Anyone else looking at buying their first home, but just can't stomach paying the ridiculous asking prices?

thord on 13/03/2017 - 15:12

I just want to get a sense to see if there are many others in a similar position?

We have money, we save and invest wisely. The deposit and repayments aren't an issue (for now), the problem is I just can't fathom the idea of dumping a decades worth of savings and investments into a single very overpriced asset.

I also hate the idea of taking out a million dollar loan which I then just give to someone else who just happened to be lucky enough to have been born a decade or two before me. Then I'm in debt for the next 30 years paying it off hoping and praying that the record low mortgage rate that we currently are experiencing remains and doesn't rise.

We could in theory keep a portion of our savings, and simply take out a cheap 1 or 2 bedroom apartment in an undesirable suburb - which in theory would be fine. BUT we're not keen on a cheaper apartment and I've seen first hand the absolutely horror of strata living with massive defect rectification bills, special levies out of no where, and stupid maintenance costs that I wouldn't incur if I had my own place as I'd do it myself. Also we consider the apartment market to be much much riskier than the freestanding house market.

Moving to a regional area is also out of the question due to the jobs my wife and I have, not to mention we'd also incur a lot of additional costs as we currently don't spend much in the way of transportation, but we would in a regional area.

It feels like we are backed into a corner with absolutely no way out.

I feel like it's affecting both of our mental health and we both feel pretty depressed over the whole thing. We're putting off kids because we can't raise them in a rental without any stability or certainty, and there would be the ever present threat of being forced to move and then what do you do with the kids school? It's just a multitude of potential problems.

We just feel totally burnt out and unhappy. How are other people coping with this shitty time?

Should we just bite the bullet and buy something, wasting our entire life savings and hope that everything is ok? Do we stick it out? Buy a cheap apartment and take all the risks that come with it?

Home & Garden

Comments

  • Fergy1987 on 13/03/2017 - 15:24
    +14

    Damned if you do and damned if you don't - At the end of the day it's going to be what your comfortable with. If you don't want to deal with the rental market and all that comes with it then buying is the solution. But that also has its cons like higher expenses etc. Really cant win!

    Buying isn't necessarily wasting your life savings I don't think either - worst case you can sell and get those savings back - or at least a good portion of it after you pay off the loan. I guess the benefit is you're at least putting it into an asset rather than someone's pocket.

    • mskeggs on 13/03/2017 - 17:38
      +96

      worst case you can sell and get those savings back

      This is the misconception that is going to end up costing those last in all their savings and 7 years of bankruptcy.
      I saw figures the other day that showed off the plan apartment buyers were down 20% if they were forced to sell in the first 2 years - and that is right now in the midst of a boom market. Everything is priced to perfection. A single financial shock could prick the property bubble (if Aussie banks can't source foreign capital, for example). Lose housing construction from the current economy and unemployment will spike a percent or two. Newly unemployed will rapidly realise a negatively geared investment property is an anchor around your neck if you can't meet payments. Forced sales, followed by other investors selling as they realise the capital growth story is finished.

      Property prices fall 15%, rents drop 10% as marginal renters stay living at home as unemployment bites, more negatively geared investors realise they can't find the gap to make the monthly payment. Some households find one adult out of work with difficulty finding a replacement job. Oh oh. They can hang on for 6 months but then there is nothing left, all the credit cards are maxed out and they sell at a $150k loss. The bank pursues them for the $50k that wasn't the deposit and they declare bankruptcy.
      The forced sale reveals real prices to valuers of the neighbouring properties, and suddenly nobody has any scope for 'equity mate' withdrawals any more and the investor market loses three quarters of buyers overnight. The Chinese can see that capital losses are coming, so their buying dries up, and there are distressed sales of off-the-plan apartments when it becomes clear no lender will step in to cover valuations made at the top of the market, and the foreign buyer takes the $50k deposit bond loss rather than complete and find themselves $150k negative.

      I hope there is a way to avoid all this unpleasantness. But the only way I can see is below CPI price growth (so flat or slightly negative) for years and years. There is no way a Sydney price of 12 times median earnings can be sustainable in anything but a dream economy.

      • Fergy1987 on 13/03/2017 - 18:30

        Eek…alot of facts. Well ill be holding onto my house with both hands then lol

        • zealmax on 13/03/2017 - 21:37
          +16

          Where are the facts? Opinions?

        • mskeggs on 14/03/2017 - 07:23
          +11

          @zealmax:
          No facts, just a scenario where a pretty mild economic jolt causes most of the people who have bought a house in the last year a lot of economic pain.

        • nikey2k27 on 14/03/2017 - 18:03
          +6

          @zealmax: it happened in USA will happen here watch this space

        • zealmax on 14/03/2017 - 18:06
          +4

          @nikey2k27: I guess anything can happen if you wait long enough. USA is not directly comparable to Australia, different lending and level of liability there.

