Australian housing bubble

[Wirephobia]

In the UK now you need to have saved around 33.3% of the value of the house you are buying before you get a mortgage. So for example a 300,000AD home would require a deposit of 100,000AD's Daunting to say the least.

 

 

I appreciate this thread is about Aus property, but just to comment on the above......

 

Mainstream lenders in the UK will still lend 90 - 95% LTV as long as affordability criteria are met.

With regard to property values, in the South they're now considerably higher than they were in 2008.

[Phoenix16]

The nature of Fifo work is that it's temporary and you work with that in mind, the contracts clearly state that you can get the tap on the shoulder at any point with little or no warning. He will have signed a contract agreeing to this. When FIFO workers are let go they are often more times than not let go on R&R as its less costly and avoids the worker doing any damage if they feel aggrieved , this process in itself isn't an indication of the economy though, but clearly there is a slow down happening, however it's not affecting everyone just as previous ones didn't affect everyone. All we can do is save for that rainy day and keep fingers crossed it doesn't last that long.

 

was an anecdotal comment to supplement my overall thoughts on the current state of the WA economy. Nevertheless and regardless of the contracts FIFO workers sign, pretty ruthless, but if you can stomach that kind of treatment towards employees then good luck to you. And PS without a shadow of a doubt the worst is yet to come...

Edited March 5, 2016 by Phoenix16

[Johndoe]

http://www.goldcoastbulletin.com.au/realestate/gold-coast-property-market-booms-for-first-time-since-gfc/news-story/21cf74f5a7dfede7f593b67a8e75e215

 

Gold Coast property market booms for first time since GFC

 

 

 

 

According to the latest figures we got in the post

 

Ours Site valuation as risen $45,000 in a year

 

 

And mine 23k

[Tutankarmun]

I am not saying they are not, just saying they are not up to 2008 prices, 8years on in the UK. Regarding 90and 95% mortgages, because of asking prices you need to be on a lot more than the average persons wage or you are combining two wages together, (man and wife) that's fine until you want to start a family.

 

Just imagine how much you pay your lender over 25 years, more than double the price you paid for your home in the first place, add on your maintenance bills over the 25 years and you will see, what places and things you have been unable to go to or do. I look back myself and think what an idiot I have been, struggling almost all my life to say I have my own place, only to kick the bucket and someone else gets the benefit. So really you only make profit if in 25 years you have both paid your mortgage lender off, the interest he has charged you, and the 25 years of maintenance costs. Add all this up and the investment is not has good as you think

Edited March 5, 2016 by Tutankarmun

[Gbye grey sky]

This was exactly the same logic used in the US sub prime mortgage lending (The Big Short) - the assumption that any economic problems and subsequent impact on the housing market would be regional and not at a large macro level. The assumption was and continues to be totally flawed.

 

The banks, like people are exposed to economic ripples. All economies respond to confidence... A shock to the economy hits people (jobs) and businesses (investment) which undermines confidence. As investment falls and unemployment rises, loan defaults increase and the banks also take a hit... This makes them pull back on lending and BAM, the circle is complete.... so begins the spiral....

 

The US sub-prime disaster arose on the back of two things.

 

One was unsustainable lending to people who had a poor credit record at punitive interest rates (almost exclusively low-start) which were almost guaranteed to default. They then bundled these sub-prime high risk (allegedly high return) mortgages with low-risk low-return mortgages and sold them as if they were a licence to print money.

 

Ultimately the shere volume of these poisonous sub-prime mortgages triggered the GFC. Property prices then fell because the market was flooded with foreclosures.

 

So long as LTV and ability to pay are administered properly then affordability acts as a natural brake on prices even when there is a shortage of property.

[flag of convenience]

Property boom and bust due to a surge, followed by a fall, in mining activity in a localised area is somewhat different to a more general collapse in the housing market which is what you are predicating and have been for several years.

 

There are tipping points where properties become plain unaffordable but this tends to lead to price stagnation or a small correction. For a major correction of 30% or more nationwide there needs to be some significant external trigger. What are you anticipating the form this trigger will take.

