House prices

That's true, and while it's not how I operate, it's how the housing market works.

I'm pretty allergic to debt, and have always done the hard work first, rather than borrow borrow borrow. My wealthy mates just laugh at me and borrow cheaply and make money off that.

We think alike.

Blowin wrote:

My wealthy mates laughed at my aversion to borrowing as well. They’re still working whilst I’m not. Debt is presented as the cure when it’s actually the disease.

Finally you are speaking some sense Blowin. Stick to this thread mate. Your dumb twin is posting in the other thread!!!

freeride76 wrote:

Dx3 wrote:

spookypt wrote:

Yes, agreed. Some woud also suggest that if we jumped high enough we could touch the moon. Ive just had an agent ring me today to say he has someone who will pay 3 times what I paid for my house 7 years ago. And again..like Ive said continuim...and then where do I go?

Yep that's the crux of it. Oh wow my house is worth $X amount, that's heaps more than I paid. I'll sell and be left looking to buy a similar house for the same price...I'll just drop many thousands on stamp duty. Only investors benefit from the rising house prices, maybe the odd downsizer.

 

What?

Anyone selling for a couple million in the city and buying for a million in the regions benefits.

Yeh my comment was on the basis of someone selling then buying in the same area, which the original comment sounded to be the case.

Island Bay wrote:

but houses are not less affordably than in the 90s when interest rates were 15%

Just thought I'd check this statement;

1992 an interest rate of 10%:

Average house price in melb was ~$130,000
Cash required for 10% deposit and stamp duty was ~$17,000
Stamp duty was ~$3,000
Monthly repayments were ~$1,100
Average monthly income was ~$2,200
Percentage of wage to mortgage was 50%

2021 interest rates are 2.5%

Average house price in melb is ~$1,020,000
Cash required for 10% deposit and stamp duty is ~$165,000
Stamp duty was ~$65,000
Monthly repayments were ~$4,200
Average monthly income was ~$5,200
Percentage of wage to mortgage was 80%

It is clearly more expensive now no matter how you look at it. The comparison year is not the worst but certainly not the best for interest rates either and considering the above is looking at a 25 year loan, as interest rates dropped mortgage repayments got considerably easier. The opposite is likely to happen to anyone buying in 2021.

garyg1412 wrote:

Dx3 wrote:

spookypt wrote:

Yes, agreed. Some woud also suggest that if we jumped high enough we could touch the moon. Ive just had an agent ring me today to say he has someone who will pay 3 times what I paid for my house 7 years ago. And again..like Ive said continuim...and then where do I go?

Yep that's the crux of it. Oh wow my house is worth $X amount, that's heaps more than I paid. I'll sell and be left looking to buy a similar house for the same price...I'll just drop many thousands on stamp duty. Only investors benefit from the rising house prices, maybe the odd downsizer.

Dx3 you need to think outside the box. You should be doing what everyone else is doing. Go an buy yourself a big arse BMW X5 (or if older than 80 a Jaguar F-Pace) on the newly acquired equity in your real estate. That sucker will only cost you a few pennies a week over 30 years and you'll look the part like all the other ponces out there.

Haha very good Gary, however I always recall old mate Scott Pape saying, buy the cheapest car your ego can afford, so you won't see me driving a range rover or BMW anytime soon. People have a tendency to look at those folks as they get out of their cars and think 'flog'. Would at least like someone to get to know me before realising that's the case..!

Island Bay wrote:

That's true, and while it's not how I operate, it's how the housing market works.

I'm pretty allergic to debt, and have always done the hard work first, rather than borrow borrow borrow. My wealthy mates just laugh at me and borrow cheaply and make money off that.

Also good and bad debt.

For example borrowing 50K for a car that the day you drive to out is worth 45K and ten years latter is worth 15K and then you ended up paying way more than 50K with interest etc factored in is bad debt. (personally im a second hand car type of guy and never borrowed money to buy a car)

But borrowing 500K for a property that in ten years may end up being worth two to three times as much even with all the interest paid is good debt.

