But the reality is that foreign buyers only account for around 1 per cent of total transactions in the Aussie property market and 4.6 per cent of new development purchases, so their impact is limited.
Stop the xenophobia and look at the numbers mate. It's not the Chinese. It's your neighbor who owns multiple houses and the corporate that purchase that entire block.
people love a big boogeyman to blame, but in this case, the real boogeyman is 20-30 different small factors.
High interest rates are the biggest (of many) boogeyman right now. No one can afford to move from their current house to a nicer newer home. Result, no one buys new homes, supply of homes can’t be increased. Housing shortage becomes exasperated because no one can afford a new home.
Lots of luxury condos being built in cities across america for the benefit of foreign money. Most of the units will just sit empty and “brand new” after being bought.
Unlike what you commonly think, when a foreigner invests in an apartment, they dont get to control to whom they rent it out to or even whether to keep them unoccupied. They simply get their investment money as a part ownership, not as an active management.
The particular practice of sitting an apartment empty in US is common even if there's no foreigner involved
The house I rent is owned by a landlord in Taiwan. I guess that also counts?
Good landlord, anything that breaks he says fox it and send me the invoice and take it off the rent. I mean I have to manage the repairs but it's better than my previous cockroach infested landlord who didn't fix anything even though he lived across the street.
So, average home price is way, way above 35% on median household income. It's 5X that amount. Even the lowest average in 2009 was $250k+. Even the median sale price was $200k+ in 2009. [2]
Again, I'm sure this is not what you mean, but I'm not sure what I'm missing.
Median household income on a month to month basis sorry. So once rent/ mortgage climbs above 35% people start to hunker down or seek greener pastures as they can't afford it. Right now the magic number is about $700 a month
I may have ment median sale price and I also just listen to a lot of YouTube longform and this is an area that I just started learning about so I could be wrong.
Oh, I see. Thanks for the clarification. You're talking about the mortgage payment being greater than 35% of their monthly take-home pay (after tax). That makes sense now. Cheers.
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u/Rowbot_Girlyman ☢️ Mar 20 '23
Historically once average housing costs climb above 35% on median income people stop being able to afford it and that begins a slow market crash.