Australia House Prices Crash: A Correction

It’s been awhile since I last talk about Australian house prices and compared them to those in the UK; I’m surely due to do that again, but not now.

House for SaleWhen I have talked about it previously, I have suggested that Australia doesn’t really do house price crashes or the “boom and bust” stuff so common in the UK. But someone did point out to me, and correctly too, that whilst prices do not crash nationally (as a rule) there can be some areas that suffer major price falls.

And that’s exactly what they have done in the last year in certain areas. Why? All thanks to the backlash from the Global Financial Crisis (GFC) of 2008 and the flooding we’ve had here lately, and particularly in 2011.

Australia’s worst hit properties.

Top 10 median price drops in percentage terms for 2011

1.   North Booval (QLD) -46.3% (houses) to $154,000
2.   Mittagong (NSW) -45.1% (units) to $225,000
3.   Jolimont (WA) -44.4% (units) to $342,000
4.   Carey Bay (NSW) -42.6% (houses) to $266,001
5.   St Kilda West (VIC) -41.8% (houses) to $1,455,000
6.   Port Augusta (SA) -41.5% (units) to $120,000
7.   Golden Beach (VIC) -40.9% (houses) to $85,750
8.   Rainbow Beach (QLD) -40.8% (units) to $219,750
9.   Acacia Ridge (QLD) -40.8% (units) to $298,500
10. Eagle Farm (QLD) -40.4% (units) to $786,500

Source: RP Data

In a nutshell, the most affluent areas (thanks GFC!) and the wettest areas (thanks floods!) have been the hardest hit, with affluent/wet areas coming off the worst.

RP Data release their latest house price data on a regular basis. At the same time as they were providing the above information, they also announced that across the board in Australia, year-on-year to December 2011, median house prices fell, on average, by 4.8%.

So, as you can see, there are at least 10 areas listed above that can comfortably claim to have suffered a house price crash, yet nationally we are looking at a slide rather than a crash.

By the way, I tried watching RP Data’s latest video about house prices, the presenter spoke of “new indices methodology”….. “an improvement on the previous home value index” …. “using an adjacent period hedonic regression method” … “using new imputation techniques”….. No wonder nobody trusts them!

Will Australian house prices crash?

Some say we may be looking at a gentle fall in prices that could last 10 years, which is the equivalent of a very slow “crash”.

Others say we are teetering on the edge of a major crash, and last year’s slide is just the start.

Then there are those who say simply what is best for them. Those selling newspapers say crash! Those selling houses can already see glimpses of a recovery.

Me, I have no idea, but I will say this.

Prices around here do seem to have dropped by much more than the 4.8% suggested nationally, or the 7.6% (RP Data) attributed to Brisbane. And I’m not talking about affluent or wet areas; I’m talking about houses outside of both of these zones.

It feels more like 15% to 20%, it’s a buyer’s market, and there are “bargains” to be had. Possibly, that is, it depends what happens next. And I don’t think anybody really knows.

Here’s what the ABS has said about house prices since the year I arrived in Australia.

First, nationally:

  • 2007 +12.3%
  • 2008 – 3.3%
  • 2009 +13.6%
  • 2010 + 5.8%
  • 2011 – 4.8%
  • 2012   ?
  • Total +23.6%

And secondly, where I live, Brisbane:

  • 2007 +21.6%
  • 2008 – 1.4%
  • 2009 +10.9%
  • 2010 + 0.7%
  • 2011 –  6.7%
  • 2012   ?
  • Total +25.1%

Given that interest rates here have averaged out at something like 5% to 7% over the same term, housing has not been a fantastic investment. Especially not for me, because I arrived in November 2007, so I missed the biggest rises when I bought my house.

It will be interesting to see where prices go in 2012.

