New Homeowner

Shortly after I returned from my Christmas holidays overseas, I got the not so pleasant phone call that my landlords were putting the apartment I've been living in up for sale. I had been toying with the idea of buying my own place for a while now, but the housing market here in Australia has been in major bubble territory for years. While it has finally started seeing more significant decreases since the price peak in 2017, I was hoping to be able to wait until later this year to start looking. However, with the impending sale I was forced into action earlier than anticipated.

I spent about a month looking around at places and going to open inspections to get a feel for what was available and prices in this market. Having never been to an auction before, I planned to go watch a couple in case I would have to bid on a property myself. One auction I went to was for a unit I had marked as having potential but hadn't had a chance to see. When I walked through the place I really liked it as it was open and had good sized bedrooms and closet space. Speaking to the agents I told them I was interested but not prepared to bid. We went outside for the auction, which turned out to be just me and another girl, who ended up leaving before they opened things. Since I wasn't bidding, the unit was passed in on a vendor's bid, and then got listed for private sale.

I spent the next week lining up a conveyancer to review the contract of sale, a pre-purchase property inspection, and getting a home loan from a mortgage broker so that I could make an offer on the unit. Thankfully a person I work with recently purchased a property, so she gave me some names of people which saved a lot of time. A week after the auction I put in an offer that was then accepted by the vendors. It was good that I managed to buy this place as the unit I was living in did sell to owner occupiers, so I would have had to move either way.

I settled on the property a few weeks ago so I am now officially a homeowner! As the building is relatively new it didn't require too many renovations or fixes. I did get it painted and replaced the beige carpets with laminate flooring and grey carpets in the bedrooms before moving in. I've been spending my time unpacking and getting settled, but overall I'm excited to finally have a place to call my own (even though I am now much more cash poor than I was a couple months ago).

Expat Observations: Real Estate

Would you pay $1.5 million for this?

Growing up in the San Francisco Bay Area made me used to insane real estate prices, but even I have been floored by the Australian obsession with property. In the 10 years I have lived here the median house price in Melbourne has gone from $350,000 to $729,500. To put this number into perspective, the median house price in the Bay Area is currently $790,500. I love Melbourne, but it is no Bay Area.

Each week there are breathless articles in the papers about Saturday auction results, clearance rates and houses that have gone $100,000+ over their reserve. One recent example is this two-bedroom home in Hawthorn which was bought in 1970 for $10,000, has been uninhabitable since 1983, and sold for $1.51 million. Yes, someone paid that much for a tear down.

So what is causing these ridiculous prices? Australia escaped the worst of the GFC and never had a property market crash. Prices have been going up an average of 6 per cent a year since the 1990s. We have low interest rates, a tax system that favors investors instead of owner-occupiers with negative gearing and capital gains tax, and stamp duty instead of land tax which adds a huge up front cost to buying a house. There is also no independent reporting of the housing sector as the media use figures directly from the Real Estate Institute and newspapers are reliant on the advertising revenue from their property sections.

Prices are currently seven times average household income (instead of the normal three). People have been calling out this housing bubble for years, but it has yet to burst. Politicians don't want a crash to happen so they have been doing everything in their power to keep the housing market propped up. In addition, because all this money across the nation is stuck in a non-productive asset, it means it is not being invested in the stock market or businesses and helping to grow and expand the economy. The day of reckoning is coming, and it's not going to be pretty.

Moving House

It all started with an ominous phone call a couple months ago from the real estate agents.  The owners wanted to get the the property appraised.  A few weeks later my fears were confirmed when I got another call saying that my apartment was being put up for private sale.  Despite my hopes that an investor would buy it, I got my notice to vacate around the start of April.  I spent a couple weeks looking at properties, including one Saturday where I went to five different inspections.  There were a lot of people at many of the inspections, but thankfully I have found a decent place to live that is very close to my current apartment.

