Wednesday, March 01, 2017

Come to my dinner party

You are all invited and as we are either childless or our children have grown up, let us bypass those chats, along with the weather conversation and anything Trump related and instead talk about property prices. Property prices are always such an interesting conversation at any dinner party, leading to mouth smacking, grasping of pearls, a gulping of your favourite red, smacking of fists on heads and of course, we could have bought in that area for $40,000, 30 years ago. Luckily we did, but it wasn't just luck, we went without, worked long hours and struggled for years.

Woe is us. Too proud to ask R for money, and with a maxed out credit card of $500 and no money in the bank, we went to a goodbye catch up with a friend who was moving overseas in I guess the late 1990s. I had enough money to buy a snack at the goodbye. I was still hungry and had no money to buy food when I later had a meal break at work. I had grabbed a couple of slices of bread from the freezer. Woe was the poor hungry and starving me. I could not immediately raise money from our investment flat or our home mortgage. Yes, it's all very relative, but I literally did not have cash available until pay day and it gave me an understanding of being poor and really going without.

Port Melbourne was once a place of wharf workers, and very cheap housing. High rise and low rise housing commission (government owned) flats were built then suddenly the suburb a few kilometres from the city boomed, beginning with some high rise own your own apartments on the beach front and an estate of good quality but cheek by jowl housing.

Through R's volunteer job, he comes into contact with a number of original residents of the area.

He has been inside this Port Melbourne place, a converted shop and he described it as a dump inside, yet it has just sold for AU$1,750,000, that is US$1,350,000, UK£1,100,000, €1,270,000.


Another user of R's volunteer duties is selling her home. You will surely agree this is modest home of an old person. She is 93 and her seven sons have insisted she move into a care home. She paid a bit more than $7,000 for her cottage and it was sold last weekend. It is clean and maintained inside but obviously the abode of an old person. Who cares about the house? She readily admitted to R that it will be demolished and apartments or a large double storey house will be built on the land. She hoped to get $1,300,000 for her home. We were doubtful and we were wrong. It sold for $1,655,000. Let me paint it simply. She paid seven thousand dollars for her home and sold it for well over one and half million dollars.


There are many reasons why property in our inner areas is so expensive, but I will leave that for another post.

32 comments:

  1. Very familiar. My mother's home was a dump. After her death it sold for nearly three quarters of a million. Which I still think is an expensive price to pay for the land - which is leased not owned.

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    1. EC, something like a 99 year lease?

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    2. Yes, but more than half of that lease has run. And we don't know what happens at the end, but assume that the owners will be expected to pay.

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  2. I would like to comwe but I live too far

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    1. Gosia, just send vodka and we will toast you in your absence.

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  3. A friend's 50 years old run down house in Sydney's suburb of Waverley just sold for $2.2 million, a mere $400,000 more than her own agent predicted. I should point out that the Sydney reality strongpoint - water views or water 'glimpses' - was not an factor in this property.

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    1. Victor, nearly half a million more. Extraordinary. I guess it was a good sized block.

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  4. Similar stories to you Andrew. Scrimped and saved to buy first home for $70,000 in Marrickville wondering how we were going to pay a mortgage of $63,000. Plenty of 101 different ways of cooking mince. Second property in Canterbury cost $265,000. 2br apartment in Surry Hills cost $625,000 six years ago sold for $1.1mil 12 months ago to buy a house in Newtown for $1.325mil and spend $250,000 renovating it for retirement.
    Sydney and Melb property markets are crazy.

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    1. Allan, I wonder if like ours, your first house was rather run down and needed and received quite a bit of work? I wonder if the point made about young people wanting it all straight away has some validity. Our house in Balaclava, 1992 to 2001 was a real dump when we bought it, and we did very nicely from it when we sold.

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  5. I am happily ovo-laco-pisco, but no meat or meat products, if that is ok for the dinner party :)

    Re Port Melbourne. Middle class families used to be pushed out into the distant green suburbs, leaving working families or unemployed families grotty suburbs like Port Melbourne and Fitzroy. I grew up in the market gardens of outer outer McKinnon post-WW2 because my parents had no savings.

    Now inner suburbs are, as you say, HIGHLY desirable.

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    1. Indeed that is fine Hels. There is always one who has to be separately catered for. My extended family owned market gardens all over Bentleigh, South Oakleigh and Clayton. Speaking of McKinnon, that is another area of extraordinary price growth, for a different reason, the first class state secondary school, and it is not a bad area either.

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  6. Oh my goodness, that is hard to believe that a small house like the sold for that price! Heaven forbid and just amazing.
    Tasmanian houses are no where priced like that - thank goodness.
    I heard that 17 new suburbs are going to be built in Melbourne area over time and cheaper house and land packages - that's interesting.

