Having constant anxiety about the housing situation

Lonemoresummer on 31/12/2023 - 12:51

Im nearly 36, and rent, also single.I am in a contract position that earns 144k before tax (contract role, likely to be made perm).

I have around 80k in assets (etfs, shares, bitcoin, gold, cash).

9k car loan. Car is worth about 25k if I was to sell.

I've started to feel like its probably time to buy. I live in the outer eastern suburbs of Melbourne and the prices are depressing me and I'm not sure if I can actually afford to buy anything.

Like two bedroom townhouses in Bayswater, is like 600k. To me this seems crazy but I shouldn't be surprised. I am constantly thinking about how I can't afford to get into the market. I only need a 2 bedroom, something modest but feel like all these new builds are starting off from 600k+ minimum for a basis townhouse. Like I'm not trying to buy a fancy apartment in richmond, willing to sacrifice a social life to live in the burbs.

Am I right to feel anxious about finding something reasonable to buy? It keeps me up at night thinking about where the hell i am going to live. I also think about having to sell the investments in order to afford a deposit as well and wonder if that is the right move.

Financial

Comments

  • TEER3X on 02/01/2024 - 16:08

    Buy an IP in a regional location, collect rent, use negative gearing. Minimize your taxes.

    Buy a house to live in when / if you get married, otherwise live it up.

    Source: I have no idea what I'm talking about, but I say it very convincingly.

  • ratman on 02/01/2024 - 16:21

    Wow a 2 br for 600k, that sounds like dream living. In Sydney I have 600k cash for a deposit and dink couple earning that much a year, and I have property anxiety because it seems like if we stepped into property market and bought a studio apartment in doonside or mt Druitt it'd still send us both broke til retirement.

  • JuryWheel on 02/01/2024 - 16:45
    +1

    I live in the outer east also, and i think you can definitely afford a good house. Personally, if it was me, id buy a rundown house on the most land as possible, as close to a trainline as possible. I reckon Boronia has a lot of upside and some nice spots, as does Ferntree Gully. Lilydale too, although its a little more expensive.

  • whitepuma on 02/01/2024 - 16:58
    +9

    You are completely right to feel anxious. We are in a very tough time right now economically, it is the hardest it's ever been for an Australian (especially younger Australians) to buy a home.

    Before i give you my advice, please note i am NOT any of the following:
    - financially advisor
    - a qualified property expert

    What i AM:
    - a Millennial in their low 30's who i would consider is doing pretty well financially, having multiple investment properties (owned mostly by the bank) as well as the property i live in (owned by me)
    - On a similar income to yourself
    - an individual who received no financial gift, employment opportunity, or loan from the bank of mum and dad to get where i am today. What i got from my parents (which i am eternally grateful for) was good financial teachings from my parents themselves who taught me all about finance, mortgages, assets, etc all from a very young age (early teens).

    Here is my recommendation (in this order):
    - Split your understanding of properties. There is your "investments" and your "home", yes, a home can become an investment, and an investment can become a home, but in your mind separate the 2 so you can adjust your decision accordingly.
    - Pay off your car loan IMMEDIATELY. use your cash, or sell some of your assets, get rid of that loan ASAP, call your lender today and close it off.
    - Usually i would say sell your car and get a cheaper car…but nowadays $25k is a pretty average car, so assuming your car is something reliable you are doing fine here.
    - do your best to get a off a contract role. full time perm is the way to be in the current economy and especially if you need a mortgage. Expect to get a pay cut being on full time compared to your existing contract.
    - Get into the property market. Buy that "home" we mentioned before. remember, it doesn't need to be your forever home, just get something to get your foot in the door and somewhere to live in the event rent keeps soaring. It could be something as simple as a 2 bedroom apartment. Make sure its within your financial means and you can afford your payments.
    - Stick at this for a while. Depending on how you are going financially after years re-assess where you are at. Who knows where the market may be in 5 years, prices could have increased dramatically and you have enough equity to buy an investment or even upgrade to a bigger home. On the other hand, prices could have even gone down (with current supply and demand issues i can't see prices plummeting down) but you will be ok, you will be in your home and doing fine.

    Also note:
    - investing in properties isn't for everyone, negative gearing isn't for everyone, but at least work to buy a home ASAP. Because based on current property prices increases what your money can get you will constantly decrease and it's outrunning wage growth.
    - To avoid trolls, you are welcome to message me directly on this one, always happy to talk about my experience and helping other people improve their situation. No i won't be selling you any courses.

    • Eeples on 02/01/2024 - 21:48
      +4

      You are underselling your parents.

