How Can Savings Keep up with Property Prices?

[BayView]

Keeping the money in term deposits is obviously not a good idea because property in the last year went up about 20% but term deposit only gives you about 6% so is there a way I can get exposure to residential real estate prices using small amounts of money?

Even though you are only getting 6%, you can still be saving funds of your own along the way.

This means you are accelerating the whole savings process.

On top of this, think about getting into a very cheap property for the first one.

This will allow you to get in sooner, and the sooner you are in, the sooner you start to climb the ladder.

 

[Piston Broke]

Whoever wants it or needs it the most pays the most.
It's the universal law of negotiation.
But when buying with a big deposit, all the lenders want my business, so I get to pick & negotiate.
Though I gotta admit I've never worried about a few $$ here and there, I'd try to work out the long term cost and go with that.
$10mth certainly would not have made a difference even when I was 18 and term deposits were earning >10% yr

 

[rugrat]

We don't pay any fees for anything with the banks either (a couple of different banks: acc's, mortgage, LOC, CC's). We shop around and negotiate. Having said that, fees are not in and of themselves a dealbreaker - it's the deal as a whole; fees, rates, terms, etc.

 

[Nikolina]

Well heres my setup to date. May help some of you.


At the time when i got my loan the CBA had an special loan introduced which i got. (Im not too sure if the loan is still on offer, I don't think it is, from memory it was a loan that was only going to hang around for a few months.) It was when interest rates were really high, so i guess good timing.

My savings account. I don't withdraw any money out of it hence why no fees, in any event the only way it would attract a fee of some sought is if i was to withdraw money out of it on more then 2 occasions in 3 months. This would attract a $2 fee per withdrawal, however i have a 50k relationship with the CBA- keep reading below.

Next i have my transaction account, i opend it up at the time of which i got my loan, now at this point in time i was given the offer off linking any one of my accounts to the home loan without this account attracting any fees, so hence why i opend an transactions account up and linked it.

Their is also an specific clause in my home loan contract which stipulates that If i have a relationship with the bank of more the 50k i pay no fees at all whatsoever.

Ive set it up to suit my needs, it works for me. I will never pay any fees, I refuse too or ill just take my money elsewhere. It's that simple.

Hope that hepls.

 

[Lynchy]

I have a corporate account with HSBC so I dont pay any fees either I pay the initial valutation fee and account set up fee but that is also all halved. Works out at about $400 to set up the loan and then nothing from there

 

[Neophyte]

I'm not sure I completely understand the problem. I think you need to quote some figures.

e.g. $400K property. Need $40K deposit + another $10-20K for costs. Call it $60K.

If you can't save at least $1K per month then a $400K property is probably above your price range. At $12K per month the property would have to be rising by $100K a year or 25% for you not to be gaining ground. That is happening this year in some places, but it can't happen for that long (otherwise property would double every 3 years).

Saving on a single income is much tougher than it is for DINKS. e.g. we saved over $5-6K per month for two years before buying.