Stormz

So.... did a search and read through alot of threads about this.

Where do you think the market lies now?

I`m on $50k a year, which apparently can get us a $220k mortgage. Also have $15k saved which can go on top = $235.

We`ve been looking South of the River for at least a 3 x 1 (3 bed, 1 bathroom) for ourselves and our 2 baby girls. Am shocked at the places we have been able to afford. I work in West Perth and the parents are in Beckenham. We`ve been looking around the Maddington/Thornlie/Gosnells area (can`t afford anywhere else it seems... soon be priced out of that as well).

The Estate Agent said he`d buy around X`mas, as more people put their houses on the market at this time of year (end of school year etc). He also said he doesn`t think things will slow for at least the next 3 years (resources boom = 4 more jobs in Perth for every job created up North). He would say that though wouldn`t he?

Thing is, when we sold our Essex house in 2000 for nearly double what we paid for it, we thought the market would crash in the UK. Next thing you know we`d been renting for 5 years and no way could we afford to buy anything, even though I was on a good wage and my wife was working too. So I`m scared that if we don`t buy soonish then we`ll be unable to buy anywhere here as well (deja-vu). We`re living with in-laws here which isn`t the best sometimes.

Opinions?

lock collector

How do you get $220 K on a $50 K income ???

Paul

Stormz

Don`t ask me... ask the mortgage broker....

lock collector

Sounds like a dangerous level of borrowing to me, I had something similair here in SA and ran like hell, a few % on the interest rate and I would have been well and truly in the poo .........

Best of luck though, the way the housing market is you will need it ......

Paul

NKSK version 2

Why don't you find a nice street and just buy? At least then you're in the market - you can always move later.

If the market continues to boom for 3 years, it will go against just about all the economist predictions that I've read - but then again I would say that wouldn't I because I've chosen to stay out for another two years.

Why not go and rent? You'll get somewhere nicer for less and you could sign up for a one of two year lease giving you some security. You can then buy a small investment apartment somewhere decent and rent it out.

lock collector

Are you mad ? Unless you can afford to have your " investment " property sitting empty then you can't afford to play that game, not with property prices the way they are. The rent will not cover the mortgage, let alone the rates, maintence etc etc.

In my day to day work I see lots of " investment " property and with a few expections the owners are not making a cent on them.

Paul

Lewis Lapthorn

The Estate Agent said he`d buy around X`mas, as more people put their houses on the market at this time of year (end of school year etc). He also said he doesn`t think things will slow for at least the next 3 years (resources boom = 4 more jobs in Perth for every job created up North). He would say that though wouldn`t he?


Mate, Chernobyl estate agents are also optimistic about the local market. It's their livlihood.

More unbiased opinion of late is showing a slow down in Perth.

Simone

We've just bought in Thornlie for 240, and we're on about $70k together (going up soon though). Had to put down 20% though, because of Pascal being on a temp visa. So mortgage only 192. We've can make the repayments easy, as we live cheaply. But then.... car needs to be fixed(nearly $1000), new chlorinator in pool (700).... I might need to go to the dentist soon...... so I'm glad we're not paying a really high mortgage. And of course in a few years we'll have kids, so only one income...

If I were you, I'd try and find something for less than 200(if you can afford even that, I'd start calculating if I were you... use online calculators etc, like at www.hsbc.com.au )
I don't think you'll find anything for that price in Thornlie, but Gosnells you should, and maybe Beckenham.
You just need to be careful which street or even which neighbours. But you live in the area, so you can check it out often.
I think this area will still keep going up a bit for a while, it's so cheap, for being this close to the city.
And it's all starting to look better(slowly), things being redeveloped etc etc.

But don't hold me to that

good luck

boom_meringue

there is nothing on the market worth having for less than 200k, we have noticed that even since we arrived here in August that prices have hiked by about 5%. Friends of ours have recently bought land in Canning Vale and are building without spending a fortune so you can get the house you want of you are careful and look hard.

4 times your salary as a mortgage is not excessive borrowing, it is just the norm. If you can make the payments and still have enough money to live then take the plunge, you will not lose money with the way the market is going. At worst you may find price rises slow to 5% per year but with Iron ore price expected to go up by 15% next year and continued high gold prices (as well as the continued influx of poms) there will continue to be more demand for houses than supply.

There is enough building work planned at the moment to keep every builder in WA busy for two years, and that is if people stop buying land and planning new builds.

Stormz

I spoke to a different mortage broker yesterday, and he has said that as I earn 50k gross, and we get Family tax A & B which is worth nearly $400 a fortnight, and as we have no debts, then we could get a mortgage up to $300,000. But realistically he said we should stick to less than $250k. 6.7% interest rate, which on $250 would be about $1400 a month in mortgage... which is HALF my take-home pay per month.

Anyway, looked at a couple of houses today in the Maddington area.