 

Obviously it will not be uniform. Just as obvious as it will be messy. Selected interests in place to prevent a meltdown , just as they were to in place to prevent a correction that should have been allowed back in 2008.

We have a government running scared and unable to introduce any sound policy. Other self interests talk down the possibility or indeed need to allow the heat out of the market. We won't know the deciding, turning factor, I'm afraid until it is upon us. Rather pointless exercise believing anything from the industry or banks though.

[flag of convenience]

That is quite a few ducks that need to be lined up in a row and many of those would only give rise to stagnation or a minor correction. But they may all happen though many are within the remit of the Australian government who fear a collapse in house prices and the resulting lost votes.

 

The main risk is high LTVs. So Long as they are kept in check then the market can effect an equillibrium. When they spiral out of control there will be a hard landing for many including the lenders.

 

I am just an interested observer of this debate. I own a house, fortunately without a mortgage as I paid mine off in the UK and transferred my equity here, but we plan to live in it long term so rising or falling value is immaterial to me. I don't have sufficient funds to buy an investment property and probably would not if I did.

 

I came here for the sunny, warm climate. I don't have a Super but if I did manage to transfer my really quite small private pension from the UK the amount would be really too small to provide much income so any changes to super entitlements will not impact on me. I will largely rely on an employment pension and a UK state pension which should be adequate for a modest standard of living.

 

Not many ducks. Banks reigning in leveraging and Aussies awake to affordability of housing would do the trick. Here in WA things are a little grim, but many still hanging out for top price. Viewed two 'have to sell' houses on the market down in the South of WA last week. The owners both unemployed FIFO workers still wanting over the top prices for their forced sales. Amazed at prices over $800,000 in such a location. Few jobs available but costs generally reflect Perth CBD area. Something has surely gotta give?

[flag of convenience]

Just hope not, the GFC was triggered by similar stupidities, overpriced housing, indiscriminate lending and over extended banks with too low an asset base / financial reserves, it only needs for property prices to tumble, as they may be doing in Perth and it could trigger a progressive crash, no wonder the Fed govt isn't keen on cutting back migration, I doubt there will be any move on taxation relief on rentals or restraint on overseas buyers.

Perth trying very hard to entice the Chinese/Singaporean market to buy in Perth, pointing out higher yields and better value than Sydney etc. Clutching at straw stuff, I'm afraid. Perth remains well over priced. Inner city still wanting 1.2 million for a refurbished sixty year old. Looked at numerous.

Saying that the housing orthodoxy religion in these parts will take some taming. Blind belief, uncritical thinking, banks throwing debt at punters, inept government, the rot has a way to play out. Makes it that much harder of course when the bang does come....

[flag of convenience]

Just hope not, the GFC was triggered by similar stupidities, overpriced housing, indiscriminate lending and over extended banks with too low an asset base / financial reserves, it only needs for property prices to tumble, as they may be doing in Perth and it could trigger a progressive crash, no wonder the Fed govt isn't keen on cutting back migration, I doubt there will be any move on taxation relief on rentals or restraint on overseas buyers.

 

More likely open house to feed the Ponzi. Turnbull doesn't want to go down as the one that crashed the housing market. They RBA, are even daft enough to lower interest rates further. Impact being ever cheaper money and more debt acquired by buying ever higher priced bricks and mortar. No end to possible stupidity.

 

Perth could, with Brisbane to follow set off a crash but make no mistake the resistance is fierce. At least it is more in the open now but still a lot of denial. Spruikers are attempting to talk up a turn around in the market next year.

[Steve99]

Of course a lot will depend on personal debt and the Banks ability to control it. In the UK at one time the finance people were happy to lend 100% mortgages, and to those with maybe a 10% deposit. Personal debt rose and was left uncontrolled. Home prices shot up almost double in 5 years, then the Banks got into trouble, people unable to pay their mortgages. It came to light that some people had mortgages for a period of 25 years and the cost was 75% of their income. 2008 came, the Government had to step in to liquidate the Banks, people lost money, their jobs, and this led to mortgages not being paid back. People had their homes reclaimed by Banks etc, the housing market plummeted. Even now 8 years later, house prices are not up to what they were in 2008. Many now will not buy, they rent, it's more secure. So when prices outstrip wages, and job insecurity takes hold, the first thing to cool is the housing market.

