

Such good insight on the needs, but it's very outdated, and most things mentioned, have changed, like lower interest rates?

Question to young Australians? Are you willing to work 40+ hours per week if you have no hope of buying a house near where you work?

Most people tend to want to live in only a few areas, mostly the major capitals in Australia, Sydney, Melbourne, Brisbane, Adelaide and Perth and of these probably 80% is in Sydney and Melbourne thus concentrating demand in a small number of areas.

Its coz of social housing low supply. And sate govt not releasing land dedicated to first home buyer only. And the land forfirst home buyer from state should be zero $. Only tge construction cost should be counted.

US, Canada, Australia and new Zealand. Have same housing problem. Something very strong link if you ask

This doesn’t scratch the surface of the black market in money laundering through property. Michael west media did an excellent investigation report into that areas negative contribution to this problem.

so correct me if I'm wrong, first home guarantee is a scheme to prop up the market even more than it already is, buying getting first home buyers into an already very sketchy market by making it appealing with only a 5% deposit required???? anyone who buys a house with this scheme is going to be repaying that for a long time and may even send them bankrupt when interest rates come up.

Public auctioning should be banned along with real estate agents who do not care about anything but their own pocket and commission therefore inflating the price by waiting at auctions as long as possible. There should be a fair price and dealt between the buyer and the seller. Ther is just too much bad psychology being put into this very sensitive market.

To bring the housing prices down is the answer to solve affordability for home buyers

No mention of tax and investors, very convenient for a real estate website to push the solution of building more houses and more government subsidies. If the government invested in high quality, low cost socialised housing to push down rental prices that would give people a chance to save and discourage investors, pushing down prices. I've seen 375sq blocks selling for over $1 on outskirts of Brisbane, how can subdivision help.

Because criminals are able to launder money by buying Australian real estate. Lawyers, Accountants and Real Estate agents are able to process huge amounts of cash without having to declare it as the banks have to.

The best thing you can give folks is a decent economy and the knowledge to keep it running smoothly. Australia's property market is only as relatively expensive as it is because wages have not kept up with the cheque Australian governments wrote on the backs of working Australians and their children. Governments thought they saw something which, in reality, was not there, and they funded it with taxpayer's money. Incompetence is a monstrous understatement. 🙏🇦🇺🕯️

Stop buying expensive furniture at rented property or decorative item … stop eating outside … stop buying expensive makeup and clothing its not that hard … gather money trust this will help u to buy a property. And go for the sale item everytime when u shopping. Easy peasy and work hard … cheers

Greed, fanned constantly by real estate companies? Not to mention property management fees for people renting. Complete waste of money for owner and renter that raises the cost of living. But as long as there's a buck in it, hey?

This video tells the fact but not even gives a scratch on surface of the problem. They talk about economics, blah blah blah, supply and demand, etc, to make you believe there is a theory behind. However, there is none. It is just basic, GREED! what OZ misses now is a policy to oversee the rental market, not just the price but condition of rental property quality. Secondly, what really broken is the taxation let the wealth scheming sacred land resources and multiple homeownership. Why there is no special stamp duty for the 2nd investment property in this country to limit the competition to those who haven't owned a house. Think deeper guys and gals. POLICY POLICY POLICY!

Govs, banks, property investors, etc., who have money or make money from properties don't want the house price to drop. They will find a way to boost the price up again, not only by lowering the rate after increasing it, but also by govornment-shared ownership, building incentives, and vast immigration (like Canada). As long as the population keeps growing and money keeps flowing, the price of houses in sought-after areas will be up there. Canada gets 450k immigrants this year. Suppose Australia gets 225k people a year, pouring to those few big cities. For Australia to keep growing, immigration is necessary, yet the rate of house construction will never be quick enough. Young Australians are competing with people who bring money from overseas and inherit wealths from their family. So just keep expanding and buying suburbs farther and farther away from the city.

Not enough homes, too many people. Supply and demand.

There had been several unsuccessful attempts to inflate property prices, across the world for the past ten to twenty years. The artificial cumulation of rise and falls created a big bubble. The interest rates versus income are now at a level that can burst this bubble. The higher end commercial in shopping malls and business districts are at a higher disadvantage than residential area retail shops. The middle class types of residential properties outside of cities should be more stable than other properties when it comes to property-(price)-crashes.

