House Vs. Apartment

People in this world vary. Some opt for coffee, others indulge in tea. Some prefer Ferrari, others Lamborghini. Some say the glass is half full, others say it’s half empty.

And when it comes to where we live, some would rather reside in the suburbs in a house with a backyard, indulging in the leafy and green surrounds, while others would rather set up shop in an apartment in the metro districts, amongst a barrage of coffee shops, commerce and carbon monoxide. So, ask yourself, what option would you favour? Unsure? Breathe easy, we’re here to breakdown a few elements to help make up your mind.


Taking a stab in the dark, most of you reading this article more than likely grew up in the burbs with a backyard that closely resembled the household arrangement of the Brady bunch. Chuck in a dog, a few push bikes and some kind of local nature reserve and we’re probably pretty close to literally capturing your childhood. Families have migrated to the burbs over the decades as a result of population growth and urbanisation. However, that trend is slowly changing. Though most people still live in separate houses, the percentage has fallen from around 86% in the 80’s to just 76% today. This trend doesn’t show any signs of stopping either.


But where has this come from? Why are we ditching the dream of Gatsby like living for the hustle and bustle of the city? It basically boils down to demographic changes inspired somewhat by societal progression. People are living longer, getting married later, having less, if having any children at all, and living younger longer than the generations preceding them. This has inspired the broader youth to opt for inner city living which warrants a, generally speaking, vibrant social scene with plenty of options on offer all within a stones throw.


This isn’t to say houses have lost their value, or that they’re only reserved for people who are knocking on the door of a nursing home. A large proportion of the population to still call a house a home. But what is best for whom? What district of living is best suited to your needs and wants?




Apartment design experienced a humble phase throughout the 60’s and 70’s. Blocks of units were made up of bricks on bricks with shoebox balconies and below average windows. Needless to say, they were rather depressing erections that scattered the skyline through the metro and inner city areas, occupied by folks who couldn’t afford anything else. They became home to stereotypes of the poor, intellectuals and artists. For the majority, they weren’t the go to for living options.


How times have changed. Contemporary design mixed a dynamic, 24/7 world has led to apartments becoming the best and most convention alternative appropriate for a large portion of people’s living needs. Development in construction design has transformed the apartment domain, through ground-breaking innovations in things like steel fabrication and application. Modern units now boast bigger balconies, nice carpet, gyms, saunas, theatres and innovation in construction capacity has led to a large number offering spectacular views. Old apartments have even been completely renovated to incorporate the old, timeless architectural designs alongside the new and modern trends.


Apartment living suit a large number of people and are catering to the changing trends of our globalised and nonstop society – hence the increase in their share. Singles, couples without children, young executives and people craving the traffic of society are the sorts opting to live in apartments.


Apartments are like lifestyle construction sets: you can mix and match the things they offer to suit what you need. Gyms, swimming pools, coffee shops, restaurants; many apartment blocks have all these facilities and more, and you can take advantage of them, or not, as you please.




Home is where the heart is, and in the past most of us have put our hearts in the suburbs. Separate houses with yards are the most common form of dwelling in this country and have been for many years.


Living in a house is desirable because it really feels like iyour own home, (despite the bank probably owning a considerable portion due to your mortgage). You’re not sharing your building with dozens of other people, you don’t have to worry about the person above you blasting Justin Bieber at one in the morning, there’s space for your dog out the back or even other animals, room for you kids to roam (somewhat) free and for you to indulge in other outdoor pursuits.


For families, a home in the suburbs is still the iconic living dream. Suburbs have facilities for children such as playgrounds and skate parks that you just don’t always find in the city, and the entire atmosphere is just more kid friendly and safer. Plenty of kids have grown up in cities over the years, but suburban living is still where most want to establish their families.


Where is it all Headed?

