Property
Jan 7th 2010, 10:29 pm
#46
Victorian Evangelist
Joined: Sep 2005
Location: Melbourne, by the beach, living the dream.
Posts: 7,704
Re: Property
It is very easy for landlords to take advantage of tenants here as legally the tenants cannot stop paying rent or even reduce the rent as this means legal eviction, no matter even whether the property is uninhabitable.
Buzzy
Jan 8th 2010, 8:41 am
#48
Forum Regular
Joined: May 2009
Posts: 60
Re: Property
Just throwing this out there but house prices are much,much cheaper outside of the state capitals. Obviously not everyone has the option workwise or desire to live in a country or coastal town. Just as a guide, I live in Singleton in the Hunter Valley (understandably not everyones cup of tea) but we bought last year - 4 bed detached, big garden and pool for $308,000 - so it is still possible to get a reasonably priced house, you just mght have to compromise on location.
Jan 8th 2010, 8:49 am
#49
Guest
Posts: n/a
Re: Property
Just throwing this out there but house prices are much,much cheaper outside of the state capitals. Obviously not everyone has the option workwise or desire to live in a country or coastal town. Just as a guide, I live in Singleton in the Hunter Valley (understandably not everyones cup of tea) but we bought last year - 4 bed detached, big garden and pool for $308,000 - so it is still possible to get a reasonably priced house, you just mght have to compromise on location.
The migrants from poorer countries, are prepared to live further out, and avoid the high prices caused by this demand for Location, location, location.
You can still get 5 bed houses in decent parts of Outer Sydney for under $400k.
Jan 8th 2010, 9:07 am
#50
BE Forum Addict
Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: Property
I still don't get it when people say that renting is money down the drain
We've been renting for years now and will probably continue to rent in Melbourne as well until we feel the time is right to buy and are comfortable with that decision.
Jan 8th 2010, 9:10 am
#51
BE Forum Addict
Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: Property
I dont know what all the fuss is about when people come to renting property. Renting over here is quite common and if you get the right property very affordable. The rent is often cheaper than the mortgage would be to buy the property, no rates to pay, no water bills to pay, no maintenance to pay, no agents fees to pay when you want to move which cost a bomb here, no taxes to pay on the new property.
To worry about lining someone elses pockets is often just putting pressure on yourself to rush into buying.
I have the money to buy a place but chose to invest and have the freedom to live a couple of different lifestyles before opting to buy and stay long term. Its an expensive mistake if you buy the wrong place and want to move.
In answer to the original question yes people are taking on big mortgages here, the government propped up the economy with loads of stimulus packages which are all coming to an end so I think it will be a bumpy ride this year. They would have been better off letting the housing market correct itself which is what was needed.
All said and done its a great lifestyle here and everything is still achievable if you are prepared to work hard.
To worry about lining someone elses pockets is often just putting pressure on yourself to rush into buying.
I have the money to buy a place but chose to invest and have the freedom to live a couple of different lifestyles before opting to buy and stay long term. Its an expensive mistake if you buy the wrong place and want to move.
In answer to the original question yes people are taking on big mortgages here, the government propped up the economy with loads of stimulus packages which are all coming to an end so I think it will be a bumpy ride this year. They would have been better off letting the housing market correct itself which is what was needed.
All said and done its a great lifestyle here and everything is still achievable if you are prepared to work hard.
.... well said
Jan 8th 2010, 9:37 am
#52
Guest
Posts: n/a
Re: Property
A renter over 35 years will pay out twice as much as a home buyer, for the same property.
And at the end of that 35 years the renter will have nothing, but the home buyer will own their own home.
Figures based on these assumptions, after 35 years:
assume House value $350,000 in year 1
assume 5% growth in rent and property value
assume 7% average Interest rate
assume 100% mortgage over 25 years
assume 5% growth in rent and property value
assume 7% average Interest rate
assume 100% mortgage over 25 years
The home owner will pay out $741,507 in Interest and capital
After 50 years, the figures become:
The renter will have paid out $3,265,829
The home owner will have paid out $741,507, having paid off the mortgage after 25 years.
Short term renting is a different matter.
Jan 8th 2010, 9:46 am
#53
Forum Regular
Joined: May 2009
Posts: 60
Re: Property
I think that is true within the cities but I don't think it extends to country or coastal towns -they certainly don't have an influx of 'migrants from poorer countries'
Last edited by moneypenny20; Jan 8th 2010 at 9:51 am. Reason: sorted out the quote.
Jan 8th 2010, 10:25 am
#54
Forum Regular
Thread Starter
Joined: Mar 2005
Location: Sunderland.
Posts: 256
Re: Property
Renting long term, especially permanently, is where the term 'money down the drain' comes from.
A renter over 35 years will pay out twice as much as a home buyer, for the same property.
And at the end of that 35 years the renter will have nothing, but the home buyer will own their own home.
Figures based on these assumptions, after 35 years:
The renter will pay out $1,408,997 in rent
The home owner will pay out $741,507 in Interest and capital
After 50 years, the figures become:
The renter will have paid out $3,265,829
The home owner will have paid out $741,507, having paid off the mortgage after 25 years.
Short term renting is a different matter.
A renter over 35 years will pay out twice as much as a home buyer, for the same property.
And at the end of that 35 years the renter will have nothing, but the home buyer will own their own home.
