Xenia, your picture is super flattering if you've been in the game that long!! You dont look a day over 25!
That photo is from the 80's
Poor first home buyers Sydney
- Thread starter Gockie
- Start date
That photo is from the 80's
You wont find any detached houses in most cities around the world. We all agree that the smart money is in Singapore. For example, they fit the entire population of Sydney and Melbourne combined in an area about the size of Adelaide.
What is so bad about living in an apartment? Maybe we could let FHBs know that there are other means of habitation besides a four bedroom house with a dbl garage and two lounge rooms and two bathrooms and a swimming pool and landscaping and.....
How about the fact that you can't fit more than 3 people in there.
In fiji they live in mud huts. Maybe our fhb should do that too.. It's so stupid comparing other countries to ours. Why should we have to change the way we all have grown up. All the people older than us lived a life where they could pay off a mortgage in less than 10 yrs for a detached house. Good luck doing that now..why should I change my way of living because singapore lives like that? Maybe we should waste less space on prisons too and throw all inmates in one jail like they do in some countries.. If we do that maybe there we be space for houses... See, that comment is as thoughtless as the one you just made..
If you can't see that there's an affordability crisis in Sydney then you're blind.. Might look ok now as rates are down but LVR's are probably at the highest they've been for young people..
It's worse than it ever has been. It will only get worse too unfortunately because that's how our economy has functioned. It's been so crap that we relied on houses to boost it for the last 50 years.. Us young people are now buying elsewhere and renting where its affordable to live.. Older generations didnt have to do that..
You won't find a house under 400k in a half decent place even 50km from cbd now. At least Melbourne and Brisbane you can. Sydney is just an overpriced mess as prices dont reflect the quality of the suburb anymore whereas interstate they still kind of are..
Not anymore!
Well....let me clarify that I'm not sure about what's available on the central coast, so maybe somewhere there. Certainly no freestanding homes, but of course, there are plenty of units available.
Nothing wrong with that. It's a wise move to get you where you want to go.
Older generations didn't KNOW they could do that. We didn't have the internet with access to all the information you guys have. We just had to muddle through the best we knew how. In retrospect, if we had the knowledge to do that back then, we most certainly would have.
You have described in a previous thread about buying into The Ponds. You are going to build a nice, brand new home in an expensive suburb. Congratulations! I'm glad you can do that, so don't take what I am going to say the wrong way.
Back when we bought our first place, we knew nothing of investments, and in order to get into the market we had to buy the crummiest place you've ever seen.
No nice new house for us! No! We had an old weatherboard heap of junk that had been covered in chickenwire & rendered! It was atrocious! The carpet was threadbare, there were holes in the walls, covered by wallpaper. Yep, found that out when leaning on a wall, one day. The roof was rusty & full of holes. I almost fell off one day when we were trying to repair it! If I bought the same place today, I'd demolish it.
There were no new furniture & furnishings. We couldn't afford that! Hubby had to catch the train to work. It took him two hours to get there some days. He had a dream to get a local job, but that was all it was, a dream, because local jobs didn't pay as well as the City, and we needed that income to pay the mortgage.
He took his own lunch every day. The only money he had each week, was his train fare. The only money I had was for groceries. We didn't eat out, go to movies, shop for recreation, etc....EVERYTHING ELSE WENT INTO THE MORTGAGE!
So, when I start to see young people today, doing what we did back then, in order to buy their first property, I will say that yes, they have it tough. The reality is though, that most of the FHBs want a much nicer home than ours, in a nicer suburb, closer to work AND have a heap of discretionary spending.
This is not a housing affordability crisis, only a misconception of priorities. Life is tough, and sometimes you have to do what you don't want to do, in order to get what you want. If you are not prepared to do that, then you don't want it enough.
I don't disagree that the priorities have changed Skater and I look up to hard working people like you who have stories like that. People like myself actually had no clue we'd be rushed into a market by the age of 25 or we'd miss out in our own backyard. Lucky for me I put away 70% of the money I got paid and have a decent enough income to go into a slightly more desirable suburb. I would live in Whalan and Tregear and Airds.. My mrs wouldn't though as shes a social worker in those areas..