Is the trend towards apartment living going to continue, or are we going to shift back towards traditional suburban living? Hard to predict, and really, it doesn’t make that much difference as to which lifestyle is best for you. Who cares about trends? It’s about where you want to live and what is most appropriate for your needs,


However, there’s nothing wrong with looking into what people are going to be doing in the future. As Australia’s population increases and expands, people wanting to dwell closer to the city are going to have to settle for an apartment. Most Australian cities are sprawling, but there’s only so far they can go until it borders on ridiculous. For this reason, apartment living will no doubt go up. Fitting people into an apartment is simply more efficient than fitting a few people into a house, while taking up a similar amount of land. In extremely dense cities such as New York, apartment, or at least townhouse, living is the norm. While Australia might have a long way to go before we reach such a situation, our cities will inevitably move in a similar direction as they become denser. Melbourne is very much in the process of consolidating its expanding and rapidly growing population.


In a more environmentally conscious paired with an ever growing population, apartments have another advantage. Land developments for suburban homes inevitably have to erode the wilderness and habitats of our fellow creatures. Fitting more people into a smaller area, benefits the environment as it minimises the need to remove flora and fauna, maintaining a strong notion of ecological sustainability for the surrounds.


When you break it all down, homes and apartments offer different advantages for different people. For the young, the mobile and the socialites among us, apartment living is the best route to pursue. However, those with families and those who value their privacy, space and independence might find the suburbs more appropriate. There’s no real answer to the question ‘which is better’, but there is a right and wrong answer for you personally, it all comes down to circumstance.

People ask me if I think that Australian housing is in a bubble!!!

Kathy Comments From : Kathy Ran -Financially Wise
Financially Wise Page –

There has been a lot said, many megabytes devoted to and much news ink used in commentary
about a bubble in Australian housing.
People ask me if I think that Australian housing is in a bubble. I usually answer in the affirmative and
furthermore tell them that Australia’s and many of the world’s housing has existed in a bubble for
the past 45 or so years.

I will get back to this in a moment, but first I’d like to say that just because Australian housing is in a
bubble, does not mean that it cannot continue for a while longer, although I personally believe we
are closer to the end point than the start point. As John Maynard Keynes supposedly noted, the
market can remain irrational longer than we can remain solvent.
Now, a very quick history lesson on events that happened 45 or so years ago and why this has
created numerous property bubbles in Australia and the world. In 1968 then US President Lyndon
Johnson eliminated US dollar gold cover. That is, the US no longer had to have a percentage of gold
in their reserves to cover each US dollar that was in existence. This was taken a step further in 1971
by the then US president Richard Nixon who suspended the US dollar’s convertibility into gold, which
meant that a US dollar could no longer be exchanged for gold.
Prior to this, under the Bretton Woods agreement in 1944, the US dollar was backed by gold and by
proxy, so were the world’s currencies as they were valued against the US dollar on the exchange
When the gold link was severed, the world changed from a gold backed to a credit backed and
driven economy. This meant the economy would only grow if credit was increasing, so people were
greatly encouraged to accumulate more debt by governments and central bankers. Many people
were happy to oblige.

Anybody who bought property in the past 45 or so years has been the beneficiary of this huge
loosening of credit brought about by the actions of both Presidents Johnson and Nixon.
When looking at Australian house prices from about 1880 until late 1960’s/early 1970’s, prices were
relatively flat, when adjusted for inflation. Once credit was loosened however, from the late 1960’s
onward house prices went parabolic over and above the inflation rate. The gains seen over the past
45 or so years are a product of this huge credit expansion.
Pretty much anybody who purchased property in that time, benefitted from increasing values. With
few exceptions, property prices generally went up far in excess of the inflation rate.
The people who benefitted from this windfall weren’t geniuses, they were just in the right place at
the right time. But many thought they were, because they made money each time they sold
property and because they didn’t understand the underlying parameters that allowed this to occur.
So the myth of property prices doubling every seven to 10 years was born. The fact that this had only
happened over the past 45 or so years wasn’t recognised. “45 years” somehow became “always”.
There were even pretty graphs with a starting year point and an ending year point to support this
property doubling “fact”, but once again, the data was extrapolated and prices averaged out over
the time frame, rather than show actual annual prices for the period in question. And more often
than not, these were not adjusted for inflation. As previously mentioned, inflation adjusted property
prices stayed fairly flat until the late 1960’s. They certainly didn’t double, for example, from 1910 to
1920 or 1930 to 1940, but the graphs made it appear as though it did.
However, in the current environment of low inflation and low interest rates, property prices are now
starting to pull back and I believe they are reverting back to the more normal mean of only
increasing in line with inflation.

