Those three years made a big difference to prices and it is hard if you are not married. Married couples are different, for a single people, canberra is a hard to buy.
Canberra Buyers freeze...
- Thread starter rugrat
- Start date
Those three years made a big difference to prices and it is hard if you are not married. Married couples are different, for a single people, canberra is a hard to buy.
Yeah true but odds says it didn't sell for 265 and more like 300.
It can certainly be done and I'm optimistic that I'll own my own home (for living purposes ) in the future but when you consider that if you wage is 1000 per week is and the reypayments are 700 a week, that doesn't give you much wriggle room if something goes wrong ( can't rent out the rooms or rates rise, broken down car, rego payments, dental work) and doesn't include body corporate or taxes, you're taking on a huge potential for risk.
Still if it says 350k... what is to say it won't sell for 400k.. leaving it unaffordable.
Trying to find a polite way to say "rubbish".
Firstly,Yes prices have increased in the past three years. Not debating that. Incomes have also increased - albeit not for everyone, but cetainly for the public servants living here.
But the part I take issue with is that 'married couples' have it better then singles. That may be true is you are talking about DINKS: Double Income, No Kids. But alot of people once they get married move on quickly from that stage. Personally, I was never in that stage. I got married when I was still an internal full time uni student, as was my Hubby. I have never made it into a 'career' because I went from fulltime uni student, to fulltime SAHM - It was a deliberate choice I would not change for all the money in the world.
I am not sure you know what SAHM means: Stay At Home Mum. That means, I have no income. Not only do I / did I have no income, but I also had children: the banks like to give you less money when you have dependants.
For my Hubby, He would have been much better off as a single person. Because his income would have just gone towards himself, not towards his wife and children. His servicability was about half of what it would have been without dependants.
When we moved to Canberra, our rental payments took up about 75% of my Hubbys income. With what was leftover we had to buy food, nappies, fuel, pay bills, etc, etc, etc. (And yes expenses for a 'family' are more then for a single, or even just a couple with no kids) We really were living paycheck to paycheck. There were a couple of times I had to borrow off my parents because of emergency expenses (like trips to the doctor, broken spectacles, and replacement window after someone broke into our car).
Canberra is "hard to buy" for any first home owner. Fullstop. I have friends in their 30's and 40's who really cannot afford to buy in Canberra at all, although a couple actually own houses elsewhere. The banks just will not give them to money they need to buy a 'house' to house their family (servicibility is a b!tch sometimes). They 'could' afford a unit, but you cann't fit three or four kids plus their parents into a 2 bed unit. It doesn't matter that their rent is around the same as mortgage repayments.
I am not, and have never said that it is 'easy'; All I have said is that it can be done. You just need to change your expectations, attitudes and those things you can control, and work with those things you cann't. And sometimes you just need to take that leap of faith, that risk, and hope that somehow everything will work out - even if it doesn't.
In my personal circumstances, my DH worked hard to increase his income, I took on a casual job (after hours, when my DH is home to have the kids - it only pays about $200-300 f/n). We also reduced our expenses as much as humanly possible, and put aside every little cent excess that we could spare. We looked to real estate we 'could' afford, even though it wasn't particularly wahat we wanted - it was the barest minimum we could live in. We made sacrifices in the short term to ensure our long term.
Even this IP we are building, the banks will give us money (just barely) for it, provided we rent it out. We cannot afford to live in it ourselves and maintain servicibility (and that house is very much comparable to our PPOR in size, etc - values have just risen).
Nothing worth doing was ever easy. For me, I am just stubborn, I like to get what I want and don't stop until I do. I also don't listen to anyone who says I cann't. If I did, I wouldn't have gotten my commerce degree, I wouldn't have gotten my law degree, I wouldn't have gotten married, I wouldn't have had three beautiful children, I wouldn't have my pets, I wouldn't own my PPOR, and I most certainly wouldn't have my IP (which is as we speak being painted). My DH would not have succeeded so well within his career. My Husband and I done all these things, by ourselves, and we have worked together and earnt everything we have, and everything we plan on having - because I can assure you that we have alot more planned.
