While I agree in principle...
Would you be able to find a property within commuting distance of, say, Paramatta, that you could get a mortgage for that could be paid off within 4 years on a lower than average wage?
Investors keep first-timers out of market
- Thread starter MsAli
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While I agree in principle...
Would you be able to find a property within commuting distance of, say, Paramatta, that you could get a mortgage for that could be paid off within 4 years on a lower than average wage?
If a decent public transport system was introduced then it would have been fine.
But, modern governments dislike spending money on anything that isn't a tax cut, so it's just a pipe dream.
Remember...our wages were average..not lower than average.
We were about 40-50% above minimum wage.
There were also 2 of us on this wage.
People will always make excuses, as to why it can't be done.
We also didn't start out with a house.
We bought a mobile, and basically lived in for free for 2 years, because we sold it for more than we paid for it.
People living at home, or taking in boarders could achieve the same result.
I've bought two properties within the last year and a bit. I intend to buy more and know that there will be CG if you buy well. However, I am not under the illusion that my house will increase in value to be worth $2.5 million by the time I'm in my 40s (i.e. a five-fold increase which was common even in "undesireable" areas in the 90s). Having an opinion doesn't preclude me from investing and I fully intend to be successful in that area.
Some properties may increase by that amount, stats don't show the renovation money spent. I bought several properties in Sydney in the 90's, and sold some, however if kept it still wouldn't be 5 times.
As stated by others lets see how you react to your future bargain purchases when people tell you how easy you got it, knowing you have, as we did back then, taken a risk of doing something rather than the risk of doing nothing, saved your butt off and invested.
As stated by others lets see how you react to your future bargain purchases when people tell you how easy you got it, knowing you have, as we did back then, taken a risk of doing something rather than the risk of doing nothing, saved your butt off and invested.
I'm not trying to minimise the risks taken and the hard work people have put in on this forum. I actually have a great deal of respect for most of them and hope that we can be half as successful. I was just pointing out how things have changed over the years and I think it's dishonest to not acknowledge this.
And no one has argued against this. We all agree it has changed ... the majority just don't believe it is harder (having lived through the last 45 - or more - years) - just different
Here is how 2 median Australian paid workers can own a house in 7 years.
The numbers aren't exact. $57k is considered median wage?
I used Canberra for this example.
$57k= $10,972 tax
=46,028 x 2 people=92,056 net
$75 food wk=$3900
$50 misc wk=$2600
$100 transport wk= $5200
granny flat- $295 wk (all bills + internet included) = $15,340
http://www.gumtree.com.au/s-ad/kara...ivate-granny-flat-with-river-views/1032273910
17kms or 23 minutes away Canberra CBD
=27,040 expenses p.a.
=65016 savings p.a
take this money and put as deposit on a house.
Here is one for $435k and is close to Canberra CBD (according to the map) 17.7 kms or 25 minutes.
http://www.gumtree.com.au/s-ad/dunl...ly-home-with-a-cottage-style-feel-/1032214873
$435k
$5959 mortgage a month for 6 years @5%
saving a month $5418 +845 rent (@195 wk)
=6263
At this point, keep working and save until the first baby is born.
Then one parent can quit work forever and care for the children.
It isn't hard..it just takes discipline.
The numbers aren't exact. $57k is considered median wage?
I used Canberra for this example.
$57k= $10,972 tax
=46,028 x 2 people=92,056 net
$75 food wk=$3900
$50 misc wk=$2600
$100 transport wk= $5200
granny flat- $295 wk (all bills + internet included) = $15,340
http://www.gumtree.com.au/s-ad/kara...ivate-granny-flat-with-river-views/1032273910
17kms or 23 minutes away Canberra CBD
=27,040 expenses p.a.
=65016 savings p.a
take this money and put as deposit on a house.
Here is one for $435k and is close to Canberra CBD (according to the map) 17.7 kms or 25 minutes.
http://www.gumtree.com.au/s-ad/dunl...ly-home-with-a-cottage-style-feel-/1032214873
$435k
$5959 mortgage a month for 6 years @5%
saving a month $5418 +845 rent (@195 wk)
=6263
At this point, keep working and save until the first baby is born.
Then one parent can quit work forever and care for the children.
It isn't hard..it just takes discipline.
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http://www.realestate.com.au/property-villa-nsw-mount+druitt-115480771
There were some cheaper, but I chose not to look at units, over 55's homes & caravan parks.
This is easy commuting to Parramatta.
Katherine says that their wages were average, let's assume $80k EACH. Now, I know someone on around $40k & single who is paying off something only slightly cheaper than this place. Just imagine how much a couple on a combined income of $160k could do with Kathryn's mindset. It really isn't that hard to imagine.
$160k household income is far from average
the link you provided is certainly an affordable property however it isnt something that an average wage earner can pay off in 4 years as was the question
If a couple work 38 hours each, earning just $20 an hour, they will get $1330 after tax. If they spend $330 per week on expenses excluding mortgage and property expenses, they have $1000 per week to go towards their house. A $300,000 house can be paid off 7-8 in years.
By incorporating some other strategies like second jobs, rent out a couple of rooms etc, they may manage to pay off in 6 years.
Edit: If they buy a $240,000 house, they can pay off in 4-5 years
By incorporating some other strategies like second jobs, rent out a couple of rooms etc, they may manage to pay off in 6 years.
Edit: If they buy a $240,000 house, they can pay off in 4-5 years
Well, I'm not sure what the AVERAGE full time wage is, in Sydney. Kathryn stated that they BOTH worked full time on AVERAGE, not minimum wages. In fact, she said that they were paid about 40-50% above minimum.
I have been led to believe that the average full time wage is around $80k. So, that being said, it stands to reason that their household income would have been equivalent to around $160k.
Anyway, that is picking at straws. If they just lived on one wage & put the rest into the mortgage, you would pay that place off in no time at all, however knowing Kathryn & her budgeting skills, I'd place a wager that they were paying MORE that one complete income into paying it off.
Medians & averages are different. You would not get two full time wage earners earning $1234pw. Remember, she said that they were earning ABOVE average wages EACH!!!
If a couple work 38 hours each, earning just $20 an hour, they will get $1330 after tax. If they spend $330 per week on expenses excluding mortgage and property expenses, they have $1000 per week to go towards their house. A $300,000 house can be paid off 7-8 years.
By incorporating some other strategies like second jobs, rent out a couple of rooms etc, they may manage to pay off in 6 years.
Edit: If they buy a $240,000 house, they can pay off in 4-5 years
Exactly!! But you are also forgetting that $20hr is a low wage. Kathryn said they were earning 40-50% ABOVE AVERAGE EACH. So......less than 4 years would be doable.
And to be nice to you Skater, the average weekly earning for an Australian *person* (averaged male and female wage) is 76k p.a, just shy of your estimate.
you are again missign my point.
this in no way answers ideo's question which was "Would you be able to find a property within commuting distance of, say, Paramatta, that you could get a mortgage for that could be paid off within 4 years on a lower than average wage"
kathryn's effort was definitely commendable however that is not what the question is about.
realistically, how easy/difficult would it be for someone to do the same in australia if they were on an average or below average wage?
Depends if you look outside of Sydney, to you know, the rest of Australia. Quite likely then.
I wasn't referring to Kathryn's post. $20 per hour, $330 per week (or less) and $240,000 house were from our experience in the last few years. Instead if paying off one house, we went on to buy 2 more houses.