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{ 38 comments… add one }
  • Lisa-Marie December 30, 2015, 2:11 pm | Link

    Hello Bob,
    I enjoyed this page, relating to over priced houses, N the economics of where this country is heading. (Au). Coming From my own housing bubble crisis, here in the USA, it resembles the same in Australia. What goes up, eventually comes down… Banks are in it ,knowing the government will back those mortgages…. On over priced houses. Sounds like smoking mirrors.. all to familar… Banks, To big to fail.. What a joke..
    Amazing that these giant banks are still in business..

    • BobinOz December 31, 2015, 12:04 am | Link

      It’s even scarier when the banks go out of business though, so maybe it’s a good thing that most survive. Plenty don’t though, and when they don’t, it’s the public that lose out. Look at Greece.

  • Michael Jordana May 17, 2012, 1:32 am | Link

    “Looking on the bright side, if prices do fall, your new house will be cheaper to buy.” Yes, indeed… except that I’m downsizing. Which means that if I lose 15% on an 800K home and save 15% on a replacement 400K one, I’ve still lost 60 grand.

    • BobinOz May 17, 2012, 6:41 pm | Link

      Now I understand those sleepless nights.

  • Michael Jordana May 16, 2012, 12:07 am | Link

    Never said I was sure of a price crash. I had simply pointed out the opinions of noted economist Professor Steve Keen, and my own view that giving potential homeowners free money to buy their first home was a dumb thing to do, in that it only raises prices by a roughly equivalent amount and rewards the home builders and home sellers, not the young buyers. Better to motivate the builders to build more reasonably-priced middle-income homes via tax incentives to them, rather than directly to the buyers.

    Anyway, re your theory of vested interests, I must say, au contraire, mon frere. I am actually looking to sell our family home, but the timing is such that I can’t do it for several months still, and I’d like very much for property prices to hold up for a bit longer, so I can use the so-called “greater fool” theory to my advantage instead of being skewered by it. However, I’m getting nervous about how things are going and what I’m seeing out there. Makes it hard to sleep at night.

    • BobinOz May 16, 2012, 10:07 pm | Link

      You could always sell now and go into rented, but that would be speculating with your own home. That’s something I never advise anyone to do.

      Looking on the bright side, if prices do fall, your new house will be cheaper to buy.

  • Michael Jordana May 15, 2012, 9:25 am | Link

    Hmm. Of course, you didn’t say where the house was. Brisbane? CBD or suburb? Northern or western? Coastal or inland?

    In any case, all real estate agents will tell you a house will sell… if priced right. It’s the unrealistic expectations of some home sellers that keep things bottled up and the inventory not moving like it should. For example, imagine that everybody dropped their selling prices by 25%… the market would take off! But hey, who wants to take that big of a haircut, right? Especially if they’re already selling close to cost.

    In any case, one swallow does not a summer make, nor one quick sale a trend.

    And “pretty close to the asking price” doesn’t say much. You might’ve quoted a discount from list, like 6.2% or 10.7% or whatever. Even a 10% discount from list could be characterised by some people as “pretty close.” But it’s still a pretty big hit to a seller’s expectations.

    • BobinOz May 15, 2012, 9:12 pm | Link

      Well, if you need specifics, it was Western Suburbs, Brisbane. They put it up for $585,000, they got $575,000 within a week. I can assure you they were trying to get as much as possible, there was no discount, no urgency in the sale, they put it up for as much money as they felt the market could bear.

      To save you grabbing your calculator, that’s a 1.7% discount from their asking price.

      Look, I’m not trying to suggest that Australia is sitting pretty whilst everyone else suffers from the GFC, but I will say at this moment in time we are faring much better than most. Things aren’t looking too rosy for the future, but let’s not talk ourselves into recession. Let’s wait and see what actually happens.

      In my experience, people like you who insist things are going to get bad, in this case property prices, have a vested interest in property prices falling. You are trying to will it to happen.

      I have another guy somewhere on this blog who is adamant that the Australian dollar is about to collapse massively, but that’s because he has great British pounds that he wants to change into Australian dollars, so he is trying to will it to happen.

      What I am saying is none of us know until it happens. Predictions, generally speaking, are worthless. It’s when things actually happen that it counts for something.