        • mskeggs on 14/03/2017 - 18:56
          +3

          @zealmax:

          I used to think that too, but no recourse mortgages are only offered in a minority of states, and Australian "no doc" loans and interest only loans offer pretty substantial risks. Current figures I saw from BT are 40% of new mortgages are interest only. Astounding!

        • zealmax on 14/03/2017 - 19:24

          @mskeggs: Count me part of the 40%. I see no end to the toiling.

        • nikey2k27 on 15/03/2017 - 07:24

          @zealmax: I know way many people just pay interest only I saw a problem the local in North Queensland Townsville went house feel by 20% overnight now recover somewhat. so many bank repo house of worker within months job loss at Queensland nickel. one mate lost 3 house to bank another one I had one was told to sell a house in Brisbane. Bank made him sell that.

        • snook on 16/03/2017 - 10:12
          +3

          @mskeggs: you do realise that this

          … who have bought a house in the last year …

          The "experts" have been predicting this since 2004 (at least) … and nothing has happened. NOTHING. Not being pedantic but come on man, there is nothing new in this 'prediction'.

          I bought a house in 2015, a year EVERYONE was saying was the end and it could ONLY go down. It's up 600k. I had the exact same money in 2004 but all the naysayers, like you, turned me off. I wasted 10 years and a hell of a lot of money. Makes me feel sick when I think I could have the same house I have now for 5-600 less than I actually paid. SICK. All because i was stupid enough to listen to the negative that never happened. NEVER happened.

          It may, or may not, happen whenever … but give the negative a break.

          If you're got the cash, throw it into the ring OP. At the very least, you have your own place and no one can throw you out.

        • jaimex2 on 16/03/2017 - 17:52

          @nikey2k27: People have been saying that for 12 years now. Meanwhile I'm $300k up for not listening to them.

        • owli on 16/03/2017 - 20:04
          +2

          @jaimex2: Realised profit?

        • hornoscous on 16/03/2017 - 23:05

          @jaimex2: Time to draw down on the equity and buy ALL the eneloops!

        • nikey2k27 on 17/03/2017 - 06:39
          +1

          @jaimex2: Gov propping it up that why it keep on going. if your own home you have not made a cent why if sold you house you would be homeless and need to buy another house in the same area it will cost all you have now.

        • jaimex2 on 17/03/2017 - 10:12

          @nikey2k27: Or when I retire I can downsize, double my retirement fund and buy a nice holiday home overseas to boot?

        • nikey2k27 on 17/03/2017 - 10:16
          +1

          @jaimex2: that only if everything same in 20year or 40years time

        • jaimex2 on 17/03/2017 - 10:56
          +2

          @nikey2k27: oh, and lets not forget that I will be paying no rent by this time. If you don't buy you are essentially bleeding money through rent indefinitely.

        • nikey2k27 on 17/03/2017 - 15:50

          @jaimex2: I never said not to buy be careful and pick your time as market overheated in Sydney.

        • Moose-au on 17/03/2017 - 20:25
          +1

          @zealmax: WOW, I wish you well dude. When I purchased my 1st house, interest rates were 15%, and I had a good deposit and plenty of backup (secure job, savings in bank, etc). If you can barely meet the repayments when interest rates are at record lows, how are you going to survive when they go back up to 15+% ??? I wish you well, I really do, but what on earth are you thinking ??????

        • jaimex2 on 20/03/2017 - 09:12

          @Moose-au: #yolo

          But seriously, repayments at the moment would be about the same as rent. If the market tanks he will be one of many defaulting, I'm hoping AUstralian's hold the RBA and banks accountable. If I ever default I'm simply fleeing the country and leaving them with the mess.

      • Aceboy884 on 13/03/2017 - 21:58
        +10

        Also fact, developer are getting desperate,

        I got two cold calls in the past week.

        Once upon a time (2008) i made some inquiries and that was it.

        They are now desperate to unload stock before construction complete.

        2017 will be a record year for new homes being built.

        Woopy to supply!

        • BadGiraffe on 15/03/2017 - 16:33
          +3

          The sad thing is, there will always be people willing to throw $600K at a small 2 bedroom unit or apartment. Where they get the money from is beyond me. Sometimes I think I should be getting a job somewhere else… but where?

          I think it's time to get on YouTube and make millions of dollars.

        • frewer on 15/03/2017 - 22:54
          +1

          @flaminglemon: Sure Felix, btw WSJ rang

        • BadGiraffe on 15/03/2017 - 23:12

          @frewer: <hangs up phone> I'm talking to no-one, bros.

        • snook on 16/03/2017 - 10:14

          @flaminglemon: they aren't throwing 600k - they're throwing 120 + stamp duty.

      • supersabroso on 14/03/2017 - 00:41
        +4

        Definitely a mis-conception I agree, remember that you lose 4% stamp duty every time you need to buy something. However, do remember that land is a fixed quantity, it won't increase. The only way to get more is to sprawl out further…and further….and further……until you're past the blue mountains and you're wasting 4hrs of your life everyday to get to work and back.

