king kong

i met a young electrician the other day , they had something like a 300000 mortgage and borrowed another 90000 for furniture and got the deposit off the olds . 90000 for furniture ,jesus

mindblower

Utter madness..

king kong

i know just to cover the outgoings he would have to earn 1000 a week pretax money just to cover bills . Thats ok if there is two, thats 500 gross each but then you have to eat ,then no doubt pay car loans . You need 1800-2000 a week every single week just to get by and put a little away and forget about having kids for 50 years .The people who have just bought my house have borrowed 425000 , they have five kids and he is never at home ,hes working in the mines . Great life eh .This house when i arrived here was 80,000 it is now 700,000.Great for me but i was earning 600 a week gross in 1991 , if i was on wages now doing the same job i would be earning between 1000-1200 a week . Bearing in mind 91 and 09 are both recessionary times for construction , the only real difference is about 10% on the interest rates .
I honestly dont know when this crazyness on property is going to end , but as ive said elsewhere the interest rates are so low and property so high there isnt much room for error .Ofcourse the avrage mortgages are lower than the new mortgages , but we need to have new buyers you cant have the same old lot on the ladder buying everything and negative gearing it and the rest of the youung people renting off the previous generation ,which is how i see it slowly playing out .

rinkerdink

Uk prices haven't exactly collapsed! 10 years of 10ish% growth year on year and with the worst financial crisis in living memory (or off all time??) they drop by a whopping 15% and are on the rise again in the SE, I'd rather be on rollercoaster than looking on wishing I'd bought a house 5 years ago - even my primitive brain can the the maths work out on this one

Devlin

What if you see in the distance that the roller-coaster will run out of track?

For a lot of more recent purchases 15% puts people firmly in negative equity. With unemployment still rising I wouldn't be touching property with a barge pole in the UK right now. Australian real estate is even more overpriced than the UK or the USA ever were so do the maths on that too...

Geelong Gent

[QUOTE=Devlin;8055502]What if you see in the distance that the roller-coaster will run out of track?
QUOTE]

Ah but it doubles every 7 years

First investment lesson "Don't base your investment on current tax legislation"
Physics "What goes up comes down"
When agents claim they can't gauge how much property will sell for - does this not concern people??? Would you like your fund manager or broker to make the same claims?

ABCDiamond

Gobsmacked was my reaction to that. I noticed I was sitting looking at the post with my mouth wide open for a few seconds !!

rinkerdink

I bought my first property (mortgage not really mine) in 2001 retunring from oz with a fiance and a bun in the oven, paid 78k against all advice coz the market was unsustainable and was gonna crash, 20 months later sold up to move out of London having scored 60K in equity, NOBODY knows, it's all hype bu**shit and guess work. only thing for certain is... people need a roof over their heads if the roof are rare the price goes up. Anybody that bought in the last 2 years are ok unless they are made redundant and have to sell, sit it out, the housing shortage in the SE in UK is critical unluss hundreds of thousands of houses are built each year for the next decade, last year practically none went up, we have an almost irretrievable backlog already can't wait to reap it.

Anybody dithering.... jump on if I were you and hang on for the ride

Catch

cracked it in one there KK,this is one of the very best example's of affordibility in perth .This mush i know just bought his first house,overstreched to the max,but he said he will be right because in the paper they said "another boom is coming" and he doesnt even work in mining.

Catch

looks like the opinion on house prices in Australia is changing on here.No doubt a few landlords will be along soon and say "what good value" they are,and they will post a nice house picture on here,not saying what a shitty suburb it is.Some pom back home will see the picture and think that is so much bigger than my semi when can we go.They arrive and think f###me its rough round here,better move to the local pom estate,see a friendly mortguage advisor,take on more debt than Pakistan.Then they will post pics of there new house on here,and convince themselves its ok to borrow 6 times there wage,because the friendly mortguage advisor said "another boom" is on the way,and the land shortage will only get worse in Australia.

ABCDiamond

Probably because prices have unexpectedly been going up again...

renth

ALL booms end in bust, always have done, always will. This boom is no exception.

Unless what has been happening to house prices isn't a boom.

ABCDiamond

And all busts are eventually followed by a Boom, of one size or another.

swigski

Better off just sticking to averages then!!

Have you got a chart for that?

king kong

i neally fell over too .