Downunder Prices are Up

A trip to Australia and New Zealand has left me convinced that our housing market is a bargain. Even before the recent Troubles and resulting price drops, a bargain. The home pictured here belongs to friends who live in Strathfield, a Sydney suburb. They’ve been offered $900,000 for this home — for 1500 sq. ft., a carport, and a small narrow back yard. Almost a million dollars — seriously? It’s a historic home, built in 1906 and nicely updated, but still. Skeptical, I went to an auction and saw a similar home but in appalling shape, sell for $755,000. By appalling, I mean rotten floor joists, fallen plaster, gutted kitchen — new everything needed! It will easily take over $100,000 to make that home habitable and it’s even smaller, maybe 1200 sq. ft. What’s going on?

Then I thought okay, Sydney is like New York City — lots of demand, limited supply, not a typical housing market. But when I looked in other areas, I continued to see California-type prices. In Bathurst, 200 km from Sydney, nice but modest homes were in the six and seven hundred thousand dollar range. Up on the Central Coast, a vacation/second home area, I saw the same kinds of numbers. Even on the sparsely populated South Island of New Zealand, prices are easily two, three, four times what we would expect to pay.

How do people make enough money to purchase a home at these prices? I tried to find out if salaries there are so much more than salaries here — but they don’t seem to be.

Let’s count our blessings. In the Triangle, you can still get a nice single-family detached home under $200,000. God Bless America!