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    1. Margaret, it is extraordinary that there will be 17 new suburbs, or was it 7? I am not sure. These will be on land now growing vegetables for us to eat. More kangaroos will be driven away. This is just not right.

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    2. 17 Andrew, twice I heard that.
      Agree about the vegies..

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  7. I don't much care about property prices but I sure like dinner parties. I know how to behave too I just sleep under the table until the ICE-CREAM appears. There will be ice-cream won't there?

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    1. For you Charlie, of there will be ice cream.

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  8. Dinner party? I'll bring my favourite fork! Wait. you're not serving anything with chilli in it are you?
    It's nice to know someone, apart from other poor people, who knows what it is like to just get from one payday to another. I've been poorer than I am now, but have never ever had a maxed out credit card.
    Housing prices really are beyond belief, I don't see how anyone could ever afford to buy these days. Of course the banks are happy to lend, and lend too much, so people buy what they really can't afford and get into trouble when two full-time incomes suddenly becomes one for any reason. When banks offer to lend more than you are asking for, people really should say "no thanks, we'll stick with what we know we can pay back", then they'd get a good credit rating, save some money and buy a bigger home later.
    I've been reading our Adelaide real estate pages for quite some time and am astonished at how quickly the prices have risen. Five years ago, a house over $1million was rare, now many are over the million and some are listed at $2.4; $2.9 and so on. How does anyone manage mortgage payments on something like that, as well as council and water rates, maintenance, repairs if necessary and on top of all that, utilities, perhaps car payments, all before you even think about groceries or new clothes and shoes.

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    1. River, I guess people who are buying houses over 1 million are not the ones to worry about. Some people do earn a lot of money. People now often have to live a long way away from their employment in outer suburbs where housing is cheaper and commute, which brings terrible traffic jams and overloaded public transport. Coming to an area near you soon.

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  9. I'll eat anything, but will only drink champagne. Okay, Australian sparkling if you must, and since it's all my palate knows...

    Real estate: now there's a topic. We bought a house in Brissie 30 years ago for 60 grand. It had been built a couple of years after the '74 flood, but had it existed then, it would have been completely inundated.
    We figured that since the last flood happened in 1892, we'd be okay. Anyway, we turned it into a rental and moved closer to the city.
    And we all know what happened in 2011 - another fucking flood! We were so lucky on two counts. Firstly, nobody was living there, and secondly, the water (that evil, stinking water) didn't reach the (furnished) upstairs. By about a foot and a half.
    Anyway, since then we've had some renos done (nothing all that dramatic), and the house is now valued at $900,000!
    So that's my little real estate story.

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    1. Rozzie, champagne drinkers become pissed so quickly and invariably say the most outrageous things at dinner parties. So do I have this right? Your house 30 years ago cost 60, has been flooded, and is now worth 900? In thirty years, that is pretty close to the best I have heard.

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  10. Ormond East Primary School was terrific!

    I remember every day when the market gardens were pulled down and McKinnon High was built. If my parents had not preferred me to go to a private school in Form I, McKinnon High would have been my school.

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    1. Ormond East, Hels. I suppose there was/is an area known as that. Little Jo has gone to a great state primary school, but I expect it will be high end private school for her secondary education. While I don't believe in taxpayer subsidised private education, I am not stupid enough to not know that generally the education is quite good and she will hear lots of good words about charity to the needy, respect for others, diversity in the community, the environment, social justice. Sorry, I feel like throwing up.

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  11. Good grief. That is simply stunning.

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    1. Sandra, for what were once worker's cottages, it truly is.

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  12. Good for her! :)

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    1. Lee, but not of huge benefit when you are 93. Her lads will be happy, and it does mean she has moved to a avery nice place.

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  13. Property prices, a conversation that is always on the agenda. Let's not forget it was the American Real Estate that caused the last financial crash in 2007!

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    1. Marie, and who could forget the names Freddie Mac and Fannie Mae. I prefer Freddie Mite and Fannie Mae.

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  14. I will come wo your party with a potato dish, which is my mainstay existence now, in all sorts of different manner cooked, boiled, baked, fried. I'll talk of rent prices skyrocketing here and working people forced to live in travel trailers, in parking lots, being harrassed and ticketed and hounded, still trying to get to work so they can keep up the trailer license and gas and get propane for heat and cooking.

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    1. Strayer, I like potatoes. I suppose your chat about rent prices might be more interesting that an evening of cat chat :)

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  15. Strayer; add a few beans to those potatoes when you can, dried beans are cheap little powerhouses of nutrition.

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  16. I think our housing market is down a bit at the moment. Good for buyers! The market goes up and down like a harlot's knickers 😀

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