My Hubby and I first hooked up in high school, we both have 5 siblings and grew up in housing commision homes. Where you go in life has very little to do with circumstances (they are but a temporary set back) and everything to do with attitude, belief and faith in your own ability to suceed. It is not so much about seeing the problems, but rather seeing the solutions and focusing on what you CAN do rather then what you CANN"T. Their are ALWAYS excuses as to why you cann't do something - successful people just find the reasons as to why and how they can.
Trying to find a polite way to say "rubbish".
Well the bottom line is that a house will cost around 380k, which is currently around 700 per week in repayments, if rates are to rise, this could well become higher than my wage (~1000 per week). I don't know what part of your post will change that very simple mathematical calculation.
I think 380k is a conservative estimate, once you consider stamp duty and add 20k onto the price of the house, as they rarely sell for the advertised price. I Imagine any deposit would be eaten up by this and by the increase in housing prices as you save it up. So I think 380k is a fair figure.
Trying to find a polite way to say "rubbish".
Firstly,Yes prices have increased in the past three years. Not debating that. Incomes have also increased - albeit not for everyone, but cetainly for the public servants living here.
But the part I take issue with is that 'married couples' have it better then singles. That may be true is you are talking about DINKS: Double Income, No Kids. But alot of people once they get married move on quickly from that stage. Personally, I was never in that stage. I got married when I was still an internal full time uni student, as was my Hubby. I have never made it into a 'career' because I went from fulltime uni student, to fulltime SAHM - It was a deliberate choice I would not change for all the money in the world.
I am not sure you know what SAHM means: Stay At Home Mum. That means, I have no income. Not only do I / did I have no income, but I also had children: the banks like to give you less money when you have dependants.
For my Hubby, He would have been much better off as a single person. Because his income would have just gone towards himself, not towards his wife and children. His servicability was about half of what it would have been without dependants.
When we moved to Canberra, our rental payments took up about 75% of my Hubbys income. With what was leftover we had to buy food, nappies, fuel, pay bills, etc, etc, etc. (And yes expenses for a 'family' are more then for a single, or even just a couple with no kids) We really were living paycheck to paycheck. There were a couple of times I had to borrow off my parents because of emergency expenses (like trips to the doctor, broken spectacles, and replacement window after someone broke into our car).
Canberra is "hard to buy" for any first home owner. Fullstop. I have friends in their 30's and 40's who really cannot afford to buy in Canberra at all, although a couple actually own houses elsewhere. The banks just will not give them to money they need to buy a 'house' to house their family (servicibility is a b!tch sometimes). They 'could' afford a unit, but you cann't fit three or four kids plus their parents into a 2 bed unit. It doesn't matter that their rent is around the same as mortgage repayments.
I am not, and have never said that it is 'easy'; All I have said is that it can be done. You just need to change your expectations, attitudes and those things you can control, and work with those things you cann't. And sometimes you just need to take that leap of faith, that risk, and hope that somehow everything will work out - even if it doesn't.
In my personal circumstances, my DH worked hard to increase his income, I took on a casual job (after hours, when my DH is home to have the kids - it only pays about $200-300 f/n). We also reduced our expenses as much as humanly possible, and put aside every little cent excess that we could spare. We looked to real estate we 'could' afford, even though it wasn't particularly wahat we wanted - it was the barest minimum we could live in. We made sacrifices in the short term to ensure our long term.
Even this IP we are building, the banks will give us money (just barely) for it, provided we rent it out. We cannot afford to live in it ourselves and maintain servicibility (and that house is very much comparable to our PPOR in size, etc - values have just risen).
Nothing worth doing was ever easy. For me, I am just stubborn, I like to get what I want and don't stop until I do. I also don't listen to anyone who says I cann't. If I did, I wouldn't have gotten my commerce degree, I wouldn't have gotten my law degree, I wouldn't have gotten married, I wouldn't have had three beautiful children, I wouldn't have my pets, I wouldn't own my PPOR, and I most certainly wouldn't have my IP (which is as we speak being painted). My DH would not have succeeded so well within his career. My Husband and I done all these things, by ourselves, and we have worked together and earnt everything we have, and everything we plan on having - because I can assure you that we have alot more planned.