Why does Australia still have this problem if they have restricted property ownership to foreiginers? Who is bidding up the real estate?

Traditionally couples would both work to save a deposit to buy their first home before they had children. Once children come along it’s far more difficult to save money.

I'm surprised that the densification of a city isn't discussed in this video. Not everyone can live in a house it's a fact. Building new houses is environmentally expensive. Houses need much more energy and water. Millions of people live in appartement. In any case the western lifestyle it's sustainable and we can't continue this way with our shrinking ressources. Recently, the french mister made a speech about the necessity of giving up the french dream of life in a big house in a country side. Even though she was criticized a lot (for a reason: she herself lives in a huge expensive house) I think it's a good direction. I think we western should calm down and check our privileges.

It "looks good on paper" until it goes so high that creates social problems like now. The issue is very very sticky and does not seem to have an easy solution.

Australia has a big problem. Ways of fixing it: 1. Invest more and give tax incentives for businesses in growing good regional cities 2. More public housing 3. Cancel the Olympics 4. Charge double rates for vacant houses and units 5. Ban overseas investment in the property market 6. Only have immigration when it works for the majority of the population and then try to then build upon growing areas 7. For people to reject higher rents and work them down and if else fails get a roommate which will have downwards pressure on the rental system 8. Allow rents to only increase no more than once every 2 years, and where it can only be increased by the inflation over that period plus an extra 5% 9. Encourage remote jobs more (when it can be done) and allow workers to live anywhere in Australia 10. Invest in growth for cheaper building materials 11. Encourage more trade based jobs for those that are unemployed 12. Disallow any Citizen to own more than 2 houses (or resident to own more than 1 house) 13. Remove negative gearing If these measures were implemented it would have a massive downwards affect on land and housing prices. By this decree, many houses would then flood the market. So there would be a higher supply, and then there would also be a lower demand. The tradie and building materials measures should also help bring down the prices to more reasonable levels

Help people to climb the deposit hurdle by allowing them to take more loans? Then increase the interest rate and royally screw them again? For another 10 years we will not see any meaningful government scheme changes around housing market. You know why? Because that's not where their majority of votes are coming from.

During the second half of the last century, the average annual permanent migrant intake was 70,000 per year. Since the Howard government that number has been tripled or quadrupled. The area of land within a reasonable distance of employment is fixed. So any increase in population makes every square metre of that land more valuable and more expensive. Great for people who own land, but younger people must pay more and more for less and less living space.

In this video they talk about wealth increasing because of house price growth. Do they mean wealth created from capital gain or do they mean apparent wealth created from owning a home that increases in valuation?

Deregulation of financial industry is to blame. Not requiring a 20% deposit is bad. Social housing will not help as the problem is to big. Buy an apartment. I own two of them in Melbourne. I never had parental help I spent three years in W.A. I am against government grants of any type. I got nothing. We need more housing and less of the not in my backyard bullshit. Build a 4 storey complex in a rich area why not.

You missed 2 important points. 1. Land appreciates buildings depreciate. An expensive house on a cheap block is a bad investment. 2. Negative gearing has skewed the real estate market. It should have been addressed decades ago but now politicians all have a cluster of rentals it will never happen. Oh, and people are stupid. They do what "everybody" is doing then complain when it goes pear shaped. "A fool and his money are soon parted"...

Australia got one of the highest housing prices in the world compared to income. Need a drastic correction on the market. Housing is a basic need of any citizen. This is just a disgrace that housing market in Australia designed to serve the rich only club.

Rents friggin expensive for a home $450- $500 week average area it’s only worth between $380- 420 A week rent just cash grab. Specially for own at 10 years ago. The mortgage isn’t that much even though the interest rate went up wouldn’t change too much. ??? Heaps of rentals out there For a home 🏡

Did some major Chinese property investor pay you to make this video? It’s the only reason I can think of that would explain why you’d leave out one of if not the largest cause of the inflated property prices,overseas investors

SO THIS IS AN ADD FOR CONTAINER HOMES?

