House Prices Slump

[willair]

Got that right. They don't want to live within their means.

BTW...does anyone else remember when they bought their very first property, and there was no FHOG than?

Nope never got nothing from the government,in fact i never even knew about those things in 1982 but Australia had a different mind set back then,you just got out and made it happen,no internet,bend over each time you went in and seen the Bank Manager and hope they would lend me the money at 19% so so different today,and look at the problems this country now faces because of easy money..willair..

 

[urchin]

No, it isn't.

There are a zillion places for sale for under $250k. Under $300k there are ten zillion.

But they are not the Taj Mahal, right on Ackland st.

That's the FHB's problem.

They want to be in the coolest pad, in the coolest spot, right near work.

They've all been watching "Friends" for too long.

Sure. it has nothing to do with housing prices being at a high versus versus annual income. nothing at all. they are all just selfish *******s. has nothing to do with speculation running up prices and creating a housing bubble....

by the way, "zillion" is not a real number

 

[Bill.L]

Hi all,

urchin,

What Bayview is getting at is that the story is the same as it always has been. A young couple can easily afford to purchase a bog standard 3 bd brick veneer in the outer suburbs. Nothing fancy, not the best location, not necessarily close to work.

I've stated it adnauseum on this forum, the cost for the young couple FHB today is probably less than that of 27 years ago.

1981, young teachers wage $12,500 pa X 2 = $25,000. Interest rates 12-13.5%
FHB grant $3000. Bog standard 3 x 1 house (20 plus years old) $44,000.

2008-9, young teachers wage $50,000 pa X 2 = $100,000. Interest rates 7-8%
FHB grant $14,000. Bog standard 3 x 1 house (20 plus years old) $190-230k.

Certainly "years of income" for the house is slightly higher, but the interest rate paid on the loan is much lower. Plus of course there was plenty of gloom and doom about the future in 1981, just like today.

bye

 

[keithj]

What Bayview is getting at is that the story is the same as it always has been. A young couple can easily afford to purchase a bog standard 3 bd brick veneer in the outer suburbs. Nothing fancy, not the best location, not necessarily close to work.

Another way of putting what Bill & Bayview said ....

FHBs don't really want to see property prices fall (by 40%?), they just want to be able to afford a house. Flat houses prices (since 2004) and wages increasing by 4%pa in 4 yrs means they are 20% more affordable.

An IR drop from 9.25% to 7.25% is a 20% increase in affordability.

The FHOG is huge free kick. It's always been hard to buy a 1st home, deal with it.

And remember that anything much better than a basic 3 x 1 home is a discretionary expense - there are plenty of entry level homes available that can be bought with a below median income.

 

[DavidMc]

Ahh yes Bill, that's true, but Friends wasn't on air back in 1981!

Not even Neighbours until 1985 (which was filmed in the outer suburb of Vermont).

 

[sunshine]

BTW...does anyone else remember when they bought their very first property, and there was no FHOG than?

1995. I was looking at the paperwork recently and was hit with $3.5k in legal fees. Every search and fee they could find.

Being a single female the bank said no, but the friendly Credit Union said yes. Not knowing anything back then I was obviously taken for a serious ride.

No FHOG available.

Sunshine

 

[Property Meister]

1981, young teachers wage $12,500 pa X 2 = $25,000. Interest rates 12-13.5%
FHB grant $3000. Bog standard 3 x 1 house (20 plus years old) $44,000.

They had the FHOG in 81 did they????

wow never knew that always assumed it was something designed in the last 5-10 years!!!!

 

[LynnH]

PM

They had the FHOG back in about '79 to '80, if I remember correctly - we bought our first PPOR in 1978 and missed out on FHOG (it didn't exist then) and friends bought about 12-18 months later and got FHOG ..... sorry I can't remember the exact dates.

Back then FHOG only existed for a relatively short time (again, can't remember exactly how long) and then didn't make a re-appearance for years.

Sorry about all the 'can't remember how long/exact dates' etc - 'old-timers' disease' is my excuse! But, yeah, it's not a modern invention!

Cheers
LynnH

 

[BayView]

BTW...does anyone else remember when they bought their very first property, and there was no FHOG than?

Yes.

I bought my first PPoR in 1985 with my girlfriend. $93k from memory.

We had to save our @rses off for about a year for the deposit while renting, and we got knocked back by my bank because she "was of child-bearing age" which would affect servicability I guess. We were both earning a decent quid too - about $30k each.

We went to another bank and got the loan - 80% P&I.

No FHOG then.

 

[BayView]

Sure. it has nothing to do with housing prices being at a high versus versus annual income. nothing at all. they are all just selfish *******s. has nothing to do with speculation running up prices and creating a housing bubble....

by the way, "zillion" is not a real number

Property has been going up and up and up ever since I had my first bum wipe.

It was expensive then, it's expensive now. That's why loans were invented.

Zillion sounds good. Sorta adds some drama to the whole thing.