My Hubby and I first hooked up in high school, we both have 5 siblings and grew up in housing commision homes. Where you go in life has very little to do with circumstances (they are but a temporary set back) and everything to do with attitude, belief and faith in your own ability to suceed. It is not so much about seeing the problems, but rather seeing the solutions and focusing on what you CAN do rather then what you CANN"T. Their are ALWAYS excuses as to why you cann't do something - successful people just find the reasons as to why and how they can.
Bloody good on you I say rugrat. Keep pushing the throttle down hard all the way and yes ignore the naysayers. I hate naysayers.
You are going fantastically well.
.
Great post rugrat.
For a 380k place you'd probably put a minimum of 5% deposit leaving $361k.
If you made use of an IO loan your repayments would be around $485 a week at 7% and if you were single renting out 1 room for about the average 5% gross yield mark of $190 would make the $295 plus other expenses more than manageable on a single average income.
If I were single and looking to get into the market here I would definitely buy an IP below the median in a more affordable area and rent somewhere else myself.
I only have my PPOR here, despite the low vacancy rates the no land tax threshold and extra high stamp duty puts me off a bit for IP's in the ACT unless the deal really jumps out as a bargain.
Great post rugrat.
For a 380k place you'd probably put a minimum of 5% deposit leaving $361k.
If you made use of an IO loan your repayments would be around $485 a week at 7% and if you were single renting out 1 room for about the average 5% gross yield mark of $190 would make the $295 plus other expenses more than manageable on a single average income.
If I were single and looking to get into the market here I would definitely buy an IP below the median in a more affordable area and rent somewhere else myself.
I only have my PPOR here, despite the low vacancy rates the no land tax threshold and extra high stamp duty puts me off a bit for IP's in the ACT unless the deal really jumps out as a bargain.
Last edited:
1) Interest rates are 7.81% at CBA and about 7.3 elsewhere. Even at 7% your math is wrong.
2) Good luck renting a room in a house in banks for $190 per week.
3) You can't buy an IP with a 5% deposit. Stamp duty eats most of that up anyway.
4) An interest only loan... I don't think that is a good idea either. You never pay of any principle, thereby lowering your interest payments.
5) You didn't consider body corporate, land tax, and further increases in interest rates.
6) As a single person in the ACT you cannot afford to buy a "house" unless you have an EL1's income and about a 50k deposit. Anything else is simply ruinious debt. Sorry if reality makes me a 'naysayer'.
7) Positive talk does not create money.
Agreed! Very good point.
Expecting to just rock up in the capital city, without a decent deposit and/or decent income and instantly buy a large house is dreaming too. People need to set goals and chip away at them without expecting to get everything instantly.
You know that is exactly right. Unless you're planning getting rich quick out of property, apparently that is now admirable. Some people got lucky, so that means everyone must also get lucky too ? Right. After all you made a 600% return on a house you bought in 1990, so the same must apply in 2010. I'd rather just work towards things slowly, work hard at what I do and hope fortune finds me, but slowly. Apparently that makes me a naysayer because I am able to say ' I can't afford it'.
I don't know which part of my post suggested instantly buying a large house, or not having a decent income. The issue of the thread has been - it is difficult to buy in Canberra. I'd like to see the math proving otherwise.
So far no one has an answer to the very basic mathematical issue the 2+2 does not = 12 which means that a grand a week income doesn't afford you a house without significant risk, regardless of having a 10% deposit or not. Lets see how well you can buy a home after you've defaulted on the first one.
So I'll just go right ahead and assume we're all in acceptance that my original post was correct.
Actually, some people do just that - try checking out allhomes.
Tell that to IMB who have just recently approved us for a 97% LVR. Plus talk to a few brokers, there are more and more financial institutions coming back to these high LVR's.
PPOR - stamp duty is likely to be minimal if at all.
IP - if you are building and have seperate contracts for house and land you can derastically reduce this amount. Plus you can claim stamp duty as a tax deduction here in the ACT, we just got over half of it returned to us in a tax refund.
