logo
‘Repeatedly outbid': readers share stories of housing despair as Australia's prices reach record highs again

‘Repeatedly outbid': readers share stories of housing despair as Australia's prices reach record highs again

The Guardian5 days ago
Dozens of Guardian Australia readers have shared their experiences of trying to buy a home in a rising market, as fear-of-missing-out fervour takes hold.
After a short reprieve, property prices have surged to record highs across large parts of Australia, making a family home even more unaffordable for prospective buyers.
One Melbourne reader, a nurse, said she felt like cattle herded from one home open to the next.
'Multiple times I went to inspections of properties I liked, only to be told on the way out that there was already an offer of $30-50k over asking and if I was interested I needed to submit a better offer within a few hours,' said the reader, who eventually secured a property.
'The market was so competitive I felt really rushed into making a decision a lot of the time.'
Auctions are heating up across the country, with six straight weeks of preliminary clearance rates holding above 70%, according to Cotality data, in a clear sign sellers are in control.
Clearance rates refer to the percentage of properties sold at auction compared with the total number of properties listed to go under the hammer, with results above 70% viewed as an indicator of strong buying demand.
Bidding is expected to become even more fierce amid expectations of further interest rate cuts and an enduring lack of supply of homes.
Property prices in Sydney, Brisbane, Adelaide and Perth are at peak levels, while Melbourne, Canberra and Hobart are also rising.
A reader in Western Australia's south-west said she and her partner bought far from their family and friends in Perth 'not because we were seeking a lifestyle change but because we simply couldn't compete in the city or suburbs any more.
'We went to countless inspections and put in offer after offer, but were repeatedly outbid, ignored by real estate agents or told homes were under offer before we'd even had a chance,' the reader said.
'At the same time, we were grappling with housing instability, facing no-ground evictions and repeated rent increases.'
The couple aged in their early 30s are now so financially stretched with their new mortgage they've made the decision not to have children.
'We simply can't afford to raise a family,' the reader said.
'That's not something we ever imagined we'd have to sacrifice, but this housing crisis has forced people like us to choose between stability and the future we once hoped for.'
Many readers commented on the presence of investors bidding up prices at auctions.
Over the past five years, investors have increased their share of new home loans from 28% to 37%, according to Australian Bureau of Statistics data.
One Canberra resident said she wanted to buy a home to provide stability for her family after moving between rentals eight times in nine years.
The public servant went to two auctions where the same investor bid up prices, with his teenage son filming.
Sign up for Guardian Australia's breaking news email
'I saw the same guy at an open house for the house we purchased and gave him a filthy look of recognition,' said the reader, who was pleased the investor didn't lodge a bid for her eventual home.
A Melbourne reader said while it wasn't always possible to identify who he was bidding against, 'it was always obvious at auctions who were the first home buyers as they bowed out first'.
Most market watchers attribute the growing influence of investors to favourable tax settings, including the Howard-era decision to halve the rate of capital gains tax.
Those settings are particularly helpful to investors when many prospective first home buyers are being priced out of the market.
Australia's intense housing problem, whereby Sydney, Adelaide, Melbourne and Brisbane are all in the top 10 least affordable global cities, has a knock-on effect across society, with foster care agencies reporting a fall in the number of applicants given many people can't afford the time and don't have the spare room to be a carer.
Some readers have turned to 'rent-vesting', a strategy of renting a home to live in while buying a more affordable property elsewhere, in the hope that capital growth will pay for a future deposit.
A Sydney reader said he and his wife tried to buy a home for 15 years.
'The most frustrating thing was watching our rent, continuously being raised, go to pay someone else's mortgage,' he said.
'We had to become part of the problem to beat the system. We had to rentvest for five years to accumulate enough equity to pay for our own home.'
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

If the economics of broadening or lifting Australia's GST are challenging, the politics are horrendous
If the economics of broadening or lifting Australia's GST are challenging, the politics are horrendous

The Guardian

time2 hours ago

  • The Guardian

If the economics of broadening or lifting Australia's GST are challenging, the politics are horrendous

