Attention First Home Buyers!!

[FlyingHigh]

Or I could tell it to the owners of a place in the hills who bought for around $1m 3-4 years ago, put in on the market about a year ago for roughly the same, have had to reduce it to $800k (recently sold), or another in the same area that was initially priced at the same, in line with other sales, nearly 3 years ago and now has been reduced to approx $775k.

but this deal isn't for areas with such high outlay & a higher risk, this is for the outer southern or northern suburbs & I am at the coalface constantly. Right now the market is starting to turn for the better & now is the time to build, I am selling on average 4 blocks per week atm, whereas this time last year, it was about 1 a month!!

Fair enough, my bad for not considering the different markets

[Psyber]

Or I could tell it to the owners of a place in the hills who bought for around $1m 3-4 years ago, put in on the market about a year ago for roughly the same, have had to reduce it to $800k (recently sold), or another in the same area that was initially priced at the same, in line with other sales, nearly 3 years ago and now has been reduced to approx $775k.

It is all timing.

The house I bought in Barker Rd, Prospect for $60K in 1976 would have brought me about $54K until early 1984, but in May 1984 I got $128K for it - I guess it would be near $600K now.
You have to look at the long term not the short term fluctuations - just like the share market.

Strange things happen in the short term.
In 1988 when the share market dropped 40% I sold a second hand Porsche for a 40% profit.
I took great delight in telling my sister, who had chided me for my extravagance in owning the car, the day after her shares collapsed.
But it has never happened again...

PS: The problem in the hills is that the demand had been high and agents were hyping the area up.
Some people were thus conned into paying a lot more than the properties were really worth at the peak and they are suffering now.

[Strawb]

I brought in what they call Inner Werribee. When I brought my house it was dropping in price. Now everyone wants to buy in the area because it is close to the station and 10 minutes away from Werribee Plaza. Most people are buying the old houses and putting units on them so they can make more money.

[Q.]

but this deal isn't for areas with such high outlay & a higher risk, this is for the outer southern or northern suburbs & I am at the coalface constantly. Right now the market is starting to turn for the better & now is the time to build, I am selling on average 4 blocks per week atm, whereas this time last year, it was about 1 a month!!

Of course you are going to say that

[Booney]

Rent money isn't really dead money.

FWIW I am a home owner (or bank slave).

yes it is....unless you have an investment property elsewhere. in 2 years, you would probably pay about $35000 rent, with nothing to show for it, whereas if you are smart, your property will have appreciated quite nicely.

Agreed.

[FlyingHigh]

A house isn't really an asset unless it makes you money. It's more accurately defined as a liability unless it's an investment property earning you rental income.

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.

**** I'm boring

da, you'd know more about this than me, but isn't a house a depreciating asset, and the land the appreciating asset? And further, investors can claim a depreciation amount on their house value?[/quote]
yep, they ain't making any more of it!![/quote]

Which reinforces the arrogance of our modern society that we think it is there for us to make a quick buck from by building all over it, and screw the agriculture or native flora and fauna.[/quote]


so, it's ok for YOU to live somewhere but no-one else can? can't go west, we are trying to stop the southern & northern sprawls, what is your cure?[/quote]
Don't worry, I feel the hypocrisy of this, and struggle with it more and more as time goes on.

[Psyber]

but this deal isn't for areas with such high outlay & a higher risk, this is for the outer southern or northern suburbs & I am at the coalface constantly. Right now the market is starting to turn for the better & now is the time to build, I am selling on average 4 blocks per week atm, whereas this time last year, it was about 1 a month!!

Fair enough, my bad for not considering the different markets

Outer areas are usually the first to suffer when the market drops off.

[CENTURION]

but this deal isn't for areas with such high outlay & a higher risk, this is for the outer southern or northern suburbs & I am at the coalface constantly. Right now the market is starting to turn for the better & now is the time to build, I am selling on average 4 blocks per week atm, whereas this time last year, it was about 1 a month!!

Of course you are going to say that

I would rather have a brand new house, as opposed to someone else's smelly house with hidden problems. plus you can depreciate a brand new house more.

[Psyber]

I would rather have a brand new house, as opposed to someone else's smelly house with hidden problems. plus you can depreciate a brand new house more.

A brand new house full of toxic glue solvents and formaldehyde from the new Gyprock?
I have been thinking of building a new house somewhere I'd like to live later, and renting it out for the first few years.
But I have to admit I'm more prone to have allergic reactions to those things than most..