IO loans, you can still CHOOSE to pay off principle if you wish, but I believe most off us simply park our excess cash in an offset account and reduce our interest that way - if we don't have any 'non tax deductible' debt we want to pay off first that is.
This is a reality with any property purchase anywhere.
I'll be sure to tell that to all the people I know who do otherwise...
Dare I even point out that you could purchase a 'unit' rather then a house, you are after all single....
Oh and I have never had a 50k deposit in my life, and my DH was an APS5 with 3 dependants, when we bought our first house.....
Positive talk does allow you to be open to oppertunities though,
Whereas negative talk never done anyone any favours.
And just to quote myself:
By the way, if you cann't get anywhere as a single person with around $1000 p/w, I'm sorry but you don't have any hope....
Actually, some people do just that - try checking out allhomes.
By the way, if you cann't get anywhere as a single person with around $1000 p/w, I'm sorry but you don't have any hope....
http://www.commbank.com.au/personal...-home-buyers-home-loan-calculator.aspx?need=1
380k at 10% is 1688 per fortnight, add in land tax and body corporate of 50 a week is 894 per week, the rest of which would be taken up on bus tickets and utility bills and maybe not starving to death ( it is actually pretty hard to starve and I am sure some charity group would give me food).
So basically in an idea situation I could live of what my boarders paid me, so probably about 240 a week.
I really, really can't afford to borrow that much, so I'd need a good deposit preferably about 50. When/if I get an EL1, then I'll do it, though I could be waiting a long time for that.
If you cann't afford to borrow that much, DON"T. Figure out what you can afford to borrow, and then work with that.
It may be you can afford something, provided that you rent it out and don't live in it yourself.
It might be that you look for a little one or two bedroom unit in QBN or Gordon, etc, to live in as a PPOR.
Or it may be that you just continue saving until you can afford what you want. Nothing wrong with this option, but it will take you alot longer then it might have otherwise.
Canberra is NOT cheap. But there will still be something in your budget out there - the question is "Do you want to buy what is in your budget?"
The other thing to consider is buying outside of Canberra. Buy an IP somewhere else that is still cheaper and within your price range; you should even be able to find something cashflow positive which would help to increase you income, getting you that much closer to buying a 'house' here in ACT. Or look for a PPOR in a nearby area, Yass, Golbourn, Captains Flats, etc and do what many other canberrans do and commute to work.
I can see that you do want to do something, otherwise you wouldn't be on a Property Investment forum. The thing you need to figure out is; what IS possible? what options DO you have? And then work from there.
You are only limited by your imagination.
And it is certainly not a race. My plan is very long term. Acquire approx 5 / 6 properties (3/4 bed homes) over then next 10-20yrs and make a significant dent in the debt against them - this is including an upgraded PPOR for myself.
It may be you can afford something, provided that you rent it out and don't live in it yourself.
It might be that you look for a little one or two bedroom unit in QBN or Gordon, etc, to live in as a PPOR.
Or it may be that you just continue saving until you can afford what you want. Nothing wrong with this option, but it will take you alot longer then it might have otherwise.
Canberra is NOT cheap. But there will still be something in your budget out there - the question is "Do you want to buy what is in your budget?"
The other thing to consider is buying outside of Canberra. Buy an IP somewhere else that is still cheaper and within your price range; you should even be able to find something cashflow positive which would help to increase you income, getting you that much closer to buying a 'house' here in ACT. Or look for a PPOR in a nearby area, Yass, Golbourn, Captains Flats, etc and do what many other canberrans do and commute to work.
I can see that you do want to do something, otherwise you wouldn't be on a Property Investment forum. The thing you need to figure out is; what IS possible? what options DO you have? And then work from there.
You are only limited by your imagination.
And it is certainly not a race. My plan is very long term. Acquire approx 5 / 6 properties (3/4 bed homes) over then next 10-20yrs and make a significant dent in the debt against them - this is including an upgraded PPOR for myself.
I have never changed my position on anything - reread all my post throughout this entire thread and point out to me where you think I contradicted myself: I am more then happy to clarify and even admit if I am wrong!