One is a private one that we could get for $240k .... 4 bed/2 bath `colonial` style (metal roof, steel framed with the `cardboard` walls). Very nice with a large kitchen and lounge.... nice feel to the place.

Other is through the aforementioned agent. We looked at it the other day and it was up for $250k. 3x1 brick/tile. Very nice layout as well, with decent sized lounge and kitchen. HUGE future potential to expand the house (it has 2 carports so one could become another room) and a powered double garage out the back which could easily become a games room. It needs to be re-decorated though as it has holes in the plaster (young daughter I guess) and the `typical` (apparently) cracks where the celing joists meet the wall plaster. He met with them today and they asked him what the house should be sold for and he said it was over-valued and should sell for $230 given it`s condition. So if we offered $230 they`d probably accept. This is the house I think we should put an offer in for, whereas my wife liked both but prefers the feel of the colonial steel framed house.... which I think is nice also but you can`t build onto it and also would not gain as much in value.

Both houses are in the same area (near the Tonkin Highway).

Then you get my Father-in-Law, who says we should just wait as he thinks the houses will all come down drastically in a year or two. He also thinks we can get a really nice house for alot less than $230... but he`s still thinking of the prices a couple of years ago.

Anyway.... so many opinions. So little knowledge. I`m not even sure what we can really afford yet and still be able to eat/drive/pay bills/breathe.

Oh, and btw, I`ve learned that steel framed places last just as long as brick/tile, are cooler than brick/tile (roof reflects heat), and don`t rust.

Simone.... Beckenham is totally out for us, it`s bloody expensive now. The in-laws house is probably worth about $400k now, whereas 2 years ago it was $200k. The only places we could afford to buy in atm are Thornlie, Maddington and Gosnells. Glad you guys eventually found a house of your own though. Well done.

Amazulu

I'm looking to buy in Perth at the moment as well, a few thoughts:
The market is slowing but is still rising. Will this will keep on going, who knows. Because of the resources, WA is a micro economy, different from the rest of Australia where prices are flat or falling. The thing is, interest rates are set in Canberra. What might be good for the east coast is not good for the west.
House prices can fall in a rising economy, it's happening in parts of America right now. Their economy is doing well & their interest rates are low, but prices are way overvalued, so they are correcting.
Eventually the housing backlog is going to be built, when this happens, prices will fall as there will be an oversupply. On the other hand, prices can be stable in a falling economy, just look at the UK.
There is a lot of optimism in the Perth property market & rightly so, but prices have been rising strongly for years, affordibility is becoming difficult. Maybe there will be a correction. I wouldn't like to call it.
One other thing, when it comes to property, opinions are like arseholes etc. I've heard so many different opinions about certain areas from Perth people that I no longer bother to ask. I'll make my own decisions.

bal56

I was told that I could borrow up to a figure roughly four times what I'm earning - I'm not going to though as I couldn't repay it and my contract only last until mid-next year. I'm forming my own opinions on the market too - I'm tracking several properties, setting target prices depending on various factors - main road proximity, a/c or no a/c, let size etc., and refusing to make an offer unless I feel the price is right. My personal view is that we need to get into the market as in the short to medium term I can only see prices continuing to rise.

Stormz

One pov is that even if something happened with my job in a year, then we could still sell the house for more than we bought it for and live with the in-laws again.... unless of course there`s a crash and we ended up in negative equity. But if we didn`t buy now then we could end up having to live with the in-laws for years until a possible crash/correction.

Everyone seems to have the same opinion that although everywhere else has prices falling, W.A. has it`s resources boom which is bringing in more and more jobs and people into the state. One thing in favour of prices flattening or falling in W.A. though is that interstate investors aren`t buying up places as much as the market is over-saturated and too expensive compared to Tasmania (the next investment target) = more houses for home-buyers to choose from.

Who the hell knows what`s going on though.

The thing I`d like to know is... which of the 2 property`s I mentioned would YOU buy?

OriginalSunshine

hmmm - don't rely on that.

remember you have 100% of the original purchase cost of the house, plus up to 10% in survey fees, taxes etc when you buy, and then 5-6% costs when you sell.

so you need to make sure when you sell that your house price has risen by at least 16-20%!

Stormz

Well, bought a house. Got the mortgage approved. We should move in Feb 3rd.

Here it is:

http://www.reiwa.com.au/Lst/Lst-ResS...584&Id=2063148

Thanks for all your input. At the end of the day my wife heard that Maddington wasn`t the nicest of places, so that was out of the picture.

We saw a house in Thornlie in an excellent location near the river for $275. We offered $270 but no joy. Then offered $275 but someone else also offered at the same time and it was for a fair bit more apparently. It was a 3x1 with a pool. A small house, but my wife loved the location.

Personally I`m happier with the house we saw a day or so later.... 4x1 etc, and I don`t care about a pool (more hassle than they`re worth really to keep clean etc), but it has a spa ... lol.

Thornlie is a sought-after area which is going up by 10 - 15% per year atm, at least for the next 2 years they say.