Swerv-o

Is this the new development in Waterloo?

The stamp free and government grants are certainly a good incentive - I think you could probably find a studio a bit cheaper though - That seems to be 1 bed prices. Strata seems about average.

Personally, I don't think that rent is dead money, as you are using it to pay for a service - the service of having somewhere to live. The issue I have with rent is that it will always increase, whereas with a mortgage, you start paying it downwards from the outset, and it will decrease, plus you also have the possibility of a capital gain on it.

I don't think that you will go far wrong if you're buying in the inner city - The transport infrastructure in Sydney favours living close to the CBD. I live 5 minutes from Redfern station and work in Martin Place - It's pretty joyous to hop on the train for a 7 minute trip, or walk to work on a nice sunny day - like I did today. As transport costs increase, there will be an increasing desire to move closer to the city, so factor this into where you are looking


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Beoz

That is an excellent point ..... if interest rates behave.


That's what worries me about Sydney ..... For some reason I just feel that if it crashes it will crash big.

BadgeIsBack

he is fabulous....! can he invest any more...

Swerv-o

Yes, if they behave. I treat the interest as essentially rent to the bank, so the more money I save and dump into my offset account, then the less rent I pay to the bank. I think I was fortunate and managed to



Sydney's a funny place - It seems that many of the suburbs have individual economies all of their own, based upon facilities, access etc. I think that picking somewhere that is close to good transport links and other desirable features is the smart play, because these will always be draw characteristics. I bought in Chippendale because it is between two universities, only 5 minutes walk to Redfern Station, 10 minutes walk to King street and Broadway shopping centre, while at the same time being a lovely leafy, tree lined suburb with a great cafe and pub culture.

I do have a car, but I think that when the renovations are finished, I will probably sell it. It's just difficult bringing back cement and wood from Bunnings in a taxi. I certainly don't use it for much else though...


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paulry

Unfortunately, in our current circumstances the sums just don't add up to buy a home here in Canberra.

On the plus side, we are lean, mean and mobile.

Zen10

I have argued vehemently about how over-priced housing is in the UK and Australia, and it is. Compared to previous generations we are asked to borrow much more money to buy comparable houses, and due to this we have less disposable income. Because of this we must import all our junk made by slaves in the third world or we would not be able to buy anything to put in our houses.

However, if I put my wage and my wife's wage together and multiply it by a sensible borrowing ratio of 3.5, I find that we can afford some pretty nice houses in Adelaide, so can I really complain? Theory says one thing and practice says another. Sadly, when we do the same calculation with British wages and house prices we can only afford dumps, which really is a pain because it means when we move back we will have to rent there.

paulry

That's a good point about the rule of thumb sensible borrowing ratio of 3.5. If I apply the same calculation, we could also find something acceptable in Canberra. Couldn't do that in London - there we would be looking at 5 or 6 times.

commonwealth

Is Mortgage Interest "dead money"? now that's another view

commonwealth

is that 3.5 x annual gross income?

Swerv-o

Again - it's the cost of providing you with the service you need to buy the house - It's neither dead money nor money well spent - just money you need to spend to meet your objectives.


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IvanM

Lost opportunity. Earning interest the money is taxable.

Swerv-o

This is why I like Offset accounts - you're maximising the work your money is doing while also being tax efficient.


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Zen10

Aye.

JoeBloggs80

Is it 3.5 for the value of the loan, or the value of the property?

paulry

For us poor AUDollarless souls both apply but I meant the house prices