      Currently, in my view, property prices are falling slightly; they are certainly not rising. Some people are desperate to sell their houses because of their own personal financial circumstances, in those cases they have dramatically lowered the prices of their homes.

      But we haven’t had a price crash, not yet. Maybe we will, maybe we won’t. I don’t know and neither do you.

  • Charles Ponzi May 12, 2012, 4:36 pm | Link

    The Global Debt Crisis continues and Australia is the caboose at the end of the train wreck. Sitting at the back of the train, it was easy to feel complacent and smug. Australians who have piled on high levels of debt to buy overpriced real estate are now discovering that we are indeed connected to the rest of the world–and so is China.

    Selling a house in Australia will become increasingly difficult as the economy falters and recession looms. Falling interest rates are now a sign that the economy is getting worse. I sense the RBA is starting to panic.

    • BobinOz May 14, 2012, 8:46 pm | Link

      A friend of mine just sold their house within one week of putting it on the market. And when I say “just”, I am talking about within the last two weeks. So not everyone is finding it difficult to sell a house and, by the way, they got pretty close to the asking price.

      I’m not saying the economy here isn’t getting worse, I do believe it is. But how much worse is up for debate, I don’t think it’s as bad as you think it is. Time will tell.

  • sam April 28, 2012, 2:04 am | Link

    “be fearful when others are greedy and be greedy only when others are fearful” warren buffett.
    the day you have a healthier bank account than this man is the day i will beleive your post when it opposes warren buffetts quotes, I beleive no better time to buy, if we can survive at GFC were stock markets saw there biggest losses in history then i dont see how the market will crash in times that are looking brighter,especially with the mining industrys expectations to need 500,000 extra workers by 2022 everyone only thinks this cause of americas situation, there are many reasons behind the US property crash, they were lending 105% to who ever asked for a loan, also people people could just walk away from there homes in america to put up for forclosure with minimal consequences, unlike here in aus, i say BUY!! otherwise youll be one of the people that thought that property was overpriced in 2005 and sat on the sidelines while the smart ones made $$$

    • BobinOz April 30, 2012, 9:21 pm | Link

      In my article I haven’t made any predictions whatsoever about anything. On that basis, how have I gone against Warren Buffett? And it might well be a good time to buy right now, I’m just saying nobody knows for sure.

      Except, probably, Warren Buffett. Anyone know what he’s saying about Australian property prices?

  • Michael Jordana April 10, 2012, 4:04 pm | Link

    Hmm, you’re not being deliberately obtuse, are you? We have a saying in Spanish, “No hay más ciego que el que no quiere ver,” meaning “None is blinder than he who refuses to see.”

    If they don’t raise the FHOG, prices will continue to slowly slide. But if they stop the FHOG completely, prices will crash.

    Think of the drug analogy again. You’re on cocaine. At first, a certain small amount was enough to give you a long-lasting euphoria. Later, as your body got used to it, that same amount barely gave you a buzz.

    So you upped the dose, say, double the amount of before. Whoo! New high! Great! Then after a while, the effects waned again as your body developed increased tolerance to the dose. Since you liked that original high, you increase the dose again. This is called “chasing the high.”

    Eventually, your cocaine habit is costing you too much… higher and higher doses, diminishing returns. You’re determined to stop. So you do. But by yourself. Cold turkey.

    What do you think happens then? You crash! PubMedHealth (http://www.ncbi.nlm.nih.gov/pubmedhealth/PMH0001943/) says: “When cocaine use is stopped or when a binge ends, a crash follows almost immediately. This crash is accompanied by a strong craving for more cocaine. Additional symptoms include fatigue, lack of pleasure, anxiety, irritability, sleepiness, and sometimes agitation or extreme suspicion.”

    Can we talk about something else now?

    • BobinOz April 10, 2012, 11:45 pm | Link

      Nice weather for this time of year, isn’t it?

