spikeyjo

Hi,

My wife and I are currently waiting for our visa's and still deliberating if we can afford the life we want in Oz.

In a nutshell, we would like to buy a $450k house in Kenmore/Bellbowrie area of Brisbane and would put down about $25k as a deposit.

We think we can both get jobs at about $50k per year each.

My question is, on these salaries can we afford a $425k mortgage, plus bills, cars, living costs etc etc.

I read the average mortgage in Oz is $300k and am now starting to worry if the lifestyle we want is actually affordable?

Please do not e-mail any sarcastics 'depends on your lifestyle', 'depends on what type of car you want' etc etc.

I have come on for some genuine help.

We are an ordinary family, with ordinary tastes and just want to know if the above is acheivable before we take the plunge.

I appreciate all the lifestyle options Oz offers, the free stuff beach etc, but want to know from a financial angle what we should be expecting. We have 2 young kids and want to offer them the best opportunities poss.

Heres hoping, many thanks

iamthecreaturefromuranus

That won't be easy. I earn a bit more than you hope to get combined and my mortgage is half of what you plan to take on and we don't find it easy to get by. That's with two teenage sons who probably cost about three times as much to keep as two little ones.

One big problem I can see... which bank are you planning to get a mortgage off that will be prepared to offer you almost nine times your 'prime income'?. Mortgage eligibility is calculated differently here than the UK, much more on an ability to pay, than the straight salary multiplyer used in the UK, but a $425k mortgage... that's going to be a huge portion of your 'planned' earnings and I doubt you will be able to find a lender.

If you take a step back from "The Dream" for a few moments and think about this with a bit more of a cold heart, then the reality is that even if you can get a bank to lend you over four times your joint income, your will first of all have to get those jobs and that's not easy at the moment, and even if you manage that, would you truly want a mortgage of that size hanging round your necks?

brendarover

Spikey,

My advice;

Firstly i am not a home owner, secondly i have never been a home owner, thirdly, i never intend to be a home owner, and finally until you actually pay off your mortgage, you are never a home owner, you rent from the bank.

Admittedly you make headway by paying off the loan, so eventually own, but i am a strange cat, love flexibility, so have no interest in owning a house.

But i do comment alot on house prices, only because i love to wind up the locals on here, the majority are home renters from the bank, with one or more negative geared investment sheds, but thats another story.

Look mate, forget buying, rent, and keep renting until house prices resume to long term trend, which they will when you can borrow 2.5 times your joint income to buy an AVERAGE house, then that is the time to buy, NOT NOW!

It will return, its just the majority do not understand the laws of science, sorry economics. Sanity will return to the market, why take the hit of a big mortgage, in a falling market when you can rent at half the cost of a mortgage, (rising cost, interest rates), let the landlord take the hit for a falling asset value, all the maintenance costs, water rates, all the sh!t?


Just rent, if all these wonderfull amateur landlords are willing to take the hit, let them, pay the rent, enjoy flexibility, enjoy life, let them spend all their time on here like ABC Diamond trying to convice the sheep that house prices are reasonable and will not fall!


Night.

Brisben

It depends on other factors on how you live, but a 400K mortgage is going to cost around $3,000 per month, renting would be $1800 ish..

It can be done and to be honest everyone worries about if they can afford it, but hey we all try to live within our budget and sure you will do the same.

The sallary you advise is not set in stone nore is the house price, so things can change.

All said, don't worry about it too much, you will find a way if you really want to.

I have a huge mortgage and 2 kids and we earn about 100k combined per year and we do just great..

Renting is a great option and gives you so much freedom..

iamthecreaturefromuranus

...and there in a nutshell you have why websites like this can be useful.

I think you would struggle, a lot, but Brisben says he pretty much is doing what you want to do and is 'doing just fine'. Let me guess who's point of view you will be listening too.

brendarover

Heavens,

Nice advice Ben. Sanity!

If Mr Rover was not such a hunk, well you are very much a looker, you tease with that lovely avatar of yours!

Seriously, things do change, just because you rent does not mean you are a second class citizen, we still hold our heads up high!