In the UK now you need to have saved around 33.3% of the value of the house you are buying before you get a mortgage. So for example a 300,000AD home would require a deposit of 100,000AD's Daunting to say the least.

Where might that $300k home be? this could be even bigger if the banks have to tighten up, ave house Melb mid outer suburbs $650K, not many people can come up with that $200k deposit.

[Ken]

Where might that $300k home be? this could be even bigger if the banks have to tighten up, ave house Melb mid outer suburbs $650K, not many people can come up with that $200k deposit.

 

Just did a quick search on RealEstate.com. I can confirm that there are homes for sale in Melbourne for under $300k - admittedly most are tiny apartments but the OP did say $300k home not $300k house.

[flag of convenience]

A flat would be a possibility for the price but other considerations needed to be given thought to. For example the cost of strata fees which can be considerable. The quality of the apartment if remotely worth the price wanted and locality.

[Steve99]

More likely open house to feed the Ponzi. Turnbull doesn't want to go down as the one that crashed the housing market. They RBA, are even daft enough to lower interest rates further. Impact being ever cheaper money and more debt acquired by buying ever higher priced bricks and mortar. No end to possible stupidity.

 

Perth could, with Brisbane to follow set off a crash but make no mistake the resistance is fierce. At least it is more in the open now but still a lot of denial. Spruikers are attempting to talk up a turn around in the market next year.

There are several issues re this statement.

'' They RBA, are even daft enough to lower interest rates further. Impact being ever cheaper money and more debt acquired by buying ever higher priced bricks and mortar. No end to possible stupidity. ''

 

Politicians do not know the difference between productive growth in all its forms and the inflation of the property market prices. They also do not know the difference between a house building boom and a house price boom.

Most politicians and many senior public servants are up to their necks in speculative property scams/schemes etc under the guise of investment and are thus totally vested interests in keeping house prices high and increasing no matter what the long term effect on the economy.

Lowering interest rates has only helped the incumbents who got into housing some years ago but has worked against first time house buyers by disproportionately pushing up prices vs wages, in this case over and over for over 15 years now. I do not see that at any time lowering interest rates has boosted real productive growth in the real economy and indeed has worked against it by persuading investors into purely speculative wheeling and dealing and this is how the banks see it too. You can borrow infinite sums of money for housing speculation but nothing towards building a business. It should be the other way round as it was pre this particular era. In fact Australia has the highest amount of bank lending going into housing as a percentage than any other country on earth. We also have the highest level of personal debt, including mortgages of all the western countries on earth.

Would not take much to push this over.

Edited March 9, 2016 by Steve99

[flag of convenience]

There are several issues re this statement.

'' They RBA, are even daft enough to lower interest rates further. Impact being ever cheaper money and more debt acquired by buying ever higher priced bricks and mortar. No end to possible stupidity. ''

 

Politicians do not know the difference between productive growth in all its forms and the inflation of the property market prices. They also do not know the difference between a house building boom and a house price boom.

Most politicians and many senior public servants are up to their necks in speculative property scams/schemes etc under the guise of investment and are thus totally vested interests in keeping house prices high and increasing no matter what the long term effect on the economy.

Lowering interest rates has only helped the incumbents who got into housing some years ago but has worked against first time house buyers by disproportionately pushing up prices vs wages, in this case over and over for over 15 years now. I do not see that at any time lowering interest rates has boosted real productive growth in the real economy and indeed has worked against it by persuading investors into purely speculative wheeling and dealing and this is how the banks see it too. You can borrow infinite sums of money for housing speculation but nothing towards building a business. It should be the other way round as it was pre this particular era. In fact Australia has the highest amount of bank lending going into housing as a percentage than any other country on earth. We also have the highest level of personal debt, including mortgages of all the western countries on earth.

Would not take much to push this over.