      • Michael Jordana April 11, 2012, 1:00 am | Link

        Nice weather, you say? Actually, an early cold snap has hit the Sydney area these last few days. It’s windy and chilly.

        Pity. Not only did we lose summer, which was wet and unseasonably cool, but this winter promises to continue wet and downright frigid.

        Bob, I didn’t mean to cut you off at the pass with regard to the question of the future direction of Aussie housing prices. If you’re really interested in pursuing the subject, and have some interest in economic theory, I recommend you do some reading of Steve Keen’s website. You might start here… http://www.debtdeflation.com/blogs/2011/04/01/this-time-had-better-be-different-house-prices-and-the-banks-part-1/ .

        I’m not a shill for Prof Keen, but I do find that his ideas resonate with me. He’s becoming more well read these days, having managed to get into a “war of words” on the blogosphere with Nobel-Prize-winning “Neoclassical” economist and New York Times columnist Paul Krugman (whom, personally, I’ve always thought little of).

        Other than that, keep up the good work on your own blog. I find it very useful and informative, plus enjoyable to read.

        • BobinOz April 12, 2012, 4:20 pm | Link

          It was 28°C to 30°C here in Brisbane all Easter weekend 🙂

          Anyway, I looked at Mr Keens page, a lot of graphs! And then a lot of comments where some people agree on some disagree. Lots of people try to predict house prices, not many are very good at it.

          I work on the reality that when house prices go up, they go up and when they go down, they go down. My golden rule is never speculate with my own property, I use that to live in. I do know of a few people who have sold their house, convinced a crash is round the corner. They think they will buy a cheaper house in a couple of years. It didn’t work out for any of them.

          Sure, the FHOG does have an effect on house prices, what that effect is cannot actually be measured. Meanwhile, those who sell houses continue to argue prices are stable or due to rise in the future and those who sell media argue we are heading for a crash.

          Meanwhile, life goes on and the fact that people have different opinions makes that life more exciting.

          By the way, congratulations on writing a comment without mentioning cocaine. Dang! now I’ve gone and done it!

  • Michael Jordana April 5, 2012, 12:07 am | Link

    Hey Bob!

    You said, “I am not convinced that the first time homebuyer grant is as evil as cocaine, or that it is responsible for pushing up the price of housing. It’s certainly not doing that now, is it? House prices are falling.”

    Yes, you’re right, they are falling. But the analogy remains valid… it IS like drugs. If you keep the dose unchanged, you find after a while that you don’t feel the same buzz as before. Your highs lose their thrill, and it takes more and more of a dose to get the same high as before. That means the Federal government will eventually have to raise the FHOG again to keep the stimulus where they want it, or else prices start backsliding, as they are now.

    Woe betide us should Canberra realize the futility (and/or the prohibitive cost) of the FHOG and ancillary grants, and decide to go cold turkey and stop the program outright, as might happen if (maybe I should say “when”?) the Liberals are swept into power.

    • BobinOz April 10, 2012, 2:52 pm | Link

      And if they don’t raise the FHOG, and prices continue to fall, then doesn’t that mean your theory is incorrect?

  • Michael Jordana March 30, 2012, 8:22 pm | Link

    Hey Bob!

    You said, “… but I didn’t think these grants were available in every state all the time? Are they?”

    Well, I’m a recent immigrant to Oz myself (became a resident in November 2009), and don’t know much about the political history of Australia. But I found this online:

    “The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.

    “Under the scheme, a one-off grant of up to $7000 is payable to first home owners that satisfy all the eligibility criteria.”

    Did you see that? A “national scheme…”

    The Queensland government website states, “The $7,000 first home owner grant was created to help you buy or build your first home. It is a federal initiative that is administered and funded by the state government.”

    A “federal initiative.” There you go.

    I checked the websites of the 3 major states, NSW, VIC, and QLD, and they all mention the FHOG. I also noticed that each state has its own first homebuyer’s bonus scheme, ON TOP OF the $7,000 grant.

    In NSW, it’s a “stamp duty exemption” of up to $17,990.

