Is it a good move financially?

[ramot]

48 minutes ago, DrDougster said:

Yup

We lived in Keyworth for 10 years until we moved overseas as expats. I still spent part of the year there as all our children were in UK at boarding school or university. We retired to live in Australia.initially for a few years to have a bit of adventure, that was 18 years ago this month, and we aren’t leaving.

[JulesBax1980]

On 16/01/2021 at 14:10, TheBrettFamily said:

Would love some advice on this...

My husband and I are seriously considering immigrating to Australia. We spent 8 weeks travelling up the East Coast from Sydney to Cairns in an old campervan in 2018 and fell in love with the place. We had a daughter at the beginning of 2020 and so it feels a bit like now or never to go before we have to start thinking about taking our daughter out of school etc.

As much as I love Australia, I do also love the UK and the life we have here especially with family being so close by. We do quite well financially at the moment, we have our own home plus a rental property, nice car and a good £1000+ spare every month to spend/save for holidays etc.

My question is, if we were to go to Australia for 3-4 years and then decide to come back to the UK,  are we making bad financial moves in going back and forth or would it not make much difference? Of course there are moving costs involved etc but it seems that you get so much more for your money in Australia - better paid job, bigger house etc. If we chose to come back after, will we effectively feel poor after? 
Has anyone had any experience of going back and forth and doing better off because of it?

Of course I am sure we are going to love it and want to stay, it’s just that I like to think long term and consider every eventuality.

Thanks for your help!

This really does depend on how things go for you. There are certain jobs in Australia that pay incredibly well compared to what you would get paid in the UK and so yes you would be better off but then there are other professions where the pay isn't as lucrative. It also depends where you settle...we found Melbourne expensive! We started in a suburb out West that was cheaper but it had no feel and so we paid a fortune to relocate to a beachside suburb on the bayside. We didn't worry about money at all in Australia but then we didn't see any improvements...we came back here and within 5 years we have built up a tidy sum in equity in the house and other things which I don't think would have happened in OZ as property where we were was soooo expensive. We used the equity in our first house to move initially and we underestimated how much it would cost. We were Permanent residents so we arrived with no work and had to live off our £ for about 6 weeks and the rate at the time was not great. Buying a clapped out car was expensive - we couldn't believe how much! We quickly spent the money from the house sale! We are now contemplating returning before our RRV runs out next April but the one thing putting us off is cost! Each time you move, you spend a fortune and then there's setting up from scratch each time. x

[DrDougster]

11 hours ago, ramot said:

We lived in Keyworth for 10 years until we moved overseas as expats. I still spent part of the year there as all our children were in UK at boarding school or university. We retired to live in Australia.initially for a few years to have a bit of adventure, that was 18 years ago this month, and we aren’t leaving.

Used to ride around there a fair bit - I lived out in Staunton in the Vale for a while. I went to med school in Nottingham back in the last century before it got too many guns! Plastic surgeon who taught me got stabbed by a former work colleague a couple of days ago after a longstanding work dispute - the guy broke into his family home in Hallam with a jerrycan and a knife at 4am ffs!

[Marisawright]

6 hours ago, JulesBax1980 said:

.we found Melbourne expensive!...we came back here and within 5 years we have built up a tidy sum in equity in the house and other things which I don't think would have happened in OZ as property where we were was soooo expensive. 

Where are you planning to come back to?  Do research house prices carefully.  If you think house prices were expensive 5 years ago, you should see what they are now (in Sydney and Melbourne especially).  

[Toots]

5 minutes ago, Marisawright said:

Where are you planning to come back to?  Do research house prices carefully.  If you think house prices were expensive 5 years ago, you should see what they are now (in Sydney and Melbourne especially).  

Comment from the Financial Review hinting houses could rise by 30%.

https://www.afr.com/policy/economy/low-rates-inflate-asset-prices-rba-20210117-p56upq

[Wanderer Returns]

20 hours ago, bicek said:

It's impossible to know how you would feel about living there 5 years down the line. Its a very personal thing, there is no algorithm for it. Ultimately for me I wouldn't make the decision based on finances, provided you can afford to actually do it in the first instance. We are looking at £20k for relocation (£25k including my husbands visa).