        Agreed that the apartment bubble will pop and soon. House prices, haha forget about it, at best you can hope that there's no more growth and this year's prices are the same as next year's because they sure aren't the same as last year's that's for sure. The only things that's the same as last year is the growth in prices 15% every single year.

        We bought an apartment and was promised $5,000 strata/year. Quickly found out it needed to jump up to $10,000/year for the next 20 years after we moved in and went to the strata meetings. Waste of money buying the strata report, didn't include this fact at all. Had to sell, now bought a house much further away, don't think we'll regret it because we actually own land now. House and apartment prices are always depreciating, it's the land that goes up like no tomorrow to make the overall gain.

        • JohnHowardsEyebrows on 14/03/2017 - 00:57
          +13

          While the land will not lose its value in the way apartments do (fixed supply, it's yours forever, no strata etc), it's this mentality of it never going down that's caused this idiotic obsession with property. The fact is property is a function of the money available. At this moment, most of that money comes from two sources: 1) investors getting a free ride off the taxpayer, and 2) Chinese nationals using the properties as a vehicle to get money out of the mainland.

          Number 1 is almost certain to change, especially if the Liberals continue to implode, with Labor finally having the balls to do the necessary and kill this rort. Number 2 is being mildly contained by foreign ownership rules, and may or may not continue for some time…the question is whether a) the money is able to keep flowing out of China, and b) the Chinese feel their investments here are safe. I imagine things have cooled down with the crackdown on external money flows the past few years, and the countless number of Chinese investors who will get burned when the apartment market - the only market foreigners are officially allowed to invest in - bites the dust.

        • drprox on 15/03/2017 - 07:16
          -1

          Couldn't agree more and been saying this to friends/family/strangers for years. Land is what's going up so don't misinterpret and charge out and buy apartments!

      • JohnHowardsEyebrows on 14/03/2017 - 00:51
        +5

        What's scary about this is that you've stated a 15% drop as if the world's come to an end…when in reality, the feeding frenzy of the property market has seen 10-15% growth every other year for the past two decades.

        Prices could drop 50%, and they'd still not be cheap. Great post - couldn't agree more. I think those with inner city/middle suburb houses (i.e. have the title to the land as well as the house) will be OK, but the apartment and flat market will be shattered by the next economic shock - I don't think apartment owners have made money in over a decade in Docklands, for example.

        • Moose-au on 17/03/2017 - 20:32

          when in reality, the feeding frenzy of the property market has seen 10-15%
          growth every other year for the past two decades.

          Not in regional Australia ! We have been in steady decline since 2008. 9 years of grind. Prices are now about 30% of what they were in 2008. 10-15% growth per year ???? I wish ! Not round here.

      • RedHab on 14/03/2017 - 08:14

        A good scenario description, and it will happen. The big question is when.

        If it only happens in 5 years time, and we see another 5 years where home prices double, then buying now is a good idea. You'll be kicking yourself for not buying. If it crashes soon, then you'll be happy you didn't buy now.

        The problem is the main media in Australia makes more money from their real-estate and domain sites than their newpapers, so they are biased. For an independent analysis see http://www.macrobusiness.com.au/

        • AddNinja on 14/03/2017 - 15:40
          +5

          The when is the hard bit. To show how naive I am - I've thought the housing market would crash pretty much since 2002.

        • RedHab on 14/03/2017 - 15:51
          +3

          @AddNinja: Don't feel alone, I have thought the same since 2005.

        • doodo477 on 15/03/2017 - 02:37
          +1

          @AddNinja: Yeah,,, Brings back memories. Thought the house market was out of reach and then travelled the world and saw many different types of cats. Came back and it was higher when I left. Only problem now I have a family and this is getting frustrating.

        • jjjaar on 15/03/2017 - 07:56

          @doodo477: what kind of cats?

        • doodo477 on 15/03/2017 - 15:40
          +2

          @jjjaar: American Cats, China Cats, Czech Cats, New Zealand Cats, New York cats, Viet-Nam cat's, Tawian Cats, didnt get any Japense Cats, some Brazilian Cat, no Mexican cats.

        • jjjaar on 15/03/2017 - 15:45
          +1

          @doodo477: Sounds like a solid foundation, with enough room to find more cats if you so desire.

        • doodo477 on 15/03/2017 - 16:00
          +1

          @jjjaar: No more catching cats, found one cat and shes had two kittens. Though Mum cat it starting to scratch up the place, just don't try to shave a cat.

        • Craze on 16/03/2017 - 13:35

          @AddNinja:
          Whilst I'm on the same boat that prices are generally over inflated (thought the price hike in 2014 was ridiculous), looking back I do regret to not just bite the bullet and jump in. Finally bought last year and had to move further out (bout 10km out) and paid about $45k more.

          Speaking from experience, just get in the market if you can afford it, you can never time the market and as long as you can ride the times you'll most probably do fine.

        • AddNinja on 16/03/2017 - 17:50
          +3

          @Craze: I'm naive but lucky. I bought in 2001, and I thought the prices were inflated. My instincts told me to sell in 2006, wait for the crash and buy back in afterwards. Lucky I'm lazy too. So, my story is sheer undeserved luck.