Figures based on these assumptions, after 35 years:
The renter will pay out $1,408,997 in rent
The home owner will pay out $741,507 in Interest and capital
After 50 years, the figures become:
The renter will have paid out $3,265,829
The home owner will have paid out $741,507, having paid off the mortgage after 25 years.
Short term renting is a different matter.
Well said.
Jan 8th 2010, 11:59 am
#55
BE Enthusiast
Joined: May 2008
Location: Perth
Posts: 838
Re: Property
You are correct. But most people, especially migrants with money, want better properties closer to the beaches and to the Cities.
The migrants from poorer countries, are prepared to live further out, and avoid the high prices caused by this demand for Location, location, location.
You can still get 5 bed houses in decent parts of Outer Sydney for under $400k.
The migrants from poorer countries, are prepared to live further out, and avoid the high prices caused by this demand for Location, location, location.
You can still get 5 bed houses in decent parts of Outer Sydney for under $400k.
Echuca ,200kms from Melbourne has whole suburbs over 700K also
Jan 8th 2010, 12:00 pm
#56
BE Forum Addict
Joined: Apr 2005
Location: Melbourne
Posts: 4,553
Re: Property
Renting long term, especially permanently, is where the term 'money down the drain' comes from.
A renter over 35 years will pay out twice as much as a home buyer, for the same property.
And at the end of that 35 years the renter will have nothing, but the home buyer will own their own home.
Figures based on these assumptions, after 35 years:
The renter will pay out $1,408,997 in rent
The home owner will pay out $741,507 in Interest and capital
After 50 years, the figures become:
The renter will have paid out $3,265,829
The home owner will have paid out $741,507, having paid off the mortgage after 25 years.
Short term renting is a different matter.
A renter over 35 years will pay out twice as much as a home buyer, for the same property.
And at the end of that 35 years the renter will have nothing, but the home buyer will own their own home.
Figures based on these assumptions, after 35 years:
The renter will pay out $1,408,997 in rent
The home owner will pay out $741,507 in Interest and capital
After 50 years, the figures become:
The renter will have paid out $3,265,829
The home owner will have paid out $741,507, having paid off the mortgage after 25 years.
Short term renting is a different matter.
On the other hand a person could enjoy renting in a place for 20 years where he probably does not wish to spend millions and then buy in a location (when location does not matter anymore) where it costs just a fraction.
I for one will definitely rent in a suburb where it would cost me millions to buy a half decent house, but close to everything - good schools, transport, Uni...etc. And at the same time buy in a suburb which costs only a couple of hundred thousands but has no amenities that I consider very important now. That's our plan anyway
I'm not sure your figures are right - have you taken into account taxes, rates, maintenance costs, insurance.......etc?
Jan 8th 2010, 12:37 pm
#57
BE Enthusiast
Joined: Jan 2007
Location: Formerly Basingstoke now Gold Coast
Posts: 721
Re: Property
I know of absolutely loads of people that owe more now 20 years down the line than they did when they first bought a place.
How many people take out a 25 year mortgage, dont re-mortgage and pay the whole lot off...???
Not many, find a statistic for that one.
Add into the figures, maintenance, rates, water etc and then see what the figures are.
Any properties would need a new kitchen and bathrooms approximately every 10 to 12 years, add that in as well and see what the percentage figure would be.
How many people take out a 25 year mortgage, dont re-mortgage and pay the whole lot off...???
Not many, find a statistic for that one.
Add into the figures, maintenance, rates, water etc and then see what the figures are.
Any properties would need a new kitchen and bathrooms approximately every 10 to 12 years, add that in as well and see what the percentage figure would be.
Jan 8th 2010, 12:55 pm
#58
BE Enthusiast
Joined: May 2008
Location: Perth
Posts: 838
Re: Property
I know of absolutely loads of people that owe more now 20 years down the line than they did when they first bought a place.
How many people take out a 25 year mortgage, dont re-mortgage and pay the whole lot off...???
Not many, find a statistic for that one.
Add into the figures, maintenance, rates, water etc and then see what the figures are.
Any properties would need a new kitchen and bathrooms approximately every 10 to 12 years, add that in as well and see what the percentage figure would be.
How many people take out a 25 year mortgage, dont re-mortgage and pay the whole lot off...???
Not many, find a statistic for that one.
Add into the figures, maintenance, rates, water etc and then see what the figures are.
Any properties would need a new kitchen and bathrooms approximately every 10 to 12 years, add that in as well and see what the percentage figure would be.
Paid off three new houses so far 2yrs / 6yrs / 1 yr , its a matter of prioritising your cash flow.
Jan 8th 2010, 1:01 pm
#60
BE Enthusiast
Joined: Jan 2007
Location: Formerly Basingstoke now Gold Coast
Posts: 721
Re: Property
I think you are in a minority by a long way, 3 houses paid of so quickly means you are earning a load of cash or the houses were really cheap and I expect the first one to be the correct one.
Try to imagine Mr Average and not massive earning Mr Perfect. The reason people owe more 20 years down the track is that they keep up scaling to bigger and better and obviously more expensive, add to that house prices rising and the 1st 2 bedroom flat bought for fifty grand would not even buy you a garage on the side of the big place now desired.
Try to imagine Mr Average and not massive earning Mr Perfect. The reason people owe more 20 years down the track is that they keep up scaling to bigger and better and obviously more expensive, add to that house prices rising and the 1st 2 bedroom flat bought for fifty grand would not even buy you a garage on the side of the big place now desired.