    In VIC, it’s currently an extra $13,000 (only if you buy a new home). In addition, there’s a $6,500 regional bonus for homes in certain “regional municipalities,” whatever that means.

    In QLD, there’s a variable “transfer duty concession rate” that can go up to $15,525, depending on the price of the home.

    I also understand that during Kevin Rudd’s tenure as PM, the first home buyers grant was temporarily boosted to $14,000, plus an extra $7,000 for new homes, taking the federal maximum up to a whopping $21,000.

    All this seems to have done, in my view, was to cause housing INFLATION. That will probably cost buyers in the end, as more expensive homes mean higher mortgages, and higher mortgages mean higher interest payments for 30 years (while incomes continue to lag farther and farther behind).

    The website crikey.com.au stated: “The first home owner’s grant, especially in its boosted form, is not a policy which benefits first home buyers, but one which will lock them into a lifetime of possibly unserviceable debt forcing them to pay more for a property than would otherwise be the case. But that’s what happens when politicians make decisions which are popular, but make no economic sense.”

    • BobinOz March 30, 2012, 9:37 pm | Link

      So the answer is yes then?

      • Michael Jordana March 31, 2012, 12:35 am | Link

        “So the answer is yes then?”

        {Sigh.} I thought I’d been clear. Perhaps I wasn’t. It’s available in at least those 3 states, and I’m pretty sure the rest, since it’s, as I pointed out, a “federal initiative.”

        To the other part of your question, the grants weren’t available “all the time,” just since 2000, as I also pointed out. And as far as I know, they continue in effect as of this writing. But like I said, I’m not an expert on the subject, just a fellow who likes to find out things. Call it intellectual curiosity.

        The grants are like cocaine, or any other addictive drug: if you keep taking it, you know it’ll kill you eventually. But if you try to break the habit, you’ll come crashing down. Between Scylla and Charybdis.

        • BobinOz April 2, 2012, 8:27 pm | Link

          My previous response was tongue in cheek. Of course you made yourself clear.

          I am not convinced that the first time homebuyer grant is as evil as cocaine, or that it is responsible for pushing up the price of housing. It’s certainly not doing that now, is it? House prices are falling.

          • John April 12, 2012, 7:35 am | Link

            The first time home buyer grant had a part in inflating house prices. Think of a young couple with a few quid for a deposit, but not quite enough, the grant swings it, and they buy (which means they borrow….a lot). Great business for the banks, and borrowing is nectar for the economy. Meanwhile the people who sold to the young couple can now move upward, the knock on effect pushes up prices.

            You say the grant is not fueling house prices so now. That’s right, because the grant, plus the crazy borrowing polices of a few years ago i.e., 99% mortgages for people working minimum wage (which won’t be seen again), plus peoples ability to pay – it all hit a peak, a limit was reached, even within those generous parameters.

            The grant is not a gift, it was a tool to keep people borrowing, they can’t remove it right now because that would make things worse.

            • BobinOz April 12, 2012, 4:26 pm | Link

              Hi John

              I have acknowledged that there is some kind of effect from the FHOG below in my response to Michael Jordana. You are certainly right about borrowing being nectar for the economy, that’s why many governments around the world to offer incentives to first-time buyers.

              Maggie Thatcher came up with the best one when she sold off council houses back in the 80s at huge discounts. Since then in the UK there have been mortgage subsidy relief, stamp duty subsidies and all sorts to keep houses moving.

              That’s why the UK is probably so good at the boom and bust economics that it has had in the past. Maybe it will come to Australia too, maybe not. Only time will tell.

  • Michael Jordana March 30, 2012, 1:18 am | Link

    There’s an Associate Professor in Economics and Finance at the University of Western Sydney named Steve Keen, who has a blog called Steve Keen’s Debtwatch (just google Steve Keen and it should come up).

