Whoa dudes. WHOA.

Last Saturday, we went to see 110 Camden St, Enmore. A deceased estate nestled in a sweet little pocket of Enmore where it meets Newtown and St Peters.  Situated on a corner block, this little ramshackled house is in sore need of major renovations. Click on the link to see more:

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2008038905

A renovator's delight, is it not? So when the agent told us we were looking at about $600k, we promptly walked away. 

It just sold for a whopping $674000.

My mind is struggling to understand the logic.  In a property market where land size seems to play a bigger role in the valuation of a property, I can't understand how a 10x18m block can attract such a huge price.  The house itself is certainly no big selling point.  So location it is. I've seen much better houses in the same area go for less. Ye gods!

Is Camden St some sort of Erko Golden Triangle-esque utopia? Please explain.

Can It Get Any Worse? And Other Rants, In Which the Word 'Ridiculous' is Overused, but Heartfelt.

Well, I've not been updating much because every time I look at the housing listings it's so very depressing I'd rather go go do something else, you know, something mindless like weeding the garden, reading pulp fiction, or curling up into a ball and sobbing bitterly, the usual kind of thing. I'm not sure if this is the case for other dabblers in the muddy puddle of a kiddie pool that is the inner west housing market, but has anyone noticed prices being even more ridiculous than usual? I needn't post an example, I am sure everyone knows what I mean. In the cases where you can actually see the prices that is, as agents these days seem to be very cagey about letting out the details of how much a property ended up going for. Being so secretive initially helps out the vendors, sure, but more often than not, vendors are also buyers, and many of those people I'm sure are also being priced out of the market, so what's the deal? Not revealing the price just helps the agents in the end. It should be compulsory for this information to be made publicly available, especially if an agent is involved.

Of course I'm a bit of a broken record about this, but it's already difficult enough to know how to value a property without having to pay $50 for a property report that doesn't tell you anything but the last price of the place you're looking at. And what's with the new law with underquoting prices - I've been very curious about how such a law can even be policed. I certainly don't see any differences in how agents are stating price ranges. There's money, and a whole lot of it, being passed on in all directions, from the companies compiling property reports out of what should be public information, to building inspectors to advertisers to solicitors to the government and especially to real estate agents. The only place the money isn't going to is the buyer (and if someone says FHOG of course I will automatically laugh in a sort of robotic monotone since I can't work up the enthusiasm to do much else).

Just recently we looked at a house that was supposedly in the mid-500 to late-500 range on a very busy street, and then later sold for $650,000, and that is not even a particularly wild example, just the recent one that came to mind. There's a pattern of properties being underquoted by at least 10% I reckon, and usually more. 10% might not sound like a lot, but it really is (if you're a first time home buyer and green... around the gills)! Fellow city-dwellers, I don't think this is supposed to be normal that properties sell for 10 - 40% above the estimated price.

My favourite analogy at the moment is the price of jeans in this country, which quite frankly is exorbitant. I am just as likely as the next person to pay high prices for good quality products. I do like to get my money's worth. But if you leave aside the ones that are organic cotton made by the hands of hipster elves in Sweden, jeans that are mass produced overseas with cheap materials, probably in sweat shops, are selling here for $150 or more. You know, because we're so far away and different from everyone else, so the price has to be 3 times as much. Right. Eventually people who've been grumbling about the price have to cave and learn to accept the price as normal, as the price goes higher and higher. Because there isn't really an alternative and they really need a new pair of jeans. If everyone else is paying a hundred bucks for jeans that happens to be 50% cheaper overseas, that's the price, right? Because the really high end jeans are now $300 so what a bargain you're getting at only half that. And yet, it's just ridiculous to pay that much for mass-produced jeans that wear out in a year or two. It's not a real price. People, it's not normal! But we all do it. Right now I am looking at properties I would have laughed at in April (and not in a servile robotic monotone either, more in a full-on evil scientist kind of way), and I actually catch myself thinking, oh, $650k for a small two bedroom terrace, that's not bad is it? Er, what?! You have to keep reminding yourself that these hugely inflated prices that are only marginally less high than other prices you're seeing are not bargains just because by looking at all these listings all the time, you become conditioned to expecting high prices and come to accept them as normal. That's a long sentence but you know what I mean. The only solution is not to buy at these prices until the market adjusts or someone adjusts the market, but sometimes that's not possible. You still need a roof over your head, even if you don't need a pair of jeans.

From being burned before, we no longer get building inspections done prior to making an offer. In Canberra I believe it's compulsory for the vendor to get a building inspection done, and then after an agreement the costs are split between the vendor and the buyer (or so I hear). (Or is that the Netherlands? I get confused reading too much property news). Sounds sensible to me! Why isn't that the case in Sydney so buyers don't have to lose $500 a pop every time on housing inspections? The incidental costs really stack up, in time as well as money, the more you keep looking, and hoping, and being eventually crushed. As I said, ridiculous. But I'm looking at you vendors-who-are-also-buyers. Is it really that important to scrape every last red cent from buyers such that you're willing to obfuscate the price or the condition of the property, because if everyone did that it would only come back and bite them in the bum later when they become the buyers. It makes sense to make a single building inspection available to everyone on the condition that the eventual buyer pays half the fees, and keep these incidental costs down for everyone.

Well, since this rant is just ranty, not very well thought outy, and not at all newsy, I leave you, dear reader, with this interesting recent article:

http://www.smh.com.au/national/firsthome-buyers-face-price-caps-20091031-hqfw.html

Will caps really do anything to lower prices? I think not, at this stage, where the price rises have sort of taken on a life of their own. Will it stop prices from rising? Hard to say but I would imagine that if prices stopped rising it wouldn't be because of these caps. I reckon loads of people have already just given up and are mostly not that desperate to get the grant anymore simply because prices are too ridiculous to contemplate now, grant or no grant. But I'm curious where all these other buyers are coming from who are willing to pay such gobsmacking silly prices for little shoeboxes. I mean I love the inner west as much as the next inner westie but This Is Ridiculous.