Ms Rover

spartacus

That's repayments of about $3k a month on a joint income of $6-6.5k, so it'll be tough. As others have mentioned, have a look at what you can buy for $450k against what you can rent for $700 per week . . . BIG difference.

Have a think about whether you're after the 'life' you want, or the house you want . . . they aren't necessarily the same thing.

asprilla

short answer is, unfortunately, no. If I were in your shoes I wouldn't be borrowing any more than 3 x your combined income, 3.5 x at the very limit.

If I were you I would be looking to rent, and then save a deposit of $100k to $150k first. After all, if you think that you can pay back a $425k mortgage on $100k joint income, and support 2 kids...you'll have no problem whatsoever renting and then saving a deposit in the space of only 2 or 3 yrs.

quoll

I, too, think you will be struggling on that income with that big a mortgage. Also bear in mind that interest rates are very low at the moment and the expectation is that rates are going to rise fairly soon so if you enter the market now thinking you can just scrape by then you would find yourself seriously stretched when the rates go up even if you could find a lender right now who would give you the dosh.

asprilla

Of course it doesn't mean you are 2nd class citizens ! hardly anyone thinks that... and those people that do, well, they are numpties.

But on the other hand....you shouldn't be listening to the stuff that your OH is coming out with. Whether or not house prices go up or down, buying a place is a good idea. Otherwise in 25 yrs time you'll still be renting and wondering why you listened to your OH, when all your friends are living in their paid off houses.

Of course - if you are planning for your future in another way (investing in shares, running a business, etc etc) then you can ignore my comment above.

But if you are like most and are simply working for the man....then consider what your position might be in 30yrs and you might start thinking twice about the idea of never needing to own a house.

Dreamy

I agree with Asprilla.

Rent first, build up your deposit, decide if that area is right for you before committing to a house sale and then look to buy when you have a better idea of your disposable income

seansuperhoop

I'm sorry I don't think the numbers for you stack up. Mortgage rates here are historically higher than in the UK. Don't be surprised if in two years they are 8 percent (or more). That's nearly $3000 a month- interest only! on the size of mortgage you were talking about.

On the plus side you can rent, suss out an area and save a bigger deposit- I don't think over the next two or three years house prices are going to rocket in Brisbane especially if interest rates do rise as some are predicting.

Best of luck

Sandra

Was on a single income of less than 100K when we started seven years ago. We rented for just over a year to ensure we liked the area and understood all our incomes and outgoing costs in depth. We then took on a mortgage of just over $400K with a sizable deposit and a decent increase of income. We found the going tough, paying at the top end of the rates but we did not have very little ones and did not need child care only used after school club for one.

I can honestly say from the experience it was hard going for us and did not endear me one little bit to living in a new country. We did not go out very much, managed on one old car and a motorbike and had very few new luxuries for the first three years.

It can be very very tough starting out a fresh, to stack other odds against your chances before you find your feet a bit seems a rash move. Rent for a while and learn the ropes - the "lifestyle" can be there but needs some thought and planning in the country so you see the best options for your choices.

Good luck

Broad Shoulders

I'd be surprised if you could buy a house in Kenmore for $450k. It's considered to be one of the nicer suburbs of Brisbane. You might get a townhouse or a unit, but I doubt very much a house.

It sounds like you are doing everything in an illogical order. I would first set about securing the jobs, then rent somewhere that is close to jobs or close to your ideal end location (Kenmore in your case) then once you have some runs under your belt and you have had a chance to perform proper recon on where you can afford look to buy.

I came over 7 years ago when the employment market was very ripe. I found it very difficult to get work then. I can only imagine that it is 10 times more difficult now for new-comers so I wouldn't underestimate this part of the planning. I would be budgeting for at least 6-9 months without jobs for safety's sake

jad n rich

Yes thats what I thought, I guess the ones in that bracket are renovators etc

Know people that paid 800k there and its nothing special. Area is a long way from a beach too, and western suburbs seem awful hot in summer.

With teens and a mortage I wouldnt want to be under 100k however at the moment if you arrived and found 2x50K jobs youd be lucky as hell any way

However I wouldnt say it cant be done, I guess if you had too, maybe lock in the mortage at a fixed rate...