Fly Away

So now you're saying that yes things are cheaper to buy now. Don't you see what I was saying about things being relative to the conditions of the time?

There were many people MUCH worse off than us, we were middle class graduates. After I got my masters I worked in public housing with truly desperate people and I know first hand, that we were very fortunate. Many of those people I worked with have never been able to buy a house. In fact, I worked with many families who lost their homes and all their life savings due to those 17% interest rates. I would imagine many of them faced very difficult lives after that and possibly never recovered.

coolshadows

Most houses in Australia have toilets (I thought most housing in the UK did too ) so it's hard to compare.

Sounds like your old house was like this one...

£37,500 3 bedroom terraced house for sale

Question is could you find a 3 bedroom unit in Australia for say $80,000 for comparison??

pomtastic

Yes, i know £16K salary, £40K mortgage. Sterling

I'm not doing exchange rates. The fact that you had to pay 2.5 times your annual salary for a mortgage is relevent. If you were paid in french francs, us dollars or whatever, it doesn't matter, it's ONLY 2.5 TIMES YOUR ANNUAL SALARY. It is affordable to pay back the loan. People are getting 5+ times their salary these days to buy the most basic dwelling. Do you not understand or summat?

2.5 times an average salary in Aus gives you a borrowing capacity of $162K. Even ABCDiamond would struggle to find anything liveable within a couple hours of commute to a city for that price.

Fly Away

Yes that sort of house. Although ours cost £52000.00 in 1990 - about $104000.00. They sell for about £180000.00 now - so about $350000.00 There are plenty of small houses for sale for that much. Imagine having to pay 17% on your mortgage on a $350K house....

We were unlucky in that we lived in an expensive city but it was about half the price as London and we lived in a very cheap area...

coolshadows

Well that house I listed is local to where I lived in the UK and many good houses there are currently going for less than $100k.

Are you sure those houses are still selling for £180k? That kind of money would by a nice detached house on a good lot where I came from.

Are we saying that say Brisbane or Melbourne is more like London than Manchester, Liverpool or Glasgow?

(and are people in Australia generally earning the equivalent of London wages? )

pomtastic

You are a graduate?

The sad fact today is that many educated graduates can't even afford any kind of housing in Australia, so even an education doesn't give you the key or right to a basic home these days. We've gone backwards.

In fact, I'm going to tell my kids to forget about education and just buy the biggest house they can as soon as possible and with prices rising 10%+ every year they won't even have to work in a few years time, they'll be able to redraw on the ever increasing equity and live a life of luxury without even sitting an exam. See, it's so easy isn't it and house prices are going to keep on going up and up until the next wave of first home buyers are going to have to stump up 20 times their annual salary and pay 99.9% of their income on mortages.

pomtastic

Do you know what even scarier, I reckon if rates go up to just 10% here, people are going to lose their homes because we have higher debt levels now. A 10% rate scenario here is so much more likely than 17% dontcha think?

pomtastic

Jeez, how is anyone from Wigan going to afford to come to Australia these days if they are relying on equity from house there.

Fly Away

I'm sorry we seem to be winding each other. I do understand that it's hard to get a mortgage on a reasonable salary multiple as property is expensive. I am trying to say that even in the days when it was possible to get a house for 2.5 x salary (and it was usually 3 x salary even in those days) it wasn't an easy ride and the conditions of the time were hard in a different way. Youngsters have ALWAYS had it tough but recently there have been groups deliberately trying to sabotage the housing market and misleading people into thinking that it was a land of milk and honey when houses were cheaper.

I just dread to think what would happen to people who buy a house at 5 times salary and then the rates go up to a level they can't repay.

As I stated in one of my previous posts, I worked with some of the people who suffered in the housing crash of the 90s. That's what colours my view. I hate these these groups who try to create these conditions again. Putting homeless families who have lost their homes and every penny they have saved into hostels or emergency accommodation is is something which will stay with me forever.

Personally for housing prices to come down in Australia would suit us well as we are currently in rented. However I wouldn't wish a housing crash on my worst enemy.

coolshadows

Some pod on the radio this morning said that after the rate rise to 4%, 40% of FHBs in the previous 18 months were in financial difficulty and were strugglying to make payments.

coolshadows

Us pie eaters have thick skins (and empty pockets)

Fly Away

I agree. What we don't want however is for prices to come down dramatically as many people will then be in negative equity and unable to sell. The very best that could happen (IMO) is for the market to stabilise and for salaries to slowly catch up with property prices. However I am sure that this pleasant scenario won't happen

Fly Away

We lived in Wigan in the 1980s and you know those terraces were going for £3k to £5k! that's astonishing isn't it?

pomtastic

Back in the 'old days' if you ran out of money towards the end of the week then that was that, you were going without food. If you didn't have the cash to pay for your bill down the post office then you'd get cut off. This doesn't happen today as credit cards enable us to prevent and delay that kind of hardship. I'm guilty of paying for petrol at the end of the month with a credit card as all earnings have been blown before next pay day.

coolshadows

so you're to blame!