When Jim Chalmers declared we needed a national debate on reforming the economy to drive the next generation of prosperity, he scolded the media for its penchant for playing the rule-in-rule-out game. The irony is that from his high horse, the treasurer had almost certainly ruled out one major change: lifting or broadening the GST. If Chalmers is being disingenuous when he suggests nothing is off the table at next month's talkfest – and he absolutely is – then he should have ruled out changes to the consumption tax from the very start. Many economists argue that lifting or broadening the GST is an essential ingredient in any reform package that fundamentally improves the efficiency of the tax system. More GST revenue can pay for cuts to income and company tax rates, for example. This shift provides a structurally more stable tax revenue base, and sharpens incentives to work and invest. Labor as a party, however, is fundamentally opposed to changing the tax on consumption on the basis that it hurts poorer Australians. Sign up: AU Breaking News email And the worry about fairness is real. New analysis by the ANU's Ben Phillips shows that the GST is 'highly regressive'. Phillips' modelling shows the bottom fifth of income earners pay 5.4% of their income on consumption taxes. That's more than twice as much as the top 20% of households, where GST accounts for 2.6% of disposable income. Broadening the GST to include the things currently excluded – such as fresh food and education – makes the tax even more regressive. Phillips finds consumption taxes as a share of household budgets climbs to 7.9% for the lowest incomes, and 3.5% for those at the top. 'I think equity concerns are spot on,' Phillips says. 'There would have to be a complicated new approach to compensation for lower and middle income workers to make it politically feasible. 'We would be relying on there being some substantial economic gains from increasing the GST, and they are probably relatively modest.' If the economics of broadening or lifting the GST are challenging, the politics are horrendous. The first hurdle is the most obvious: the states get the revenue, while the commonwealth cops the heat. Even if the Albanese government could agree with its state and territory counterparts to share the proceeds, there is also the issue that the GST distribution system has been fundamentally undermined by the obscenely generous deal with Western Australia, the country's richest state. As such, a bigger GST pile without getting rid of this distortion would simply exacerbate what Saul Eslake has called 'possibly the worst public policy decision of the 21st century'. Which begs the question: can we get meaningful tax reform without lifting the GST? Ken Henry, who authored a major tax paper in 2010 and is considered the country's high priest of reform, argues that 'tax reform cannot be done piecemeal; a big package will be required'. He recently told The Conversation's Michelle Grattan 'it would be better not to constrain the reform process by ruling out the GST'. 'Having said that, I do think it's possible to achieve major reform of the Australian taxation system without necessarily increasing the rate or extending the base of the GST.' Such reforms could be paid for via higher taxes on natural resources, and on wealth and savings – both on capital gains and income from that capital (think property investments and superannuation). Chalmers' narrative for the reform roundtable apparently leans into Henry's view around some kind of tax 'grand bargain'. But again, the treasurer's ambition is much more narrow. He has famously described his approach to reform as 'bite-sized chunks', and defended his policy initiatives since coming to power as 'modest but meaningful'. In fact, the most obvious next steps for Labor when it comes to tax is reforming the treatment of family trusts, and introducing a road user charge to replace dwindling fuel excise revenue. Whether we need another roundtable to get there is an open question. Viva Hammer, who played a key role in designing America's immense Tax Cuts and Jobs Act of 2017, had some advice for policymakers. Speaking at a tax roundtable organised by the independent MP Allegra Spender, Hammer said the ambition should be 'to think about doing something better, and not something perfect, because perfection is for the angels'. Breaking it down to the lowest common denominator, the independent economist Chris Richardson's advice is 'let's just stop doing dumb things'. Speaking at the same event in Parliament House on Friday, Richardson said his number one 'dumb thing' is how we tax gas through the petroleum rent resources tax (PRRT). Australia over recent years has become a gas superpower. And yet, incredibly, the tax take has not changed at all, Richardson says. Labor's tweaks to the PRRT have not changed this reality – as Richardson says, the forecasts for revenue from this tax are a 'big fat nothing' in future years. 'Some people say you can't change because there would be some 'sovereign risk',' he said, referring to the claims that altering these rules puts off foreign investors and can choke off funding for the industry. 'Sovereign risk is where one side gets next to nothing across a long period of time, and our own stupidity has got us there, and we should do better.' Richardson believes we are also not charging banks enough for the implicit 'too big to fail' insurance provided by taxpayers. The two suggestions, he said, could raise $5-6bn a year.

Report: Home values drop by millions in Greater Toronto Area
Report: Home values drop by millions in Greater Toronto Area