      • Artkin on 14/03/2017 - 16:11
        +7

        You're not factoring baseline mineral wealth and desirability of immigrants to enter English law country (haven + diversification) plus our proximity to newly wealthy megamarkets (such as china) and multicultural reputation.uni education, tourism and immigration lever will keep things purring for a while yet. Monetary policy is still functioning, wealth effect of high HPI keeps baby boomers spending. Only wild card is intergenerational war (via politics) should xgeners and below wise up. Although after 20 years of unprecedented growth they seem like the docile lambs unable to think past the latest pop concerns (eg lock out laws). Demographics (aging population who benefit from HPI) will obviously resist at all costs and deflect to minority rights which will cost nothing to give up yet take up alot of valuable airtime

      • mchoodie on 14/03/2017 - 21:01

        mskeggs, any reference points for the 12x median earnings comment? Not challenging, just curious to read a bit more into it. Perhaps some comparisons to other parts of the world?

        Cheers

      • Thaal Sinestro on 17/03/2017 - 17:43
        -2

        Housing prices in Australia will never fall. Property appreciates in value by 10% per year. Best to purchase a house now because in 10 years time it will cost over twice as much to purchase. Everyone who has as money to invest, invests it in housing in Australia. Recently there as actually been a slight decline in home loans for owner/occupiers (people cannot afford to enter the market anymore), but at the same time there was a 40% increase in loans for investment properties.

        Governmental policy (Labor or Liberal), has a single aim, to drive up the cost of property so that the rich people who own property will become even more affluent at the expense of the poor. Any time politicians claim to be concerned about housing affordability, they are lying. These bastards want to make housing unaffordable. They all own investment properties.

        The only way housing prices would stabilize (stabilize, and not fall, it will never fall), is if immigration was stopped and foreign investment in housing prohibited and policed. Also remove -ive gearing and capital gains discounts.

        Housing in Japan in cheap in comparison to wages because they have no immigration and a really low birthrate, so more stock is becoming available.

        • Moose-au on 17/03/2017 - 20:51

          Housing prices in Australia will never fall.
          ???? Geezuz mate, what on earth are you talking about ??? Maybe in Capital cities, but not in regional Australia. Prices are less than 1/3 of what they were in 2008.

        • King Tightarse on 18/03/2017 - 17:15
          +1

          "Tulip prices can never fall" So says the last gullible Dutchman.
          Unexpected factors pop every bubble. "Never" is along time. Infinite growth with finite resources is simple impossible.

  • [Deactivated] on 13/03/2017 - 15:24
    +10

    http://www.news.com.au/finance/economy/australian-economy/ca…

    interesting article

    the punch line: "Move out of Sydney"

    • tryagain on 13/03/2017 - 16:01
      +13

      And another from a few day's ago. http://www.smh.com.au/comment/ive-always-loved-sydney-but-im…

      I moved out of Sydney about 8 yrs ago and have absolutely no desire to move back. Most of our family are still in and around Sydney so we regularly head back for a visit, which reinforces my desire not to move back. I think it is in big part to do with the idea that you must worship at the alter of property market and to do this you need to sacrifice your life to your career and it's progression to be able to obtain enlightenment (property ownership in Sydney), only then can you be content in your superiority, and just like a cult, anyone who dares to leave is obviously deluded and missing out.

      Your

      Moving to a regional area is also out of the question

      Is only the case because you choose it to be, leaving isn't the necessarily the best option for everyone but it's your choice to either stay and pay what I would agree are overpriced property costs, stay renting or move, but these are all your choices, nothing is being forced on you.

      • thord on 13/03/2017 - 16:11
        +15

        Changing careers and taking a 50% pay cut isn't really something that's desirable to us. Our work simply isn't present in regional areas. We'd have to start again from a low-tier position and cop the massive wage loss. I don't think that would be acceptable to most people.

        It would also put us in a similar position as we are now. (i.e. with a heavily reduced income, the reduced price of regional areas would still have an equal sting).

        • tryagain on 13/03/2017 - 17:04
          +6

          Without knowing what your line of work is I find it a little hard to believe that you are one area in all of Australia that you can get work in or similar to what you and your wife are doing now. Yes, you will likely take a pay cut but would also have reduced living expenses. As I said it's certainly not the best option for everyone but is is an option and no one is forcing you to stay.

          My comment isn't so much against actually buying property in Sydney but more the lengths you are expected to have to go to be able to which have lead to you being burnt out and depressed. Now that I live away from Sydney, buying property just seems like part of life as opposed to an all-encompassing reason for it.

        • tryagain on 14/03/2017 - 09:14
          +11

          @supersabroso: You really need to get out of Sydney/Melbourne more if you think everything outside of them is a 2 IGA country town. We were referring to regional area's which for example the Gold Coast is with a population of over half a million, pretty sure you will find more than a couple of schools and restaurants there to choose from.