 

Yes quite correct. Hence the Ponzi scheme of it all. Vested interests as opposed to national interest all too apparent, I'm afraid. Besides the lowering on interest rates is a rather blunt instrument with banks taking it upon themselves to raise rates anyway. Time to move away from housing as a means of salvation and return it to what it should be. That being a place to live in first and foremost and not a casino chip to be played in the hope of profit.

 

We are in a definite mess of our own making with little will apparently to correct or courage to act. Just how messy it all gets remains to be seeing. It does no good to the economy though sucking up so much unproductive wealth nor on the well being of the population.

[Parley]

Do you actually know what a ponzi scheme is? Or is it just a fancy word you have heard.

[Lambethlad]

This article appeared today:

There have always been booms. But in the past two decades, housing prices have increased faster, for longer, than at any time since at least 1880, according to the Australian Bureau of Statistics.

For Australians under 35, the numbers are ugly. The size of the average loan taken out by a first-time buyer in New South Wales has swelled by more than 43% in the past four years (and 20% in the past year alone) to about A$424,000 (£218,000). Wages in the same period increased 10%.

 

In Sydney, where the surge is strongest, it took about four times the median household income to buy a home in 1975. Today, with a median house price surpassing A$1m, that figure is 12 times. Property in the harbour city is pricier than in New York and even in the US’s least affordable city, San Francisco.

It’s a predicament UK millennials might recognise: only London can match Sydney’s price-to-income gap. In north-east England, the cheapest region in England and Wales, the proportion of income spent on property has nearly doubled in two decades, according to Guardian analysis. Nationally, since 2010, in terms of house prices outstripping incomes, the UK and Australia have been neck and neck.

Australian millennials risk becoming the first generation in the country’s recent history to be poorer than their parents at the same age, the Grattan Institute has warned.

Buying in 2016 means heading to the outskirts. The most popular suburbs for first-home buyers in NSW last year were Liverpool (20 miles from Sydney), Werrington (30 miles) and Spring Farm (37 miles).

Kaitlyn Offer’s house-hunting took her 2,200 miles across Australia, from Perth in Western Australia to Geelong, a port city one hour’s drive from Melbourne.

“When my husband Chris knew he was going to start studying, we decided we needed stability, and renting wouldn’t provide that,” she says. “We needed a house we could afford, that had a bus or train line, job opportunities, access to universities. Geelong ticks all those boxes – and prices are half what they are in Perth.”

The house needed lots of renovating and the hour-long commute “not necessarily ideal”. But the 28-year-olds had to make a choice: carve out a new life somewhere regional, or buy in a city “and never go to the pub on a Friday night or a movie”.

Alexander Allen, 25, took the other road. Three years ago he bought an apartment in Neutral Bay, a harbourside suburb on Sydney’s lower north shore.

“I grew up with parents telling me property is the best thing you can do, the earlier you can invest and get a foothold in the market, the better off you’ll be,” he says.

He had every advantage: “I was living at home, rent free. I was pretty much working full time as a childcare assistant. I didn’t have many expenses, wasn’t going out drinking a lot.”

Another hurdle, the deposit, Allen cleared with a A$50,000 loan from his parents. “Without that, it wouldn’t have been possible,” he says.

He delayed study and took on three jobs, include his own online business, to keep up with the repayments. “I had a job as a motorcycle postie, which I never saw as a career or anything. But suddenly I couldn’t leave it,” he says.

 

“I was basically a poor person. Even though I had this apartment, I was constantly living with the frustration of earning my fortnightly income and seeing the greater majority of it disappear a day or two later.”

Holidays, nights out, festivals – they mostly passed him by. “It’s something I get bitter about. Especially in your days on Facebook when you see every second mate on some amazing holiday and you’re at home counting every cent,” he says. “After a few months you do notice your social life shrinks. It sucked.”

Allen says he probably made the right choice “in the long term”. He just didn’t realise how much he was sacrificing.

“I wasn’t unhappy living my life. But I do regret not being out crafting experiences with my friends. Looking back on it now, the opportunities aren’t boundless. Taking them while they’re there is something I would have wanted.”

