Australian housing bubble

[Sustain]

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

 

Why a bad idea?

 

I would think its actually a sound strategy given the flexibility it provides.

 

If circumstances change which is easiest selling a house/apartment, or ending lease and taking new lease up elsewhere?

 

I have a close friend who pays $1000 a week rent for a house, his neighbors pay around $3000 a week on a mortgage

 

He makes more per year on his property "share" portfolio than they do in "assumed" capital gain (think they said it was 17% last year), as its not a gain unless you sell.

 

He has been retired 20 years, sold his family home when he was in his fifties.

[flag of convenience]

 

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.

 

Chances just working to pay of an over inflated pile in Sydney would be enough to drive anyone to despair. The person in question appears lucky, able to live at home, likely with keep provided for little.

What young person wouldn't feel the pain? Just a shame it has got to this. Shame also the only way some see a way forward is to gamble on the property market to bring them future riches. Shame also how many are so gullible as to follow the advice of get rich con artists are buy multiple properties on credit.

 

Be far better to have a saner housing policy where houses performed their duty as places of abode and all that goes with that rather than seen as vehicles of extreme possible wealth. Shame Australia didn't have a proper guaranteed pension in place so such folly wouldn't see day light.

[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. QUOTE]

 

Why a bad idea?

 

I would think its actually a sound strategy given the flexibility it provides.

 

If circumstances change which is easiest selling a house/apartment, or ending lease and taking new lease up elsewhere?

 

I have a close friend who pays $1000 a week rent for a house, his neighbors pay around $3000 a week on a mortgage

 

He makes more per year on his property "share" portfolio than they do in "assumed" capital gain (think they said it was 17% last year), as its not a gain unless you sell.

 

He has been retired 20 years, sold his family home when he was in his fifties.

 

Renting provides flexibility. As well as possibly untying wealth for better use if previously owned. Makes good since in certain situations but hardly in Australia of late. We need secure rental tenure as in other countries to avoid exploitation and abuse of situation.

Not sure if renting in Sydney is remotely feasible though with age.

[flag of convenience]

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.

 

Another sign of ever falling living standards and over population in our cities.

[Guest]

But no doubt you hate urban sprawl too flag...

[Parley]

For most retired people having their own home paid off that they live in should be their goal.

 

It is an exempt asset, not assessed by centrelink for assets test for the aged pension.

They have security of living, not worried about having to move at the whim of the landlord, no worries about rent going up every year when their income doesn't.

 

For most people, paying off their own home is the best strategy.

[Diane]

There is an interesting plus side though as mentioned in the article: young people these days seem to do a lot more travelling, for a lot longer, than when we were their age. If you don't (or in their case, can't) get tied down with a mortgage etc, you have a lot more freedom to travel and visit and live in many different countries and places.

[paisleylass]

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.

 

Hopefully won't come to that, but we are also aware we should avoid having too much to our names by the time we die as we have no close younger relatives to bequeath to. I despise equity release schemes but maybe we'd have to go that avenue. We would have to spend a lot of money in a short time haha!

 

Not quite true that it should necessarily be cheaper to rent, many struggle to save a 20% deposit in the first place. I believe that once you have put down such a large sum, the mortgage should be at most equivalent to rent. I'm not even including rates, water, maintenance and other costs renters don't pay.

 

We will buy, but the proportion that house prices have outgrown earnings is awful and very unfair to owner occupiers. I would like to see less favourable conditions for investors, and it has already started with interest rates.

[JockinTas]

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

 

You already have one going on the housing bubble.

 

You're right Parley. I should have thought of that. Perhaps @calNgary or one of the other mods would kindly merge it with the "Housing Bubble" thread.

[JockinTas]

 

Renting provides flexibility. As well as possibly untying wealth for better use if previously owned. Makes good since in certain situations but hardly in Australia of late. We need secure rental tenure as in other countries to avoid exploitation and abuse of situation.

Not sure if renting in Sydney is remotely feasible though with age.

 

I know a few European folk who have always rented. The rental system is very different to Australia's. Here is an interesting article.

 

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

[Johndoe]

You're right Parley. I should have thought of that. Perhaps @calNgary or one of the other mods would kindly merge it with the "Housing Bubble" thread.

 

Perhaps Parley can do it seeing that he has taken to wear the mantel of a moderator

[newjez]

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.

 

The investors are supplementing your lifestyle. How can that be bad?

[flag of convenience]

 

I know a few European folk who have always rented. The rental system is very different to Australia's. Here is an interesting article.

