Property prices may dive
Mar 21st 2009, 6:56 pm
#16
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Joined: Mar 2006
Location: Sunshine Coast
Posts: 136
Re: Property prices may dive
We live on the Sunshine Coast and housing here is very overpriced in my opinion - the average house price is something between 9 and 10 times the average local wage on the Coast.
I'm afraid I don't have much sympathy for the 50+ years crowd as they've had the best of the housing market and seen their property prices increase dramatically and probably unsustainable over the last 10-15 years - they also lived in an era where Dad went to work and Mom stayed at home with the kids - no child care issues in those days - can you just imagine what you'd have to be earning to afford that nowadays. They'll also have enough saved through Super to get them out of jail if they've overreached.
It's the 20 and 30 somethings I feel sorry for, if they've bought they've had to buy at over inflated prices, if they are on an average wage they both must work or they've no chance. And that's if they can keep both their jobs.
The way the market is now, it'll only take one person in a 20-30 something couple to lose their job and they'll be in serious financial trouble.
The FHBG is a complete red herring as, when the recession and rising unemployment really hits, anyone with less than a 20% deposit will probably end up in negative equity. It's just drawing in more and more suckers to this vicious circle that i'm afraid that older greedy generation must take the blame for - they won't though ofcourse.
I'm afraid I don't have much sympathy for the 50+ years crowd as they've had the best of the housing market and seen their property prices increase dramatically and probably unsustainable over the last 10-15 years - they also lived in an era where Dad went to work and Mom stayed at home with the kids - no child care issues in those days - can you just imagine what you'd have to be earning to afford that nowadays. They'll also have enough saved through Super to get them out of jail if they've overreached.
It's the 20 and 30 somethings I feel sorry for, if they've bought they've had to buy at over inflated prices, if they are on an average wage they both must work or they've no chance. And that's if they can keep both their jobs.
The way the market is now, it'll only take one person in a 20-30 something couple to lose their job and they'll be in serious financial trouble.
The FHBG is a complete red herring as, when the recession and rising unemployment really hits, anyone with less than a 20% deposit will probably end up in negative equity. It's just drawing in more and more suckers to this vicious circle that i'm afraid that older greedy generation must take the blame for - they won't though ofcourse.
Mar 21st 2009, 7:10 pm
#17
Lost in BE Cyberspace
Joined: Mar 2008
Location: Sydney, NSW
Posts: 7,580
Re: Property prices may dive
Dangit, I hope that is wrong, as I'm just about to sign contract on a house.
There is no way I can get another job to help OH out as I've just been diagnosed with MS so no one would have me, whatever the law says, and I'd probably be too tired anyway. As long as interest rates don't go over 10% we'll be able to get by we think.
There is no way I can get another job to help OH out as I've just been diagnosed with MS so no one would have me, whatever the law says, and I'd probably be too tired anyway. As long as interest rates don't go over 10% we'll be able to get by we think.
Mar 21st 2009, 8:05 pm
#18
Has left the building
Joined: Mar 2007
Posts: 4,079
Re: Property prices may dive
That is assuming the Super hasn't lost a lot in the stock market rout...
Also, think the withdrawal would attract a much higher rate (am not too familiar with the tax rules).
The average Toorak homeowner has a mortgage in excess of $ 1 million (East Brighton - around 700k)..... wonder if their Super will cover the mortgage?
I am completely taken aback by the LTVs (100-120% of home values
) permitted by banks in Australia (this is continuing even after the financial crisis, although CBA recently announced a 3% equity requirement). I think banks are in for a rude shock if/when the employment situation worsens....
Also, think the withdrawal would attract a much higher rate (am not too familiar with the tax rules).
The average Toorak homeowner has a mortgage in excess of $ 1 million (East Brighton - around 700k)..... wonder if their Super will cover the mortgage?
I am completely taken aback by the LTVs (100-120% of home values
) permitted by banks in Australia (this is continuing even after the financial crisis, although CBA recently announced a 3% equity requirement). I think banks are in for a rude shock if/when the employment situation worsens....In Toorak if they have a mortgage at all it would be rare. Most homes are geared from other investments - ie debt held in company, cash withdrawn and used to buy personal property.
Last edited by Geelong Gent; Mar 21st 2009 at 8:08 pm.
Mar 21st 2009, 8:51 pm
#19
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Re: Property prices may dive
I'm afraid I don't have much sympathy for the 50+ years crowd as they've had the best of the housing market and seen their property prices increase dramatically and probably unsustainable over the last 10-15 years - they also lived in an era where Dad went to work and Mom stayed at home with the kids - no child care issues in those days -
You are looking at two very different generations.