We are still in the UK and organising our relocation to Australia at the moment (I'm Australian, my husband is British but has just had his 309 visa approved). 

We are comfortable in the UK financially, but not happy. So ultimately money isn't the important factor for us. My kids will be 6, 3 and 0 when we relocate. We are keen to move whilst our eldest is still young. I moved A LOT when I was kid (4 countries) and it didn't bother me so much until after the age of about 12. Then it really impacted me in ways I am still coming to terms with as an adult. But that's just my personal experience (every kid will respond differently), but it is why I am very keen to not repeat this with my own kids. 

We were too, but money doesn't buy happiness.

Congrats on the visa - when are you emigrating?

[Wanderer Returns]

7 hours ago, DrDougster said:

Used to ride around there a fair bit - I lived out in Staunton in the Vale for a while. I went to med school in Nottingham back in the last century before it got too many guns! Plastic surgeon who taught me got stabbed by a former work colleague a couple of days ago after a longstanding work dispute - the guy broke into his family home in Hallam with a jerrycan and a knife at 4am ffs!

I did my teacher-training in Nottingham Uni and a week after I started the course, a fella got murdered in the street below my apartment. Not sure if it was a shooting or a stabbing, but there was one of those little white tents for a while. Apart from that I rather liked the place - much more interesting city than Derby!

[ramot]

1 minute ago, Wanderer Returns said:

I did my teacher-training in Nottingham Uni and a week after I started the course, a fella got murdered in the street below my apartment. Not sure if it was a shooting or a stabbing, but there was one of those little white tents for a while. Apart from that I rather liked the place - much more interesting city than Derby!

Ey up me duck. I had no problems in living full time near Nottingham for 10 years and 10 years part time. I did years of market research on The Nottingham streets and never felt unsafe.

Sorry OP better get back to the thread.

[Wanderer Returns]

39 minutes ago, ramot said:

Ey up me duck. I had no problems in living full time near Nottingham for 10 years and 10 years part time. I did years of market research on The Nottingham streets and never felt unsafe.

I don't see you you rushing back there any time soon!

Buderim of Beeston? Hmm...

[Bulya]

21 hours ago, ramot said:

We lived in Keyworth for 10 years until we moved overseas as expats. I still spent part of the year there as all our children were in UK at boarding school or university. We retired to live in Australia.initially for a few years to have a bit of adventure, that was 18 years ago this month, and we aren’t leaving.

Who would...

[bicek]

3 hours ago, Wanderer Returns said:

We were too, but money doesn't buy happiness.

Congrats on the visa - when are you emigrating?

It sure doesn't. And has never been something that drives us. We both work part time and are more focused on a modest lifestyle and better quality time spent with our family, particularly whilst they're young. My husband has worked in Melbourne before in the same industry he works in now so we are familiar with what his earning potential could be over there (we travelled there with him on a work visa in our mid twenties). He has a couple of contacts but not many, so we would be going over with no jobs lined up and hoping to sort work once we get there. Keen to not burn through the savings; that is always a worry. 

Thank you. We are aiming for October. Just sorting out our pet's importation paperwork at the moment. He is more complicated than us to relocate! Really hoping the flights become a bit more consistent and reliable by that point, but also not confident about that at all.

[bicek]

7 hours ago, Toots said:

Comment from the Financial Review hinting houses could rise by 30%.

https://www.afr.com/policy/economy/low-rates-inflate-asset-prices-rba-20210117-p56upq

The article is only visible to subscribers. 30% over what time period? A year? Or longer? That seems a pretty steep rise...

[Marisawright]

5 minutes ago, bicek said:

It sure doesn't. And has never been something that drives us. We both work part time and are more focused on a modest lifestyle and better quality time spent with our family, particularly whilst they're young. My husband has worked in Melbourne before in the same industry he works in now so we are familiar with what his earning potential could be over there (we travelled there with him on a work visa in our mid twenties). He has a couple of contacts but not many, so we would be going over with no jobs lined up and hoping to sort work once we get there. Keen to not burn through the savings; that is always a worry. 

Thank you. We are aiming for October. Just sorting out our pet's importation paperwork at the moment. He is more complicated than us to relocate! Really hoping the flights become a bit more consistent and reliable by that point, but also not confident about that at all.

