What planet are you on. Now is not the time to be buying a house if your worried about your job. Are you for real??
Sorry but thats the stupidest thing i've read on this forum.
First Home Buyers Back in the Market
- Thread starter suburbangirl
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What planet are you on. Now is not the time to be buying a house if your worried about your job. Are you for real??
Sorry but thats the stupidest thing i've read on this forum.
I think what sparky is trying to say is that IR's have fallen so much and the purchase prices has (in some areas) taken a hit to the point where now (in some areas) it is about the same cost to make payments as it would be to rent. Rents are seemingly going up & up.
If you lose your job you still need to live somewhere - why not your own home if it is the same cost as renting? In this case it would be better to get a home loan now while you still qualify, because if you lose your job you may not qualify - makes perfect sense to me - but maybe I'm biased
I don't post on this site very much now since "D&G" is not welcome, but I can not let this go without comment.
Sparky23, this is possibly the worst "fiancial advice" I have ever seen in my 40+ years on this planet. My god, do you understand the world of pain you are happily sending people down if they are foolish enough to follow it ?
The one and only priority for anyone who is not in a secure job right now is to bunker down and get rid of debt before things get a lot worse.
If you get to keep you job, then you are well set up to do ok when the recovery finally comes... if you lose your job, at least you are not crippled with a mortgage and foreclosure sale.
Sparky23.. you should either put a warning on the footer of all these kinds of posts that you are not a FA, or you need to post your license so that complaints can be directed to the correct authorities.
Sorry but surely people have to live somewhere and if rents skyrocket as predicted but interest rates continue to fall as they are doing then it will be a cheaper option to pay a mortgage than to pay rent, this has already happened in many areas. In addition the money spent putting a roof over peoples heads will be buying them an asset that will increase in value and therefore improve their future position. The trick will be to fix at the correct time, these are my opinions not my advice people read the differing opinions and make up their own minds.
If interest rates rise it means the economy is picking up and needs slowing down - the dreaded deflation risk being no more. So I suspect demand will be driven by whatever combination of economic growth and/or inflation you predict to occur to bring this on...
It may fall, stagnate or pick up as a result - you pays your money and you takes your chances. Personally I think the higher yields available with these properties provide protection and if it all keeps turning to custard economically you can definitely see more people trading out of the expensive stuff (whether they rent or own it) to go live in the cheap stuff which at the very least provides a floor for cheaper properties.
Just my 2c.
The pain of having to liquidate property when you're unemployed to resolve debt seems to elude you. In a high-cost rent situation you can walk away at short notice. Selling into a market where others might be selling due to similar circumstances will cause nothing but heartache.
Let them rent sparky, in this game we play who dares wins.
When rents skyrocket the losers can join the fury club and whinge about the high rents they have to pay for a dog box to greedy landlords and about the greedy specufestors who bought all the cheap houses while the economy was shaky.
You are 100% right, without the mortgage you can always move back with mum, find a room at St Vinnies or find an unused park bench if you blew the rent money on booze or drugs.
You mean like the current market ? Because right now its not exactly a sellers market.
I think people forget buying property is a long term proposition. Sure rates are low now, sure you can fix. Whats the bet fixed interest loans reset in a high interest, low unemployment time in the future. Then what?
A lot of people (property investors included) have short memories and they can forget that rates go up and down, economy goes good and bad etc. This selective memory combined with unbridled optimism is the reason people get hammered financially, lose a lot of money and often nearly lose their house(s). As been seen numerous time on the forum.
By the way: With 7000 jobs lost just yesterday, closing of some Hardly Normal stores and LARGE retailers going into liquidation this week. The signs are bad for the coming year. Unemployment rising, recession a definite etc
If you think property prices and rents can continue to rise in the coming year. Well....what can i say.......good luck....i think you'll need it.
The current buying activity is like a suckers rally on the stock market and will fall in a heap when government assistance ends in June 09.
A lot of people (property investors included) have short memories and they can forget that rates go up and down, economy goes good and bad etc. This selective memory combined with unbridled optimism is the reason people get hammered financially, lose a lot of money and often nearly lose their house(s). As been seen numerous time on the forum.
By the way: With 7000 jobs lost just yesterday, closing of some Hardly Normal stores and LARGE retailers going into liquidation this week. The signs are bad for the coming year. Unemployment rising, recession a definite etc
If you think property prices and rents can continue to rise in the coming year. Well....what can i say.......good luck....i think you'll need it.
The current buying activity is like a suckers rally on the stock market and will fall in a heap when government assistance ends in June 09.
HAHA...that's funny. Are you serious? If you are, good luck with it.
Have you heard the term 'risk management'?
Have you heard the term 'risk management'?
The government assistance is unlikely to end in June. More likely they will increase the assistance, in addition to tax cuts and further monetary and fiscal stimulus.
I agree.
There are too many who foolishly think that recent (40 year) trends are the norm, and long term (200 year) trends are no longer important.
The amazing rise of Real Estate is a short term event... that does not mean you can't make money out of it... just that it's easy to forget these booms have very looooong periods where capital gains is zip... even less than zip.
It's a matter of what picture you are looking at... the micro one (12 month), the mini one (1-2 years) or the macro one (10-20 years), or the mega one (50-100 years)... yes I pulled these descriptors out of my own mind.
If you don't mind parking your debt into a depreciating asset for 5 - 10 years (or longer) right through a recession the magnatude that very few of us have ever experienced before ... then giddy up...