Compare the first home buyers house that a current over 50 year old had back then, to todays first homes.
There are plenty of houses about that are similar in wage multiples to the 1970's, but although the older people were happy to live in something of that nature, todays generation just isn't.
Mar 21st 2009, 8:56 pm
#20
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Joined: Mar 2006
Location: Sunshine Coast
Posts: 136
Re: Property prices may dive
Not as many cars in the family either or TV's, if you had one.
You are looking at two very different generations.
Compare the first home buyers house that a current over 50 year old had back then, to todays first homes.
There are plenty of houses about that are similar in wage multiples to the 1970's, but although the older people were happy to live in something of that nature, todays generation just isn't.
You are looking at two very different generations.
Compare the first home buyers house that a current over 50 year old had back then, to todays first homes.
There are plenty of houses about that are similar in wage multiples to the 1970's, but although the older people were happy to live in something of that nature, todays generation just isn't.
Not on the Sunshine Coast there aren't.
I have to say your comments are fairly typical though.
Times have moved on regards TV's and Cars too. Many people need two cars in the family just to be able to get to work these days.
Not the case in the 60's when you only needed one cause Mom stayed at home.
Mar 21st 2009, 9:02 pm
#21
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Joined: Mar 2006
Location: Sunshine Coast
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Re: Property prices may dive
If you honestly believe it's possible today to have a family with kids, one full time earner with 2009 costs of living, earning an average wage, being able to afford their own home when they just have the FHBG then can you please point out where these suburbs are.
Last edited by Pearl&Wal; Mar 21st 2009 at 10:33 pm.
Mar 21st 2009, 10:11 pm
#22
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Joined: May 2003
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Posts: 24,246
Re: Property prices may dive
I think the houses at the low end need to be lower not higher as first home buyers might get the grant but if they are not earning a decent wage and have children servicing the loan is beyond most of them.
Super is dire not earning a fig at the moment and not a lot of people are on multipliers anymore. So I believe there would not be enough super for most people in trouble to repay their homes.
Compulsory super has only been around since 90 I know because I was one of the people who started with it and I can tell you my payout was chicken feed.
Super is dire not earning a fig at the moment and not a lot of people are on multipliers anymore. So I believe there would not be enough super for most people in trouble to repay their homes.
Compulsory super has only been around since 90 I know because I was one of the people who started with it and I can tell you my payout was chicken feed.
Mar 21st 2009, 10:38 pm
#23
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Location: Hill overlooking the SE Melbourne suburbs
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Re: Property prices may dive
Not on the Sunshine Coast there aren't.
I have to say your comments are fairly typical though.
Times have moved on regards TV's and Cars too. Many people need two cars in the family just to be able to get to work these days.
Not the case in the 60's when you only needed one cause Mom stayed at home.
I have to say your comments are fairly typical though.
Times have moved on regards TV's and Cars too. Many people need two cars in the family just to be able to get to work these days.
Not the case in the 60's when you only needed one cause Mom stayed at home.
None around for quite away here in SE Melbourne, maybe a unit or duplex at 4-5x income.
Mar 22nd 2009, 12:01 am
#24
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Re: Property prices may dive
Absolutely 
2 cars, 4 TV's, 4 computers, 2 lounge suites, 5 bed house, and that's us with just 1 kid, on one wage, with a stay at home parent
2 cars, 4 TV's, 4 computers, 2 lounge suites, 5 bed house, and that's us with just 1 kid, on one wage, with a stay at home parent
Last edited by ABCDiamond; Mar 22nd 2009 at 12:11 am. Reason: spelling
Mar 22nd 2009, 12:10 am
#25
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Re: Property prices may dive
ST MARYS $159,950 2 Bedrooms 1 Bathrooms
PENRITH $165,000 2 Bedrooms 1 Bathrooms
The problem is that most First Home buyers want something better than those properties, they dont want to travel too far to work. Those ones are 1 hour travel from Sydney CBD.
One average wage is about $1,100 pw then add the FTB for the kids and you can be on a decent income.
But, it does mean starting small, and maybe just one car, and maybe no big Plasma TV.
There is a brand new 3 bed house near us for $255,000. I got an email from the agent for it yesterday. But I doubt it will sell fast, as it isn't in the best area.
Mar 22nd 2009, 8:30 am
#26
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Re: Property prices may dive
I think expectations have to be lowered now and its going to be tough. Lots of spec houses for sale just like the last time and the builders got burnt big time.
There are three brand new units near where my mum lives and they have been on the market for over a year and reduced by hundred grand now and still only one has sold.