Have you considered going somewhere other than Melbourne? Almost everywhere else in Australia will be substantially cheaper for housing, making it far more feasible to work part time

[bicek]

2 hours ago, Marisawright said:

Have you considered going somewhere other than Melbourne? Almost everywhere else in Australia will be substantially cheaper for housing, making it far more feasible to work part time

We're not planning to live centrally. It's much more affordable where we are looking at, on the outskirts. 

My husband's work industry is predominantly based in Sydney and Melbourne. We both love Melbourne/Victoria, that decision was an easy one for us.

[Toots]

11 hours ago, bicek said:

The article is only visible to subscribers. 30% over what time period? A year? Or longer? That seems a pretty steep rise...

An internal RBA document, made public on Friday, has predicted a 30 per cent growth in property prices over a period of three years if interest rates remain persistently low.

According to the RBA’s data mapping, a permanent 1 percentage point (100 basis point reduction) cut in the official rate could increase real housing prices by 30 per cent after about three years.

On the contrary, the RBA noted, if low rates are only temporary, house prices would rise by 10 per cent over the three-year period.

The official interest rate is currently at a record low of 0.1 per cent, following several cuts since mid-2019, with RBA governor Philip Lower noting on numerous occasions that the rate will not increase for “at least” three years.

[Marisawright]

11 hours ago, bicek said:

We're not planning to live centrally. It's much more affordable where we are looking at, on the outskirts. 

My husband's work industry is predominantly based in Sydney and Melbourne. We both love Melbourne/Victoria, that decision was an easy one for us.

I'm not a huge fan of the outer fringes of Melbourne, they seem to have gone downhill in recent years.   However, Melbourne businesses have really embraced the work-from-home idea due to the long lockdown we had, so we're seeing people moving even further out to the country.   Ballarat is becoming popular.  I even know someone who lives in Bendigo and works for  Melbourne Uni. She works from home and drives in two days a week.  She loves it and says she finds the commute easier than when she lived in Frankston!   I always thought of Geelong as a fairly boring place but it seems to be "the" place to move to for families with small children now.

[MacGyver]

4 hours ago, Toots said:

An internal RBA document, made public on Friday, has predicted a 30 per cent growth in property prices over a period of three years if interest rates remain persistently low.

According to the RBA’s data mapping, a permanent 1 percentage point (100 basis point reduction) cut in the official rate could increase real housing prices by 30 per cent after about three years.

On the contrary, the RBA noted, if low rates are only temporary, house prices would rise by 10 per cent over the three-year period.

The official interest rate is currently at a record low of 0.1 per cent, following several cuts since mid-2019, with RBA governor Philip Lower noting on numerous occasions that the rate will not increase for “at least” three years.

12 months ago the predictions were that prices would fall by 30% and we were hesitating to buy, worried the market hadn't bottomed out yet. I dont know if this is a temporary spike due to covid stimulus, or a sign of things to come, but I trust the market this year about as much as I trusted it last year! Oh to have a crystal ball!

[Parley]

27 minutes ago, MacGyver said:

12 months ago the predictions were that prices would fall by 30% and we were hesitating to buy, worried the market hadn't bottomed out yet. I dont know if this is a temporary spike due to covid stimulus, or a sign of things to come, but I trust the market this year about as much as I trusted it last year! Oh to have a crystal ball!

True. I would think the main reason for pushing up prices would be immigration ie new buyers additional in the market.

There is not much immigration happening so i don't know why prices would rise dramatically.

[DrDougster]

Also worth noting that this year lots of people have at least an extra year's worth of holiday money and spending burning a hole in their pocket and time on their hands to waste on realestate.co.au 

[newjez]

3 hours ago, MacGyver said:

12 months ago the predictions were that prices would fall by 30% and we were hesitating to buy, worried the market hadn't bottomed out yet. I dont know if this is a temporary spike due to covid stimulus, or a sign of things to come, but I trust the market this year about as much as I trusted it last year! Oh to have a crystal ball!

Most governments seem to be actively kindling inflation to lower their debt. We don't know if that will be successful, but it could cause interest rates to spike. If anyone is buying, I would lock in low rates for as long as you can.