Personally, I'm into capital preservation... I'll buy assets when they are (historically) cheap on my own time frame..... done it before with real estate, will do it again.
If the cycle is of such a long period this time around that Real Estate is not cheap enough for me to participate again before I retire from it ... then too bad... there is a very large basket of assets to cherry pick from... Real Estate has been good, but it is only one class. I suspect that Oil will become a better investment than Real Estate going into the mini and macro picture, but that's just my own guess.
agreed...
and it will not work if the Gov. aim is to keep Real Estate prices going up (or from falling).
Australia is NOT different enough from USA, UK, Ireland, Spain, NZ etc. to avoid a very long and painfull recession.
I wish you the best with your investment... your going against the global tide ... "just keep swimming, Just keep swimming, Just keep swimming"... la la la la la.
Possibly, we don't know at this stage. But if they do extend is that a realistic basis to buy long term investment property.
You are getting away from market and investment fundamentals here and investing in an artificially created economic & property market environment.
What happens when the assistance does stop (government cant go into deficit forever), IR are rising, employment is higher, recession etc...what then.
Property is (or should be) a medium/long term bet. Not a year or two,
You are getting away from market and investment fundamentals here and investing in an artificially created economic & property market environment.
What happens when the assistance does stop (government cant go into deficit forever), IR are rising, employment is higher, recession etc...what then.
Property is (or should be) a medium/long term bet. Not a year or two,
Can I just say that I wasn't trying to say that people can rush out and buy luxury penthouse apartments and be able to afford them with no job!
I am talking about something much more sensible and affordable that will put a roof over peoples heads and no it may not be in areas that some of you would choose to live for example consider a price range of $250,000 - $350,000. In NSW the FHOG on a new build or h/l package is $24,000 leaving on $350,000 $326,000 if other costs are covered or a little more if rolled into the loan and if there is no further deposit available so weekly repayments depending on interest rates and on interest only would be:
6% - $407
5% - $313
4% - $250
On a $250,000 property with same grant applying:
6% - $260
5% - $217
4% - $173
Surely these numbers will have to look attractive with rents moving, I think $250 at the moment is one of the cheaper rents around again depending on area but these will be increasing. My properties are rented out at $290, $345, $350, $375 and $390.
Variable rates are a tad over 6% now and look to fall a fair bit more on Feb 3rd so down to the 5's and more anticipated, if people don't want to wait for a better fixed rate there are 4.99% available now. As mentioned if the rates go up again that will be because the economy is getting better ergo jobs will be available again.
This is just a forum and everyone has a different take on things, I only have logic to go on not a zillion years of experience or diplomas in economy or whatever. Just my thoughts.
I am talking about something much more sensible and affordable that will put a roof over peoples heads and no it may not be in areas that some of you would choose to live for example consider a price range of $250,000 - $350,000. In NSW the FHOG on a new build or h/l package is $24,000 leaving on $350,000 $326,000 if other costs are covered or a little more if rolled into the loan and if there is no further deposit available so weekly repayments depending on interest rates and on interest only would be:
6% - $407
5% - $313
4% - $250
On a $250,000 property with same grant applying:
6% - $260
5% - $217
4% - $173
Surely these numbers will have to look attractive with rents moving, I think $250 at the moment is one of the cheaper rents around again depending on area but these will be increasing. My properties are rented out at $290, $345, $350, $375 and $390.
Variable rates are a tad over 6% now and look to fall a fair bit more on Feb 3rd so down to the 5's and more anticipated, if people don't want to wait for a better fixed rate there are 4.99% available now. As mentioned if the rates go up again that will be because the economy is getting better ergo jobs will be available again.
This is just a forum and everyone has a different take on things, I only have logic to go on not a zillion years of experience or diplomas in economy or whatever. Just my thoughts.
So you're suggesting that if you don't feel secure in your job you should take out a mortgage? The financial advice on this forum is spectacularly bad.You are 100% right, without the mortgage you can always move back with mum, find a room at St Vinnies or find an unused park bench if you blew the rent money on booze or drugs.
You mean like the current market ? Because right now its not exactly a sellers market.
One could argue that the previous FHOG stimulus earlier this decade caused a rush of people to over commit in a booming Sydney market and led to the consequential collapse in FHB areas in the west of the city.
I agree with your sentiments re: artificial stimuli. Right now we have FHBs in states with boom prices locking in large loans at low rates. Going forward, unless there is another favourable wage boom, it may be very difficult for those FHBs to service these very large mortgages as interest rates increase or unemployment rises.
Can someone outline a scenario where interest rates rise and unemployment rises at the same time? To me that only means inflation is getting out of control - if economic growth was causing interest rate rises then unemployment wouldn't be a problem.
If inflation gets out of control (a pretty reasonable possibility IMO) then rents will rise to keep up so renting won't be particularly attractive either. Whereas a long term fixed rate mortgage gives you protection against this scenario.
But then if a FHB is insecure in their employment I don't think they have the luxury of taking advantage of this.
Us investors however - an environment of rising rents (inflation), long term locked in IRs on the slump and an increasing demand for cheap accomodation could well be a profitable combination.
If I could afford the repayments even if I lost my job then I would, but that is what I would do. I'm not suggesting YOU do that or anything else for that matter, what I could suggest is that if you are in need of financial advice to find yourself a good financial adviser and pay him for advice. Taking advice from anonymous posters on some forum is plain STUPID and free advice is worth just that.
Lucky for you then, you probably take your advice from the other forum.
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