How young people can tap into the property market?

[nhg]

Because the goal posts have shifted.

Everyone wants to start off with a 4x3 DLUG, or a trendy pad in the CBD, or Elwood etc.

http://waitbutwhy.com/2013/09/why-generation-y-yuppies-are-unhappy.html

 

[property_girl]

I can see why the younger set are lining up as first home buyers....NOT

The question is why should young people HAVE to undertake these measures when the boomer generation before them did NOT. It's TOO HARD!!! Look at the rates of first home buyers and tell me its not.

... it, the world has changed. The rules have changed, what worked for you 10, 20 or 30 years ago does not work now. The FHB's know this even if you don't.

Sorry, but the boomer generation (me at least) didn't take a gap year, never had a mobile phone (let alone a $1000 mobile phone), didn't have all the gadgets, all the designer clothes and bags that some of these kids have.

On the other hand, I absolutely agree that it is so much harder to buy a house these days. I think we are heading in the direction of Europe, where you either have to rely on an inheritance or money from your parents to buy a home. I bought my first home for $120,000 with a $20,000 deposit. These days kids have to taken on mortgages of around $400,000. How depressing. I take my hat off to Rohan and the other younger ones who have done it.

 

[norwoodman]

Sorry, but the boomer generation (me at least) didn't take a gap year, never had a mobile phone (let alone a $1000 mobile phone), didn't have all the gadgets, all the designer clothes and bags that some of these kids have.

On the other hand, I absolutely agree that it is so much harder to buy a house these days. I think we are heading in the direction of Europe, where you either have to rely on an inheritance or money from your parents to buy a home. I bought my first home for $120,000 with a $20,000 deposit. These days kids have to taken on mortgages of around $400,000. How depressing. I take my hat off to Rohan and the other younger ones who have done it.

The "c" word has already been used in this discussion, but I definitely think that compromise is required for first time buyers to enter the market. So many people still operate on the premise that the first property you buy has to be a place you would choose to live in long term.

There are still plenty of sub-$300k markets around Australia, in major centres even.

 

[Trippy]

Then:
Must have genuine savings of 20%. Max LVR 80%
Nearly impossible for a single woman to purchase
Consumer goods a lot more expensive
17.5% Interest rates

Now:
Don't need savings, 95% loans commonplace.
No discrimination
Consumer goods cheap as chips in comparison to wages
Sub 5% Interest rates

Your arguments don't stack up...I don't believe consumer goods are cheaper now than say 20 or 30 years ago... can you explain why you believe this is the case?

Don't need savings, 95% loans commonplace....So you don't need a deposit, borrow more than the boomers did say 30 years ago for the same end product. Lower deposit, greater loan, bigger repayments, longer loan period, parents provide guarantor to just get a leg in ...how the hell does this help a FHBer? This makes it easier than you had it Doesn't this just condemn a FHBer to a life of financial slavery for the same product you got cheaper and easier (not to mention the impact on the parents should the children default on the loan)?

17% interest rates ...peaked at 17 odd percent over a 4 year period. Over a 20 year loan a 17% rate is not a major issue, considering inflation was running around 8%. The real rate is closer to 9%.

 

[skater]

Your arguments don't stack up...I don't believe consumer goods are cheaper now than say 20 or 30 years ago... can you explain why you believe this is the case?.

Not that this really warrants an answer, but here goes......

I bought a TV somewhere around 1984. It wasn't big, it wasn't a brand name. It was the cheapest I could find. It cost me around $500. I was earning something like $17k working full time. Here are some prices for today. Using eBay, as I had that open:

http://www.ebay.com.au/itm/Kogan-19...7491299?pt=AU_Televisions&hash=item2592d91963

http://www.ebay.com.au/itm/Bexa-BXE...3683252?pt=AU_Televisions&hash=item27e90d3c34

Both those are under $200. The second one is from JB Hi Fi, so a well known store.

I'm pretty sure that the average wage is a lot more than $17k these days.

Then there was the mobile phone that Hubby had to buy for work, in the 90's. It cost something like $1k, and it was garbage. Again, much lower wages.

