Oh my. I have just read this whole thread. And this link :
http://forum.globalhousepricecrash.com/index.php?showtopic=20868
The price of property to fall? This is laughable. The reason that the price of property has grown is becuase it all comes down to demand and supply.
My my how quickly have people forgotten. How many needed to share a bedroom back in the day? How about a family of four or five sharing the same bathroom? It was managable back then, so why shouldn't it be now?? Were credit cards available to every Harry and Sally back in the day?
I remember when I was a young child, I went to wedding invitied by my parents friends and relatives. Fast forward a few months later and we would go visiting. The newly weds had either stayed with their parents or moved in with the inlaws. In 4 years they managed to save a VERY reasonable deposit which enabled then to buy a nice house and the loan to be paid back easily. PEW people would do such a thing now.
I'm 26, I study full time, I work full time and i'm currently building my PPOR. I have a few friends who bought their first homes while also studying full time and working full time. There are a number of students who are renting. They want to play house, have parties and have boys stay over.
I was taught NEVER to buy a car through finance or through a loan. I was young, and 18 and I wanted a car. My parents forbade me to take out a loan. When I did get my first car, they showed me that it was NOT an asset. As soon as I drove my car out of the dealer why wheels were worth a WHOLE lot less as my parents tought me before.
This anticipation of a housing crash may happen but highly unlikely. Is the population going to decrease for this to happen? So people are not going to reproduce? Skilled immigrants to be refused visas? Australia to ban the incusion of regugees? GET REAL. People will reproduce, skilled immigrants will come here and we will offer support to refugees. 97,500 places for skilled migrants have been allocated for 2007-2008. In yesterdays paper I read that 13,000 people will be offered refugee status here.
It's all about SUPPLY and DEMAND.
Once upon a time people got married in their early twenties and there were two incomes going towards the mortgage. It was paid off quicker. All those years back, 2 year old childern were not wearing baby nike sneakers, or wearing baby country road. THAT IS A FACT.
Now a days people are marrying later, into their thirties. Thats when they buy houses. Or people want to buy a house on a SINGLE income. It wasn't done like that before. Oh and lets not forget the divorce rate compared to before. Obviously when a couple divorces there is a need to house an extra person in society.
My parents own many homes including a beach house as well as Ip's outright. If they can do it anyone can. Some facts as to how they got there:
They did not go on a holiday for 7 years after buying their first PPOR and obviously had a loan to pay.
We wore hand me downs incuding toys. My bike had to last me a long time. My parents wern't going to buy me one every two years.
Both my parents worked.
My dad was offered overtime and took it everytime. Something he still does today.
When my dad bought a new car. He could afford the BMW X5 cash. Instead he got a Nissan X Trail.
My parents were paying more than 18% interest for their current PPOR back in the day (only coz they didn't sell their PPOR at the time). Times were tight but we got through. I was never allowed a pair of nikeys until my parents had just about paid off the loan. With their work ethic it didn't take long.
My parents NEVER lived beyond their means and my parents taught me that if you can't afford to buy things in cash, well then you simply can't afford it (with property being the exception of course).
My parents have taken me to visit their home country. It was a culture shock to me to see 3 generations living in the same house. People there have NO choice. They can't afford to buy and the cost of housing is high. We have it pretty good compared to that. My parents bought a house there. In 1985 it cost them 60k AUD. Yes it has increased the problem is that the MONTHLY wage there is 500 euro and your lucky if you actually get paid. Work opportunities are limited. THAT IS REALITY. I have reaslised that i am lucky that my parents had a dream and that was to come here to have a better life. They didn't throw it away. They busted their guts and said that their children will have everything they didn't have and more.
The reality is that there will always be rich people and poor people. Like my father says in this country as long as you have the drive to work you will always have an opportunity to have whatever you want. People become greedy and buy things that they cant afford. One of my mates took out a loan for a 1 month USA holiday. People like that will continue to exist. There will always be people who want doodads but can't afford them.
You will also have people otherwise known as "old money". These people will be set and hey most parents want the best for their children. Then these children will likewise want the best for their children and invest for their future.
And I wonder why the family in a newspaper article that I read even went out and bought a house and land package in the outer subs when they already had two young children and another who just came along. The wife wasn't working. He had just lost his job. They admitted to living on the credit card. Oh and they NEEDED two cars worth 50k right?
