Is it a good time to buy a house in Perth?

[Peach]

Just as house prices don't necessary constantly creep ever upwards. Look at USA or Ireland and a host of others. Rents do give flexibility to make any number of decisions. Life is surely more than a mortgage to pay until near the grave these days. Not forgetting all that entails. In days past the decision was far easier. Especially nerving for those paying off an over valued asset after a price correction. Perth down the road all too ready for such a thing with so much in one basket.

 

Some win some lose. I'd argue that more win...

[flag of convenience]

Some win some lose. I'd argue that more win...

 

This was pretty much the case in the past for most even with the high interest rates of a few decades back. I would argue we are in unchartered territory at the moment with very inflated house prices that continue to grow in city locations with a record low interest rate that will grow and catch out not a few.

 

I do agree though it is hard to shake enthusiasm in Oz in the housing market. Not a healthy thing but very ingrained.

[Peach]

This was pretty much the case in the past for most even with the high interest rates of a few decades back. I would argue we are in unchartered territory at the moment with very inflated house prices that continue to grow in city locations with a record low interest rate that will grow and catch out not a few.

 

I do agree though it is hard to shake enthusiasm in Oz in the housing market. Not a healthy thing but very ingrained.

 

I didn't mention Oz in the equation.. The fact stands that every year you pay off of a mortgage you are closer to not having a mortgage. People speculate on their future incomes going up as well. The £100K mortgage I had at the beginning of the 2000s seemed a huge amount, now it is more than half paid off and doesn't seem so huge. Yes it is a gamble, but like I say for most people when it comes to their primary residence - in the long term the gamble pays off.

[newjez]

3.7% over the last twelve months according to reiwa, which is about half of Perth gains over the same period. It is not enough to suggest it is a good investment, but it could be good value.

 

Just as a side comment; anyone in the UK thinking about moving to Mandurah, the house prices there haven't gone down 28%, they've probably gone up 10% this year. So, don't move to Australia based on that advice.

[colinmaclec]

The thing a lot of people don't seem to understand is that if wages don't increase at the same rate as house prices then we have a huge problem? What do we do when an average house becomes 20x avg salary? 50 year mortgages? All we in the western countries have been doing for the last few years is giving a larger slice of our income to the banks. It does not really benefit anyone apart from developers who get in and out at the right time and the banks and governments. Those who gloat about how much their house has increased in value are kidding themselves because unless they downsize or live in a tent they wont ever see the money. If we paid less for property there would be more money to spend on other things thus keeping more people in jobs to produce what we buy or more money to save in our accounts. This is all going to explode eventually and will never be sustainable. Japan is a good example there property market went sky high 20 odd years ago and has never really recovered again.

[gpo1971]

3.7% over the last twelve months according to reiwa, which is about half of Perth gains over the same period. It is not enough to suggest it is a good investment, but it could be good value.

 

That's the last quarter, it says +8.8% for the year.

 

http://reiwa.com.au/Research/Pages/Regional-profile-results.aspx?suburb_id=2013&census_code=2013&geogroup_id=1372&geogroup_parent_id=17

[legoman]

just remember what people in the uk and others thought, boom will never end, get the house at any cost. the see what happened. luckily hindsight is in perth

[flag of convenience]

I didn't mention Oz in the equation.. The fact stands that every year you pay off of a mortgage you are closer to not having a mortgage. People speculate on their future incomes going up as well. The £100K mortgage I had at the beginning of the 2000s seemed a huge amount, now it is more than half paid off and doesn't seem so huge. Yes it is a gamble, but like I say for most people when it comes to their primary residence - in the long term the gamble pays off.

Very long term maybe, but no getting around paying to much for an asset add mortgage costs to that and fees tax etc, it can take a very long time to recover.

All of us that purchased in the early 00s made a killing. Wasn't planed it just happened. That will unlikely be repeated even with high immigration and low interest rates. Perth doesn't have the same degree of Chinese investment as east coast cities where prices are likely out of reach for a good percentage of the population. Dreadful what happened and what is happening.

[flag of convenience]

3.7% over the last twelve months according to reiwa, which is about half of Perth gains over the same period. It is not enough to suggest it is a good investment, but it could be good value.

 

Or in turn lousy value when the downturn impacts on WA.

[Xenon4017]

The £100K mortgage I had at the beginning of the 2000s seemed a huge amount, now it is more than half paid off and doesn't seem so huge.

 

And at todays interest rates, the 50k remaining costs you 50$ per week in interest.

 

Compare that to someone who takes out 350k today.

 

If you paid back your mortgage at the same rate that they must pay just to pay back the interest, then you'd be mortgage free in about 3 years.

 

It's hard to imagine that in 10 years time the 350k mortgagee will enjoy a similar position to yourself right now.

 

That's not your fault, and no one has to take out a mortgage they can't afford. But it's a bit ungracious not to acknowledge the fact that you've benefitted from a change in economic conditions that todays housebuyers almost certainly won't.