They have position close to the town ideal for older people or down sizers but no takers.
Now that super is linked to the markets no guarantee in the end what payouts will be or what the world will be like when people retire.
Most people's houses only rise with inflation and are relative to the present time in price. Only land in the CBD and surrounds gives better returns due to shortage.
As for Toorak people highly geared whatever way they arrange their funds, is still highly geared and lots of houses are on the market in the top suburbs now.
I too feel for the late twenties to 40 age group with young children who have bought at the top of the market.
There are three brand new units near where my mum lives and they have been on the market for over a year and reduced by hundred grand now and still only one has sold.
They have position close to the town ideal for older people or down sizers but no takers.
Now that super is linked to the markets no guarantee in the end what payouts will be or what the world will be like when people retire.
Most people's houses only rise with inflation and are relative to the present time in price. Only land in the CBD and surrounds gives better returns due to shortage.
As for Toorak people highly geared whatever way they arrange their funds, is still highly geared and lots of houses are on the market in the top suburbs now.
I too feel for the late twenties to 40 age group with young children who have bought at the top of the market.
Mar 22nd 2009, 9:16 am
#27
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Joined: Mar 2006
Location: Sunshine Coast
Posts: 136
Re: Property prices may dive
WERRINGTON $147,000 2 Bedrooms 1 Bathrooms
ST MARYS $159,950 2 Bedrooms 1 Bathrooms
PENRITH $165,000 2 Bedrooms 1 Bathrooms
The problem is that most First Home buyers want something better than those properties, they dont want to travel too far to work. Those ones are 1 hour travel from Sydney CBD.
One average wage is about $1,100 pw then add the FTB for the kids and you can be on a decent income.
But, it does mean starting small, and maybe just one car, and maybe no big Plasma TV.
There is a brand new 3 bed house near us for $255,000. I got an email from the agent for it yesterday. But I doubt it will sell fast, as it isn't in the best area.
ST MARYS $159,950 2 Bedrooms 1 Bathrooms
PENRITH $165,000 2 Bedrooms 1 Bathrooms
The problem is that most First Home buyers want something better than those properties, they dont want to travel too far to work. Those ones are 1 hour travel from Sydney CBD.
One average wage is about $1,100 pw then add the FTB for the kids and you can be on a decent income.
But, it does mean starting small, and maybe just one car, and maybe no big Plasma TV.
There is a brand new 3 bed house near us for $255,000. I got an email from the agent for it yesterday. But I doubt it will sell fast, as it isn't in the best area.
Try to do the same for the Sunshine Coast where, I can assure you, the average wage is no where near $1100 per week. Reduce that by about 20% and you'll be getting warmer.
Mar 22nd 2009, 9:53 am
#29
Joined: Jun 2006
Posts: 4,555
Re: Property prices may dive
Great areas if you are into drugs and flannos. Your post highlights the issue.
WERRINGTON $147,000 2 Bedrooms 1 Bathrooms
ST MARYS $159,950 2 Bedrooms 1 Bathrooms
PENRITH $165,000 2 Bedrooms 1 Bathrooms
The problem is that most First Home buyers want something better than those properties, they dont want to travel too far to work. Those ones are 1 hour travel from Sydney CBD.
One average wage is about $1,100 pw then add the FTB for the kids and you can be on a decent income.
But, it does mean starting small, and maybe just one car, and maybe no big Plasma TV.
There is a brand new 3 bed house near us for $255,000. I got an email from the agent for it yesterday. But I doubt it will sell fast, as it isn't in the best area.
ST MARYS $159,950 2 Bedrooms 1 Bathrooms
PENRITH $165,000 2 Bedrooms 1 Bathrooms
The problem is that most First Home buyers want something better than those properties, they dont want to travel too far to work. Those ones are 1 hour travel from Sydney CBD.
One average wage is about $1,100 pw then add the FTB for the kids and you can be on a decent income.
But, it does mean starting small, and maybe just one car, and maybe no big Plasma TV.
There is a brand new 3 bed house near us for $255,000. I got an email from the agent for it yesterday. But I doubt it will sell fast, as it isn't in the best area.
Mar 22nd 2009, 9:54 am
#30
Guest
Posts: n/a
Re: Property prices may dive
In Nambour, the median price of smaller properties (which used to be the first home buyer type properties) is $250,000, not on the waters edge of course.
As an indication of wages, the ATO has the median wage at Nambour as being about 82% of the national median wage.
The national average Male Full Time Total Earnings in Nov 2008 was $1,313.60 pw ($68,307 pa), therefore Nambour would be about $1,050 pw.
(Please note the statistical comment in my signature
)