Australia housing bubble

[hackney]

Originally Posted by zilo

Yep.

Stop being an employee..start a business.
Else you are destined to be just another loser,

Err, no.A lot of businesses fail(fact).

[zilo]

Originally Posted by hackney

Err, no.A lot of businesses fail(fact).

Sure whatever you say

[hackney]

Originally Posted by Itsme

Seen many business owner's turn losers with failures, seen plenty of employees being very successful with their careers and finances.

Pretty spot on.

[b0son]

I don't know who to believe less.... Zilo and his $500k-earning kids renting, or the dude with the 6 second Aurion....

[hackney]

Originally Posted by b0son

I don't know who to believe less.... Zilo and his $500k-earning kids renting, or the dude with the 6 second Aurion....

Well said! Touché!

[290GTP]

Originally Posted by zilo

Yep.

Stop being an employee..start a business.
Else you are destined to be just another loser,

Lol. You spend enough time on these forums and you read some pretty stupid comments. Congratulations Zilo, yours is the stupidest.

[hackney]

Originally Posted by zilo

I could banter with you all day and pick things apart but wil just quote that bit and agree with you

I have three millenial kids.

one earned 500k last year the other earned 450k.

No sympathy from me....both are renting...FFS

Of course you do.

[FairmontGS]

Originally Posted by zilo

I could banter with you all day and pick things apart but wil just quote that bit and agree with you

I have three millenial kids.

one earned 500k last year the other earned 450k.

No sympathy from me....both are renting...FFS

That's damn good money for banjo playing

[.:4:.]

Sort of relivent. A few years back at smoko one bloke was rattling on about never being able to get into the housing market. A few others agreed. I chimed in by saying i have a mortgage and a house. We were all on similar wages. So old mate who started this conversation, his answer was yeah.... but... then gave up. My response to him was he could save a lot if he got off the bags, followed up by if he got a girlfriend it would free up a lot of cash vs the 3 times a week he would pay for prostitutes.
So it was a case of easy to complain, yet do nothing towards the end goal.

[T3rminator]

Originally Posted by zilo

I could banter with you all day and pick things apart but wil just quote that bit and agree with you



I have three millenial kids.



one earned 500k last year the other earned 450k.



No sympathy from me....both are renting...FFS

That's why we look at median, the common 50 percentile.

Raised a fair point. Saving on an average income won't get you far these days, so you gotta earn. Stock market, earn as you save.

[MITCHAY]

Well mine is going up the full rate no suprise. I'm now at 5.77 after 2.06 discount. I'm holding on to variable because I think they may overcook this ****, too late to fix and have heaps of buffer.

The good news is I checked out my super balance. With that and my cash in bank - my outstanding mortgage, I'm about 13k ahead

[prydey]

I'm 45. I don't pay attention to labels so don't know what generation that makes me but I think it is harder to buy a house now.

Each generation doesn't like to admit that the next generation has anything more difficult. It's just the human brain and how it works.

'back in my day...' anecdotes are alive and well, and even those complaining now about how it's harder than previous generations will likely still forget all that when the next generation grows up and claims they now have it harder.

[Itsme]

Originally Posted by prydey

I'm 45. I don't pay attention to labels so don't know what generation that makes me but I think it is harder to buy a house now.

Think you are correct, two incomes to sign up for mortgage then wife ceased work after 12 months leaving me to cover the repayments, these days I would say it takes two incomes to cover most mortgages.

[BENT_8]

If my 2 eldest kids can do it on public school education and average employment by age 22 then no, it isnt hard at all.
Its all about starting small in a low cost area and using it as a stepping stone for the future not as a forever home.

Both have built identical 2bdrm, 2.5bthrm town houses, my Son paid $223k in 2020, my Daughter paid $263k in 2022.

[prydey]

Anecdotes don't really prove anything though. No one is saying it isn't possible or that it was easy before.

[Adamz Ghia]

Originally Posted by BENT_8

If my 2 eldest kids can do it on public school education and average employment by age 22 then no, it isnt hard at all.
Its all about starting small in a low cost area and using it as a stepping stone for the future not as a forever home.

