Attention First Home Buyers!!

[Q.]

It's been proven time and again that the best strategy (financially) is to rent and invest the difference between your rent and what a loan repayment could have been into an income generating asset (shares, term deposit, rental property etc). But that discounts the value that people place on the great Australian dream.

But how many people that Rent would actually do that?

Owning a Property and having a Mortgage is more about a forced saving for me.

Forced spending you mean

[Q.]

Courtesy of Pseudo from an older topic:

http://www.bubblepedia.net/tiki-index.php

Shattering some of the memes bandied about on this thread.

Taking finanical advise from bubblepedia.net? That could be quite risky too...

Interesting artical seems to draw a lot on one Sydney based example - doomsday reports like that have been around for years

I wouldn't take financial advice from any one source and my advice to anyone is read, read, read.

Perpetuating invalid logic like "Rent money is dead money" doesn't help anyone (except perhaps the banks).

IMO, I would wait before investing in a house. Keep pouring money into a term deposit. I think we should wait and see what effect government inaction on a rising Aussie dollar courtesy of international hedging of our currency has on jobs. My prediction, rising unemployment, which will lead to defaulting on loans and crashing of house prices.

[AFLflyer]

Interesting debate.
It’s so different for everyone, each individual is in a different situation.
To me, its common sense.
1) Don’t over commit (over spend) the average loan is now 450k in Aust!! Aim to pay back ATLEAST 1-2% higher than your current rate.
2) Save a big deposit.
3) Renting is fine, as long as left over money is being invested for the future. If possible of course.
4) Live within your means, get rid of all other debt before even thinking about a home loan
5) If you have a home loan, smash it as much as possible. Home loan free by 40 is our goal.
6) Don't own a credit card if you have a habit of not paying it ALL off each month.

So much financial advice is common sense, ever read the barefoot investors book? It’s based on it.

[Dutchy]

Interesting debate.
It’s so different for everyone, each individual is in a different situation.
To me, its common sense.
1) Don’t over commit (over spend) the average loan is now 450k in Aust!! Aim to pay back ATLEAST 1-2% higher than your current rate.
2) Save a big deposit.
3) Renting is fine, as long as left over money is being invested for the future. If possible of course.
4) Live within your means, get rid of all other debt before even thinking about a home loan
5) If you have a home loan, smash it as much as possible. Home loan free by 40 is our goal.
6) Don't own a credit card if you have a habit of not paying it ALL off each month.

So much financial advice is common sense, ever read the barefoot investors book? It’s based on it.

Some good advice here.

[Punk Rooster]

A house is going to appreciate at likely 2-3% at best over the next 5-10 years, if not stand still.

This is highly unlikely ... occurred in the early to mid 90's, but not since.

As a very rough guide, a house will approx double in value every 7-10 years ... not saying they will in the next 7-10 years, but most likely far exceed 2-3%.

wrong.
Let's use Psybers 1984 house @ $128,000 as an example.
1991- 256,000
1998- 512,000
2005- 1,024,000
2012- 2,048,000

Psyber said it would be worth approximately $500-600k.

[dedja]

LOL, let's use Dedja's house as an example.

I built my house 15 years ago, and it's worth approx 4 times what I paid for the land and to build ... maybe I've just been lucky?

Then again, I bought a house in 1992 and sold it 5 years later ... for only 5% more than that I bought it.

[The Sleeping Giant]

Buying a house is more about "freedom " for me. Renting means landlord's, property managers, inspections, restrictions etc. We have a house down in Adelaide with tenants, and will be buying a place in Darwin in 6 months time. Not sure whether to keep the rental and buy something low key, or sell the rental and buy something high end. With inpex starting up next year, housing prices in Darwin are going to jump nicely.

[Psyber]

wrong.
Let's use Psybers 1984 house @ $128,000 as an example.
1991- 256,000
1998- 512,000
2005- 1,024,000
2012- 2,048,000

Psyber said it would be worth approximately $500-600k.

I'd have to admit that was a wild guess - I haven't looked up recent sales in Barker Rd, Prospect.

[rk25]

Spare a thought for those of us in Melbourne:

http://www.realestate.com.au/property-h ... -108458711

http://www.realestate.com.au/property-h ... -107596580

Both in similar areas. At least in Adelaide you get much more bang for your buck. Renting would be pretty much a similar story too. One of the reasons we're considering a return.

[Brodlach]

Spare a thought for those of us in Melbourne:

http://www.realestate.com.au/property-h ... -108458711

http://www.realestate.com.au/property-h ... -107596580

Both in similar areas. At least in Adelaide you get much more bang for your buck. Renting would be pretty much a similar story too. One of the reasons we're considering a return.

Another reason to come back to Adelaide rk25

[rk25]

Spare a thought for those of us in Melbourne:

http://www.realestate.com.au/property-h ... -108458711

http://www.realestate.com.au/property-h ... -107596580

Both in similar areas. At least in Adelaide you get much more bang for your buck. Renting would be pretty much a similar story too. One of the reasons we're considering a return.

Another reason to come back to Adelaide rk25

Cheaper houses, better beaches, better footy clubs, the most beautiful cricket ground in the world, and no Victorians. Sounds pretty good to be honest! Melbourne is great, but Adelaide is home (and a lot bloody cheaper).

[gossipgirl]

best option is to squat

[smac]

best option is to squat

For you maybe. I can go standing up!

[heater31]

best option is to squat

For you maybe. I can go standing up!

Been waiting for someone with the balls to respond like that

[gossipgirl]

I knew I had opened myself up .......

[Sojourner]

With the comment about houses doubling every ten years, bear in mind that althogh the graph trends upwards it peaks and troughs as well. After the last two recessions we saw a major punt upwards on both occassions. I think that the reason this occured is for the same reason as now, Building was flat last year yet the population is increasing and is projected to go from 23million now to 30million in 2030. People have to live somewhere and existing houses appear to take a punt upwards when markets do the same, as I suspect will be the case this year. I am told by a mate in real estate that the first two weeks of this year were the best they had in the last 18months and I am noticing a number of properties being sold in my area that had been on the market a while.

Still, if you do rent it is much cheaper than trying to pay off a mortgage - the Anglo Saxon Term "Mort Gage" actually means "Death Pledge" when translated correctly. If you can find a good rental at a reasonable rate and are disciplined enough to know how to invest your money into the right funds you can well make more money than what your house may appreciate at. You can also lose the lot if you dont know what you are doing however and the market crashes and you dont know how to spread your funds accordingly. Hence Mortgage payments work out to be enforced savings for many people which is not the worst thing for them either.

[Zelezny Chucks]

I knew I had opened myself up .......

Anyone willing to touch that one???

[mickey]

I knew I had opened myself up .......

Anyone willing to touch that one???

I would, but the post would be deleted almost before it had landed on the board.... and don't forget the ban

[CENTURION]

I knew I had opened myself up .......

no, only if you stood up you would