So not all debt is equal.

carpetman wrote:

Island Bay wrote:

but houses are not less affordably than in the 90s when interest rates were 15%

Just thought I'd check this statement;

1992 an interest rate of 10%:

Average house price in melb was ~$130,000
Cash required for 10% deposit and stamp duty was ~$17,000
Stamp duty was ~$3,000
Monthly repayments were ~$1,100
Average monthly income was ~$2,200
Percentage of wage to mortgage was 50%

2021 interest rates are 2.5%

Average house price in melb is ~$1,020,000
Cash required for 10% deposit and stamp duty is ~$165,000
Stamp duty was ~$65,000
Monthly repayments were ~$4,200
Average monthly income was ~$5,200
Percentage of wage to mortgage was 80%

It is clearly more expensive now no matter how you look at it. The comparison year is not the worst but certainly not the best for interest rates either and considering the above is looking at a 25 year loan, as interest rates dropped mortgage repayments got considerably easier. The opposite is likely to happen to anyone buying in 2021.

Glad someone did the sums. Now is a lot harder

Zen thank you for the fantastic posts above. I am in agreement with you on the character of the Japanese people (whom I admire) and their conservative nature. Raised similarly, I agree with Blowin and Island Bay above as well. At present I'm seeing a situation of the debt becoming a problem for a distant relative, and watching it reverberate throughout an extended family. It seems one can be of inflationary mindset or not; if you were born postwar it's been up up up, but if you were born earlier you saw deflation and adjusted behaviour to suit. Australia's last recession, the deepest since the 1920's/30's occurred right on our gen leaving school - that tends to leave a mark, and the debt-adverse will shine when the piper comes calling for 30 years of payment. However, there's been nothing but bubble and bailing out overexposed people ever since the 90s. I've given up waiting for the Day of Reckoning. But maybe we can do a Swellnet Seance and pray for rising interest rates to St. Jerome.

Agree with you that the combination of stable wages, slow growth and tightly controlled immigration is not a bad thing at all. Japan will remain Japan after this age passes. If anyone gets into the monetary theory stuff, from 1815 to 1914, under gold/silver standard, inflation was kept low, wages stable and the introduction of interest in 1815 allowed people to actually save and retire off their earnings. When the gold standard was broken (after WW1 for some, by early 30s for others), printed currency was let out of it's box and the result has been you might save and invest, but everything you might want to buy is going up fast, too.

Zen - Totally up for catching up if I am ever in Japan! Would love to surf there; stayed in Okayama as a teen and it was a great experience. Are fireworks still legal?
Sake/Pachinko/Fireworks is always a fun night. Perhaps I will ask for your help one day for some translation, as I'm slowly building toward a little hobby business and I reckon it might do well in the Japanese market.

goofyfoot wrote:

carpetman wrote:

Island Bay wrote:

but houses are not less affordably than in the 90s when interest rates were 15%

Just thought I'd check this statement;

1992 an interest rate of 10%:

Average house price in melb was ~$130,000
Cash required for 10% deposit and stamp duty was ~$17,000
Stamp duty was ~$3,000
Monthly repayments were ~$1,100
Average monthly income was ~$2,200
Percentage of wage to mortgage was 50%

2021 interest rates are 2.5%

Average house price in melb is ~$1,020,000
Cash required for 10% deposit and stamp duty is ~$165,000
Stamp duty was ~$65,000
Monthly repayments were ~$4,200
Average monthly income was ~$5,200
Percentage of wage to mortgage was 80%

It is clearly more expensive now no matter how you look at it. The comparison year is not the worst but certainly not the best for interest rates either and considering the above is looking at a 25 year loan, as interest rates dropped mortgage repayments got considerably easier. The opposite is likely to happen to anyone buying in 2021.

Glad someone did the sums. Now is a lot harder

Did a few NZ examples, and they came out much more even Stevens. But I’ve only been here since 2001, so my data don’t go that far back.

Cheers VJ, and yes, it's a genuine offer.

