Homes officially out of reach for under 35's

[barney8]

b8, with regards to your response to the following comments here

with this comment......



Tax payable including medicare levy based on combined, but two single tax payers earning $50 & $55k is actually only 20,175, meaning $84,825 net pa. No family tax benefits taken into account here.....

You can get a mortgage today at 5.99% fixed for 3 years, and on a mortgage of $460k, P&I payment for the year is $33,060. Given the traditional concept of 1/3 of gross income being taken up by the mortgage, then 33,060/105000 = 31.5%.

What's out of the ordinary here?

I think a couple of things. first is expecting a HL to be at 6% for the life of it(30 years)?? , second is using a % of gross income to define affordablity.(last time I checked home loan payments on a PPOR came out after tax not before). Third, these guys(your employees?) are nurses. Arent they governed by a pretty lousy award? I mean I cannot see their wages increasing greatly, can you as their boss?

I hope for their sake that the market they have bought into 550K for that type of property is good buying and it will experience good capital gain(relative to other areas). At least then they will be asset rich.

I just don't think a household income of 105K warrants a 450K+ mortgage(if they had 100K on the nose for deposit then its prob around 470K with stamp duty). Particularly with three kids to feed/school/entertain, a couple of cars(i assume two, even if old and paid off require fueling, rego and servicing). Particularly borrowing at historically relatively low rates.

Household income of maybe 150K+ yes, but not just over 100K? Particularly when breadwinners work in an industry with no real prospect of major wage increases.(or maybe you can correct me - joe public, on that point, obviously you knowing a lot more than I would in the area of nursing).

Maybe they are entrepreneurial and have a few other income streams going. Maybe enough dough provided via an IP.(although you alluded them to using equity to buy into this new place?). But on face value, I think they have put themselves into a pretty risky situation.

 

[mattysavager]

I think that under 30s have high expectations.

You can rent somewhere pretty nice in inner Brisbane for $400 per week, but if you spend that same $400 per week on a mortgage, that doesn't buy much. For their $400 rent money, they get ducted AC, dishwasher, under 10 years old, 2 bed 2 bath.

In my real-estate office, between 5 of us (all under 25 years old, all earning around 50K), we own 7 properties. We're realistic and switched on to the local market, which helps. Under 30s just aren't trying hard enough. And now is the perfect time to buy.

 

[barney8]

I think that under 30s have high expectations.

You can rent somewhere pretty nice in inner Brisbane for $400 per week, but if you spend that same $400 per week on a mortgage, that doesn't buy much. For their $400 rent money, they get ducted AC, dishwasher, under 10 years old, 2 bed 2 bath.

In my real-estate office, between 5 of us (all under 25 years old, all earning around 50K), we own 7 properties. We're realistic and switched on to the local market, which helps. Under 30s just aren't trying hard enough. And now is the perfect time to buy.

Own as in paid off on under 50k per year? Great work! Been scooping the pool of cheap property before it hits the market?

whats about your PPOR? rent/own/paying off?

 

[lizzie]

Now you just being sarcastic ... you full well understood that he meant owned/mortgaged.

It is very possible to own/mortgaged at under 30 - even under 25 - as shown time and again, with real life examples, from personal experience by people on SS.

 

[matto_]

and another story purporting the same thing.


http://www.theage.com.au/business/housing-stress-hits-young-people-hard-20120418-1x6ii.html

 

[Luv2Travel]

and another story purporting the same thing.

Is this for real:

"Underscoring the difficulties, three out of four Youth Allowance recipients receiving rental assistance were still in housing stress after they received the payment, said Ms Toohey."

""For example - Youth Allowance for a young person living independently is $201 per week plus a maximum rate of rent assistance at $60 per week giving a total income of $261 per week."

Where's the part time job??


Read more: http://www.theage.com.au/business/h...people-hard-20120418-1x6ii.html#ixzz1sN5ZC3ZF

 

[barney8]

Now you just being sarcastic ... you full well understood that he meant owned/mortgaged.

It is very possible to own/mortgaged at under 30 - even under 25 - as shown time and again, with real life examples, from personal experience by people on SS.

Using debt is wise, but I believe it can be done very recklessly as well.

Take the two examples from buzzlightyear. his 1st I would view as probably responsible. But the 2nd I think is reckless.

Claiming(and or having) lots of property does not necessarily make you a wise investor/home owner.

