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Our son at age 22 bought his first unit. One year later, he is about to move into his first house, half share (renting out the unit). It can be done, even on a salary less than "average".
You just have to lower your expectations (as we all had to when we first bought) and compromise, and work and spend to a budget.
And James tell me....could you afford to buy a property today if you were looking at buying one?
Two people who work for me
Male aged 25, $50k pa,works Northside Brisbane wife aged 25, nurse, $50kpa works RBH, purchased 3/2/2 in Northlakes for $345k with 45k deposit - 3 x income.
Female aged 30 $50kpa,works Northside brisbane, Husband, 33 Nurse C$55kpa works Redcliffe Hospital, bought 2nd home in Caboolture 4/2/2 on 1100 sqm for $550k with $100k equity earned on their fist home purchased 6 years earlier - just over 4 x income (oh and 3 kids)
Commute - 35 minutes to Northside, 1 hour to CBD, 15 Minutes to Redcliffe - affordable, yes with 2 incomes but neither earning over the odds. Times have changed and 2 incomes are needed but also available. These guys are not struggling, have holidays, evenings out etc but set a priority of buying their own homes early.
.....Female aged 30 $50kpa,works Northside brisbane, Husband, 33 Nurse C$55kpa works Redcliffe Hospital, bought 2nd home in Caboolture 4/2/2 on 1100 sqm for $550k with $100k equity earned on their fist home purchased 6 years earlier - just over 4 x income (oh and 3 kids).....
Question on number 2, Not struggling? 105K P/A approx 75Kpa after tax I imagine would be reasonably generous.(with family tax benefit).
Repayments on 460K mortgage? 32K just in interest.(let alone any principal) so if they tip in a tiny bit more to actually pay down some debt and half of their after tax income is going into their house.
Then they have to feed, school their three kids, run prob two cars? All on 35-40K per year? Sounds tight, once you take out groceries, a little entertainment, a little sanity time off. Not super comfortable.
6 years to earn 100K in equity too. doesnt sound huge for a family home. might have been easier to rent and save in hindsight there....
Yep I bought my first property with an income under 30k PA
looked at 1 last week 210k rented 300 per week 1 acre block can be split into half acre blocks maybe 1/4 acre.
population approx 60,000 many more like this around atm...
What about the poor buggers over 35?
As most mortgages are for 30 years, buying at 36 will mean technically they will still have a mortgage at 66, after retirment. So lenders need to see an exit strategy. The problem becomes worse the closer you reach retirement age, and the less super and other assets you have..
They don't have to take the whole loan period to pay it of though.
But of course; that's not what people do; you've gotta borrow as much as you physically can, pay the minimum repayment (because you're at your borrowing limit) and hope like hell the interest rates don't go up.
This would explain why a .25% change, or a jump in the price of petrol each week, sends so many screaming into the streets with shouts of.... "OMG!...how will I afford the groceries now?"
And how much pain will your mortgage actually inflict in the future when you are paying $3 a litre for fuel.$10 for a can of coke. $800 per week for your average rent etc etc.
And most importantly average wages have adjusted up to allow for this new cost of living.
things look bad today( and for many they are) but things change . Ask your parents,grandparents. They will keep you entertained for hours about what things use to cost and what they use to get paid.
Probably not much pain at all as wages would have gone up a fair bit as well
My point exactly.
I'm not going to argue the fact that it's a hard time to buy for some or the fact that better investment returns may be found elsewhere.
But I think you can safely say that with time it will get easier.