None of the five established houses I have ever bought has been smelly, but the office premises in Melbourne St had some fungus under the floor I had to treat.
The house in Prospect did have some hidden problems I had to fix but the profit on sale more than offset that.
(I've had two new houses, one built in 1972 and one in 1983.)

[Booney]

but this deal isn't for areas with such high outlay & a higher risk, this is for the outer southern or northern suburbs & I am at the coalface constantly. Right now the market is starting to turn for the better & now is the time to build, I am selling on average 4 blocks per week atm, whereas this time last year, it was about 1 a month!!

Of course you are going to say that

I would rather have a brand new house, as opposed to someone else's smelly house with hidden problems. plus you can depreciate a brand new house more.

If brand new houses were built to a higher quality, I'd agree. A 100 year old brick place has already stood the test of time, I doubt some of the shoddy shacks put togther today will be here in 100 years.

[Footy Chick]

100 year old houses have more character for mine... todays houses have no thought put into the process of their construction and for the best part all look the same.

[Pseudo]

Whether buying is better than renting depends upon many factors, including timeframe.

Play with the following to see what I mean:

http://www.nytimes.com/interactive/busi ... lator.html

[Gingernuts]

Rent money isn't really dead money.

FWIW I am a home owner (or bank slave).

yes it is....unless you have an investment property elsewhere. in 2 years, you would probably pay about $35000 rent, with nothing to show for it, whereas if you are smart, your property will have appreciated quite nicely.

Agreed.

I disagree.

Currently I pay $330 a week. If I took out a bank loan for the same house (about $350 000 at a guess) I would suggest that with bank interest + annual rates + maintenance + water rates + house insurance (all 'dead money' also by the same definition that I don't pay at the moment) I would come close to that anyway.

'Rent money is dead money' is a myth perpetuated by the real estate and banking sectors to make cash as far as I'm concerned.

I'm not saying property isn't a tidy investment, but I don't think it's the holy grail that Australian society makes it out to be.

[Psyber]

If brand new houses were built to a higher quality, I'd agree. A 100 year old brick place has already stood the test of time, I doubt some of the shoddy shacks put together today will be here in 100 years.

That was what put me off the idea of building a new house to rent out.
I'd walked around the outside of a few display homes looking at the finish, rather than just the dressed up inside, and realised I'd have to be constantly checking for shonky short cuts.

I've tended to go for a compromise - old enough to be solid and young enough to not need much repair.
My current house is a double brick built in 1987 and is as solid as a rock. I have had to have new wheels put on a couple of the sliding doors.
The previous one in Victoria was a brick veneer built in about the same era, but in a Federation style that appealed to my wife.

[heater31]

but this deal isn't for areas with such high outlay & a higher risk, this is for the outer southern or northern suburbs & I am at the coalface constantly. Right now the market is starting to turn for the better & now is the time to build, I am selling on average 4 blocks per week atm, whereas this time last year, it was about 1 a month!!

I'm in a similar position on the coal face but for a builder and it is very different where I'm sitting to what you describe.

IMHO I don't see much changing until the end if the year unless Julia opens the wallet and throws some $$$ around willy nilly.....

[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.

[Hefty]

I have just bought my first house at Lightsview through the Affordable Housing program and buidling to start early next month.

It's interesting to read everyone's thoughts/ideas about buying/renting a house. I have been renting/living with other people for the past 15 years and decided it was time to put my money towards something that I will happily call my own. To say I'm sh!tting myself is an understatement........mortgage repayments, gas/electricity/water/council rates, fitting the house out with furniture/whitegoods etc is definitly going to be a struggle at first budget wise.

For what I know will be initial money restraints will be worth it in the long run. Just have to cut back on my gambling for a while

[scoob]

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

[wooly]

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.

[Footy Chick]

I have just bought my first house at Lightsview through the Affordable Housing program and buidling to start early next month.

It's interesting to read everyone's thoughts/ideas about buying/renting a house. I have been renting/living with other people for the past 15 years and decided it was time to put my money towards something that I will happily call my own. To say I'm sh!tting myself is an understatement........mortgage repayments, gas/electricity/water/council rates, fitting the house out with furniture/whitegoods etc is definitly going to be a struggle at first budget wise.

For what I know will be initial money restraints will be worth it in the long run. Just have to cut back on my gambling for a while

or increase it in the hope that you win big and can pay off the house

disclaimer: SAFooty endorses responsible gambling practices