Wendy

Which is why I am spending all my cash, and not saving it! They've had enough already...

pomtastic

I'll guess that Bermudashorts house she rents is worth about $1.5 mill + if they were to buy it - so she is getting a bargain by renting and not buying.

paddyo

"cheap, white, fruity".......sounds like a former g/f of mine!!!

calliope

That's cheered me up no end.

Bermudashorts

Something like that, 750k would get a 2 bed unit in Collaroy. We are enjoying living in a house we could not afford to buy.

BadgeIsBack

It's not a bad rule of thumb but ultimately it's sort of meaningless. The higher the salary the higher the purchasing power. I think individuals need to do the absolutes on their own time if they want to avoid disappointment especially in cases when wages really are low - for them - in Australia.

I think it was Fish who probably summarized it best...

Beoz

Agree. My rented house is worth a bit over 1 million. There's a morgtage of about $1700 per week. In the meantime I pay $750 per week in rent, living 5 minutes walk from Bondi and a 20 minute commute to my desk. Whilst the $750 is dead, like half the $1700 would be paying interest, the other $950 isn't, and there's a lot that can be done with that.

Still, as someone previously mentioned. It's nice to be able to paint the walls pink and 10 very large dogs and if Mrs Beoz had her way we'd be $950 a week lighter doing just that. As I keep reminding her, there's no way in the world we'd be saving that amount in the UK right at the point in time on current FX rates.

Amazulu

Well said. There is too much bollocks written on BE about this subject.

iamthecreaturefromuranus

Each to their own. I'm sure the owner of the property is happy you're helping them buy it as well.

BadgeIsBack

I actually agree that the cash rate is useful -especially if people are buying overseas.

But I'm a big fan of the affordability approach you have also made.

paulry

And that's assuming that your assets havent been sold by the state to pay for your nursing home care.

paulry

But it really doesnt add up. Well it only adds up if the landlord bought the place when properties were a lot cheaper or paid a large deposit otherwise the rent will barely cover his costs.

Beoz

My landload bought the property 2 years ago. If he didn't has a sizeable deposit then he's having to dip into his pocket to make up the massive shortfall. Believe me, if the gap between mortage and rent wasn't so great I'd buy but Australia loves a bit of negative gearing. It makes no sense to buy property as an investment where I live in Sydney. Gold Coast may be a different story.

Bermudashorts

Its a mutually agreeable arrangement. The landlord has something I need and am willing to pay for. What landlord does with the money doesnt worry me.

calliope

I'm sure here is one of only two or three countries that allow losses created by negative gearing to be deducted for tax purposes, which only encourages it. My feeling is that people that have indulged in negative gearing in Australia will be in a lot of trouble if or when the market turns. I think something like 75% of landlords are negatively geared. No wonder rates are being cut!