Economists - Decade of house pain predicted

[BayView]

Hey Bayview, if you are willing to divulge, at $245k sale price what gross yield does this represent?

Not that good for an investor trying to buy now.

It will rent for $220 per week, and the sale price right now is likely to be in the $240's.

I wouldn't buy it if I was an investor, but I want yield and potential CG.

We pais $155k at purchase, so our yield is decent.

The problem also at the moment for the market is that very few people are able to get finance. Banks are not being very friendly, despite what what some here might think. They personally may be able to get it, but the wider community has been shut out. The criteria is really tight.

This is the thing that no-one in the media is metioning.

 

[Deltaberry]

My suggestion would be to buy some of those 9+ wagyu marble

 

[Different Here]

Economists - Decade of house pain predicted

Pain for whom? A correction in prices won't be painful for young people hoping to buy their first home. Why are they given a lower priority than existing homeowners?

 

[Aaron_C]

Pain for whom? A correction in prices won't be painful for young people hoping to buy their first home. Why are they given a lower priority than existing homeowners?

They will be in pain when they lose their jobs due to a house pricing crash meaning they can't afford a home anyway

 

[Different Here]

They will be in pain when they lose their jobs due to a house pricing crash meaning they can't afford a home anyway

Existing homeowners are just as likely to lose their jobs, so a drop to more affordable prices will help level the playing field. In fact, with so many families relying on dual income, the loss of just one job will mean they lose the house. So dual income homeowners are twice as likely to be hit by job losses.

 

[VYBerlinaV8]

Existing homeowners are just as likely to lose their jobs, so a drop to more affordable prices will help level the playing field. In fact, with so many families relying on dual income, the loss of just one job will mean they lose the house. So dual income homeowners are twice as likely to be hit by job losses.

The bit I think we're missing here is that if there is a major price drop, unemployment will shoot through the roof. Banks won't be lending, either, so I'm not sure how first home buyers generally will be any better off. Sure, the numbers will be lower, but so will their prospects and ability to borrow and repay a loan. As always, a few will do well.

The market is now just past it's peak. Give it some more time, and prices will relax a bit further. They aren't going to go back to 2001 levels in the desirable locations, however.