What’s galling is, it doesn’t have to be this way. “This isn’t about the invisible hand of the market,” says Eamon Waterford, head of advocacy at the Committee for Sydney, an urban affairs thinktank. “The government is consciously and actively taking the decision to support investors over first-home buyers.”

Negative gearing – which allows investors to claim losses on a property, including interest or maintenance costs, against their taxable income – is one villain. Another is a capital-gains tax exemption for investors selling property. Both encourage buyers to stick their capital in a second or third home, pitting them at auctions against first-time buyers.

Millennial anxiety over housing, simmering for years, boiled over last year when the then treasurer, Joe Hockey, seemed to dismiss the issue, suggesting homes were readily affordable – “if you’ve got a good job and it pays good money”.

The backlash put housing affordability on the agenda, but little action has followed. The federal Labor opposition is cautiously considering limits on negative gearing. Efforts to make renting more stable and secure are being pushed in Victoria and New South Wales.

The search for solutions also saw property dovetail with another Australian passion: blaming Asians, with suggestions Chinese investment was driving up prices. “We don’t really have enough detailed data to support this,” housing analyst Eliza Owen says. “You hear lots of anecdotes about Chinese people showing up to auctions, but there’s nothing to say they’re not Australian citizens.”

Like any issue affecting poorer or younger Australians, inaction comes down to a lack of political sway. “Low-income people have low access to decision makers,” Waterford says.

“And this is of very little direct benefit to anybody but low-income people – except it benefits us all in the intangible, ephemeral way of improving the society we live in.”

Tinkering with policies is only half the work. Millennials also need to get dreaming, imagining a new Australian ideal in line with economic reality.

 

“The idea of house prices being cheap again, we probably need to kill,” Waterford says. So too “the idea of home-owning as the path to security and stability”.

And last, the mother of them all: “The idea of owning a free-standing home on a quarter-acre block. It’s just not feasible. The houses of the future will be about small homes, shared spaces, bigger lifestyles.”

[Petals]

The problem as I see it is that there has been too much support given to people who invest in property and not enough to people who want to own their own home. If we are not going to build state housing anymore then we need to house our workers. The workers who are not on film star wages but the workers who make our lives easier doing the jobs some of us would not want to do for a low hourly rates.

 

Until we stop moaning about the cost of this and the cost of that service and pay people decent wages at the lower end there is and will always be a housing crisis. Its a two tier society not on breeding as in the past but on who has what and this is not the way to a cohesive society.

 

We need to get rid of negative gearing, make housing cooperatives for lower end users and get people into houses. We also need to stop mechanising every menial job and letting people get into work who have less education and qualifications. Not everyone on the dole wants to be but there are no jobs for them to do.

 

Until we all take a cut in our standard of living things will only get worse I believe.

 

Already we see the apartments being a problem and I have always thought that the standard apartments built no sound proofing etc etc and lots of negative gearing investors who have no real interest in keeping the property up to standard, will just bring ghettos of the future.

 

I would never live in an apartment and most Australians do not want to live in an apartment. Its alright for people who are ok to say yep put them in apartments, but me not me, I need my quarter acre.

 

Its stuffed up mess mainly brought about by years of inaction by the present and previous governments who only look after the well off.

[paisleylass]

100% agree petals. We are soon to buy our first house in Aus, and absolutely will NOT downgrade for the sake of owning. We live (renting) in a 4 bed standalone house with pool and it is completely affordable. It is crazy that it will be a squeeze to afford to buy a similar property. But we don't want an apartment, town house or even a skinny standalone on a 400sqm block with a crappy strip of grass at the back.

 

We would rather rent forever than downgrade, which unfortunately is what the investor-biased establishment wants.

Edited March 10, 2016 by paisleylass

[paisleylass]

As for the oversupply of apartments, I read yesterday that the problem will be particularly bad in Brisbane due to the relative size of the market. On the same page, an article about a horrible new development planned for Kangaroo Point clifftops, which will ruin the landscape. Also, an apartment-only 'city' is planned for Ipswich. Every day more plots snapped up for development. Houses disappear, ugly high rises replace. The warnings are clear, but developers seem blind to them.