Changing demographics as baby boomers retire and change from spenders into savers, will impact
on property prices as well, particularly when they start to sell their assets to fund their retirement.
Not just prices for property, but shares and businesses as well.
Overbuilding of flats around Australia’s capital cities will also have a dampening effect on housing
prices, particularly in attached dwellings. Real sustained property price corrections could happen as
soon as the 2017-2018 financial year, if not sooner.
The way global economies are at the moment, there are no guarantees that prices will remain
stable, let alone increase any time soon. And with the oversupply of flats coming into the market,
most likely just as the global markets enter a serious downturn, falling real estate prices are a very
real possibility, particularly from investors exiting the market. When they are not seeing any real
capital gain (after inflation), have very low or no yields and longer vacancy periods, but still have to
put their hand in their pocket every month for expenses, there could be a rush for the exits.
Real estate, after all, is a non-productive consumption item.
Prices may rise but people seem oblivious to the fact they can also fall. What goes up can also come
down. So capital gain only really exists if it is realised. Unless capital gain is locked in (ie. sold at the
highest valuation price), it’s not real capital gain.
You cannot rely on the greater fool theory forever. This is the theory that a greater fool will come
along and pay you more for your “asset” than you paid for it initially.
The banks have been complicit in this, allowing borrowing against any increase in equity so the debt
load is constantly increasing. This strategy is also pushed by property spruikers as a means of
increasing your property portfolio.
Yes, a property investor might have a two million dollar property portfolio. But if it’s secured against
a debt of $2.5 million thanks to falling property prices, that’s hardly a sound financial position to be
in. If and when that happens, the friendly bank won’t be quite so friendly any more.
The problem is that, as previously mentioned, housing is a non-productive consumption item whose
purpose is to provide shelter, but is being sold as an investment item reliant on capital gain rather
than yield.
So, as well as property not doubling every seven to 10 years over a long period of time, Australian
property prices can also actually fall. And this is even more likely at this particular juncture.
We are entering a deflationary period, a period of asset price falls. The reason the massive money
printing or quantitative easing programs we have seen over the past few years by many countries
have not succeeded in increasing asset prices consistently, kick starting the economy or causing
massive inflation or even hyperinflation, is that this money printing has just stopped the deflationary
forces from having their full effect. It’s why the global economy is sluggish at best. With the amount
of money printing carried out by various governments, global economies should be booming. They
are not.
Just as record low, and in some cases negative, interest rates have similarly been unsuccessful in
getting the global economy moving.
There is a train of thought, particularly amongst politicians and central bankers that inflation is good
and deflation is bad. But I disagree. Before the turn of the last century, (and incidentally before the
proliferation of central banks), deflation was as much a part of an economy as inflation. Before the
1900’s, periods of inflation were generally always matched with periods of deflation.
It was only when central banks decided that deflation was a bad thing that we have had persistent
inflation. Inflation has only been a feature of modern economies from about the early 1900’s
onwards (incidentally, the US Federal Reserve Bank came into being in 1913).
Why is deflation the enemy? Deflationary periods are useful to dampen and remove malinvestments
from the markets and bring the economy back into equilibrium. This is now being
prevented from happening.
Japan is well into its third decade of deflation. Asset prices (property, stocks and businesses) are
about half the value they were during the 1980’s and have never recovered those highs. The
various governments of the day have tried desperately to stimulate inflation and asset price growth
through massive quantitative easing (far greater than the US) and zero and negative interest rate
policies. It hasn’t worked. Inflation is still negligible and asset prices are still languishing. And yet
Japan is still ticking along nicely and they’re in no immediate economic trouble. Why? Because
inflation isn’t needed!
And why are our politicians and central banks so desperate to see inflation? Because it increases
asset prices, which brings about the so called “wealth effect”. When asset prices are rising, people
feel wealthier and more secure and this supposedly encourages people to spend more. And why is
this a good thing? Because under a fiat (debt backed, not gold backed) monetary system (pretty
much all developed nations and most developing nations) in order for the economy to grow, we
need to borrow more and get further and further into debt. In other words consume today with
tomorrow’s income.
The record amount of debt we currently have in Australia does not bode well either. Australia is
currently one of the most indebted nations in the world. We have record amounts of private and
corporate debt, and public debt is increasing faster than any other developed nation.
Rising public debt endangers our AAA credit rating, which in turn will increase borrowing costs for
the major banks causing interest rate rises above the RBA “official” rate. Many of the private debt
holders won’t be able to afford any interest rate rises. A massive amount of this private debt is
secured against this non-productive consumption item, property, which will either be defaulted
upon or sold at a loss.
What does this mean for the housing bubble? Who knows! It could continue for another 10 years,
start to deflate next month or pop in a year.
The markets can only be gamed for so long before they revert back to the mean. We are probably
now entering an extended deflationary period and sluggish global economic growth, after more than
100 years of constant inflation. Get used to it. This is most likely the new normal.

