As it turned out, outer surburban Melbourne remained flat until 1999. The council valuation had actually gone down 4 years after I bought. I watched with some amusement at the inner city boom that started around 1996. I knew it would wend its way the outer suburbs eventually. I was was right, because I am Wulfie!
I was rather heartbroken for quite some years after Caroline left me. I was also worried about meeting the repayments on my own. I paid out the Ex a paltry sum by today's standards. She just wanted enough for a long vaction to her homeland Holland. And the new car!
Back in 1999, I even contemplated financing an investor home in my own suburb. So sure I was that when 2000 came, the new prices would be leaving the static 90's behind. But I was unsure of myself at the time. As it turned such a move would have been a good money spinner.
By 2001, checking the new prices. I laughed my way home at the Ex.
I'd alway's wanted my own place. I had been brought up in lousy rental accomidation. My parents only managed to buy a unit 10 years after I had moved out from them. And get this, I lent them my savings to help them buy it! That was in 1989, but they repaid me in a few years.
Now I'd think it reasonable in the "lucky country" that one's own home may be a birthright. I certainly respect that property closer to the city center is going to be ruled by supply and demand. But what about the prices in the sticks of Melbourne? 130k for 700 m2 or less even further out I am. Just how do they manage to get that.
A modest house construction can be purchased for under 100k. And here I guess you get more or less what you pay for. But 130k for the dirt? Block improvments and ultility connections with governement charges works out at around 40k. So excuse me, 90k left over for the right to call a patch of dirt your own!
The original owners purchase deed's state 20k for my place's site in 1986. As of now, a vacant block in the same area has 190k tacked on it!!!
Something tells me, the aspiring home purchaser is footing the bill for a lot of things that have nothing to do with property.
One feature is what seems to be a negative cash rate at the RBA. The money more or less expands at over 10% per annum. But the cash rate is down around 6%. If we allow 1.5% for general population increase. So the money supply is measured per capita. We have still had a negative interest rate between 3 and 4% the last few years. Property boom look no further, this was the governments magic economy. Printing it!
With such a negative interest rate property speculators had a windfall flipping land. The same article with no improvement, will simply increase with the money supply. Good pay for sitting on your bottom!
Looks like owning your own place, now comes with huge disbursements to government cronies!
I think as the price malaise settles on the wannabe homeowner. There will be some harsh words for the authorities.