Fireworks are still legal. You can buy them in a convenience store this time of the year.

Alcohol and fireworks. It's a winning combination. What could possibly go wrong?

Happy to help with the translation- my wife and I just finished two excerpts from a book.

Also a lot of lenders want a 20% deposit now days.
Good luck for any young person/apprentice trying to save $200,000 for an average priced house. Fuck good luck to anyone trying to save that, especially if they're paying rent while trying to save

Fortunately for the debt averse is the reliable and cheaper option of renting a home for your family. A secure choice. Stress free. A fark you to the man. And the freedom to live where one chooses at anytime. No mortgage no worries.

And no security in retirement

no security now. which is why the "no debt" argument is void.

Bonza...

Renting - stress free? If you luck into a long term rental in your preferred place to live, maybe. Maybe as well if you have to or want to move all the time. If not, it can be moving every few years at a timing out of your control when the property gets sold or lease ends. Upheaval for you, family schools etc.

Air B & Pee soaking up supply made it harder in recent years. Renting then became radically less attractive for many in the last 12 months with covid driven people movements meaning nothing can be found in many suburbs that were previously offering a lot of choice.

Renter's future is at the whim of the market and landlord decisions.

Owning you own home provides multiple forms of security - financial, forced saving/investing, locational, lifestyle planning, destiny control and peace of mind.

Renters in retirement make up the poorest societal group.

Frog - I was taking the piss.

you're comments are exactly what those fortunate to have bought in favourable times fail to acknowledge when claiming debt is bad. I've commented on this before.

I parked for an entire uni degree on campus for free, there's that. Blowin I'd love to discuss the housing example. I worked in the North West with crew who were on something like 5/2 and every 5 weeks they'd bank 26K or so - you can pay off an early 2000s priced house with that in a reasonable amount of time. Oh yeah, stay on the mine camp as part of the contract.

bonza wrote:

Frog - I was taking the piss.

you're comments are exactly what those fortunate to have bought in favourable times fail to acknowledge when claiming debt is bad. I've commented on this before.

Okay. Missed that.

The scale if debt these days can be scary. My kids bought ok but people I work with with kids just a few years younger are seeing both renting and buying as impossible. Stuck. Not good.

carpetman wrote:

Island Bay wrote:

but houses are not less affordably than in the 90s when interest rates were 15%

Just thought I'd check this statement; 1992 an interest rate of 10%: Average house price in melb was ~$130,000 Cash required for 10% deposit and stamp duty was ~$17,000 Stamp duty was ~$3,000 Monthly repayments were ~$1,100 Average monthly income was ~$2,200 Percentage of wage to mortgage was 50% 2021 interest rates are 2.5% Average house price in melb is ~$1,020,000 Cash required for 10% deposit and stamp duty is ~$165,000 Stamp duty was ~$65,000 Monthly repayments were ~$4,200 Average monthly income was ~$5,200 Percentage of wage to mortgage was 80% It is clearly more expensive now no matter how you look at it. The comparison year is not the worst but certainly not the best for interest rates either and considering the above is looking at a 25 year loan, as interest rates dropped mortgage repayments got considerably easier. The opposite is likely to happen to anyone buying in 2021.

Much, much harder.

Craig wrote:

carpetman wrote:

Island Bay wrote:

but houses are not less affordably than in the 90s when interest rates were 15%

Just thought I'd check this statement; 1992 an interest rate of 10%: Average house price in melb was ~$130,000 Cash required for 10% deposit and stamp duty was ~$17,000 Stamp duty was ~$3,000 Monthly repayments were ~$1,100 Average monthly income was ~$2,200 Percentage of wage to mortgage was 50% 2021 interest rates are 2.5% Average house price in melb is ~$1,020,000 Cash required for 10% deposit and stamp duty is ~$165,000 Stamp duty was ~$65,000 Monthly repayments were ~$4,200 Average monthly income was ~$5,200 Percentage of wage to mortgage was 80% It is clearly more expensive now no matter how you look at it. The comparison year is not the worst but certainly not the best for interest rates either and considering the above is looking at a 25 year loan, as interest rates dropped mortgage repayments got considerably easier. The opposite is likely to happen to anyone buying in 2021.

