The Sydney property market is out of control and prices just keep going up. First home buyers can't get a look-in because cashed-up Asians are buying up property all across the city. At almost every auction, the successful bidder is Asian.
But these wealthy investors have no intention of living in the property they buy, they are after a high rental return which is guaranteed because they know there is a critical shortage of rental properties in Sydney.
The proportion of first home buyers in NSW who took out residential loans in december was only 7.1 per cent, the lowest on record. Young Aussie couples desperate to get started, are shattered to find that the offer they have stretched themselves to pay, is now way, way too low.
Reserve Bank Governor Glen Stevens told Parliament last week that affordable housing in Sydney has become a major social issue but he can't do anything about it. He cut rates to their lowest level in more than 50 years last week, pulling the cash rate down from 2.5 per cent to 2.2 per cent. He's also worried that unemployment will peak at a higher level than expected.
Treasurer Joe Hockey thinks it's a good idea for young people to dip into their super early so they can get into the market but not everyone agrees. Some say it's a good idea and others think it's an incredibly stupid idea.
But there is more bad news. Adult children of elderly parents can no longer sit back and wait for their inheritance from the sale of the family home, now worth around $1 million. Australians are living much longer and there is a 50 per cent chance that the remaining elderly parent will have to sell the home to enter an aged care facility, which over time, will gobble it all up.
Last year we said it couldn't last, house prices were insane and the bubble had to burst. But this is March and it's still going strong. There is no sign of the market slowing down as auction prices continue to break all records every weekend, all around the city.