 

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

 

I haven't read the piece but know the German situation very well. There is some areas pushing for a more Anglo Saxon approach (disastrous) but forces of reason still rule . We could learn a lot of what to do and not do with far greater protection of renters rights as well in Australia.

We have the worst of both sides here but things will have to change just a question of when and many more to get sucked in.

[flag of convenience]

Hopefully won't come to that, but we are also aware we should avoid having too much to our names by the time we die as we have no close younger relatives to bequeath to. I despise equity release schemes but maybe we'd have to go that avenue. We would have to spend a lot of money in a short time haha!

 

Not quite true that it should necessarily be cheaper to rent, many struggle to save a 20% deposit in the first place. I believe that once you have put down such a large sum, the mortgage should be at most equivalent to rent. I'm not even including rates, water, maintenance and other costs renters don't pay.

 

We will buy, but the proportion that house prices have outgrown earnings is awful and very unfair to owner occupiers. I would like to see less favourable conditions for investors, and it has already started with interest rates.

 

Just don't be one of the many that leaves large amounts untouched in their super funds. The angst created around ageing by government and vested interests clearly as large proportions of the population fearing age poverty and thus arriving at the above mentioned daft situation.

[flag of convenience]

The investors are supplementing your lifestyle. How can that be bad?

 

Investors are doing little more than preventing First Home Buyers to get a leg up.

[flag of convenience]

For most retired people having their own home paid off that they live in should be their goal.

 

It is an exempt asset, not assessed by centrelink for assets test for the aged pension.

They have security of living, not worried about having to move at the whim of the landlord, no worries about rent going up every year when their income doesn't.

 

For most people, paying off their own home is the best strategy.

 

Well actually it is an untapped asset. Just how long it will be allowed, in the sense of being tax free, is anyone's business. It doesn't make a lot of sense a sole surviving aged person living in a million plus dollar house not having to contribute just as it doesn't a free gift to kids to inherit whom have to contribute nothing towards their parents care but gain the benefits.

[paisleylass]

The investors are supplementing your lifestyle. How can that be bad?

 

I know haha! Of course we need rental properties, in fact both our landlords since we arrived were former owner-occupiers rather than intentional investors. Just seems so common here though, I have met so many people at work and socially who have investment property. And there is an oversupply of rentals, at least here in Brisbane.

[amibovered]

I'd bet that if this was a thread about how wonderful life was in Downunderland, there would have been no whinging.

[Guest]

Perhaps Parley can do it seeing that he has taken to wear the mantel of a moderator

 

He'll need to learn how to moderate himself first before he starts on the rest of us. :wacko:

[flag of convenience]

But no doubt you hate urban sprawl too flag...

 

All part and parcel of lower living standards. Any idea why well thought out inner city living is so expensive and favoured by the European elites?

Ever wonder why certain Australian cities wish to emulate places such as Vancouver, similar in ways, but miles ahead in urban living?

[flag of convenience]

I know haha! Of course we need rental properties, in fact both our landlords since we arrived were former owner-occupiers rather than intentional investors. Just seems so common here though, I have met so many people at work and socially who have investment property. And there is an oversupply of rentals, at least here in Brisbane.

 

It became one of the few games in town. Any man and his nag jumped aboard the good ship, Housing Rot. Many see it as a way to retire by forty and life of rents rather than working. Many have leveraged themselves up to the gills to achieve this little thought out road to glory.

A nation of Landlords. Even worse than a nation of shopkeepers. What do you reckon?

[paisleylass]

I just think it's too prolific flag! I see ads daily on facebook for property investment seminars, not just small time stuff but get-rich-quick portfolio crap! I could never be tempted, it's way too risky! Jeez, we lost enough on our house in the UK. I swore we'd never buy again, but sick of not being able to hang bloody pictures up. And the rest.

[Parley]

There is absolutely nothing wrong with buying a house as a real estate investment and letting it out.

 

A perfectly legitimate wealth creation strategy.

[paisleylass]

Certainly separates the haves and have-nots.

[Keith and Linda]

I just think it's too prolific flag! I see ads daily on facebook for property investment seminars, not just small time stuff but get-rich-quick portfolio crap! I could never be tempted, it's way too risky! Jeez, we lost enough on our house in the UK. I swore we'd never buy again, but sick of not being able to hang bloody pictures up. And the rest.

 

One has to ask why are you actually getting that on your facebook? and why you are actually spending time reading it!