Don't need savings, 95% loans commonplace....So you don't need a deposit, borrow more than the boomers did say 30 years ago for the same end product. Lower deposit, greater loan, bigger repayments, longer loan period, parents provide guarantor to just get a leg in ...how the hell does this help a FHBer? This makes it easier than you had it Doesn't this just condemn a FHBer to a life of financial slavery for the same product you got cheaper and easier (not to mention the impact on the parents should the children default on the loan)? .

No, you don't really need savings. You can get a gift from a parent, you can use the FHOG, you don't have to prove where it came from.

Do you have ANY IDEA AT ALL how hard it is to save 20%. There wasn't a convenient FHOG to help you out. You had to prove that YOU had saved it all by yourself. If you don't like the bigger loan you can still put in the 20% if you so desire. Nobody is MAKING you get a 95% loan.

I would have much preferred a 95% loan and a nice juicy FHOG.

17% interest rates ...peaked at 17 odd percent over a 4 year period. Over a 20 year loan a 17% rate is not a major issue, considering inflation was running around 8%. The real rate is closer to 9%.

When I took my loan out, it was at 7%. It quickly grew to 17.5%. Not a major issue you say, I'd like to see how you'd go, even with 9%. You have absolutely NO IDEA!!!!

 

[TMNT]

Your arguments don't stack up...I don't believe consumer goods are cheaper now than say 20 or 30 years ago... can you explain why you believe this is the case?

Don't need savings, 95% loans commonplace....So you don't need a deposit, borrow more than the boomers did say 30 years ago for the same end product. Lower deposit, greater loan, bigger repayments, longer loan period, parents provide guarantor to just get a leg in ...how the hell does this help a FHBer? This makes it easier than you had it Doesn't this just condemn a FHBer to a life of financial slavery for the same product you got cheaper and easier (not to mention the impact on the parents should the children default on the loan)?

17% interest rates ...peaked at 17 odd percent over a 4 year period. Over a 20 year loan a 17% rate is not a major issue, considering inflation was running around 8%. The real rate is closer to 9%.

Consumer goods; assuming you mean electronic goods are far cheaper now then before

Decent TV's were 1500 when I was growing up, a toaster was like 60plus

Now you can get a tv for 300, 800 for a decent one, you can get a toaster for 10 from kmart

And that's not even considering inflation

 

[Harro]

Your arguments don't stack up...I don't believe consumer goods are cheaper now than say 20 or 30 years ago... can you explain why you believe this is the case?

Don't need savings, 95% loans commonplace....So you don't need a deposit, borrow more than the boomers did say 30 years ago for the same end product. Lower deposit, greater loan, bigger repayments, longer loan period, parents provide guarantor to just get a leg in ...how the hell does this help a FHBer? This makes it easier than you had it Doesn't this just condemn a FHBer to a life of financial slavery for the same product you got cheaper and easier (not to mention the impact on the parents should the children default on the loan)?

17% interest rates ...peaked at 17 odd percent over a 4 year period. Over a 20 year loan a 17% rate is not a major issue, considering inflation was running around 8%. The real rate is closer to 9%.

Using this logic you'll be a renter for life. Just what property investors love!

 

[redwing]

No idea re: Melbourne prices and suburbs but could a FHB, with FHOG look at areas such as the below:

1. Melton
2. Werribee
3. Cranbourne
4. Hoppers Crossing
5. Pakenham
6. Tarneit
7. Frankston
8. Sunshine
9. Dandenong
10. St Albans

And when able, rent a room or two to friends to assist with payments, improve its value whilst there etc?

We started out in a caravan, moved to a shed, then a unit, then an apartment, then a house...

 

[WattleIdo]

You have absolutely NO IDEA!!!!

Agree. Plus, your picture is out of focus - like you're trying to be annoying or something.

I bought a kettle in my favourite store today, Big W. Can you believe it? $7.50!

Nearly everything is cheaper and there's heaps more to choose from. I can't be bothered listing it all. Maybe speak to some older people in real life and genuinely try to find out what life was like before you came along. You might enjoy it - plus they tend to be quite pleasant.

disclaimer: I'm not a baby boomer nor the child of baby boomers. Gotta take things as they are, not whinge about how unlucky you are.

 

[MattADL]

Good work Matt. Were you working full time?

Part time 16k a year.

 

[Spades]

Hey Matty,

Well done...Especially on 16k per year...Some negative and naive comments on here.

Good for you for putting it out there!

Who says you can't but can do.