          Not worth it, the majority of Aussies understand, thus the housing price issues in Sydney and Melbourne. There's also a good reason why 40% of the entire population of Australia lives in just 2 cities (Sydney and Melbourne) and it's not because country living is great.

          You do realise that 40% is a minority, not the majority right, kind of throws that whole point on its head.

          But in all honesty, if you think that less of a choice for eating out is actually a significant factor in your quality of living, then Sydney/Melbourne are likely a good match for you. We used to eat out a lot when we lived in Sydney, not anywhere near as much now, that's not because of lack of choice, but more to do with a different stage of life. I can't say that I miss it at all, enjoyed it when we did it a lot but then life moves on. I didn't downvote you BTW

        • Illian on 14/03/2017 - 17:15

          @tryagain:

          I would hardly call Gold Coast regional, it's mostly a tourist destination and most of the homes are mansions owned by the rich as weekend houses, the workers are in the lines of grey apartment buildings. Somehow I don't think that's gonna help too much with the OP's situation. I get your point, but Brisbane itself would be a better example, even just 20mins from the CBD you can find something that would be 1 1/2 hours away in Melbroune for the same price. I once lived in Dysart, it has but one IGA, a bakery and a cafe, you can buy a 4 bedroom house for 60k, that's about as regional as it gets.

        • tryagain on 14/03/2017 - 17:52
          +1

          @Adonael:

          I would hardly call Gold Coast regional

          It is considered part of regional Australia, ie you have your capital cities and then outside of those you have your regional cities/area's, some people conflate regional and rural which the Gold Coast isn't. I used regional as that was what the OP had used.

          it's mostly a tourist destination and most of the homes are mansions owned by the rich as weekend houses, the workers are in the lines of grey apartment buildings. Somehow I don't think that's gonna help too much with the OP's situation.

          Over half a million people live there, there are some bits that fit your description and these are often what tourists see but on the whole, it's a lot bigger and more diverse than that.

          I get your point, but Brisbane itself would be a better example

          Brisbane might be a better option for the OP especially when it comes to employment and housing affordability but as I was referring to regional area's when I mentioned the Gold Coast it wouldn't have been a good example there.

        • supersabroso on 14/03/2017 - 22:50

          @tryagain: Yeah, I wouldn't call the Gold Coast, Newcastle, Wollongong regional towns. I'm talking, Bathurst, Orange, Dubbo, Cobar etc.

          Capital cities make up 66% of Australia's population so my point is not moot, 66% is the majority. My point was that if 2 cities alone could make up 40% of the population then obviously it must be better for the vast majority of people. I think that if you start including towns like Newcastle, Wollongong, Gold Coast that are right next to the capital cites, you'll find this figure quickly hikes upwards to about 80%-90% of Australia's population.

          I speak from experience when I talk about the 2 Thai restaurants and only IGAs. I've travelled extensively all around regional NSW and a bit of each state too. Yes, in the larger regional towns you will get to enjoy the one and only Woolworths and a single Coles too :P

        • konazz on 16/03/2017 - 00:14

          @supersabroso:

          Not sure what tiny towns you're going to. Even Bathurst has a lot of shops, and I consider that region.

          On topic
          I've told my friends to leave Sydney - some can't leave because of a particular skill set but mostly its through apathy. We have a friend who is a asst principal and her husband is a landscaper, greens keeper, has an MR license… they are perfect candidates to leave Sydney, but they have a tightly knit friendship/sport group.

          We made the jump 7 years from the Hills shire to Canberra. We've never looked back. The first few years were pretty crappy on 1 low APS income while my wife studied and we bought a house (currently worth $435k, and takes me 18 mins to CBD) but now we are buying our next house 35 mins out from work in Bungendore. 2150m2 block, 305m2 house for $690k - 5 cafes, a few restaurants/pubs walking distance. Nearest major shopping centre is 15 mins away. Try finding a semi-rural lifestyle in a house that big, less than 45 mins from CBD.

          Career switches can be scary, but back yourself and you never know what you'll find. I'm still amazed more Sydneysiders don't look for work in Newcastle, Bathurst or Wollongong - all about 2 hours of Sydney. We make the CBR<>SYD drive every second weekend as its an easy drive to visit friends and family.

        • tryagain on 16/03/2017 - 15:18

          @supersabroso:

          Yeah, I wouldn't call the Gold Coast, Newcastle, Wollongong regional towns.

          Either would I, and that is because they are cities, not towns. OP didn't mention regional towns he mentioned "regional area's" which includes cities as well.

          With your other point, you continually conflate regional, country, area's, towns, cities etc to try and make your point. You have just shifted the goal posts away from what this topic was actually about. If we purely stick to the comparisons that the OP used as that is what this is about then we have Sydney with approx a population of 5m and Regional Aus with approx 7.5m so even then your popularity equates to better argument is against you.

        • belongsinforums on 16/03/2017 - 22:26

          @Adonael: most of the gold coast homes are mansions? wow. wonder why theres so much poverty there, then?

