Investors keep first-timers out of market

From what I am reading, the economists are making the bold statement that investors are pushing first home buyers out based on the number of loans being sought at the lenders.

This surely cannot be an accurate description to make the assumption.

Many FHB's that I know have been fortunate in being given their first property through their parents or are being loaned the monies by their parents.

Then there are others who are property owners but have never purchased their PPOR. Some I am sure contribute on this forum.

These people would not be captured in the figures that are being touted.
 
I've always wanted to own one of these ... but can only afford a 5yr old Toyota Corolla ... I'm going to the media for a whinge and the government better do something about it! ... Life is so unfair!
 

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TMNT said:
$5600 pa BC ouchy

45sqm

1bdr

not boutique

seems to me are the main reasons for the price,

but at $400k for a 1bdr thats very exxy on face value alone
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I agree - ouchy bc fees - but that's what you pay. My bc on two bedroom 1960's, no lift, brick in Newcastle are over $2k a year.

So then again ... what's wrong with this one? A little smaller but still looks pretty good

http://www.realestate.com.au/property-apartment-nsw-potts+point-114949963

Or if it's to exxy ... go to the other side of the Eastern Distributor for near two thirds the price
 
chilliblue said:
From what I am reading, the economists are making the bold statement that investors are pushing first home buyers out based on the number of loans being sought at the lenders.

This surely cannot be an accurate description to make the assumption.

Many FHB's that I know have been fortunate in being given their first property through their parents or are being loaned the monies by their parents.

Then there are others who are property owners but have never purchased their PPOR. Some I am sure contribute on this forum.

These people would not be captured in the figures that are being touted.
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I think I move in the wrong social circles in that case :D
 
chilliblue said:
Many FHB's that I know have been fortunate in being given their first property through their parents or are being loaned the monies by their parents.
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Well I seriously doubt that the number of FHBs who get given a house in cash / with no loan at all would be such a substantial number...
 
The issue is that subsidised investors are pushing home buyers out of the market.
Where or what it is is irrelevant, doesn't matter if it's potts point, blacktown or bondi.
Many arguments here are just trying to divert attention from the real issue by pretending a first home buyer shouldn't have the hide to buy where they want to live.
 
Aaron_C said:
Well I seriously doubt that the number of FHBs who get given a house in cash / with no loan at all would be such a substantial number...
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I think this argument was raised before by China (apologies China if it was someone else) and it amounted to around 4% of all buyers in the market.

The percentage of that 4% who are FHB would be negligible and have no overall impact on the stats for loans for investors vs PHB.
 
wategos said:
Many arguments here are just trying to divert attention from the real issue by pretending a first home buyer shouldn't have the hide to buy where they want to live.
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They can buy wherever they like but the only distinguishing factor is money. They are not the only one who wants to live in Potts Point.
 
Aaron_C said:
Well I seriously doubt that the number of FHBs who get given a house in cash / with no loan at all would be such a substantial number...
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No but it must be a factor.

I know that we have set aside 2 of IP's to be a first home for our children when they are old enough - or alternatively they may use the income to purchase something else.

Being a first generation Australian, there are many like me and you are now seeing reports of parents doings exactly the same thing.

However, on saying that, I do strongly agree with wategos. If you are unable to purchase the type of property for the price that you want that you need to adjust your expectations.
 
Ideo said:
I think this argument was raised before by China (apologies China if it was someone else) and it amounted to around 4% of all buyers in the market.

The percentage of that 4% who are FHB would be negligible and have no overall impact on the stats for loans for investors vs PHB.
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On the issue of statistics. I saw some analysis that suggests while loan approvals are on the rise the volume of funds on loan is not changing much.
Perhaps that suggests a combination of some people paying down debt while rates are low and many others refinancing existing loans.
 
I really can't see investors paying too much to out bid FHB. Of all the properties that we have bought, we have only paid asking price for 1. ALL the others we offered below asking price and any FHB could have gazumped us easily by only offering asking price.
But not one did. Why should I (as an investor) be held responsible for their lack of action?
 