Why no one want to say honestly, Chinese and other foreigners coming to Australia lead to increase the prices for housing.

This country has gone to the dogs, we now live in shipping containers.

The problem is wages, if people could afford to buy apartments developers would be in a mad rush to buy inner city real estate and build them, thus meeting that need. But most people can't even afford to buy an apartment and developers are crying that building materials are too expensive because they see the demand but can't afford to build apartments cheap enough to supply it.

Same in my country, salary downgraded hard

The more difficult you make it for young people to own their own homes, the more difficult you make it for them to have families. Business interests will be happy if the descendants of those people who built Australia's infrastructure and institutions die out. That will be the excuse to replace us with workers from low wage countries who don't have a history of unionism. In order to increase the number of dwellings in a city, you have to build up or out or more densely. All three options are a drop in living standard. You can prevent this by returning Australia's migrant intake to the 70,000 per year that was the average in the 20th century.

Solution is to lower house prices by 25% - back to pre-pandemic levels.

Crazy how Australia has so much land yet the prices is unaffordable. Our population isn't crazy like China or America etc our property prices doesn't make sense.

So what he is saying is the drop of interest rates in a cause, allowing a lot of borrowing for purchases of houses, making it competitive.

$88,000 for a container home seems really high. The economies of the world are broken.

where are promised social housing projects. That's the kryptonite for to tame this mad mafia in housing sector, keeping Australians lives as hostage.

There is no way to keep up the number of houses with the population growth, because you have to build further and further away from infrastructure. Infrastructure takes a long time and loads of money to build. The only way is to increase the density, that is apartments, but in this country, no one buys apartments. I believe the government needs to regulate the apartment industry, and demand builders to build more large space, more bedroom apartments, so families can live in them. Maybe the. It will attract more buyers into apartment and eventually resolve the house crisis.

There is no crisis, homes are full and in high demand and tenants are bidding rents up. The only answer is to reduce taxes for builders and developers so more properties get built creating more supply. This will reduce the prices of rental properties and the prices of newly contracted homes

If only governments would watch this then maybe they would have a clue to what's going on . Australia is one big Country that isn't going to run out of land . More subdivisions . It's take 26 years to build a few streets where i live 25km out of Melbourne . It's slow really slow and the blocks are tiny lol . With 200k migrants are year , that housing can't seem to keep up with .

Most places cost about 1m a 20% deposit is 200000 Who can afford to pay $4,000 a month on a mortgage

And the quality of Australian houses is the worst among the developed countries. It is closer to tents - on top of this crazy house price, you need to spend another +100k to have insulation done due to the poor energy efficient standard in Australia.

Simple answer build more homes such an easy fix.

It is incredibly dangerous for any market to rise 20% in just one year. Let alone real estate which normally rises 5% steadily in one year. The current property is probably a bubble and a -10% adjustment is needed to ensure market stability.

I don't think that the house prices have gone up that much; rather the prices have been steady if we take into account of real purchasing power of money. A dollar was worth a lot more 20 years ago than a dollar today. So, if we try to compare buying a house 20 years ago with buying a house today. Of course, it would seem that the house costs more.

Foresure we need higher interest rates, tax air bnb abolish negative gearing, reintroduce capital gains tax on investment properties

You also need to consider, that current homeowners like to move houses, to upgrade or downgrade. So that automatically makes home owners 1-2 million dollars ahead of first home buyers. So a 100k deposit, just cannot compete with a $1-2 million deposit of asset ownership. Another issue is that the asset rich did not work for a large portion their wealth. The value of house price capital has been larger than salary earnings and saving. So effectively the wealth gain for home owners on equal salary with non home owners is 3 or more times that of non home owners over the past decade, that is not fair at all. Think about it, a non home owner will save 100k over 10 years, vs a home owner who will save 100k over 10 years + $500k capital gains(depends on the home that is owned, in some cases, it's in the Millions) NOT FAIR AT ALL IS IT. The only solution really to close the gap is to severely drop house prices. So the deposit competition between ownership to non ownership isn't in the Millions, and the wealth gap decreases.

If the government would tax the empty holiday houses, thousands of houses would be put on the rental market, ane the rental crisis would be solved.