        • Illian on 17/03/2017 - 14:30

          @tomkun01:

          I have no idea, maybe I'm just not familiar with the outskirts, but even if I look at google earth now the suburbs immediately surrounding GC are all large houses and every second house has a pool to boot, it's obviously a wealthy area, perhaps the inequality is just more noticeable because of that.

  • try2bhelpful on 13/03/2017 - 15:31
    +23

    I can feel your pain and it is time the Government did something about stopping home ownership being an investment, rather than somewhere to live. There needs to be tax penalites if someone owns more than a home and one investment property and there needs to be a hefty tax for housing stock being purchased by people who are not Australian citizens/permanent residents. This would need to be done properly, not poorly like they have done with the Centrelink debacle, but this would provide the Government with additional funds to provide public housing to people who can't even afford to rent in the current climate. You might want to look at a nearby rural area where Public Transport is well setup; e.g. I grew up in Geelong and say to people that if they are considering the fringes of Melbourne then Geelong might be a better option. If you can possible avoid it don't get an apartment - they never appreciate as well as houses and you have to deal with the body corporate. Best of Luck with your journey.

    • neonlight on 14/03/2017 - 09:46
      +5

      Wishful thinking none of these will be implemented. The economy right now heavily relies on housing industry and government collects tons of billions of stamp duties. Its not gonna stop. When you buy a property or attend auction, the agents don't check what background or nationality or residency you have. They are not enforced to do, nor they will do so at their own will. All they care is the highest price obtained for the selling to make lumpsums of their commission at the highest

      Not to mentioned, construction is huge right now thanks to investors mainly buying offplans. And thanks for companies using 457 visa to hire workers, it doesn't really create jobs for local people.

      • try2bhelpful on 14/03/2017 - 09:54

        Yeah, I know such a rort. All those people who made squillions with the dodgy education "colleges" are pouring the money into real estate now. Hopefully the WA election result will be a kick in the pants for the current governments to do something about the inequality. Hopefully this will drive politics more towards the centre and get rid of some of the self interest rhetoric. The sellers don't need to do any of the lifting on nationality. That is the beauty of real estate - there is actually an asset you can track and tax.

        • neonlight on 14/03/2017 - 09:58
          +1

          The worse I have seen with my own eyes…I went to a house auction before I can clearly see this person registered at the auction on behalf of someone else overseas. Then I can see they eager to get the property no matter the cost. I went and bid at 910k then they would jump to 950k no hestiation, of course they won.

          Us locals cannot compete because we are on a loan, they are on cash.

          The situation has improved only little bit because money transfers have restrictions since but still doesn't really help much

        • try2bhelpful on 14/03/2017 - 09:59

          @neonlight: That was why my original statement included extra taxing, if you had more than one residence and one investment property. Hopefully that will reduce that sort of issue.

        • cameldownunder on 14/03/2017 - 12:19
          +4

          @try2bhelpful: I am with you on that totally. Investment properties, should have their income, or potential income, if left empty, added to the salary. Negative gearing abolished, capital gain taxes proportional to the length of the ownership. 95% the first year, and discount of 5% every year thereafter.

        • try2bhelpful on 14/03/2017 - 12:24
          +1

          @cameldownunder: There are a number of creative ways our Governments could be getting money for public housing; whilst only affective a small number of people who can afford it. The "empty" tax is one councils are currently investigation. The only issue I have with it is where a single residence property is empty because you are having an issue with getting the council to agree to modification plans. I have a friend who is completely demoralised with her house modifications because the council is a nightmare - even though they have agreed to many multiple storey apartment conversions across the other side of the freakin' street from her.

        • cameldownunder on 14/03/2017 - 12:29

          @try2bhelpful: There are always cases that need to be examined, and exempted.
          I am impressed with how little Council are interested in the Residents, and screw them most of the time. There was an article about a Northern Suburbs council, who is tricking people into thinking they need council approval for things they really don't, so the council can make extra money.
          Or council that have millions in the account, but no money for parks, road fixing, school signals.

        • try2bhelpful on 14/03/2017 - 12:39
          +2

          @cameldownunder: Oh yeah, you can then throw in the "study tours" overseas. Haven't these people heard of "facetime" type apps.

          I recently had my old balcony extended and it took 3 freakin' months for the approval to be given. Balcony couldn't be seen from the street, neighbour had no issue with it, had a licenced builder already lined up, had engineering plans all done, even provided photos showing exactly what the views were from the balcony. Nope, still needed more information and I had to wait whilst the planner worked through the 60 other applications she had on her plate. I'm sure my councillors went on a number of study trips whilst I cooled my heels 'cause they won't employ enough workers.

          Don't even get me started on the Catholic University near us; anything is OK by the council not matter how badly it affects the locals. The council does stuff nothing for the average home owner and anything they might try to do gets over ruled by the State Planning minister.

          Rant over.