Much, much harder.

True that, that's the scariest thing for first home owners buying now, even if they can afford to somehow keep on paying their mortgage when interest rates rise, they could still end up paying a loan that's say $700K on a house that could drop in value by 50K to even 200K.

But at the same time, if you don't get into the market and think it's going to drop you might price yourself out, every-time these prices rises happen we all think, the bubble is going to burst but it hasn't.

Blowin, maybe a rough 'how to' - not that I am in a position to be wanting at present, but as a general 'outside the box: how-to' discussion. I reckon it would find an eager audience.

All the corona stuff has evoked within me a desire to get back to being away from it all, on some remote coast. I must balance this with continual medical need. From my working life, I literally worked over almost all the southern surfable coasts of Australia, so I have a pretty good idea of where I might want to do this. In my life the confluence of having a family really early (creates need for stability) and following through early, and loving being near waves, while being willing to work remote - away from or with fam - lots while young and capable, has worked out OK.

Zen that's all excellent - will love to come over as the current craziness subsides. The lads love the snow and rip it, too. I'll keep chugging away with CAD and create a need for translation :)

It will if interest rates rise dramatically, but it seems like the whole game has changed so who knows when that will happen or if.

what sad is seeing families ( who don't necessary live in a suburban nightmare) being moved every 6-12 months further and further away from the life they have built for themselves, their kids - close to family, school, connections. friendships, work. constantly on edge about what they are going to do when the lease runs up and the home they pay for used as an advert to sell to karnst with 5 houses - spoken and treated like scum by the dumbest, cruellest, luckiest mofos that walked the earth.

if you are lucky enough to get a deposit together then buy. borrow as much as you can and more. having a 30 year mortgage over your head is better then being on the street now.

the government has your back.

Its a different world. has been for a long time. its only thinking outside the box until everyone else does it = new problems + new restrictions. e.g. vans. airbnb.

living off the reservation is cool. .. until you realise you still need dual incomes. or the closest job is more than 3 hour away. and your parents need help and they live 12 hours away. maybe you can afford the house on one income but the missus is going batshit crazy coz you leave 6am to get to work and get home at 9pm or you FIFO- and on weekends the swell is up. and your kid broke his ankle jumping off the tank and now you gotta drive 3 hours to the hospital. and the wifi is shit so your missus cant work from home. and the closest good school takes 1.5 hour to get to. etc etc

Bonza You seem to have two different suggestions within 6 minutes . Congratulations as that is very hard to do ( even for you ) .
"1.if you are lucky enough to get a deposit together then buy. borrow as much as you can and more. having a 30 year mortgage over your head is better then being on the street now.
2. living off the reservation is cool. .. until you realise you still need dual incomes. or the closest job is more than 3 hour away. and your parents need help and they live 12 hours away. maybe you can afford the house on one income but the missus is going batshit crazy coz you leave 6am to get to work and get home at 9pm or you FIFO- and on weekends the swell is up. and your kid broke his ankle jumping off the tank and now you gotta drive 3 hours to the hospital. and the wifi is shit so your missus cant work from home. and the closest good school takes 1.5 hour to get to. etc etc "

How man young people can afford to buy inner city ?

I am not surprised though after seeing your previous posts !!!

The French have managed well with renting !
Advising people to borrow huge amounts of money ( for 30 years ) when interest rates are at the lowest ever and when unemployment rates are low may seem sage advice to you . What can go wrong ? What will happen in the future . I have no crystal ball but China could invade Taiwan , Iran might throw a nuke at Israel , Covid lockdowns may be the new normal , interest rates might go back to the average rates of the last 100 years , unemployment might go up ?
I would counsel you to keep your sage advice to yourself . You are an accident waiting to happen .

Your stupidity is amusing to me. Keep it up.

I wonder who agrees with you oh sensible one .