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chilliblue said:
Many FHB's that I know have been fortunate in being given their first property through their parents or are being loaned the monies by their parents.
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Your circle of acquaintances are different to wider society I reckon...like almost everyone here on SS.

We here on SS - as a group (but not including me), from my observation - are not the normal Mr and Mrs Thong - this joint seems to be full of higher income earning, 25-35 professional folk in IT, engineering, town planning and the like, living in inner city areas.

The fact that folk are even here puts them in the very small percent of folk - not many folk invest in property, full stop.

That's not the wider demographic of our society.

Given that the larger percentage of wage earners are on average wage (the high income earners scewing the stat big time), I would take a punt that the majority of folks are not giving a house to their kids.

This is more common among yer Southern European folk - Greeks, Italians etc I believe, but across the board; not a lot.

Some will give their kids some money towards their first house, or go guarantor for the kids loan etc - but not the whole purchase in cold hard folding.
 
joanmc said:
I really can't see investors paying too much to out bid FHB. Of all the properties that we have bought, we have only paid asking price for 1. ALL the others we offered below asking price and any FHB could have gazumped us easily by only offering asking price.
But not one did. Why should I (as an investor) be held responsible for their lack of action?
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+1

Depends on the property the FHB is trying to buy too.

Buy the skanky do-er upper in skankville or even plain old middle-Suburbia and many times there is no/little competition.

Buy the swanky 1 bed studio in Docklands, South Yarra, Port Melbourne, Elwood (or Potts Point, etc) and the competition will be solid.
 
joanmc said:
I really can't see investors paying too much to out bid FHB. Of all the properties that we have bought, we have only paid asking price for 1. ALL the others we offered below asking price and any FHB could have gazumped us easily by only offering asking price.
But not one did. Why should I (as an investor) be held responsible for their lack of action?
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I'm in the same boat.

When I've bought I've generally had the agent open the property early, then made an offer on the spot, and asked for an answer on the spot.

Most of the FHBers I know mope around 'thinking about it', then when they eventually decide to make an offer the property is gone.

I'm not beating these people of price, I'm beating them on time.
 
Anyone who says it was hard when they first bought into the market and claiming now is no different is wearing rose coloured glasses. When I bought my first home in 83 I was on 6500 pounds a year, the house cost me 15,000 pounds (which was the median house price at the time). The ratio in the early 80's was somewhere between 2-3:1.

My son who is 22 is on $65,000, he does boost that with overtime to $80,000current median house price here in Melbourne $595,500. That's a ratio of between 8-9:1.

Our house prices are over inflated thanks to quick fix schemes like the FHGB, relaxing laws for overseas investors, changes to super, restricting land release, tax incentives.

Yes we need to encourage people to finance their own retirement but not at the expense of those just starting out, just passing the problem on to the next generation. The current tax system benefits investors and existing home owners.



The following is a clip from a radio interview with Abbott, its scary to think this bloke is running the country! If he wants to get more houses built simply change the negative gearing laws to new houses only!

NEIL MITCHELL:


Prime Minister, the housing bubble ? it increasingly is being argued that Chinese people are particularly using it as a land bank. I mean one Sydney-based real estate agent said 80 per cent of the properties selling are going to Chinese people. The national bank says one in eight ? a significant increase. Is that dangerous to have Chinese investors build sort of ? inflating the price of our houses?


PRIME MINISTER:


Well I certainly think that it?s important to get more houses built and if there?s a strong market for flats and for houses, that?s a good thing, not a bad thing. Don?t forget Neil that if housing prices go up, sure that makes it harder to get into the market, but it also means that everyone who is in the market has a more valuable asset.


NEIL MITCHELL:


But interest rates can?t stay at this level, people are going to get burnt.


PRIME MINISTER:


I am sure the Reserve Bank is very conscious of the fact that there are a whole range of things that need to be managed here and I would be confident that the Reserve has got its eye on housing prices and will appropriately manage the level of interest rates.
 
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