I think there is a crisis of affordability in Sydney no matter how much you save and what your priorities are. I think my children in 20 years will be screwed. Hopefully I can be successful enough to teach them early and possibly financially support them to take the steps I've taken.
Xenia, your picture is super flattering if you've been in the game that long!! You dont look a day over 25!
My new best friend!
No it was 2013
But this is the thing. The market is a changing thing. It's super expensive RIGHT NOW (in Sydney) because we are in the middle of a boom, but give it, say, five years, when interest rates are climbing and people are finding it hard to pay the mortgage (babies, loss of job, divorce etc), prices will be more flexible. ADD to that, that in that time there has been wage growth. Slowly what is unaffordable becomes more affordable until eventually everyone wants to buy in and off we go again on the next boom.
With your children, so long as they are taught from a young age, what their priorities should be, there is really nothing else you can do. I forced both of mine to save & by the time they were 18, both of them had a very healthy nest egg. Now both adults, it is up to them to put into practice what they were taught as children.
Yeah you're probably right and I can't not listen to you regarding it to be honest because I've only been through this boom whereas you've gone through a few.. The only thing that worries me is incomes aren't growing much atm. Our economy isn't in the best position.
Good work with the kids. I met your daughter along with you at the wenty meetup a couple months back when we spoke about Airds. Thanks for your advice back then. Unfortunately the house went way over what I thought it was worth so I skipped it and moved up a price bracket in my search haha
So not true. Everyone I know in their 30's who doesn't own a home by now I can show you exactly why they don't. They spent most of their 20's blowing cash on night clubs, overseas trips, expensive cars, drugs, big birthday parties, hotels in the city etc. I did all that too BUT I put some money aside and now im fine.
You want to buy your first home? Here I'll show you how to do it on an average wage in 2 years:
Work Monday - Friday at you're normal job - SAVE - $300
Work Saturday/Sunday somewhere - SAVE - $200
You should still have another $1000 for all your other life costs. They should be able to save around 50k in 2 years, buy a BRAND NEW unit somewhere decent and they can start on the track to doing something with their life.
If an ordinary every day bumpkin can't do that they have no hope. It's a little bit of sacrifice to get ahead and out into their own place off mummys tit.
We don't have an affordability crisis, we have an expectations and discipline crisis.
#$%^&* SAVVVVEEEEEE!!!!!
Don't worry too much. Over time, it all evens itself out. Last cycle, even though I'd seen it all before, I sat there in wonderment thinking 'how will people pay for all this?', but they do. Wages grow, welfare grows, prices stabilise and we all move along.
There's little point in worrying about what we can't change, only place yourself in the right position, so that when things make sense to you, you are ready strike and have something ready for when the values move upwards again.
Only a small minority can think like that. Most people are hardwired to think "if i only own 1 property then i must live in it.".
I've tried to explain the cashflow and flexibility advantages of renting out an IP and then renting yourself to friends and relatives who are not investors. None have been very receptive of this alternate mindset. Even when you run them through the numbers and they clearly understand that by doing this they'll end up with 10-15k extra per year, most will simply refuse to change their thinking, citing a perceived drop in quality of life or lack of security in where you live.
I'm 27 and started around your age. Went into property not knowing much other than a desire to invest and set myself up for the future. Bought a 3br apartment off the plan in 2012 for 500k in Homebush West and subsequently got lucky because of the Sydney property boom. It is now worth around circa 700k.
I think our greatest commodity and advantage is TIME (age and opportunity for time in market). Start early, train your mindset, and act. In 10yrs time any small mistakes you might have made will be a distant memory.
Not really. Its just that what was the sticks back then is now the inner city.
Example:
Summer Hill - Use to be the Western Suburbs. Now its the inner West. What is now deemed the Western Suburbs is about 30km away from Summer Hill.
Thanks Skater. Quite reassuring.
Befuddled, I agree. It works out better to rent and rent your house out. That $350/week I save by renting instead of paying my PPOR mortgage will help my future wife and I relax and live comfortable while she's studying in her masters.
That's a great result with Homebush.
True about being young. What's next for you?
Befuddled, I agree. It works out better to rent and rent your house out. That $350/week I save by renting instead of paying my PPOR mortgage will help my future wife and I relax and live comfortable while she's studying in her masters.