Daily Mail​

time7 hours ago

  • Daily Mail​

Report: Home values drop by millions in Greater Toronto Area

Home values have dropped by millions of dollars over the last three years in the Greater Toronto Area, a new analysis found. Ten neighborhoods saw the median sale price of a single-family home fall by 40 percent or more since 2022, according to new research by Wahi, a Canadian real estate listing website and app. Houses in Canada reached their peak values in April 2022, after two years of historically low supply and rock-bottom interest rates spurred by the COVID-19 pandemic. 'Prices for single-family homes have held up better than condos, but Wahi's latest analysis shows how much market trends can vary from neighborhood to neighborhood,' Wahi CEO Benjy Katchen said in a statement. Four neighborhoods in Brampton, the third largest Toronto suburb, were in the top ten in terms of largest percentage drops in value. They included Huttonville (-53 percent), Vales of Humber (-50 percent), Northwood (-44 percent), and Westgate (-40 percent). These areas are among the hardest hit, but the downward trajectory is widespread, with 289 of the 344 neighborhoods that Wahi analyzed having lower prices this year than in April 2022. Windfields, an upper-middle class area northeast of downtown Toronto, had the biggest home price decline as a raw number. The median sale price of a Windfields home declined by $3.1 million since 2022, when a property cost a whopping $6.3 million. Windfields saw a $1 million bigger drop than Wanless Park, the next biggest loser at a $2.2 million decrease over the same period. Some experts view these price cuts as the market coming back down to earth from an artificial pandemic-era boost caused by quantitative easing. Between 2020 and March 2022, home values across the nation surged by about 65 percent. This didn't last because the Bank of Canada, like the US Federal Reserve and most other central banks around the world, raised interest rates to stifle inflation. Higher interest rates make it harder for home buyers to obtain favorable mortgage terms, while also incentivizing home owners to stay in their current residence. Although Canada has been gradually lowering rates since June of last year, the market is not expected to experience same historic levels of price growth as it did in the pandemic, according to a report from the Bank of Montreal . In March 2025, Bank of Montreal Senior Economist Robert Kavcic said that even though resale prices have found a floor in many markets, it will take years before homes return to their 2022 peak values. Assuming there is a stable economy, steady wage growth and neutral interest rates, the investment bank predicts the market will return to 2022 highs in 2029. A recent report from TD , the second largest consumer bank in Canada, offered a rosier outlook on the housing market going into 2026. 'There's been a cloud of uncertainty that has contributed to the negative buying sentiment that's weighed on the housing market,' TD Economist Rishi Sondhi said. 'TD Economics thinks some of that uncertainty should wane in the back half of this year and dissipate even further into 2026.' Sondhi acknowledged that condos in Toronto have declined and said they will likely continue to do so through to the end of the year. The bank forecasts that condo prices will have dropped by 15 to 20 percent since 2023. The ebb in prices doesn't have to be a bad thing, Sondhi added, saying it could be a signal for a resurgence just around the corner. 'Affordability in the GTA condo space has improved because we have seen declining prices since the third quarter of 2023,' he said.

House price drop imminent across America
House price drop imminent across America

Daily Mail​

time8 hours ago

  • Daily Mail​

House price drop imminent across America

Buyers are walking away from home purchases in record numbers, causing complete chaos in the US housing market . In June, over 57,000 home sales across the country were abruptly canceled , equaling a staggering 14.9 percent of homes that went under contract, according to a report from Redfin. That number is an uptick from 13.9 percent of sales which collapsed this time last year. It's also the highest June figure ever recorded since Redfin began tracking cancellations in 2017, and the Sun Belt has become ground zero for cancelled deals. It's all down to the buyers, who currently hold the power in the real estate market. With a surplus of sellers flooding the market and far fewer buyers, Americans looking to buy now have the upper hand, and it seems they're taking full advantage of it. The soaring cost of homes, home repair and near-record mortgage payments are also giving Americans cold feet. Some buyers simply balk when they see the reality of their future monthly bills. 'I've also heard of some buyers backing out because they're hoping home prices or mortgage rates are going to plummet soon, even though that's unlikely,' Zschirnt said. There are also budding homebuyers rattled by bigger picture issues like economic uncertainty, tariffs, stubborn inflation and fears of a looming recession. Meanwhile, sellers are scrambling to keep deals alive. 'Sellers are willing to make deals because in today's buyer's market, they don't want to lose out on a sale once they have a buyer under contract,' said Van Welborn, a Redfin Premier agent in Phoenix. 'A few years ago, when the market was more competitive, sellers were able to tell buyers to move on rather than pay for repairs found during the inspection period. 'Now, sellers are doing whatever they can to close the deal. I have one buyer who discovered a septic issue on an ultra-luxury home and was able to talk the seller into reducing the price by $1 million.' The majority of cancelled deals are found in the Sun Belt. Redfin links the spike to heavy new construction in those regions - meaning even more choices for buyers - as well as skyrocketing insurance costs driven by natural disasters. At the other end of the spectrum, Nassau County, New York, saw just 5.4 percent of deals fall through, making it the lowest in the country. That was followed by Montgomery County, Pennsylvania, with 6.8 percent of cancellations and Milwaukee with 8.2 percent. Despite those areas remaining strong, cancellations are rising nearly everywhere else across the US. Only seven metro areas saw a drop compared to last year, but the changes were minimal. Fort Lauderdale had the biggest decline, with 16.5 percent of deals canceled down from 17.7 percent, followed by Denver with 16.2 percent down from 17.2 percent.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store