Shark Tank Australia Season 02 – Episode 01

Pitch 01: On the go

Offers from Sharks : 3 (300,000 for 20%), Second offer ($600,000 for 35%)

Counter : 15% for $300,000 | counter 2 ($600,000 for 30%)

Outcome : Deal….. $600,000 for 30%

The 25-year-old built the sports apparel company out of his garage in O’Connor just over four years ago. He’s now running a multimillion-dollar company that employs 13 people and is looking to go global.

On The Go Sports offers customers the ability to customise sportswear for groups or teams. More than 300,000 people 10 countries have now used the products  –including Richard Branson.


On the go


Pitch 02 : Clever Score

Offers from Sharks :$200,000 for 50%  + $ 75,000 salary

Counter : $200,000 for 33.3%

Outcome : NO Deal!!!

Comments : Very complicated pitch. He didn’t able to mention what is he going to do with the money. Also, he divided his business to Australian business and International business.


Pitch 03 : Sharknado Alive

Offers from Sharks : $600,000 for 50%

Counter : N/A

Outcome : Deal!!! for the asking price.

Comments : Entertainment company with a new twist. Andrew thought all five sharks should made a deal.  4 sharks firstly agreed with Andrew to go to a deal and finally Steve also agreed to go with all five sharks. Seems like its a foolish investment. Sharknado is one of the foolish movies ever made.


Watch all the Season one Episodes below


It does annoy me a little that the media latch on to stories that the “property bubble” is about to burs!!!!

Comments From : Geoff Schippers

Geoff Schippers of Scout Finance has been a mortgage broker since 1998 and has settled more than 3,000 loans worth in excess of $750,000,000. He has previously been Mortgage Choice Australia’s No. 1 mortgage broker and now runs his own boutique brokerage offering the same exceptional service and unparalleled expertise for mortgages (residential and commercial), strata finance and asset finance. For enquiries, call Scout Finance today on 02 9526 7899 or visit

It does annoy me a little that the media latch on to stories that the “property bubble” is about to burst and sighting the situation in the USA after the GFC as some kind of precedent for what’s going to happen in Australia. It’s absolute garbage.

Firstly, the rise in housing prices in the USA pre-GFC was predicated on unsavoury lending practices that blind Freddie (Mac) should have been able to see coming; loans to borrowers who couldn’t afford them (or worst still didn’t even have jobs) coupled with adjustable rate mortgages that jump up 4% after the introductory period, a legal framework that permits non-recourse mortgages (i.e. walk away from an upside down property with no consequences) and a derivatives market which amplified the effect of rising mortgage default rates and you get an almighty bubble that can do nothing else BUT burst.

Whilst the increasing availability of credit to Australian borrowers has long been the argument for proponents of the Australian property bubble, the fact is that’s it’s never been to the same extend that it was in the USA pre-GFC – ever. Yes, average household debt has risen markedly since the 1950’s, but so too has society changed. Households are no longer single income families, and so with the increasing incidence of double income households, household borrowing capacities have increased accordingly. It becomes a self-fulfilling prophecy that because we earn more we borrow more and therefore we have to earn more but it’s a trend that is unlikely to reverse any time soon.