Yes, live in a metal tin can! Container homes are such a terrible idea.

No bill shock on building a new home ? Builders going bust all over the place...I feel for them families who have lost money

I love one sided videos like this as it shows the intelligence of the real estate industry. If you can’t buy a house in Melbourne for around 600k then your not doing your research. If we were all so concerned about this issue, why not count how many homes are purchased via foreign ownership. Why does everyone need to live near the city ? The couple that moved from metro Melbourne to sale were the smartest

It seems to me that mortgage rates determine the devaluing rate of the purchasing power of a currency. So the devaluing rate of purchasing power would lie between the lowest and highest mortgage rates which is determined by the quantity of different types of house buyers. If the dirty overseas money were larger, the devaluing rate would be higher, and if the 25 years house buyers were larger, the devaluing rate of purchasing power would be lower.

Government. Making to many tax ofsets . It's a home not investment. Same house cost 35000$ back in the 80's

Chinese buyer's allowed to buy and leave empty when they don't live here, government corruption

When home owners get a updated land value ,they never object as they like the warm feeling! But stupidly never question it ,then down the track,up go your rates as councils love it because your rates and land tax" if any" are based on a miniscule percentage of the land value.. GOT YA. A average suburb close to inner city sydney a 250s.m block in 1980 L.V approx 35k now 900k ..rest my case

Getting into the housing market it's definitely not worth it with these high interest rate repayments back to the bank's

Great story and well produced.. :) i got into the market in 2008 while it was dumping.. but i saved for 10 years

There's one thing that nobody ever mentions,Greed!

A lot of money that is hunting for something

You accept the state's aid, you accept the state's conditions.

Younger generations need to cut their bad debts and spending habits eg credit cards after pay and subscription monthly costs. It’s too common now younger generations have bad debts. Credit cards or multiple, after pay, fancy car on finance, subscriptions for all tech/entertainment and want to work Mon-Fri to spend Sat-Sun going out partying or eating $20 avocado on toast. Of course you won’t be able to afford a house. What happened to the generation that would tell their kids if you can’t afford it, don’t get it! Bad debt culture.

There is so much land per head capita in Australia with great education and world leading skills and standards in building, it seems crazy that the nation can't build enough homes for its younger generation. More motivation and focus required.

I'm homeless and I like a worsening housing crisis, means I can camp anywhere - even in the city - and don't get hassled. Can't afford it, who cares, the space I'm in is the only space that is truly mine.

Cheap housing in SHANGHAI, BEIJING or HONG KONG if interested, for any would be homeowners I hear.

Build more public housing.

wrong market doesn't need to keep with population growth, it does need to keep up with "money / debt creation directed towards housing growth" ....because the spoils go to the most outrageous speculators...many people have made "collecting " houses their lifes work.. and they may own - 4 appartments and one house. Or 10 flats - each bought from gains in equity from previous purchases. Banks would lend to people building up wealth this way. the catch is that if some people own several properties, or if enough people own several, as is true in a speculative market, then there WILL not be enough to go around at reasonable prices.....and now the barrier to enter this market is crazily high, with so much debt hinging on it that even the government is too chicken to let market forces lower it even SLIGHTLY - as levels of debt are just too high, and small reductions would cause large stresses in market.

Its not supply and demand. Free money.low interest rates.a house is a non productie investment .everyone should rent invest in productie make things schools and productive investment

if you got a divorce or broke up with your partner - hello renting - hello homelessness. Youre literally 6 weeks away from living in your car at all times in modern life. My dad used to sell alan bonds real estate and i remember over hearing them talk about putting their lawyer on local council to help get around planning laws. Its all about property developers. They are the ones getting rich off everyday people. 4 out of five homes sold arent to people who will live in them theyre to investment or second home tax break schemes. Australia needs to follow what Singapore did, create a massive amount of public housing. Singapore invested in its people it had no resources. We need to invest in people not bricks and mortar. Its a trap. It takes away everyones focus. All people care about is property prices. I got run out of my home by phobic neighbours worried about property prices and the cops helped them - every law is written to favour the rich. Its all wrong. All of it...stop pretending it will get better - so many people are living in their cars right now.