I have never changed my position on anything - reread all my post throughout this entire thread and point out to me where you think I contradicted myself: I am more then happy to clarify and even admit if I am wrong!
Nah you had a go at me for saying I couldn't afford to buy a HOUSE.
Now you're talking about units etal, which really have nothing to do with what I intially said.
Bull.
I had a go at you for suggesting it is harder for singles then it is for married people to buy into the canberra market. Because that is utter crap.
I then (in the same post) suggested that you need to 'rethink', and find another way to go about buying into the canberra market.
I have always maintained it is 'possible' to buy into the canberra market and even eventually get the 'house' you want, but that you may need to settle for smaller first.
Try READING my posts. ALL of them.
I also suggested that maybe your attitude is what's holding you back. I believe that now more then before. If there is a will, there is a way. You just have this set way in your head as to how you WANT to proceed - but (by your own admission) you cann't: the problem is you don't look for other ways as to how to get there.
I gave you the benefit of the doubt that you must be on this forum because you want to get ahead. Obviously I was wrong. You just want to complain. You just want everyone to agree with you that 'poor' you have it sooo hard and blah, blah, blah...
whatever....
You can lead a horse to water, but you cann't force it to drink.
At the end of the day, I am only replying because I am borred and have nothing better to do. You can take or leave anything I have to say, I don't really care and I don't really expect you to take away anything, as you don't even seem to read my posts properly. It's no skin off my nose, if you sit there doing nothing for however long until you are an EL1 - at which point house prices will likely be higher and you will probably still be in the same position.
Me I have my PPOR, I will have tenants in my IP paying a significant amount of the mortgage for me in Feb, and I will be putting in place my other plans I need to put in place to get the bigger better house that I want to live in with my family.
A good attitude does not equate to dollars. Its heaps easier for a couple to buy a 3 bedroom house, infact I'd say they're the only people who really can afford it in the current market. I think that is just basic math.
What I find most bemusing is that I have a thread on buying a shitting one bedroom unit because that is all I can really afford.
What I find most bemusing is that I have a thread on buying a shitting one bedroom unit because that is all I can really afford.
There are definitely parts of Canberra that are expensive. I think it's surprising just how expensive outlying areas are.
I've bought several IPs in Canberra all in central areas (3 in Braddon, 1 in Phillip). I've started investing in Queanbeyan, because I have lived there practically all my life, and in the last few years have starting seeing very solid signs of gentrification. There is lots of redevelopment going on. Also, Queanbeyan is closer to the key areas of Civic, Barton and Woden than many parts of Canberra. It's also cheap compared with parts of Canberra with comparable commutes to the key areas, although this is changing now. Finally, the stock is of good quality - that 60 year old shoebox home might be old and basic, but it's typically well made and sits on a nice block of land.
Queanbeyan still has a stigma of being 'struggle-town', but again, this is starting to be thrown off by people who move there as a place to start, but then find they like it.
I've already seen very solid CG from my IPs (and they're all units, which is supposed to mean less CG), and I don't see big gains without improving a property over the next few years.
My next project is likely to be another block of units in Queanbeyan, similar to last year's project.
I've bought several IPs in Canberra all in central areas (3 in Braddon, 1 in Phillip). I've started investing in Queanbeyan, because I have lived there practically all my life, and in the last few years have starting seeing very solid signs of gentrification. There is lots of redevelopment going on. Also, Queanbeyan is closer to the key areas of Civic, Barton and Woden than many parts of Canberra. It's also cheap compared with parts of Canberra with comparable commutes to the key areas, although this is changing now. Finally, the stock is of good quality - that 60 year old shoebox home might be old and basic, but it's typically well made and sits on a nice block of land.
Queanbeyan still has a stigma of being 'struggle-town', but again, this is starting to be thrown off by people who move there as a place to start, but then find they like it.
I've already seen very solid CG from my IPs (and they're all units, which is supposed to mean less CG), and I don't see big gains without improving a property over the next few years.
My next project is likely to be another block of units in Queanbeyan, similar to last year's project.