Both have built identical 2bdrm, 2.5bthrm town houses, my Son paid $223k in 2020, my Daughter paid $263k in 2022.

So it is harder. I don’t claim to know the exact percentage, but lots of people my parents age bought their forever home straight off the bat. They didn’t have to start from a ‘low cost area’ and then move later. They bought their big suburban blocks, built decent sized houses and never had to leave.

These days, they have to buy land (note land, not the house) that is half the size (if not less) yet four times the price (adjusted for inflation) and 5 times further away from the centre of town on incomes that have not kept pace with housing values.

To get what our parents had is not impossible but it’s definitely a lot harder. You can argue all you like, the numbers don’t lie.

[b0son]

Originally Posted by BENT_8

Both have built identical 2bdrm, 2.5bthrm town houses, my Son paid $223k in 2020, my Daughter paid $263k in 2022.

I did a quick search in SW Sydney for homes below $250k. I got two hits. One was a unit in an old retirement village, the other was in a caravan park.

What a time to be alive...

[BENT_8]

Originally Posted by prydey

Anecdotes don't really prove anything though. No one is saying it isn't possible or that it was easy before.

You said harder to buy a house, its not, the same principles apply, save a small deposit and buy what you can afford.
They might not be able to start off in a forever home as Adamz Ghia is mentioning but that doesnt mean its harder, just that the entry point is different.
Id go as far as to say a 2bdrm, 2.5bth townhouse would be a better featured home than any average suburban forever home from the 60's or 70's, and who really wants a 1/4 acre block at 22.

[Adamz Ghia]

In 20 years, the entry point is going to be a one bedroom box that includes the toilet, laundry, kitchen and bathroom in it, and Bent will be here telling us it’s easy to buy your own place.

[b0son]

Originally Posted by BENT_8

You said harder to buy a house, its not, the same principles apply, save a small deposit and buy what you can afford.

But if houses are more expensive, they're more expensive from one end of the market to the other. That means the cheapest house on the market is more expensive. So that requires working more to save the same % deposit, and working more to pay that house off.

Ergo, it's harder.

[BENT_8]

Originally Posted by b0son

But if houses are more expensive, they're more expensive from one end of the market to the other. That means the cheapest house on the market is more expensive. So that requires working more to save the same % deposit, and working more to pay that house off.

Ergo, it's harder.

And you'll earn more,.
My kids both bought using Homestart with lless than 5k deposit after FHOG and builder contribution.
The interest is higher but the repayments per week dont change as per a normal bank loan, they just extend the repayment period from the base of 19yrs, but that can also shorten down the track if rates drop or they can refinance with another lender.
Both my kids did it on $1k per week take home.

[kevino]

Those prices beginning with a two must be in regional South Australia.
You would not buy anything like that in S E Qld beginning with a two.
Maybe beginning with a four.
And I would think Sydney and Melb would begin with a five.

[T3rminator]

Originally Posted by Adamz Ghia

In 20 years, the entry point is going to be a one bedroom box that includes the toilet, laundry, kitchen and bathroom in it, and Bent will be here telling us it’s easy to buy your own place.

When I was looking for rental in London, I came across some pretty depressing scenes. The exterior would look nice and posh, but inside were basically a bunch of rooms with a bed and table. Table had a microwave on it, which had an electric plate on top, and that was your "cooking" area. Laundry, kitchen and bathroom were in a common area and shared with the other 20-30 bedsits in the building. You were looking to pay 100-200 quid a week for the privilege.

[BENT_8]

Originally Posted by kevino

Those prices beginning with a two must be in regional South Australia.
You would not buy anything like that in S E Qld beginning with a two.
Maybe beginning with a four.
And I would think Sydney and Melb would begin with a five.

No, about 40 minutes north of the city with 3 shopping centres within 10 minutes, one of which is across the road, reception to yr12 school a 2 minute walk and trains within 5 minutes and buses at the end of the street.

