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OOps!,didn't see bushies posts,
We moved from Portland two and a half years ago,(my son and his family still live there).
@bushies.girl wrote:We left Portland around the same time as you ...... was getting way to rough, full of druggies n drunks ...... From what I have seen, house prices are going backwards there now n not much is selling at all
The rental prices have gone up to where some now want $260 to $300 or more and they are not getting it as
no one can afford those rates as the ones that work mostly own their own houses.
So the ones that are forced to rent haven't got the money to rent those houses and the owners of the houses
are forced to sell.
If they lowered rents to affordable rates they could still rent a number of those houses.
It's not a place you want to live now as it's rapidly going downhill,(one of our friends that still lives there
lost two of her sons to drugs)
@***super_nova*** wrote:There was a time, when my daughter was little that I would have liked nothing better than to live in a smaller town, but even then it was not feasible. Unless you can find work, you cannot buy, does not matter how cheap it is. It is a vicious circle. Just like all those small outback towns that experienced enormous housing boom when mine opened near by. Very ordinary houses, that before were being sold for couple of hundred thousands, went for million, then the mines decided to FIFO, and the families who moved to these towns thinking they will be able to open business and bought at the inflated price lost fortunes; they were unable to sell; some just left with nothing leaving their house to be repossessed. People who need to work cannot move to places just because they are pretty.
It is very simple; there is a big demand for housing in areas which are close to employment opportunities, and there is very low demand in areas without jobs. Also some attractive coastal areas are in demand by retirees. But basically cost is driven by demand. Getting rid of negative gearing would to dampen the demand and allow more people to get into their 1st home.
FIRST - APOLOGIES FOR THE ESSAY. Congratulations if you make it to the end. 
Unfortunately like a lot of these things it is not " very simple ".
The silly house prices are mainly ( but not exclusively ) a Melbourne / Sydney phenomena.
The reasons for this are complex, but as Supa nova has noted " basically cost is driven by demand". There are a number of reasons for the demand in these cities.
One that has not been mentioned yet ( its not PC. ) is that Australias population is growing. This growth is not coming from existing Australians having large families, but as a direct result of our governments migration policies. These migrants are mainly wanting to move to Melbourne and Sydney because there are strong "new Australian" communities already established in these cities. This is perfectly understandable, but so to is the pressure this is placing on the cities urban growth and infrastructure also perfectly understandable.
As Nova has noted there are A FEW highly specialised occupations where specialists need to be in these large centres to reach the pinnacle of their career's, but these people and their families are not the ones feeling the pressure of housing stress. The vast majority of jobs that you and I do are not really tied to place. You can be a teacher or a bathroom tile salesman or an accountant or a taxi driver in any reasonable population centre. Very few of us are elite athlete's, business leaders or highly acclaimed brain surgeons who HAVE to live in the big two cities. Still the myth exists that if you want to persue a carreer you need to live in the big two.
The effect of O/S investment is mainly centred on several Eastern seaboard centres incl. Melbourne and Sydney as the O/S investors come from highly populous places where anything under 5 million people is considered a small country town. Like others, they are chasing the bubble growth in Australian major city prices as investment classes internationally are performing poorly and very fragile. Some of the very expensive waterfront homes are being purchased by Chinese investors who wish to trade and do business with Australia. This is a reasonably recent phenomena.
Government policies of self managed superannuation and negative gearing of property is driving a housing bubble in these centres. As some have already noted these centres have experienced high double digit growth in house prices for a number of years now. Why would an investor put money into a fragile stock market that may be returning 8%-10% growth and could easily fall away very quickly or bank deposits paying 3% when they can receive 25-30% growth from housing in Melbourne or Sydney.?
These pressure's have resulted in continued expansion on the urban fringes, to the point where transport times and social isolation is making these fringe suburbs almost unlivable. This has the effect of further increasing the value of existing inner city property.
All of these pressures have resulted in an increase in prices. There are two parts to this increase in house prices. The first is structural or " real " price increases. For the reasons mentioned, inner city property has had a genuine re-rating of value and will never go back to pre-boom levels.
Perhaps a more significant element is the second part of price increases, this being the speculative component. As INVESTORS have poured money into the market, they have created a giant Ponzi scheme. Continued increases in prices and profits relies almost entirely on other investors pouring even more money into the market to keep the party going. As many have already noted, house prices no longer bare any resemblance to their intrinsic value as a place to actually live.
This has created a housing price bubble. Eventually the share market will recover or interest rates will rise or rising unemployment will halt the price increases or Labour will win the next election and change negative gearing rules. 
Once the music stops there could well be a run for the exits with investors grabbing their profits and running as fast as they can. Should this eventuate we could see a significant fall in house prices making them more affordable for young people. Quality homes in inner areas are never going to fall to levels of ten years ago, due to the structural component of house price increases, but slightly less attractive " middle " areas could face significant falls.
I doubt that housing affordability will ever really return to levels of 30 years ago in places like Melbourne or Sydney due to structural changes, but there will be opportunities for younger people who have saved some money to enter the market in the future when the investors pull out of the market.
Housing is not as volatile as farming but one of the rules I run my farming business by is " nothing stays very dear or very cheap for very long "