        • ruddiger7 on 14/03/2017 - 14:42

          @neonlight: Years ago when getting through uni I would do admin work through a building certifiers. I reckon about 15-20% of applications were chinese investors. I know this for a fact as their contact and sales agent listed was someone who specialised in being the intermediary between the investors and the building certifiers/whoever else. It is a worry how much they are buying, even though my partner and myself save 60-70% of our pay and have a decent amount for a deposit I cant see myself being able to afford anything reasonable let alone have kids in my early 30s.

        • Suspect420 on 15/03/2017 - 09:43

          @try2bhelpful: wouldn't work. People would split properties between family members

        • try2bhelpful on 15/03/2017 - 13:14

          @BKZ: They have to run out of family members eventually. It would still be better than what we have today.

    • ribze1 on 14/03/2017 - 19:28

      Libs won't touch it.

      At least Labor have said they will cut NG to being available on only newly built properties (thus not taking away from the demand for new builds), whilst doing the right thing by grandfathering current arrangements.

    • User102430 on 15/03/2017 - 22:57

      They solved the problem, at least to some extent, in Vancouver, by introducing foreign buyer tax:
      http://globalnews.ca/news/3201112/bc-foreign-buyers-tax-vanc…

      Now the question is, what government will do here?

      It's not even about stamp duties and other small things, it's about 4 big banks that are 30% of a total ASX market cap + are the biggest tax payers in the country. Should housing slow down, banks will slow down = government income will slow down.

      So I'm rather sceptical…

    • jpee on 16/03/2017 - 22:34

      There needs to be tax penalites if someone owns more than a home and one investment property = Welcome to land tax

      In regards to tax on foreign ownership, from what I have seen it won't solve the problem. Sons & daughters of wealthy families obtain citizenship or residency and Mum & Dad buy it in their names .

  • geek001 on 13/03/2017 - 15:38
    +5

    I feel you bro. I don't know how people in Sydney do it, unless you are really well off. The way I see it, you have a few options:

    1. Don't worry about it and find the courage to let the uncertainties affect what you want out of life.
    2. Buy an investment property, at least you will be somewhat hedged if property keeps going up.
    3. Bite the bullet and find a place of your own.

    Whatever you choose, don't let fear paralyse you but also remember to not bite off more than you can chew. Good luck and I hope you come to a decision that works for you and your family.

    • danyool on 15/03/2017 - 00:00
      +1

      Op Location: Sydney

      Checks out

  • Euphemistic on 13/03/2017 - 15:42
    +2

    Jumping in and buying something will not be 'wasting your life savings'. It is what many people use their 'life savings' for. Unfortunately it also means signing up for a large loan you will need to pay back.

    First home won't be your last typically, so start with something you can more afford, a small house in a reasonable area, the best you can affrod. Don't get hung up on buying a house to fit your teenagers into if you have started reproducing yet, it's a long way off and things change.

    If you are keen on DIY, you can make good changes to a house for not too much outlay, it's when you need to bring in a tradie it gets really expensive. Buy a fixer upper, but don't expect it to double in value if you slap on a coat of paint.

    • thord on 13/03/2017 - 16:09
      +10

      I call it wasting our life savings because we've worked extremely hard to save what we have. That's why I said the cost isn't really the issue.

      The issue is this horrible feeling that we're getting screwed. We worked extremely hard and sacrificed a lot, and now we're just going to hand over everything to someone who by sheer luck and happenstance was born 20 years before us and benefitted from the biggest boom is memory? That's a really, really hard pill to swallow.

      • onetwothreefour on 13/03/2017 - 16:29
        +2

        Chances are if they didn't build there own home you are buying off someone who was in the same position as you, just a few years earlier. Such is life.

        What else are you going to do with your life savings that isn't a waste? Surely buying your own home is a good thing, you'll regret it if you get to retirement age and you're still renting. You could buy then but the prices will be more expensive than today!

        • thord on 13/03/2017 - 16:40
          +4

          Oh we will buy our own place at some point, we just don't want to be screwed when we do it. I mean, we get the sense that now is possibly one of the worst times in history to buy. Mortgage rates are at their lowest ever, they can only go up from here (in theory).

          There's that nagging fear that we're going to be the parachute for someone smarter who is getting out of the market at it's peak, and we're going to buy in and see prices stagnate and interest rates rise. Locking us into a horrible deal for the life of the mortgage.

          It's pretty hard to get over that fear.

          Right now we're making good money on our investments, to swap those gains in a bad decision and be locked into and reminded of that bad decision for possibly 30 years, I don't know, that would completely crush us.

        • onetwothreefour on 13/03/2017 - 16:45
          +13

          @thord: maybe you need to not think about so much, you seem to be affected by this decision more than what you should be. When you say things like it's effecting your mental health, you are putting off kids, it may crush you etc then maybe you need to just not buy now and you will know when it's the right time.

          I had three kids while renting, it didn't cause any problems.

        • thord on 13/03/2017 - 16:50
          +4

          @onetwothree:

          The problem is it affects us every day. Coming home to a our place reminds us that we have minimal rights as tenants, that's kind of inescapable.

