xzibit

Well thanks for all the replies people.

Obviously, from what I can see, when I come round to taking out a mortgage, I need to work out the maximum I can afford to pay back a month (or week) and then get a mortgage for slightly less than this, so I can overpay slightly. If the rates and therefore the repayments rise, I then can still afford them, but not be able to overpay as much.

Forgive me for being niave on the subject, I haven't ever looked into it really. Although, it does now worry me that some friends of mine have taken out a 100% mortgage at 5x their salaries back here in the UK! Scary.

Thanks guys, I won't be buying for at least 2 years after arriving anyway, so just need to make sure I rent a cheapish place and save, save, save!

cufc

I wouldnt worry Australia has over inflated house prices and is heading for a crash its inevitable... its starting to happen in NSW and Perth...slower growth states like SA will crash also...inflation is out of control and i predict interest rates going into double figures and with a global slowdown te 400,000 properties will be selling for a lot less.
I will post gain when this rings true.

Nursebank

Ummmmmm? Adelaide will feel the pain last as it felt the joy last? There is no hiding place i am afraid, if the average wage is "X", then the average house price will be around 3 to 3.5 times by "X" i am afriad? It may rise to 10 to 1 in a peak, and reduce to 2 to 1 in a trough, but as plain as the nose on my face it will resume normal practice and fall inline with around 3.5 to 1. Where 1 is the yearly wage, and 3.5 is the muiltiple? So unless wages are rising rapidy in good old Adelaide, especially in the first time buyer belt, well you can get ready for either severe stagnation of house prices, or some pretty significant falls over the next five years?

I love the way people feel so bloody smug about " i bought in the right area" or " they will just keep rising here, because i am here" What you earn, is what you can afford, NOT WHAT YOU CAN BORROW, it is what you can afford to pay back?

There are far too many property bulls on this site, all expats; all with cash equity from UK house sales, what about the poor old Oz'ys, you arrive, you push up house prices with your cashed up status, you borrow, up to 10 times the average local income, then you moan house prices are to high in Oz?
A bloody joke? Look forward to the great crash of 2008 to 2015! Houses affordable for all, not the idiot elite, who ramp up, and sprout nonsense!

Just click on my signature, have a good laugh at Nu Labor Britain, we are a big joke! It looks like our Ozy cousins are following us in our pursuit of being the jokes of the world economic community?

Nice post!

asprilla

change the record, Nursebank!

cheers
Mark

Amazulu

Inflation is not out of control. It's rising and is worrying but it is not out of control.

Zimbabwe - inflation is out of control there.

Nursebank

Why! I ask why, housing bulls to a red rag hey mate? It takes all sorts, bring on the crash, the USA have a big crash, the UK are in the sh!t big time, but the back water of Oz is different, right oky doky? Your having a laugh, you really are markywarky? G'daymatey!!!

There are not enough housing bears on here, too many bulls, too many VI's, all p!ssing in the same pot, "i want my shed to go up and up", "how dare you suggest house prices may fall" too many bully's on here, speak out i say, speak out, bring on the crash, a fair housing cost for a fair days or yearly wage!

Negative yields, taking the p!ss, negative when you part time investors, you i want to get rich quick brigade realise you have a debt twice the size of the value of the asset you have raised your debt against, lovely jubbly!!!

asprilla

Nursebank, you haven't got a clue have you?

I believe that there will be a significant slow down in Aus house prices...this will take the form of a price drop, or a prolonged period of stagnancy.

For every 10 housing bulls, there only needs to be 1 nursebank!

What's your favourite movie? let me guess - "Clueless" starring Alicia Silverstone?

ps - all in good jest nursebank... I've got no ill intentions against you. cheers !

Nursebank

Luvs you too baby! Happy Valentines day!!!!

Wendy

Who rattled your cage?

There's no need to be all 'holier than thou' I am entitled to my opinion just as much as you are you know!

Here's some interesting reading for you:

In the past three months, the biggest house price increase has been in Adelaide, where a 6 per cent jump in prices has raised the annual total to 20.2 per cent.

Mr Lindeman said investors were diverting their attention from Perth, which has become too expensive, to Adelaide, still the cheapest mainland capital city.

http://www.news.com.au/business/mone...013951,00.html

And yes, I have seen the evidence of this as house prices in Adelaide continue to rise by the minute and hoards of people turn up to opens in the hope they can get a bargain. Adelaide is NOT slowing down anytime soon.

dpande

Oh dear.....have a look at
http://www.pricedout.org.uk/

Rising property prices are NOT good news.

e.g.- you want to move UP the property ladder- the gap between your current property and next one is so big you can't afford to move. This is the situation we are in currently.
About 10 years ago our house in the UK (small 3 bed semi) was worth around 60K, and the next one up the ladder (say..an extra bedroom and a garage) was about 90K. Therefore, an 8K increase in salary plus 3-4K in savings would allow you to take on an extra 30K mortgage to buy this house, quite a realistic and achievable prospect.
Now...Our house is about 200K but the next one up is 325K- is it likely that I will have a 40K increase in salary to ever be able to afford to move- is it ****!
So please, if your house has risen in value, DON'T celebrate it, because it is likely you are stuck in it for a lot longer than you wanted to be, and probably forever.....in which case its value is totally irrelevant anyway.

MartinH

I wish people would put rational logical thoughts on here rather than a stream of ill considered rants.

I think at the end of the day (as has been said before) it is very difficult to predict what is going to happen in the housing market and nobody can say either that prices are about to crash or that they will continue to rise. If anyone can make an accurate prediction then they are clearly very wealthy.

If is easy to argue about economic fundamentals around affordability and clearly there are some very real issues for those wishing to get their first foot on the ladder. Nevertheless, the difference with the Australian market (compared to the UK or other markets) is that Australia has significant net population growth which, combined with little available land (or rather little available in areas which make sense – meaning easily commutable) means that there is upward pressure on house prices.

Perversely, increasing interest rates means that less people can afford to buy which increases pressure on the rental sector (vacancy rates are very low) which pushes rents up which in turn encourages more people to invest in buy-to-let. Increasing rents means that the economic difference between renting and buying reduce and more people think about buying and so the cycle repeats.

This is not the case in either the European or American property markets.

The more important ideological argument is that the whole focus of the governments attack on inflation is via interest rates. However, a large percentage of the population who either have a low or no mortgage, the effect is minimal. As those who have the largest mortgage pressure are generally the lower paid it could be argued that interest rates have a greater impact on the poor than the rich! With the governments intention to pass money back through tax cuts most of that benefit will filter through the rich and into the economy, thereby stoking inflation (the poor will use the tax cuts to pay the increased interest costs!). I am not a socialist (far from it) but that’s how I see the current scenario.

It seems that in order to keep everyone happy the government would be much better off adopting a much more balanced fiscal package which took money from where it is clearly impacting inflation (i.e. the rich) rather than interest rates (which impact the poor).

Vote for me.

Vim Fuego

This is like being at a particularly dull cocktail party in Islington with Dido on the stereo.

bcworld

...sounds like the UK to me. Albeit the % population growth is probably less the land available is much less.

And as I was trying to say to the lovely Trixy the other day the interest rate tool is not simply aimed at mortgagees and consumers. Business borrows money & services debt too....rises in interest rates are also intended to slow business investment to manageable levels and take some heat out of the wider economy.

bcworld

jellibaby

and nursebank banging on the ceiling from the flat below shouting "stop enjoying yerself"