Phillip Island’s Cape Woolamai has been dubbed Victoria’s version of the “next Byron Bay”.
https://www.realestate.com.au/news/cape-woolamai-victorias-surprise-next...

R.I.P.

Back in around 1998 my mate inherited about $250 000 from an old lady who was missing her husband who passed away, so my mate gave her a young puppy.
She loved the dog so much she would make dinner on a plate as though it was for her husband, with mashed potato, steaks peas and other vegetables and put the plate on the floor for her dog.
She appreciatd it so much my mate inherited all her money.

He then decided on either a trip to cloud 9 or a trip to victoria with his new panel van. we decided on vic, and he shouted me the whole trip.we went to victoria, phillip island and mornington penisnsula for 3 weeks including a 2 week trip of south coast nsw too. In victoria we got howling SW winds for three weeks and the smallest it got was 3-4ft on one glassy day near quarantine sandbar. When we got out of the surf and tried to setup the bbq a bug crawled into my mates ear and he was in agony, i had no licence but had to drive him 30kms to the nearest doctors surgery that was open.the water was cold the wind was always howling and we didnt really score untill we got to disaster bay in NSW, we scored bendalong pumping, congo and a beach near bunga head absolutley pumping.Also found a few secret yet long barrelling secret spots that later on appeared in bodyboarding videos and became crowded.
Anyway that trip turned us both off victoria and made us appreciate NSW south coast a lot.
He should have gone to the phillipines though, i never got the chance to pay him back for all the things he shouted. Great surfer too, picked up surfing on that trip very quickly getting shacked on hollow 6ft beachbreaks within a month of buying a standup.

https://www.domain.com.au/news/investors-inspections-allowed-to-go-ahead...

"Back in around 1998 my mate inherited about $250 000 from an old lady who was missing her husband who passed away, so my mate gave her a young puppy."

I thought that was the start of quite a different story...

every lonely old chook needs a puppy

geek wrote:

Phillip Island’s Cape Woolamai has been dubbed Victoria’s version of the “next Byron Bay”.
https://www.realestate.com.au/news/cape-woolamai-victorias-surprise-next...

R.I.P.

Blowin wrote:

Direct result of Indo talking up the surf.

Ha ha...i saw that article the other week.

God what a crock of shit, it's nothing at all like Byron bay, at best it's closer to a poor mans Suffolk Park a windy cold one for most of the year..

It's like those articles "the next Bali" and then they pick some random island to do an article on, an island with average waves, pretty ordinary culture and everything cost as much as back in Australia.

Two years ago you would have picked this up for $350k. That old Ken Bruce advert keeps playing in my head but instead of furniture we're talking real estate.
https://www.realestate.com.au/property-house-tas-stieglitz-137038338

The future is bright

https://www.smh.com.au/lifestyle/fashion/the-new-breed-of-fashion-influe...

What a bunch of greasy, shallow, ridiculous spivs.

Blowin][quote=bonza wrote:

The future is bright

https://www.smh.com.au/lifestyle/fashion/the-new-breed-of-fashion-influe...

That’s got to mark the top doesn’t it?

More likely the nadir

bonza wrote:

The future is bright

https://www.smh.com.au/lifestyle/fashion/the-new-breed-of-fashion-influe...

Feeling badly dressed and quite frankly inadequate after reading that rubbish.

yeah garyg, that's a bit crazy, but I guess good for the sellers. Always loved St Helens and at one stage thought about getting a bargain down there, when it was possible. Doubt it is possible anywhere in Tassie now.

saw there was a new record set for a sale in Derby the other day. Now that is crazy, when I was living/working down that way in '97, that was a sure tumbleweed town that no-body wanted anything to do with, look at it now...

Green jam…. $1.3M for that two bedroom timber cottage known as crack house! …. large block size and zoning must have had a bit to do with it.
https://www.google.com.au/amp/s/amp.abc.net.au/article/100419092

Ditto to the above on that NE coast, a beauty. Worked up in Derby, I'd rather take the waves of an inconsistent coast no matter how cold :)