I spent the Easter holiday packing and picked up my keys today.  I've already made a few walking trips to the new place bringing stuff over I don't really want to pack such as picture frames and food.  Tomorrow is the big moving day and I have been finishing my packing tonight while watching a little thing called the royal wedding.  I'm sad to be leaving my current place.  I think it would be different if I had actually chose to move.  This is the downside to renting- sometimes you don't have control over things.

Washing Machines and Apartments Don't Mix

Once again I have had an incident with a neighbor and their washing machine causing chaos.  The previous times have unfortunately been with the people who live above me, which meant I had water coming through my ceiling along the beam when their machine has overflowed.  Last night however it was the people across the hall from me.  While they were out (it always happens when they go out) their washing machine broke mid-cycle, with the door opening and water coming out for a couple hours.

I first noticed a bit of a wet spot on the carpet by my door, and when I opened it the entire hallway was soaked.  Other neighboring units also had water seeping in.  We ended up shutting off their water, but I had a very soggy portion of carpet.  When they did finally get home they were horrified, especially since they were leaving for India in the morning for two months!  Thankfully they organized to have someone come today to remove all the water from the carpets and dry them.  I now get the great pleasure of having an industrial strength fan blowing in my unit 24/7 for the next two days.  It's so loud I can't really watch tv.  So the lesson here to any renter is never leave your apartment while you are doing laundry, because it will be the one time when things go horribly wrong.

Slumburbia

Here's a really interesting article for those of you interested in housing and urban planning: "Is Suburbia Turning Into Slumburbia?" by Carol Lloyd.

My Ceiling of Woe

I thought my leaking ceiling issues were over but last week I heard that dreaded sound of dripping again. I couldn't find where the water was coming from until I looked up at my kitchen light and saw that the fixture was full of water. This happened on a Friday night, so of course I had to wait until Monday to speak with anyone at Body Corporate. On Tuesday the plumber came out and checked Unit 23, but there were no obvious signs of leaks, so he figured it must be coming from Unit 24. Unfortunately, we didn't have access to the unit, so the plumber returned the following morning to check Unit 24. After running water from all the taps, it was determined that the leak wasn't coming from there, but from Unit 23 after all. We didn't have access to the unit that morning, so the plumber decided to cut a couple holes into my ceiling to see if he could find the leak. However, he couldn't figure out where the leak was coming from so I had to wait until Friday when everyone's schedules were finally coordinated to get things fixed. It turns out the water was coming from the kitchen sink area of Unit 23 and after putting 3 more holes into my ceiling, the leak was finally found near my ceiling beams! The cause was two segments of pipe that had completely separated from each other because someone forgot to blue-glue the two pipe segments together when the building was constructed. The plumber glued the pipe back together and also anchored it to a beam in the ceiling (they had forgotten to do that too). Now the problem is getting all these holes in my ceiling repaired. I'm waiting to hear from Body Corporate when the plasterers will be coming out (better be early next week) and then once that dries the ceiling will be painted. I am hoping to get this all fixed before my parents arrive on September 3rd.

Why Is My Ceiling Leaking?

On Tuesday night I was starting to make my dinner when I heard the sound of water. I turned around to see a stream of water pouring down from my ceiling off the support beam and onto the carpet. I quickly grabbed a pot to catch the water and rang my real estate agent to ask what to do. Thankfully the water stopped after a few minutes, but I ventured upstairs to chat with my neighbors to see if they had any leaking water. There was nothing evident happening in either of their apartments, and thankfully they were nice and sympathetic to my situation. I woke up the next morning and everything was still dry. It was a good thing that I left the pot on the floor though because when I got home it was half full with water. After chatting with Body Corporate I ventured upstairs again to chat with my neighbors. We suspected that the problem could be with a shower leak that one unit had had repaired earlier in the week. They got the plumber to come back out, and there hasn't been any water since, so I'm hoping that the problem has been fixed for good.

