Property Market in Australia

[guest32487]

Know the area, and wait a while as prices have a way to go before they hit the bottom. Unless you don't mind taking a hit of 5-10% over the next year or so.

You need to factor in the cost of renting whilst you're waiting for those prices to drop...

[stevemalbec]

As I've said before, putting your deposit into a good deposit account, not paying strata fees, water rates, maintenance costs etc, could easily offset the rent.

[guest32487]

As I've said before, putting your deposit into a good deposit account, not paying strata fees, water rates, maintenance costs etc, could easily offset the rent.

By my reckoning to offset a $500 a week rent, you'd need to be $26K a year better off to not be out of pocket.... Which is far more than my deposit interest, water rates or maintenance costs (didn't by a unit so no strata fees).

[RockDr]

By my reckoning to offset a $500 a week rent, you'd need to be $26K a year better off to not be out of pocket.... Which is far more than my deposit interest, water rates or maintenance costs (didn't by a unit so no strata fees).

Where we are living, rent doesn't even cover the interest on a mortgage, let alone any other fees.

[stevemalbec]

Where we are living, rent doesn't even cover the interest on a mortgage, let alone any other fees.

Out of interest, can you say where you are?

[starlight7]

The thing with realestate.com.au is that the asking prices can be a long, long way from the actual price paid. They report the auction prices but they won't tell you the others. You always offer a fair bit less than the asking price as a matter of course!

[stevemalbec]

By my reckoning to offset a $500 a week rent, you'd need to be $26K a year better off to not be out of pocket.... Which is far more than my deposit interest, water rates or maintenance costs (didn't by a unit so no strata fees).

In the areas that I've been looking, a broad rule of thumb is that a property selling for $500K would be rented out for around $500 pw. So, if prices fall by 5% (which they have done in some areas over the last year), a $500k property would cost $475k. So, after paying $26K rent, you'd break even, but be better off with the interest on your deposit, no water rates or maintenance costs. Of course this kind of calculation only works in the current market which is in a correction mode. If prices were rising as they were over the last 10 years, I'd be buying asap. But I'll definitely be renting for the next year or so. On the other hand, having a young family or needing to live near a specific workplace would make it difficult to be so flexible.

[guest32487]

In the areas that I've been looking, a broad rule of thumb is that a property selling for $500K would be rented out for around $500 pw. So, if prices fall by 5% (which they have done in some areas over the last year), a $500k property would cost $475k. So, after paying $26K rent, you'd break even, but be better off with the interest on your deposit, no water rates or maintenance costs. Of course this kind of calculation only works in the current market which is in a correction mode. If prices were rising as they were over the last 10 years, I'd be buying asap. But I'll definitely be renting for the next year or so. On the other hand, having a young family or needing to live near a specific workplace would make it difficult to be so flexible.

Thanks for the explanation it does make sense. But in the scenario you've described, wouldn't you rather be breaking evening - but paying your own mortgage off?

[Petals]

I was having a look at a realestate site the other day, on the house, it gives estimates of house prices in streets. Interestingly I looked up my house and the estimation they gave was about two hundred grand out. You see we have lived in the house since it was built and therefore there is no history for the house so they look at the council valuations. Of course houses only get sold for council valuations in the depths of a depression. So if you are looking at this particular site you really have to keep an open mind, what you see may not be what is actual.

[proview]

I have made contacts with agents since July this yr about various property I have seen, I have seen property priced at $500,000+ and asked the agent would offers of up to $60,000 less be accepted, their reply was yes as the market is struggling, therefore a buyers market, this will be good for me.