    Basically, Prof Keen maintains that Australian housing prices are in a bubble caused by repeated applications of first-time homebuyers grant schemes, which artificially boost prices by increasing demand. According to him, these schemes have “always been used as a means to stimulate the economy, and it’s worked—but in much the same way that an anabolic steroid will help an athlete win a medal: it pumps up the performance at the event, only to leave the athlete with long term health problems in the future.” He expects housing prices to be down some 10% by the end of 2012.

    Well, I’m no economist, but I do see houses for sale in my neighborhood remain on the market much longer than before, I see unsold properties piling up. That might be an early warning, the proverbial dead canary in the coal mine, the quickly receding tide that signals an incoming tsunami.

    • BobinOz March 30, 2012, 2:22 pm | Link

      Well, I think we are all agreed that house prices are not going to be rising much any time soon (probably). I’m sure the first-time buyer grants have helped fuel the price rises in the past, but I didn’t think these grants were available in every state all the time?

      Are they?

  • Cyril March 29, 2012, 9:03 pm | Link

    I saw wicked camper “a backpacker hire van” cruising up the hwy heading towards the qld border… A slogan grifitti on the back

    Said “mortgage – the triumph of imagination over intelligence”

    I laughed and then thought about my Qld mates who have had massive equity loss over the past year!

    Perhaps this imagination was inspired some media in 2010.

    Regards from sth of the border

    • BobinOz March 30, 2012, 2:19 pm | Link

      They do have some great slogans on some of those camper vans don’t they? Cyril, I thank you for your concern regards Queensland property prices, although I’m not sure it isn’t gloating 🙂

      Are property prices holding steady down your way then?

  • John March 25, 2012, 10:18 pm | Link

    I arrived here in January 2010 from the mother land. Within the first few months of being here I noticed something that didn’t seem quite right; the newspapers and prime time TV news here in Brisbane were obsessed with the housing market, and their combined message, was simply that if you don’t buy today! you’ll be regretting it forever. The TV news in-particular ran ‘stories’ nearly every night showing the glum faces of families on garden lawns out bid at house auctions. These ‘stories’ were a type of propaganda. I think TV air time and newspaper space was bought and used as I’ve described to keep people buying houses, why? because people spending large amounts of money, borrowing, is what this economy needed at the time to fend of the recession that other parts of the developed world were feeling more acutely in 2009/10. But the hype was nonsense, the first time buyers grant of 15k, the housing market hype from the Courier Mail, all there to paper over the fact that house prices are over priced here in Brisbane, and Australia wide. Peoples’ wage packets did not explode just because house prices used to go up 10% a year, and there is the problem, when 1st time buyers can’t afford to get on, the ride stops. The people who can’t get this into their heads are most Queenslanders, they are still talking about a ‘blip’ in the market, arrogance bordering on stupidity. What do they think, that it will be over soon and back to business as usual, until a unit costs a million dollars and we’re all millionaires? House prices won’t ‘crash’ like in Europe 2009, but will adjust to reflect what people earn. I feel sorry for people who were frightened into buying by the media at the end of 2009/2010, they will be in negative equity for quite some time.

    • BobinOz March 26, 2012, 9:57 pm | Link

      Well John, you don’t think much of Queenslanders do you? “..can’t get this into their heads” …. “arrogance bordering on stupidity”. It’s lucky for us that you flown yourself all the way over from the UK to put us straight.

      By the way, I don’t know which TV news programs you watch, but I don’t think I have ever seen any evidence of the kind of propaganda you’re talking about. And I’ve watched hundreds and hundreds of news reports from both 7 News and ABC.

      • John March 28, 2012, 5:24 pm | Link

        I don’t watch TV in this country so I can’t remember the channel, but I think news channel 7. This channel shows news at regular intervals during prime time viewing. The ‘story’, showing despondent young Australian families unable to buy a house for the competition at auctions, and rising further price increases predicted, ran off and on over during Jan 2010, and maybe longer, it was aired at news intervals during the evening, and then repeated a few days later. Another ‘story’ ran concurrently, claiming wealthy Chinese people were coming here to buy up properties like hot cakes from under the noses of the Aussies, and newspapers, i.e., Courier Mail and Brisbane Times, ran stories with similar themes of prices continuing to sky rocket, it’s now or never blah. The lines were there to read between…..

