iamthecreaturefromuranus

You own a house at then end of one and nothing at then end of the other?

paulry

These days buying a house in Australia may be a wise decision for those who already have most of the capital or are expecting house prices to continue to significantly rise. Otherwise it's cheaper, easier and less risky to rent.

Beoz

Strange question ...... but is owning a house economic utopia?

iamthecreaturefromuranus

I'm not going to go down the route, that's been played out so many times on here, about just how smart an idea it is to rent.

Two statements. I followed the first. Feel free to pull them apart.

I need somewhere to live, so I bought a home with a mortgage. At the end of the payment period the house will be mine. I will own that asset.

You need somewhere to live, so you rent. At the end of 25 years you have **** all. Somebody else owns the asset.

iamthecreaturefromuranus

Why easier? I personally know a couple of families, who have been given their marching orders by the landlords, as they want to sell up. I wouldn't fancy that hanging over my head all the time.

Amazulu

I agree. Each to their own, but it's owning for me.

Renting is all well and good when you are younger, but when you come to retire and have nothing to show for it, you will be at the mercy of the state or private landlords.

paulry

Easier to move from one city/state to another or to upsize, downsize, hit-the-road without having to first go through the buying and selling palaver with estate agents fees, legal fees and the taxmans cut. Maintenance is mostly the landlord's worries and expense, as is water, rates, and insurance. Admittedly there is a lack of guaranteed continued residence but if you are a good tenant a landlord will think twice before letting you go and if he does then you'll get a good reference and should be able to easily secure another. No way is perfect but here and now renting looks best

paulry

+1 (each to their own)

Turban Explorer

House owning as investment is more confusing for me here - the negative gearing, first time buyer grants create artificial pressure too. Regional towns either seem to be in boom or bust phases so there's luck involved too. We've lived in places and paid $350 a week (Magnetic Island) yet they wanted $500k to sell. That's a very low yield and it seemed the same in many other Qld areas too. Yield should be at least higher than a term deposit. My other property gives me 7% and if you can't see over that then buying doesn't make sense. The economy here is slowing so buying anything might leave you in negative equity pretty quickly. Cash is king right now.

iamthecreaturefromuranus

I've never bought a home as an investment, only as somewhere to live.

RedT

We've only been here just over three months but so far we've found practically everything to be more expensive in Sydney than in London. If it weren't for the fact that we're both earning more we'd be screwed!

The one main thing that IS cheaper is travel. My 1-5 travelcard in London was £159 per month (or thereabouts) whereas I pay $155 in Sydney, around £97 so that's a good saving. Rent is extortionate, food is generally very dear, we haven't paid any bills yet but I'm not holding my breath for any great savings. Even my skincare which is Australian costs more here than in London! You would think not having the cost of export etc on top would make it cheaper but no. Drugstore cosmetics are stupidly expensive also, luckily I stocked up a fair bit and sent a box full of stuff with our shipping but it'll run out eventually!!

paulry

Seems to me that housing choices as talked about above are just another of those new migrant versus old migrant contrasts brought about by the changed economic landscape. Interesting question is will the pendulum ever swing back to the favourable conditions of yesteryear? Where's that crystal ball?

calliope

I would buy if I could afford to because I don't want to be at the mercy of a landlord when I'm older, but I can't afford it so I have to rent. Like someone on here said, if you buy eventually you will own the asset, but if you buy at the wrong time and go into negative equity for years and years, that plus all the interest to the bank might have made it better to save up and buy outright when much older. With rampant house price inflation this is impossible because no one can save faster than the inflation.

Turban Explorer

Can the Gene Hunt picture get put back on? I used to feel horny every time you posted due to that avatar.

Beoz

Had a chat with a 70 year old neighbour on the weekend who has paid off his mortage on his property which is now worth 1.3 million. Unfortunately for him his Super was gobbled up by the financial crisis and he only has about 4 years of it left. So here's a guy who has lived in the same house for 40 years, paid it off 15 years ago, has 1.3 million at his disposal should he want to cash it in, and may need to do so just to put food on the table.

I too would like to buy, not that I can't afford it, I just don't think its the right thing to do right now.

On top of that, every time I go for a loan calculator I'm presented with this image.