      They gave you a stable home. And the opportunities that come with that.

      Not everyone is so lucky.

      • whitepuma on 03/01/2024 - 07:30
        +1

        I am underselling them, I completely agree. They gave me alot and there is no denying it.

        They gave me a roof over my head, food in my belly, positive role models to look up to, and they taught me a lot.

        You are right, not everybody is so lucky.
        I'm just saying though it can be done without getting money from bank of mum and dad.

        I was also just giving the OP clarity into my situation so they understand where I came from and if my situation may be relatable to themselves. Not so much trying to showboat.

      • MrThing on 04/01/2024 - 16:35

        kek, nice one

  • Bearlion on 03/01/2024 - 10:25
    +1

    Don't buy new, buy older place that's unattractive to investors. A lot that cannot be developed into duplexes or a 10 year old + unit property. Might take a year of searching but you'll find value here!

    • whitepuma on 04/01/2024 - 10:38

      Older places aren't unattractive to investors. Their just unattractive to investors planning on playing the depreciation game.

      Many investors prefer older as they tend to be lower price & good bones.

      • Bearlion on 04/01/2024 - 12:54

        If that's the case, it's still less buyer competition.

        • whitepuma on 04/01/2024 - 12:57

          no its not.

          Because those investors playing the depreciation game aren't interested in older places.

          You have investors interested in both new and old places, it's just different groups of investors for each.

    • MrThing on 04/01/2024 - 16:37

      buy old houses which are actually built quality and to last, not out of polystyrene and garbage

  • jedimaster on 03/01/2024 - 12:24

    Why not buy in the west near Werribee. Plenty of stand alone houses for $600-700k

  • payless69 on 03/01/2024 - 12:34
    +2

    Maybe move to Bulgaria!
    Food is cheap, chicks are hot and Greek food can be found down the road…

  • pogichinoy on 03/01/2024 - 15:55

    36 and all you have is $80k worth of assets?

    You’ve been in the workforce for at least 15 years.

    Where did all your savings go?

    • echelon6 on 04/01/2024 - 06:34

      I reckon

      Looks like bank of me is no better than bank of mum n dad

  • lost00 on 03/01/2024 - 16:13
    +1

    How about buying in the west?
    https://www.realestate.com.au/vic/werribee-3030/

    • Protractor on 04/01/2024 - 10:51
      -1

      It would have to be more affordable than the far west>WA . ES investors have flooded the market.
      https://www.abc.net.au/news/2024-01-04/east-coast-investors-…

      This will become the "ever increasing prices model" right across the country. like a snake eating it's tail.
      There's no place left to hide the BS that RE investors are not greedy soul sucking vampires.

  • takemymoney on 03/01/2024 - 20:49
    +1

    IMO, you need a bite from other people's reality. You salary is quite high - there are families surviving with half of that. Check your finances and non-survival expenditure - most of good things in life are free. Maybe minimalism is your thing and radical changes are needed. Take good care of your health and don't be irrational about it - this can trip any savings quite quickly. If you have parents in Aus, why are you worried? You will inherit stuff down the road anyway.

  • xdigger on 04/01/2024 - 11:20
    +2

    If you join the ADF you'll get free accommodation. Defence budget is protected and increasing in keeping with the US-led wars so you don't have to worry about being homeless ever in the reserves.

  • payless69 on 06/01/2024 - 10:42

    Suggest you move to the best city in the US, home of Elon Musk:
    https://www.youtube.com/watch?v=3DJQDyJldqs

  • kiriakoz on 08/01/2024 - 10:12

    Being anxious is normal. I’m not sure the people telling you to not be anxious are being as helpful as they intend to.

    Create a plan. You don’t even need to stick to the plan forever, it’s just a plan based on right now. Obviously add in your goals such as wanting to be perm, which might have sub goals too (performance metrics, discussions with boss etc).

    The human brain likes a plan. To paraphrase the joker, it almost doesn’t matter what the plan is as long as there’s a plan.

    I do feel like you’re in a better position to many, good luck.

    I am a manager at a big bank and many people in my team suffer from anxiety about this matter. I do feel sympathy for them as I feel like it was easier for me just due to age. I’m not rich, I just bought earlier than them.

  • brandt on 11/01/2024 - 15:16

    There is a huuuge mindset shift required to buy in this market. I too looked at outer suburbs of Sydney 4 years ago and said wow thats so overpriced.. and its all doubled today. Now if I had bought one of those properties I looked at and thought overpriced at $1m, Id have been 0.4m richer.

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