        It’s not a far fetched, here anyone with money and vested interests can buy airtime, there is a day time TV show, again I don’t know the name or the names of the presenters, but they are ‘Richard and Judy’ daytime style hosts. I’ve seen them ….’interview’….. an individual on the pros of Life Assurance, and the interview is clearly scripted, its a TV advert only within and not between programming, which means the network and their presenters were bought. This is an American import, and in some ways, the culture here in Queensland is mirrored on Americas’.

        ‘Well John, you don’t think much of Queenslanders do you?

        That’s too sweeping a statement, I know many fine Queenslanders, the only difference is, I arrived on Emirates with a glass of wine, while their ancestors arrived in prison hulks : )

        …….it’s a joke… only just a joke….

        • BobinOz March 30, 2012, 1:36 pm | Link

          Ah, yes, that sounds like an advert for the Today Tonight show on Channel 7. I’ve written about them before, see my page about Australia’s current affairs programmes.

          Largely speaking, the shows are full of scaremongering and horror stories, so now it makes sense. I can’t speak for that daytime TV show, I never watch the TV during the day. Thankfully.

          PS. I think you’ll find most of the prisoners went to New South Wales, Tasmania and Victoria.

          • John March 30, 2012, 8:34 pm | Link

            Yes, but unfortunately the worst were shipped to here!

            http://www.brisbanehistory.com/convict_era.html

            There’s a very good book if you ever get the chance to read, Kate Grenville – The Secret River, 2005, Kate Grenville is an Aussie author, her book is fiction based on the true story what it must have been like for the first settlers. Of what it must have been like to be poor, charged with some petty crime in England, and shipped 10 000 miles away to somewhere hot and alien. It captures the moment that surely must have happened, as individuals did their time and gained their freedom, and realized that Australia wasn’t a ‘life sentence’ at all, and in fact was it a rose garden, compared the slums of the English towns and cities they’d be dragged from in the 1800s. I’m not sure but the secret river in the book could be the Brisbane river.

            • BobinOz March 30, 2012, 9:43 pm | Link

              Well, some of the other states may have got the quantity, but we got the quality crooks. Good for Queensland!

              I reckon there’s quite a few people living in the UK now that really wished their great great grandparents had been crooks so they could now be living in the very rose garden you mention. I mean, all they had to do was pinch a loaf of bread or something and they’d be here.

              Too late now.

  • Afton March 24, 2012, 11:28 am | Link

    In reality of course, it’s a case of supply and demand. House prices over the past few years have escalated to ridiculous highs, whereas now they have just slowed off a little, better reflecting their original, over-inflated value. So instead of realising 1.5 or so, I’d probably only realise 1.1, just land value, ’cause the house isn’t up to today’s standards. Now the Valuer-General would probably give a price of only 2/3 that amount.

    One should always check council records to see when a property was last purchased, and of course the price paid. The Gold Coast is a prime example, some houses there have been on the market for at least a year, and moved down in price by some 200k, suggesting they were way over the mark to begin with.

    • BobinOz March 26, 2012, 9:49 pm | Link

      Yes, that’s true, I believe the Gold Coast has been hit quite hard.

  • BobinOz March 23, 2012, 2:41 pm | Link

    I do understand the point you are making, I haven’t compounded the percentage changes in my totals. But I was more interested in comparing the annual percentage changes around Australia with those here in Brisbane.

    Well spotted though!

  • Rick March 21, 2012, 11:21 pm | Link

    Hi Bob,

    There is a slight error in your calculation, it doesn’t really matter to make your point though.
    Example:
    If a price is 100 AUD in 2008.
    And in 2009 there is a 10% increase
    and in 2010 there is a 10% decrease.
    The price is not 100 AUD again in 2010, it’s 99 AUD 😉

    Great blog keep up the good work 🙂

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