[Keith and Linda]

This article appeared today:

There have always been booms. But in the past two decades, housing prices have increased faster, for longer, than at any time since at least 1880, according to the Australian Bureau of Statistics.

For Australians under 35, the numbers are ugly. The size of the average loan taken out by a first-time buyer in New South Wales has swelled by more than 43% in the past four years (and 20% in the past year alone) to about A$424,000 (£218,000). Wages in the same period increased 10%.

 

In Sydney, where the surge is strongest, it took about four times the median household income to buy a home in 1975. Today, with a median house price surpassing A$1m, that figure is 12 times. Property in the harbour city is pricier than in New York and even in the US’s least affordable city, San Francisco.

It’s a predicament UK millennials might recognise: only London can match Sydney’s price-to-income gap. In north-east England, the cheapest region in England and Wales, the proportion of income spent on property has nearly doubled in two decades, according to Guardian analysis. Nationally, since 2010, in terms of house prices outstripping incomes, the UK and Australia have been neck and neck.

Australian millennials risk becoming the first generation in the country’s recent history to be poorer than their parents at the same age, the Grattan Institute has warned.

Buying in 2016 means heading to the outskirts. The most popular suburbs for first-home buyers in NSW last year were Liverpool (20 miles from Sydney), Werrington (30 miles) and Spring Farm (37 miles).

Kaitlyn Offer’s house-hunting took her 2,200 miles across Australia, from Perth in Western Australia to Geelong, a port city one hour’s drive from Melbourne.

“When my husband Chris knew he was going to start studying, we decided we needed stability, and renting wouldn’t provide that,” she says. “We needed a house we could afford, that had a bus or train line, job opportunities, access to universities. Geelong ticks all those boxes – and prices are half what they are in Perth.”

The house needed lots of renovating and the hour-long commute “not necessarily ideal”. But the 28-year-olds had to make a choice: carve out a new life somewhere regional, or buy in a city “and never go to the pub on a Friday night or a movie”.

Alexander Allen, 25, took the other road. Three years ago he bought an apartment in Neutral Bay, a harbourside suburb on Sydney’s lower north shore.

“I grew up with parents telling me property is the best thing you can do, the earlier you can invest and get a foothold in the market, the better off you’ll be,” he says.

He had every advantage: “I was living at home, rent free. I was pretty much working full time as a childcare assistant. I didn’t have many expenses, wasn’t going out drinking a lot.”

Another hurdle, the deposit, Allen cleared with a A$50,000 loan from his parents. “Without that, it wouldn’t have been possible,” he says.

He delayed study and took on three jobs, include his own online business, to keep up with the repayments. “I had a job as a motorcycle postie, which I never saw as a career or anything. But suddenly I couldn’t leave it,” he says.

 

“I was basically a poor person. Even though I had this apartment, I was constantly living with the frustration of earning my fortnightly income and seeing the greater majority of it disappear a day or two later.”

Holidays, nights out, festivals – they mostly passed him by. “It’s something I get bitter about. Especially in your days on Facebook when you see every second mate on some amazing holiday and you’re at home counting every cent,” he says. “After a few months you do notice your social life shrinks. It sucked.”

Allen says he probably made the right choice “in the long term”. He just didn’t realise how much he was sacrificing.

“I wasn’t unhappy living my life. But I do regret not being out crafting experiences with my friends. Looking back on it now, the opportunities aren’t boundless. Taking them while they’re there is something I would have wanted.”

What’s galling is, it doesn’t have to be this way. “This isn’t about the invisible hand of the market,” says Eamon Waterford, head of advocacy at the Committee for Sydney, an urban affairs thinktank. “The government is consciously and actively taking the decision to support investors over first-home buyers.”

Negative gearing – which allows investors to claim losses on a property, including interest or maintenance costs, against their taxable income – is one villain. Another is a capital-gains tax exemption for investors selling property. Both encourage buyers to stick their capital in a second or third home, pitting them at auctions against first-time buyers.

