Buy now Pay later (NSW)

M

mflying

http://www.smh.com.au/nsw/luke-fole...g-second-election-debate-20150308-13ydxz.html

What do they think?? do they really think or consult anyone in banking industry?

lender will take that as ongoing expense and it will reduce borrowing capacity of FHB.


FHB may get carried away with idea but in real life i dont see how it will benefit them.


it is like wayne swan saying.. if you don't like the service or rate of the bank.. walk across the road and find another bank for your home loan.. easier said then done!


what;s your thoughts MBs?
 
Interesting thought.

The biggest problem with stamp duty for FHOB is that its upfront, which is difficult for that segment who typically have lower capital bases to work with. With that in mind, I like the policy intent to reduce the upfront cost. Although given stamp duty is currently waived, it may actually work against first home buyers.

In terms of borrowing capacity, its a worthy consideration for the buyer themselves, but not so much for the governments policymakers. Policymakers don't make decisions with a view to a beneficiaries future borrowing power impact. Nor should they.

I think in general, housing discussions in NSW should focus on the supply side. For FHOB, I personally prefer Hockey's plan to allow some dipping into super to fund that first deposit. This may have an impact on people down the track, but will have to be modelled out with future life expectancies and working ages considered.

Cheers,
Redom
 
mflying said:
super industry will make sure that doesn't happen!
Click to expand...

Yep I agree, they hate it. They're the experts so I don't think i'd come off any good questioning their judgement, but I'd probably personally be a beneficiary of it, so self-interest has me supporting it! :)
 
mflying said:
lender will take that as ongoing expense and it will reduce borrowing capacity of FHB.
Click to expand...

This is an excellent point. You're in a position where you're forced to save what's effectively an extra 1% of the purchase price for the first 5 years of property ownership, lenders will be compelled to account for this in their affordability calculations.

I agree that the biggest impediment to FHBs is saving the deposit, but affordability is still a significant factor. On balance, I don't see that this sort of approach would have any real impact. I suspect the uptake of this would be very low.

I don't agree with accessing super for deposits either. Over a lifetime of work, it's the first 10 years that has the biggest impact on a good superannuation based retirement outcome, as it is with any compounding interest scenario.

Increasing supply is a nice idea in theory, but difficult in practice. With Australia's centralised employment hubs (predominately inner city metro based employment) there simply is no land available near where most people work. It's not possible to increase supply in a way that people can afford.

What really needs to happen is to decentralise where people work. Encourage businesses and educational centres (uni) to set up in regional locations where there is land available to increase supply. Easy to say of course, but after a century of urbanisation, it's difficult to implement. There's no easy answer to the challenges for first home buyers and it's already been that way for over 50 years.
 
Peter_Tersteeg said:
Increasing supply is a nice idea in theory, but difficult in practice.
Click to expand...

it is not as difficult as it sounds..

Sydney is flooded with Granny flat due to introduction on state wide policy and introduction of private certifiers.

apply the same principal and theory with multi dwelling and apartments.


bottleneck is at council level.....
 
This is nothing new. When I bought my first place there were no FHOG, but there was a Stamp Duty concession where it was paid over 5 years.
 
That addresses residential supply (in a very limited manner, not may families want to live in a granny flat).

What about logistics and infrastructure? More apartments doesn't help public transport and traffic congestion.
 
Peter_Tersteeg said:
.

What about logistics and infrastructure? More apartments doesn't help public transport and traffic congestion.
Click to expand...

guy who ran London metro is in charge of NSW transport now.... and he is using his wealth of knowledge to get best out of with whatever limited transport network we have.


but i defiantly agree with you.... logistic and infrastructure are biggest issue.

NSW govt is sort of tackling a problem by creative business centres in Parramatta and Liverpool (Blacktown, Campbelltown, and Hornsby to follow)
 
Its a stinker of an idea IMO.

* It will create more leverage in the system when this is definitely not what is required ATM. A $25K savings on upfront stamp duty could just end up being geared. At 90% LVR that extra $25K would allow another $250K in buying power.
* As others mentioned what about factoring in the commitment from the banks end. Messy.
* And my biggest concern. What happens in a default situation or a high LVR negative equity situation. Does the government bankrupt the purchaser? Do they fight over priority with the bank?
 