[wolvesaussie]

Question for u. Was doing our budget last night I think we may be able to save 50, 000 a year while renting. In eight years at today's prices could buy a house nearly without a mortgage. Instead of paying 800, 000 over 25 years... what are the downsides to this? Obvoisly houses may continue to go up but I confodent they are high as can go

[Xenon4017]

Question for u. Was doing our budget last night I think we may be able to save 50, 000 a year while renting. In eight years at today's prices could buy a house nearly without a mortgage. Instead of paying 800, 000 over 25 years... what are the downsides to this? Obvoisly houses may continue to go up but I confodent they are high as can go

 

Can you give some more details? Are you saying you can rent the same (similar) house for 1000$ a week cheaper than buying? Obviously buying also incurs some fixed costs in terms of stamp duty/rates/water etc. But even so, such a discrepancy is hard to explain, unless the landlord vastly undervalues his house, or the potential sellers vastly over value theirs. (The latter is more common IMHO)

[nicolac34]

Question for u. Was doing our budget last night I think we may be able to save 50, 000 a year while renting. In eight years at today's prices could buy a house nearly without a mortgage. Instead of paying 800, 000 over 25 years... what are the downsides to this? Obvoisly houses may continue to go up but I confodent they are high as can go

 

I've no idea - but would you not be better off saving $50k for a year, buying a house and then overpaying the mortgage (assuming your mortgage isn't going to be $50k a year + any rent you are currently paying) and therefore paying it off sooner?

 

Committing to saving $50k a year for 8 years would be unrealistic for us, but paying off a $400k mortgage in 10 years seem achievable.

[newjez]

I stand corrected . I was looking at Mandurah Murray

 

http://reiwa.com.au/Research/Pages/Market-indicators.aspx

 

That's the last quarter, it says +8.8% for the year.

 

http://reiwa.com.au/Research/Pages/Regional-profile-results.aspx?suburb_id=2013&census_code=2013&geogroup_id=1372&geogroup_parent_id=17

[flag of convenience]

Question for u. Was doing our budget last night I think we may be able to save 50, 000 a year while renting. In eight years at today's prices could buy a house nearly without a mortgage. Instead of paying 800, 000 over 25 years... what are the downsides to this? Obvoisly houses may continue to go up but I confodent they are high as can go

 

Certainly does work out far cheaper if able to pay cash. Folk seem to forget the actual price of the house includes the mortgage. As some claim rent is dead money giving it to a bank doesn't strike me as too clever either.

 

WA has some of the least affordable housing in the country. Just how much further it can rise is debateable. Although with Australia's tax system rewarding investors on the back of first home buyers all is possible.

[flag of convenience]

I've no idea - but would you not be better off saving $50k for a year, buying a house and then overpaying the mortgage (assuming your mortgage isn't going to be $50k a year + any rent you are currently paying) and therefore paying it off sooner?

 

Committing to saving $50k a year for 8 years would be unrealistic for us, but paying off a $400k mortgage in 10 years seem achievable.

 

Providing rates don't rise or job issues arise or a host of other things that may happen. I am a believer in paying as much as possible at the onset and giving the banks nothing or very little. $50,000 would probably not even cover the government tax on house purchase.

[nicolac34]

Providing rates don't rise or job issues arise or a host of other things that may happen. I am a believer in paying as much as possible at the onset and giving the banks nothing or very little. $50,000 would probably not even cover the government tax on house purchase.

 

$50k per year for 8 years is $400k - as a first time buyer (at the moment anyway) no stamp duty to pay. So if you put $50k down on $400k you'd have no government tax surely? Although putting 20%+ down would be more preferable to avoid LMI.

[Bibbs]

as a first time buyer (at the moment anyway) no stamp duty to pay.

No duty if under $500k.

Then it's a sliding scale to $600k.

Then you pay it all over $600k.

[flag of convenience]

No duty if under $500k.

Then it's a sliding scale to $600k.

Then you pay it all over $600k.

 

Exactly. As I mentioned Perth is becoming unaffordable for the average earner. Foreign investment funds are questioning the wisdom of investing in Australia's over heated property market. I wouldn't enter without a big wad then with extreme caution.

[Bibbs]

Exactly. As I mentioned Perth is becoming unaffordable for the average earner. Foreign investment funds are questioning the wisdom of investing in Australia's over heated property market. I wouldn't enter without a big wad then with extreme caution.

 

But there are always new estates out the city.

 

Some friends live in Baldivas. Neither earn an above average wage, but they have a large 4x2 on a good size block.

 

Least that is still an option. When I lived in the SE UK, I didn't even have that option available.

[newjez]

Exactly. As I mentioned Perth is becoming unaffordable for the average earner. Foreign investment funds are questioning the wisdom of investing in Australia's over heated property market. I wouldn't enter without a big wad then with extreme caution.

 

Perth is starting to look like Spain. It's a down turn away from a crash. It will be the cloned fringes that get hammered. That and the units which are popping up everywhere.

[Bibbs]

Perth is starting to look like Spain. It's a down turn away from a crash. It will be the cloned fringes that get hammered. That and the units which are popping up everywhere.

 

Be nice in some ways, but awful in others.

 

Seen an apartment I'd like for the in-laws to live in when they arrive.

The price of $1.2, and $6k of annual strata fees make it a bit of a lotto dream at the moment.

[nicolac34]

Be nice in some ways, but awful in others.

 

Seen an apartment I'd like for the in-laws to live in when they arrive.

The price of $1.2, and $6k of annual strata fees make it a bit of a lotto dream at the moment.

 

I cannot believe the amount of strata fees some places charge! Saw one that was $1,700 per quarter - I mean I know there was a pool and a gym, but if you think how many apartments in a block then surely the strata company is making an absolute fortune!

 

Puts me off buying anything in strata that's for sure.

[Peach]

Perth is starting to look like Spain. It's a down turn away from a crash. It will be the cloned fringes that get hammered. That and the units which are popping up everywhere.

 

Should read: I hope that Perth is a bit like Spain when we get there. From here in the UK things are looking awfully expensive. I've read that units are popping up everywhere.

[newjez]

I was was there last week. Perth looks like Spain before the crash. But by all means fill your boots if you think there is money in it.

 

Should read: I hope that Perth is a bit like Spain when we get there. From here in the UK things are looking awfully expensive. I've read that units are popping up everywhere.