Im a House Builder, so I understand the Housing Topic from a few...

Im a House Builder, so I understand the Housing Topic from a few different angles compared to an outsider Analyst and even your Average Aussie.

Theres 2 sides to the Coin, on one hand if you took the avarage house apart and tried to sell all the parts of it on Gumtree. Assuming the avarage house is 20 years old, all those parts of that house would be lucky to pay you 5 grand in cash .

But a Brand new house built next door with all the latest stuff best of everything may have cost 600 grand to build that house yet may only be worth 150 grand more than the 20 year old house next door. The Comparatives are true but not fair when comparing apples to apples.

House Value takes on much more than its tangible value, its replacement value meaning whats it going to cost to build new, plus the time and plus how can you attain that position. So thats why an old place gets close to New Price because its ready now.

On an overall there are about 10 million Dwellings in Australia at avarage 20yrs old. They were built to last not much over 25yrs before full reno rebuild required. Australia needs another 10 million dwellings built or rebuilt just to replace the 10 million old dwellings we have.

Plus the Asian demand projecting an extra 600 million asian Middle Class over the next 10 years, with more than 10% of those keen to invest in Australia even if in a sindicate. That is like having an extra 10 times the investment demand on its way from asia.

So we are not an isolated Island fending for ourselves, there is 60 million others outside of Australia all keen to buy property inside a fund or group. Does that change things ?? sure does.

Because we arnt the USA where asian Buying would have only 1/15th the effect on that market compared to Australias small market by World Standards.

Highrises get built here now and 60% or more of it sells to asia for cash settlement. So asking the Question about Hows Asia going as far as its flow of investment money into Australia is the big indicator.

If that flow stops, or if that flow speeds up. Then thats the Handbrake and the Gas pedal.

Australia needs 20 million new dwellings Built and rebuilt, some to replace the aging ones, and some for the population growth, Investors and Immigrants.

So thats why we have a dump of a house selling for stupid money. The even more stupid part is you could build the best house in town and spend 1.2 million yet sell it for only 900 grand.

So its unfair on both ends, the Crap is worth way too much and the Good stuff is below replacement value.