I know a lot of people will not agree with this statement but at a basic level I feel a big problem is that FHB are simply not realistic about where they can live.
I totally understand they want to be close to work and family but the reality is that market may be too expensive yet they refuse to make other considersations, simply not realizing it's having a negative affect on their future. They continue to save to live in a suburb which simply outgrows the speed in which they can save.

The point I am trying to make is that people are always saying it's so hard for FHB to save a deposit because they need realistically 10%, but that is because they want to enter the property market in a 500k property.
Many do not even consider living 10km's further out where in some instances the median price can be 200k cheaper yet they still have access to most of the same things, it may just take an extra 10 minutes on the train.

Whilst I would love to own a beautiful home in Brighton reality is I simply cannot afford it so I bought where I could afford first up and as the equity grows and my income increases I will soon enough upgrade to a better suburb and so on.

I have a few friends in this situation now and the thought of another suburb literally 10 minutes by car and 150k cheaper will not even be considered.
 
Yes its tough to move out West and the ego takes a dent. When the family home has been Watsons Bay the move to Rose Bay must be a kick in the teeth. :D

Newly married couple might have to economise and buy a 4 bedder instead of five. Or not water views. Nah....
 
In some industries that rely on social status and connections moving out west would be career limiting. Not saying it's right but that's the reality. It was certainly like that back when I was in corporate land. May have changed a bit but being "connected" is still very important.
 
There should be no stamp duty for FHB and foreign investors should be taxed crazy amounts but anyway. This is a very good point the generation from 25-30 has had it two good living in there parents house s in good areas then they fill entitled to live there aswell.
 
Marty what about the poor Mt Druitt lad who's trying to carve a career in the corporate world ? do they have to lie about where they live? I know it may be reality but what kind of sociiety do we live in?
 
Last edited:
Datto,

I have worked with bosses who definitely do not like people living in Western Sydney, not the people who employed them but the ones they are working for directly.

I've had others who like employing people from the west because they believe they're willing to work harder because they have something to prove.

Being from the west I prefer the second one as long as they're paying just as well as the others.

Regards

Andrew
 
Really? What sort of industries are we talking about? Or is this purely a sydney thing because location discrimination in Melbourne is unheard of, well atleast in my circle of friends and family who span many corporate industries, a number of them based in the East with us coming from West.
 
I think its time we grew up and addressed the structural change that is happening.

Its less and less possible for an average income earning family to own a property in a reasonable close to work area in Sydney.

Look at other high value cities in the western world...............

70 ish % investment with various stake holders owning the stock

30 % ownership

Its close to the reverse here, but there is a definite shift

APRA is trying to stop the trend to provide financial system stability, thus further restricting supply, and various state and fed govs stick their finger in the pie to look like they are doing something.

Interesting times.

ta
rolf
 
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albanga said:
The point I am trying to make is that people are always saying it's so hard for FHB to save a deposit because they need realistically 10%, but that is because they want to enter the property market in a 500k property.
Many do not even consider living 10km's further out where in some instances the median price can be 200k cheaper yet they still have access to most of the same things, it may just take an extra 10 minutes on the train.

Whilst I would love to own a beautiful home in Brighton reality is I simply cannot afford it so I bought where I could afford first up and as the equity grows and my income increases I will soon enough upgrade to a better suburb and so on.

I have a few friends in this situation now and the thought of another suburb literally 10 minutes by car and 150k cheaper will not even be considered.
Click to expand...

What? A 500k property? In Melbourne? If you're looking for a detached house, that budget will seriously limit the suburbs you can even look at. At 150k cheaper, you're talking about an area that would have zero amenities and would barely scrape into the boundary of the Melbourne metropolitan area to start with. The commuting costs of such suburbs would completely destroy any saving you're making with a slightly smaller mortgage, not to mention having pretty much zero CG prospects for the future. I'm all for being realistic but your suggestion is borderline ridiculous. Also, I'm not sure why you mentioned Brighton as an example, as I don't think you can buy a closet in Brighton for 500k.

Edit: Just had a quick look online, for that price, you're pretty much limited to the likes of Truganina, Mernda and Doreen. Yep, totally an extra 10 minutes on the train :p
 
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