That's a great result with Homebush.
True about being young. What's next for you?
I have another place settling in probably 4months in the Parramatta area. Another OTP (gasp!). Was purchased 18months ago though so it's gotten a nice chunk of CG as well based on comparable sales. Will be a PPOR though, bought with the missus.
After that might have a look at Brisbane if we can afford to go again. Otherwise will pay down debt and prime for more IP purchases in 2yrs. Going for properties with land component though. Strictly no more OTP apartments! Was quite fortunate to have bought the OTPs at a good point in the cycle. Don't have the risk appetite to go down that path now!
Good post.
I think what a lot of (younger) folks don't realise is that folks of my age, and before me, etc - and now yourself as a younger person - many folks got into their first place by often working 2 jobs, or a lot of extra hours in their main job, and cutting back on "doodad money", etc.
My first PPoR was bought after having worked in my own ProShop for 15 months without a day off - 7 days a week, daylight to dark...saved loads of money.
Very hard to spend money when you are only working every day.
Not bragging about what I did; just trying to illustrate what lots of folks do to get ahead earlier - the things we folks here on SS have all no doubt bone which other folks we know don't see us do.
Mine wasn't a conscious decision though; I had to work all those hours because it was a new business and I had no (couldn't justify the expense of) staff.
I think the perception by many younger folk was that we older folks simply swanned into the r/e agency and bought something using an average wage. Not likely to happen.
And, now what we knew as the outer suburbs back in those days have become almost inner suburbs, and many of the older houses on large blocks have gone - replaced by multi-townhouse sites.
The value of these sites has jumped up quite a lot in comparison because of their value to a developer for multiple town houses on the site.
Even here in my little backwater; lots of larger blocks on the flat nearer to the beach have skyrocketed over the last decade or so due to their development zoning - and the demand is there to support the change.
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The average Australian wage last year was around 75k.
http://www.livingin-australia.com/salaries-australia/
Compare that to the average back back 15 years ago where the average wage was around 35k.
http://www.abs.gov.au/AUSSTATS/[email protected]/allprimarymainfeatures/84E9D7715F9801E4CA2572980020BB25
"For the financial year 2000-01, the average individual annual wage and salary income for wage and salary earners in Australia was $34,745. This was an increase of 4.2% over the previous year ($33,341) and a 21.9% increase on the average in 1995-96 ($28,494). The average annual rate of increase over the last five years has been 4.0%.".
The capital growth in housing definitely outstripped wage increases. You'd be hard pressed to find many houses that haven't tripled in price since the early 2000s, whilst wages pretty much doubled during that period.
Another factor to consider is that the 'average' wage is also distorted by high income earners so the median wage would be more appropriate. The latest median wage was $57,400 back in 2011. https://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/
I'd hazard to say that the discrepancy between the average and median wage would have increased more in 2015 in comparison to 2000 as Australia has increasingly seen rising income inequality. If you're earning below median income it's not hard to see why a lot of people are disillusioned with house prices- particularly in regards to Sydney.
http://www.livingin-australia.com/salaries-australia/
Compare that to the average back back 15 years ago where the average wage was around 35k.
http://www.abs.gov.au/AUSSTATS/[email protected]/allprimarymainfeatures/84E9D7715F9801E4CA2572980020BB25
"For the financial year 2000-01, the average individual annual wage and salary income for wage and salary earners in Australia was $34,745. This was an increase of 4.2% over the previous year ($33,341) and a 21.9% increase on the average in 1995-96 ($28,494). The average annual rate of increase over the last five years has been 4.0%.".
The capital growth in housing definitely outstripped wage increases. You'd be hard pressed to find many houses that haven't tripled in price since the early 2000s, whilst wages pretty much doubled during that period.
Another factor to consider is that the 'average' wage is also distorted by high income earners so the median wage would be more appropriate. The latest median wage was $57,400 back in 2011. https://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/
I'd hazard to say that the discrepancy between the average and median wage would have increased more in 2015 in comparison to 2000 as Australia has increasingly seen rising income inequality. If you're earning below median income it's not hard to see why a lot of people are disillusioned with house prices- particularly in regards to Sydney.