I like gazillion as well - that's 100 zillions. Or is it 1000?

I would have used gazillion, but I didn't want to exaggerate.

 

[Sunfish]

I've stated it adnauseum on this forum, the cost for the young couple FHB today is probably less than that of 27 years ago.

I hadn't thought of the house being any easier to buy (it never was easy) but what you say sounds about right. What has become considerably cheaper is the cost of "setting up house". As a percentage of a year's wage the durable goods needed to live, with the possible exception of furniture, would be less than 10% of what it was.

Because of this high cost almost all purchases were done on HP at 10% flat (this is close to 20% reducing) and the items sometimes didn't outlast the finance. Low income earners (and they were very common) found themselves in a debt trap. The older folk then still had vivid memories of the depression and the war so home ownership wasn't as important.

On reflection this would have been more'n 27 yrs ago, but I saw it.

 

[Peter 14.7]

No, it isn't.
FHO want it all

They've all been watching "Friends" for too long.

To illustrate this point it commonly known that the careers/incomes of the characters in friends would never have sustained the rent of the apartment they had.

Peter

 

[Peter 14.7]

Yes.

I bought my first PPoR in 1985 with my girlfriend. $93k from memory.

We had to save our @rses off for about a year for the deposit while renting, and we got knocked back by my bank because she "was of child-bearing age" which would affect servicability I guess. We were both earning a decent quid too - about $30k each.

We went to another bank and got the loan - 80% P&I.

No FHOG then.

Stop me now. Favorite rant ahead!

ME TOO!

We bought for $72.5K. Toolevery $ and I cashedin my super $3k and wife dad loaned us $7k to get the deposit. Bank charged 13.5% and didnot include wife as 'we would obviously be having children soon". We were 22.

Well bank was right but soon is stretch at 16 years later.

To all those FHO struglling to get the first one let me say, it was always a struggle! My advice: Buy as little as your ego can afford and save, save save.
We bought in 1989 our first PPOR and was PPOR debt free in 2003. It took us 14 years albeit we moved three times with work but again nothing special.

First new car was 10 years into our marriage. Save save save!

Peter

 

[quoll]

Perhaps slowdown would be a better description.

bye

Slow down will not sell as many news papers! Depression / Crash / Recession good solid words that induce fear and apprehension, also help sell news papers.

Why bother with the truth when a sentational headline will sell more news.

It's good to see some of the old guard coming back.

Cheers
Graeme

 

[sailor]

PM

They had the FHOG back in about '79 to '80, if I remember correctly - we bought our first PPOR in 1978 and missed out on FHOG (it didn't exist then) and friends bought about 12-18 months later and got FHOG ..... sorry I can't remember the exact dates.
LynnH

I bought my first PPOR in 1981. NAB knocked me back because I was a single income female, newly divorced. Credit Union gave me a high interest loan, and there was no FHOG.

 

[quoll]

They had the FHOG in 81 did they????

wow never knew that always assumed it was something designed in the last 5-10 years!!!!

They also had it in the early 90's or late 80's but by 92 it had shut it's doors, we missed out, bought in NOV 92, missed out on baby bonus's they had them before and after our kids where born.

Oh poor us we miss out on all the freeby hand outs.


BAahhahhaha

 

[sailor]

Oh poor us we miss out on all the freeby hand outs. BAahhahhaha

Yes, you and me, we just fund them for the others!

 

[Peter Parker]

Yes.

No FHOG then.

In the '80s it was called the 'First Home Owners Scheme', and about $7000 if I recall correctly.

Grants or cheap loans for first homebuyers have been a policy for the better part of 60 years:

http://www.abs.gov.au/Ausstats/[email protected]=Summary&prodno=1301.0&issue=2001&num=&view=


Peter

 

[plusnq]

The grants were staged payments. Initial lump sums were much less than $7,000, about $3,500 maximum. The grant was income tested on a sliding scale.

http://parlinfo.aph.gov.au/parlInfo...cheme 1983;querytype=;rec=10;resCount=Default

Ended 30.6.1991

I never qualified sadly. Nothing new there

Cheers

Shane

 

[Sunfish]

I never qualified sadly. Nothing new there

I don't really want to whinge because I think I won the lottery being born where and when I was although my parents could not say that. (In spite of being a triple certificated nurse, Mum never worked a day after she married)

There was a lot to be said about being raised before TV. I never knew I was so poor, but I spent time fishing and swimming.

But without rich parents university wasn't an option. You youngsters mightn't like HECS but at least you had the option.

And there was bugger-all help when raising our family. Child-care and pre-school didn't exist. Mrs T was able to work because we were part of a family. The Gov never contributed one cent.

We had to save 20% of our house price plus legals etc.

We also missed out on the Howard handouts because we were neither high earners nor battlers with dependent kids.

The recent Rudd largesse is the first handout I remember getting.

In case you think I'm bitchin I'll reiterate:

I think I won the lottery being born where and when I was