Ps.You gotta start somewhere and getting a foot in the lower end is a step up...You will do well.

 

[happygolucky]

Hey Matty,

Well done...Especially on 16k per year...Some negative and naive comments on here.

Good for you for putting it out there!

Who says you can't but can do.

Ps.You gotta start somewhere and getting a foot in the lower end is a step up...You will do well.

Well said! Spades.

 

[skater]

Ps.You gotta start somewhere and getting a foot in the lower end is a step up...You will do well.

Exactly!

Where there's a will, there's always a way.

Remember, later on when people say you were 'lucky', that in life, often you create your own luck.

 

[kathryn d]

We started out in a caravan, moved to a shed, then a unit, then an apartment, then a house...

I was 6 (1966) when my parents bought their first house. They were 36 & 42.
It was a 2 bedroom tiny house with an outhouse. My father built a shed for the 5 of us to live in for the summer until the house was enlarged for us.
The shed was later turned into the chicken coop....so I always say my parent's first house was a chicken coop



Great post skater !

 

[Dan_p]

Funny that everyone states..save more..spend less...buy cheaper (read a dump)..set your sights lower..I could do it 10, 20 or 30 years ago so why can't the younger set now do it...

You should of tried it back in the 1790's when land was free, then it was hard

 

[Deltaberry]

Hi all,
I am a long time lurker. This is my first post. Just want to gain some insight as how the young people can tap into the property market nowadays.

Recently I came across a case where a collegue wanted to buy his first home. He is a full time Uni student, but has been working casual in our office for at least 2 years. His income is probably around $20,000 pa. Just wondering:

1. If he has any chance of tapping into the current property market?
2. Even if he could get a loan, it won?t be enough to buy a decent property unless he could come up with a big deposit. Today, a 1 bedroom apartment in Melbourne metropolitan probably costs around $300,000 plus (I could be wrong).
3. Does it mean that he has to wait till he finishes his Uni and has a full time job? As the property market keeps soaring, it would be even harder for him to do it.

What is your wisdom thought or advice to these young people who has the right mind but .....

Thank you all in advance.

A decent property? Wow.

 

[happygolucky]

A decent property? Wow.

That's only my thought. I did not get that far to see what he was looking for. But as many wise people has suggested, that I had not think of - like the frankston unit with good rental yield. I think young people with a bit of discipline do have the chance to tap into the property market. Well done to those who had done it and shared here. I have definitely learnt and know how to help/educate my kids now. Thanks again for all the input.

 

[chausta]

I'm young and still think property is affordable. Of course if you want the brand new 4x2 home it probably won't be. Interest rates are at an all time low too.

Most of Gen Y can't save. Just remember its not how much you earn, its how you save it. I remember when I said that to a "friend" look at where I'm today.

I really recommend this book, if you want the right mindset.

https://www.richdadworld.com/rich_dad_poor_dad_story.html

 

[Jaggannath]

Your arguments don't stack up...I don't believe consumer goods are cheaper now than say 20 or 30 years ago... can you explain why you believe this is the case?

Don't need savings, 95% loans commonplace....So you don't need a deposit, borrow more than the boomers did say 30 years ago for the same end product. Lower deposit, greater loan, bigger repayments, longer loan period, parents provide guarantor to just get a leg in ...how the hell does this help a FHBer? This makes it easier than you had it Doesn't this just condemn a FHBer to a life of financial slavery for the same product you got cheaper and easier (not to mention the impact on the parents should the children default on the loan)?

17% interest rates ...peaked at 17 odd percent over a 4 year period. Over a 20 year loan a 17% rate is not a major issue, considering inflation was running around 8%. The real rate is closer to 9%.

Free trade agreements have made the relative cost of living cheaper. It's a fact, and the reason a lot of manufacturing jobs have gone offshore.

Personally, I bought my first place on the SA state median price of $250k (IIRC), while earning the princely sum of around $45k/year. I saved my butt off while at uni (and prior, got a job at a supermarket as a 15yo), and bought as a 23yo. I wish I'd had the guts to take on more debt in some ways

 

[Jaggannath]

Exactly!

Where there's a will, there's always a way.

Remember, later on when people say you were 'lucky', that in life, often you create your own luck.

Where there's a will there's relatives

And the harder I work, the luckier I get