[FirstWorldProblems]

House prices are affected by many variables, and intuitively we assume under-supply to be the most impactful, but if you look at the studies that has not been a major driver, the biggest one by far is interest rates and the abundant supply of cheap credit.  Secondary to that is anything else affecting monthly payments.

Buyers don't buy based on house price.  They buy based on affordability of monthly repayments.   For a really clear example, look at the Help to Buy scheme in the UK.  This is an equity loan scheme applicable to new builds only,  which was intended to get people on the property ladder by helping overcome their credit and liquidity constraints.   In practice it has substantially increased house prices because developers have pushed up the house cost to offset the benefit.   If you are interested in more info google Economic Impacts of Help to Buy.

You see the very same thing in the new car market.  Deals aren't done on sticker price, the salesman or woman have transitioned selling tactics to focus on monthly cost.  So the sell is now a combination of product and credit cost.

So it seems reasonable therefore to predict that, as @newjez says, that inflation will be one tool employed to lower government debt that has grown due to Covid and so as interest rates go up, house prices would hold steady or perhaps drop.

[bicek]

18 hours ago, Toots said:

An internal RBA document, made public on Friday, has predicted a 30 per cent growth in property prices over a period of three years if interest rates remain persistently low.

According to the RBA’s data mapping, a permanent 1 percentage point (100 basis point reduction) cut in the official rate could increase real housing prices by 30 per cent after about three years.

On the contrary, the RBA noted, if low rates are only temporary, house prices would rise by 10 per cent over the three-year period.

The official interest rate is currently at a record low of 0.1 per cent, following several cuts since mid-2019, with RBA governor Philip Lower noting on numerous occasions that the rate will not increase for “at least” three years.

Interesting, thank you for sharing!

[bicek]

15 hours ago, Marisawright said:

I'm not a huge fan of the outer fringes of Melbourne, they seem to have gone downhill in recent years.   However, Melbourne businesses have really embraced the work-from-home idea due to the long lockdown we had, so we're seeing people moving even further out to the country.   Ballarat is becoming popular.  I even know someone who lives in Bendigo and works for  Melbourne Uni. She works from home and drives in two days a week.  She loves it and says she finds the commute easier than when she lived in Frankston!   I always thought of Geelong as a fairly boring place but it seems to be "the" place to move to for families with small children now.

There's a lot of variety on the outskirts of Melbourne (it's vast!), so we are open minded to find somewhere suitable for our growing family. And have been watching the property market closely for a number of years. Hopefully we can be in a position to purchase something before prices rise too high, as @Toots indicated could be a possibility!

Great to hear that Melbourne businesses are embracing the work from home idea. It really does make a lot of sense, environmentally, as well as logistically.

[bicek]

13 hours ago, MacGyver said:

12 months ago the predictions were that prices would fall by 30% and we were hesitating to buy, worried the market hadn't bottomed out yet. I dont know if this is a temporary spike due to covid stimulus, or a sign of things to come, but I trust the market this year about as much as I trusted it last year! Oh to have a crystal ball!

So true, it's incredibly unpredictable isn't it. 

[bicek]

6 hours ago, FirstWorldProblems said:

House prices are affected by many variables, and intuitively we assume under-supply to be the most impactful, but if you look at the studies that has not been a major driver, the biggest one by far is interest rates and the abundant supply of cheap credit.  Secondary to that is anything else affecting monthly payments.

Buyers don't buy based on house price.  They buy based on affordability of monthly repayments.   For a really clear example, look at the Help to Buy scheme in the UK.  This is an equity loan scheme applicable to new builds only,  which was intended to get people on the property ladder by helping overcome their credit and liquidity constraints.   In practice it has substantially increased house prices because developers have pushed up the house cost to offset the benefit.   If you are interested in more info google Economic Impacts of Help to Buy.

You see the very same thing in the new car market.  Deals aren't done on sticker price, the salesman or woman have transitioned selling tactics to focus on monthly cost.  So the sell is now a combination of product and credit cost.

So it seems reasonable therefore to predict that, as @newjez says, that inflation will be one tool employed to lower government debt that has grown due to Covid and so as interest rates go up, house prices would hold steady or perhaps drop.

All very interesting, and lots to digest there. Thanks for your input!

I'm hoping they at least hold steady long enough for me to stand a chance of purchasing something in the next couple of years. 

Edited January 20, 2021 by bicek