If that wasn't enough apartment drama for me, I've also just gotten notice that my rent will be going up $44 a month when my lease is up in October. I'm not too thrilled about that, but there's not much I can do. Good thing I have a 3% raise going into effect that month as well.

My Apartment

I have been meaning to post pictures of the inside of my apartment. I still have a few more little things to buy (mainly poster frames for my posters- ignore the white walls) but otherwise it is pretty much decorated. Enjoy!

A Place To Call Home

This is the outside of my new home! Since the search for a decent house was taking too long and not very successful, I decided to check out some of the new apartments that have been built in Brunswick. I got word today that I have been approved for an apartment. It is in the Brickworks development, which was an old brick factory. There are apartment buildings as well as townhouses. It should be a good place to live, and it's located near both the trains and trams. I get to pick up the keys on Monday.

Since the house hunt is over, it's all about furniture and appliances now. I went with my friend Will to IKEA today and picked up some kitchen stuff to tide me over until the boat arrives with the rest of my belongings. I've also priced out some furniture, which I will be ordering for delivery.

Besides the trip to IKEA, I had brunch with Will, his girlfriend Helen, and their dog Bella. It was great to catch up with them, and I got to see their house in Abbotsford. If you are in Australia, you can check out Helen on Tuesday nights at 10:00 p.m. on the ABC tv show Vulture. She is a panelist on the show, which discusses art and culture.

Wandering Around

This week I have been busy doing various things. Besides the house hunt, which has switched to an apartment hunt, I opened a bank account at an Australian bank. I also went down to the Victorian Institute of Teaching to register to teach here. It should take about a month for them to process my application. I cannot do any teaching jobs until I am licensed in Victoria.

Today I headed down to Prahran to catch up with Peter and Mark. I last saw Peter on the Finn Brothers tour in Austin, Texas last year. It was nice to see them and spend some time in their Greville Street property, which will be going up for auction at the end of October. It's such a great house and I will miss it a lot. You can check out the listing here.

House Hunt

The past few days have been an adventure trying to find a place to live. I have been all over town getting keys from real estate offices and looking at properties. This is a bit difficult to do without a car. I checked out all the places I could on foot by myself, and today my friend Fran helped out by driving. I've seen some good places and some real shockers. The worst had to be a place in Fitzroy where over half of the power plugs didn't work! There are two places in Brunswick where I have submitted applications, so I'm hopeful that I will get one of them early in the week. It will be exciting to move into my own place. Next I'll have to deal with furniture and appliances. I did do some preliminary pricing on appliances, so I've got an idea of what I want. Hopefully the sticker shock from all this stuff won't kill me.

The Flights

The journey to Melbourne began on September 30th with tearful goodbyes to my family and friends. The first leg from San Francisco to Los Angeles was delayed a half hour, but I still landed pretty much on time. I had to take the shuttle over to the international terminal at LAX, and it was hot and humid even at 9:00 p.m. I checked in at Air New Zealand and met a woman who was taking the same flights as I was, and was also a teacher. We made it through security and chatted before boarding the next leg- Los Angeles to Auckland, New Zealand. I had an aisle seat on an emergency exit row, and was next to the kitchen area. It was nice to have leg room though. The 12 hour flight was long, and I didn't get much sleep. Once we landed in Auckland (on October 2nd), it was a quick walk over to another gate for the final flight to Melbourne. I got my second breakfast meal of the day on the flight, and was very happy when we landed 3 1/2 hours later. Customs was quick and easy. After about 24 hours of traveling, I was ready for a hot shower! My friend Michelle picked me up at the airport and we headed over to her house in Brunswick.

After cleaning up and eating lunch, we took a drive around Brunswick and checked out some of the places I had bookmarked from the real estate websites. The next step is to set up inspections and hopefully I will have a place to live in the next two weeks. There are several promising properties. I still can't believe that I'm in Melbourne, and I don't think it will click with me that I'm here to live permanently and not on vacation until I have my own house.