Furthermore, APRA has actually already been taking pro-active steps to REDUCE the availability of credit to borrowers by demanding more stringent lending criteria of the mortgage providers it regulates. Therefore, even if credit was considered to be too readily available previously (which is contentious to begin with) it’s already tending back the oth er way.

Secondly, property values are a function of supply and demand. It’s been regularly reported recently that Sydney house prices have increased significantly over the last 2-3 years. However, it’s no coincidence that it’s the same city with the greatest shortage of available property! I’ve heard experts quote that net migration into Sydney accounts for an increase in demand for approximately 10,000 dwellings per annum. And what have the state government done to facilitate that development? Antiquated urban planning processes which restrict the supply of new property developments? How about a road and rail network incapable of supporting the increasing size and distribution of the population? Is it any wonder, when we’re always 20 years behind the current population’s needs, why we end up with a shortage of property which in turn drives prices up? Perhaps if the powers that be had the vision, will and finances (or better still, stopped wasting money on things like, for example, a desalination plant!) to bring Sydney into the current decade, we wouldn’t be talking about a “property bubble”.

And thirdly, reports on isolated pockets throughout Australia where the property prices have dropped significantly as being the precursor to a wider housing bubble are nonsense. Any town throughout Australia that has been particularly influenced by the rising and falling fortunes of a single industry (e.g. mining) is in no way indicative of the Australian market on the whole. Generally, mining towns with limited supply of property suffer from sharp rises in rental prices as the industry prospers (again, supply and demand). When out-of-town investors then think they’ve stumbled on the “rental return of a lifetime” and flood the market, property values rise until the perceived rental return becomes normal again. Then, as recent times have shown, when that industry wanes and rental returns decline (back to normal), p roperty prices also decline (back to normal). Yes, I would consider that to be a bubble, but it’s an isolated bubble – not an “Australian housing bubble”.

But again, Sydney needs another 10,000 dwellings per annum just to meet the organic growth in demand for property. Post-GFC, property development all but ceased in Sydney for years and the cumulative effect of that rising demand has put us in the situation we’re in today. Until that demand abates, or supply catches up, how can we expect anything but a continuing rise in property prices?

5 reasons why the Australian housing bubble is far from bursting

Steve headshotComments from Steve Jovcevski. He is a property expert at financial comparison site,

You can read more about Steve on the Mozo blog here:


High credit quality

Strict lending criteria and serviceability requirements ensure Aussie home borrowers who are approved for a loan are quality candidates and can generally afford to repay it. For instance, borrowers can no longer borrow 100% of the property but are required to have at least five per cent deposit and pay Lender’s Mortgage Insurance on low deposit loans.


Fewer foreclosures

In addition to tighter regulations, lenders can also seek financial retribution if a borrower defaults on their home loans. For this reason, borrowers are less likely to default their home loan, resulting in fewer foreclosures.

For a massive property collapse to occur, we’ll need to see wide scale job losses and foreclosures which is in fact, the opposite of what is happening in Australia with unemployment at a steady six per cent.


Regulatory bodies are doing their job

Financial bodies such as the Australian Prudential Regulation Authority are keeping a closing eye on the housing market. Last year when APRA found there were too many investors driving up the market, it stepped in to enforce a 10 per cent cap on investor lending growth.

We’re not the US

Earlier this year, investment expert Jonathan Tepper on 60 Minutes tipped that the mortgage bubble in Australia as well as the United States and Ireland would burst with property values plummeting up to 50%. While these predictions gained a fair share of concern, Tepper’s predictions did not compare apples with apples.

Instead, we need to compare large cities with other large cities such as Sydney and New York that tend to behave quite similarly.


We’ve seen this before

It may be difficult to remember the peak of the last property boom all the way back in 2003, but I can guarantee you we were hearing similar doomsday predictions about the property bubble bursting. In terms of the way borrowers are leveraged today versus 13 years ago –it’s pretty comparable.

Because we didn’t have a property bust back then, it’s highly unlikely we’re on the brink of having one now.


Steve is Mozo’s property investment and lending expert. With an extensive knowledge of home loan products and property trends, Steve is full of practical tips to help first homebuyers, refinancers or investors build and get the most out of their property portfolio.