          I'd love to forget about it and not worry, but we can't. Everyone needs a home. Maybe if we had something like 5 year tenancies the feeling of instability would go, but that's just not practiced here.

        • [Deactivated] on 13/03/2017 - 17:07
          +30

          @thord:

          you have a very negative attitude

          Perhaps that's why you haven't bought. I took the 'risk' 3 years ago and have not looked back. Best decision ever

        • tomleonhart on 13/03/2017 - 17:08
          +9

          @thord: if something affects you everyday and you have the ability to fix it.

          Then perhaps fix it?

        • thord on 13/03/2017 - 17:10
          +1

          @tomleonhart:

          Yes but the fear is ending up in a worse position. Nobody can deny that the market is precarious at the moment. Record low rates, record high personal debt. It's just not that simple.

        • tomleonhart on 13/03/2017 - 17:20
          +17

          @thord: doesn't sound good too me.

          Your problem is you are living in fear. Unless you do something about it, nothing will get better.

          • You're scared of being kicked out to a point that you admit it's affecting you everyday. And you're putting off children.

          • You're also scared of being in worse off position financially so bad that you refuse to take action today.

          Like you, we knew we can't cope with renting and we were having a baby. We knew we had to do something so we bought our house 2 years ago. It's 40kms west of Sydney, but we had a place to call home and our little girl had a place to grow up.

          I knew how much the mortgage repayment is and we could afford it comfortably, so dropping house price didn't concern me at all.

          The media beat up about house price has been the same since 2012.

        • [Deactivated] on 13/03/2017 - 17:21
          +1

          @tomleonhart:

          I said this and I got negged lol

        • mskeggs on 13/03/2017 - 18:00
          +17

          @sinishta:
          Past results are no guarantee of future returns.

        • tomleonhart on 13/03/2017 - 18:59
          +9

          @mskeggs: and inaction is a guarantee of current misery to continue.

          IF OP doesn't want to buy a place, OP will have to work toward his/her feeling towards renting. Moving sucks but it's not that bad.

        • mskeggs on 13/03/2017 - 19:49
          +3

          @tomleonhart:

          It isn't always a good time to buy, even if the alternative is stressful.
          The stress will be much worse if OP commits in the teeth of a correction.

        • naru6705 on 13/03/2017 - 21:14

          @tomleonhart: show some empathy

        • 4foxache on 13/03/2017 - 21:40
          +11

          @thord: No one can predict what the market is going to do. The best advice I ever came across was the best time to buy a property is whenever you can afford it. Overtime you will never lose on property especially land and house… if your planning on raising a family there then you can play the long game and ride out the bumps. In my opinion you are costing yourself more by sitting on the sidelines hoping for a drop that may never come.

        • geoffs87 on 14/03/2017 - 09:22
          +2

          @hawkus81:
          100% this. if prices go up, you will make money when you sell. If prices go down, you will only realise this when you sell, if you sell. Everyone who's ever bought a house ever would have spent their life savings, or a good chunk of it. If prices go up and you didnt buy when you could, you'll just end up spending more for the same house a couple of years later. If its not going to be an asset you'll sell in the short term, just make sure you buy in an area which is synonymous with growth. Ie don't buy in a mining town. Don't buy in outer suburbs where land can come online at any time. Buy in the lifestyle suburbs, where people will always want to live. Sure, they might be more expensive, but they will be less impacted by downturns.

          A mistake people make in downturns is sell for fear of continued loss. Correct, past performance is not an indicator of future returns, however look at almost every asset post downturns… almost always corrects. These 15% YoY growth rates are not uncommon. Since the year 2000, many suburbs (metro and regional) have increased at crazy rates most years, with some years dropping a little.

          Edit. I bought my first home 6 years ago, had a small deposit and a tiny income. Extended myself and everyone said it was stupid for me to go that deep in property. My portfolio has since increased and i'm nearly 7 figures better off in equity than my friends and critics who stayed renting and invested in shares. Sure, that might not continue… but it very well might, right? They said prices will fall every year for the past 7 years, i havent seen it yet.

        • airzone on 14/03/2017 - 10:44
          +3

          @tomleonhart: +1

          Op, you have been overthinking the situation. You have 2 options available to you today - buy or rent. Pick one, be happy with the choice, move forward, and don't look back. Both are valid choices with pros and cons that you're no doubt intimately familiar with.

          If you're thinking of having kids, you'll be making these far-reaching decisions all the time. You need to get into practice for it.

        • cameldownunder on 14/03/2017 - 12:24

          @mskeggs: I bought in 2012, My Shares were at a low, currency against me. Worst time to sell all.
          5 years later: We love out house, our kids go to the local school and love it, we are in a good neighbourhood, and I could no longer afford the house, even with the shares doubling in value. Sometimes one has just to bite the bullet, and push through with it.
          Of course mortgage repayment have to be calculated, and a possible increase in Interest rate in the next 20 years taken into account.
          We still would be able to repay mortgage at 6% base rate.

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