Its a choice to live in the major east coast cities, people hang **** on us Adelaideans but when a 22yr old can build a comfortable home with the above services for under 300k, the savings will pay for plenty of cheap flights to the 'big smoke' where the action apparently is.

[kevino]

That’s awesome.
Saving or not paying an extra 200k to live in Bris Syd or Melb is a great set you up for life move.
I quite liked Adelaide on my one visit got a lot going for it.

[BENT_8]

Originally Posted by kevino

That’s awesome.
Saving or not paying an extra 200k to live in Bris Syd or Melb is a great set you up for life move.
I quite liked Adelaide on my one visit got a lot going for it.

As I said, neither of them built them as forever homes but being 2 bed, 2.5bth, so each room has its own toilet, shower basin, built in robe, ceiling fan and ducted refrigerated reverse cycle A/C, plus one room has a 4mx3m balcony, when they decide to step up, and with 30 minute public transport to the city universities, they can rent the rooms to students for about $200pw and boost their borrowing power for something bigger locally or if they decide, move to the east coast and always have something to come back to.

[BENT_8]

Many, many moons ago, late 2005 actually, just before I joined this forum, my Wife and I decided to sell up and move to the country.
Just prior to that my Cousin, who owned a civil construction company in the UK called Tamdown PTY LTD forewarned us of the impending GFC and had sold his company and much of his property portfolio before the **** hit the fan.

As it turns out we dodged that bullet in Oz by wasting our budget surplus on flat screen TV's for dole bludgers and the like so we never got our property crash.
At the time we'd realised a $105k profit on the house we'd owned for 4yrs and I just couldnt see any real further capital growth in that area.

I clearly remember the comments at the time about the impending property crash and those who said it would never happen and history shows the latter were correct...until now.
I copped criticism for selling up as apparently I'd have nothing to give my kids when they needed help getting into the market.
My response to that criticism was to say If I raise them right, keep them grounded and teach them work ethic they wont need any handouts from me.
They both started work at 14 and have worked their way up from fast food to working admin in National and multi National companies and now have their own homes by age 22.
Tell me how I failed them.

I'll admit I've burnt a lot of money renting in the past 17yrs but I also raised my kids in a brand new house that had I owned would have cost me $500k and id still have 8 yrs to go on the mortgage.
We're currently building a townhouse too to the same spec as its all we need now with only our 11yr old left at home.
They can divvy that up when we're pushin' daisies.

[prydey]

Originally Posted by BENT_8

And you'll earn more,.
.

Yet still the percentage of income required is far more than previous generations when comparing apples with apples.

[b0son]

Originally Posted by BENT_8

And you'll earn more

Houses as a proportion of income have been rising since the 90s. Probably close to 3 times more as a proportion of income by now. Harder.

We havent had meaningful wage inflation for 20 years (the wage price index has been trending down for most of that period). If the prospect of wage growth to help you pay down a big mortgage is lower now than 20 years ago, it's harder.

A thing can be possible while being harder than it was before.

[BENT_8]

Originally Posted by prydey

Yet still the percentage of income required is far more than previous generations when comparing apples with apples.

No doubt, renting also takes a larger percentage than it did in previous generations.
So is a bottle of Pepsi, couldn't believe it when I saw OTR selling 600ml Pepsi for $5.19, I remember using a bottle of Coke as an example many years ago when I asked if a bottle of Coke would ever really be worth $5, well in many places it is now and the reason they can charge that is the same reason people pay 40k for a 30k SUV, 70k for a 40k ute and $500k for a first home.
Because a fool and their money are easily parted and they need to be on that list.

For the best part of 2 decades I've been saying those who have built their wealth through property have just created a rod for the backs of our kids but I was criticised for stating the bloody obvious as no one wanted to admit it was their doing, not whilst they enjoyed the capital growth.
Now all of a sudden its too hard, give me a break.

I doubt any of the 'Its harder for my kids' people would slash 50% of their property value to solve the problem though.

Your kids can either cry about how hard it is to buy a 500k house in the cool coastal suburbs down south or actually do some buying/building in the hot, busted **** north like mine have.

Choices.