Millennial anxiety over housing, simmering for years, boiled over last year when the then treasurer, Joe Hockey, seemed to dismiss the issue, suggesting homes were readily affordable – “if you’ve got a good job and it pays good money”.

The backlash put housing affordability on the agenda, but little action has followed. The federal Labor opposition is cautiously considering limits on negative gearing. Efforts to make renting more stable and secure are being pushed in Victoria and New South Wales.

The search for solutions also saw property dovetail with another Australian passion: blaming Asians, with suggestions Chinese investment was driving up prices. “We don’t really have enough detailed data to support this,” housing analyst Eliza Owen says. “You hear lots of anecdotes about Chinese people showing up to auctions, but there’s nothing to say they’re not Australian citizens.”

Like any issue affecting poorer or younger Australians, inaction comes down to a lack of political sway. “Low-income people have low access to decision makers,” Waterford says.

“And this is of very little direct benefit to anybody but low-income people – except it benefits us all in the intangible, ephemeral way of improving the society we live in.”

Tinkering with policies is only half the work. Millennials also need to get dreaming, imagining a new Australian ideal in line with economic reality.

 

“The idea of house prices being cheap again, we probably need to kill,” Waterford says. So too “the idea of home-owning as the path to security and stability”.

And last, the mother of them all: “The idea of owning a free-standing home on a quarter-acre block. It’s just not feasible. The houses of the future will be about small homes, shared spaces, bigger lifestyles.”

 

The above in red is the bit which gets me. Every second mate is out enjoying themselves! so has every other second mate sacrificed to do the same as this guy? Choices have to be made ultimately this guy was happy with his choice and therefor his sacrifices.

I know I, and several others on this forum made similar sacrifices in the hope of having a better later life, when one can then go to the pub, have holidays, go to festivals etc. Along with possibly helping our children, again something which the above guy benefited from too.

 

I am not saying it is easy, but then we also thought it was not easy at the time, but it is not impossible if one is willing to accept the sacrifices needed. There will of course always be some that will never have the wages to do it and again that was the same in the past too, I know of several old school friends that have never being able to buy, they are however content with their lot.

[Parley]

100% agree petals. We are soon to buy our first house in Aus, and absolutely will NOT downgrade for the sake of owning. We live (renting) in a 4 bed standalone house with pool and it is completely affordable. It is crazy that it will be a squeeze to afford to buy a similar property. But we don't want an apartment, town house or even a skinny standalone on a 400sqm block with a crappy strip of grass at the back.

 

We would rather rent forever than downgrade, which unfortunately is what the investor-biased establishment wants.

 

All very well while you are working, but a bad idea to be heading into retirement or unemployment as a renter only.

 

Also, I think it is always more expensive to buy a home than rent a similar home.

That is to be expected actually or everyone would buy rather than rent.

Edited March 11, 2016 by parleycross

[JockinTas]

http://www.theguardian.com/world/2016/mar/10/the-death-of-the-great-australian-dream

[Parley]

Do you really need to create another thread on the same topic ?

 

You already have one going on the housing bubble.

[flag of convenience]

Do you actually know what a ponzi scheme is? Or is it just a fancy word you have heard.

 

I return the question. Do you know? Yes I know very well, apparently you are clueless. Or if not please explain why the present sad situation in Australia is anything other? New word for you? Ponzi schemes have been around for decades in one form or another. Just a shame it is now part of Australian housing.

[flag of convenience]

All very well while you are working, but a bad idea to be heading into retirement or unemployment as a renter only.

 

Also, I think it is always more expensive to buy a home than rent a similar home.

That is to be expected actually or everyone would buy rather than rent.

 

Even dumber to go into retirement with a mortgage on an over inflated property. But hard to win either way when it comes to Australian houses. Renting can be a nightmare with lack of secure tenure, market forces and little tenant protection.

Buying on the other hand purely unaffordable in the big Australian cities. Smaller cities as well are among the most expensive in the world in many areas. Housing in Australia is purely dumb which ever may one looks. Just waiting for a burst.