 

[mrsdawnrazor]

The examples actually came from me. My employees are not nurses, their spouses are. I don't believe these guys are being irresponsible, they are making choices that others may not choose to make. They have prioritised owning their own home over other lifestyle choices, and whether or not you think t is fiscally responsible is not the point. The theme of the thread was whether housing is affordable for the under 35's and the examples show it is.

I know these people, they are not numbers and they are NOT under mortgage stress. When the second couple needed some extra cash to replace their car, the husband went from day shifts to night shifts to increase his income. Again another choice, prioritising a safe car over their old rust bucket.

Will their income increase - yes it will - both work in marketing and have the ability to move up the corporate ladder so in five years time when they are earning a lot more, plus having (hopefully) gained equity in their home, will they have been irresponsible?

 

[Deltaberry]

Is this for real:

"Underscoring the difficulties, three out of four Youth Allowance recipients receiving rental assistance were still in housing stress after they received the payment, said Ms Toohey."

""For example - Youth Allowance for a young person living independently is $201 per week plus a maximum rate of rent assistance at $60 per week giving a total income of $261 per week."

Where's the part time job??


Read more: http://www.theage.com.au/business/h...people-hard-20120418-1x6ii.html#ixzz1sN5ZC3ZF

The Age?

Is that the left-wing newspaper where journalists can't afford houses?

 

[VYBerlinaV8]

Claiming(and or having) lots of property does not necessarily make you a wise investor/home owner.

It doesn't necessarily make your a bad investor either. It depends on the property you bought and what you paid for it.

 

[The Fence]

and another story purporting the same thing.


http://www.theage.com.au/business/housing-stress-hits-young-people-hard-20120418-1x6ii.html

Wouldnt it be amazing if the media reported on the real life experiences of how the young CAN afford property today.

Agenda.....

 

[Dan_p]

Wouldnt it be amazing if the media reported on the real life experiences of how the young CAN afford property today.

Agenda.....

Exactly, it is a thing called perspective

 

[kum yin lau]

Hi, depending on timeframe, a loaf of bread has gone up how many times? So bread is unaffordable.

When is the best time to buy?
Today is the best time to buy.

When is the best time to sell?
Today is the best time to sell.

This opinion doesn't come from me. I read it somewhere.

KY

 

[Melbournian]

depending on their income level and where they want to purchase.

if it is a couple earning around 40-60K each for the last 3 years and planning to start a family with only a small deposit of 30-40K then places in vic like hawthorn, glen waverley wouldn't be an option. they would have to go further out.

if you go back 15 years ago and i know ppl starting on salaries around 40-60K - you could buy an armadale townhouse for like 400K.

Average salaries just aren't what they are here in australia

should watch the series, million dollar listing new york and see how many places sell irrespective of their million dollar tag and they are so many ppl buying these in the US

 

[Jonril]

The Age?

Is that the left-wing newspaper where journalists can't afford houses?

I am not suprised they cannot afford housing. I hear the copywriters get paid a ha'penny per article and have to cover ink and pad costs themselves.

They should strike for the right too collective organisation. The media barons will probably lock 'em out however.

Bleak times we live in can't afford a decent latte for a fair days work.

 

[Aaron_C]

I am not suprised they cannot afford housing. I hear the copywriters get paid a ha'penny per article and have to cover ink and pad costs themselves.

They should strike for the right too collective organisation. The media barons will probably lock 'em out however.

Bleak times we live in can't afford a decent latte for a fair days work.

A latte these days in the CBD costs $3-$3.50. How is that unaffordable? I particularly like reading the comments on any The Age / SMH article about property.

 

[Aaron Sice]

A latte these days in the CBD costs $3-$3.50. How is that unaffordable? I particularly like reading the comments on any The Age / SMH article about property.

come to Perth - just drank $4.80 worth.....

 

[Aaron_C]

come to Perth - just drank $4.80 worth.....

Wow but you guys get paid $100,000 to drive a truck don't you?

 

[Aaron Sice]

Wow but you guys get paid $100,000 to drive a truck don't you?

yeah it's so easy spending 3 out of every 4 weeks in fifty degree heat away from family and friends - anyone can do it....

oh, wait....they're still hiring - i wonder why?

 

[Deltaberry]

yeah it's so easy spending 3 out of every 4 weeks in fifty degree heat away from family and friends - anyone can do it....

oh, wait....they're still hiring - i wonder why?

Omggggggg I can't believe I'm meant to work hard for $100k.