"Rush of first home buyers but many aren't sure they can afford payments"

[evand]

If a lot of first home buyers are sruggling now on such low rates imagine the carnage when the FHBG stops. It was always going to happen.

With unemployment to rise......OMG!....you dont need a crystal ball....just half a brain.

The most dangerous time to buy property is at the bottom of a rate cycle. For obvious reasons. And i dont buy the 'fix your rate' line. Dont ever believe the banks are giving money away and fixing rates rarely works in favor of the borrower.

Maybe nonrecourse predictions will eventuate.

 

[keithj]

If a lot of first home buyers are sruggling now on such low rates imagine the carnage when the FHBG stops. It was always going to happen.

Whats the FHBG got to do with IR rises ?

With unemployment to rise......OMG!....you dont need a crystal ball....just half a brain.

The govt is a couple of steps ahead of you - the big4 will be giving a repayment holiday to newly unemployed.

The most dangerous time to buy property is at the bottom of a rate cycle. For obvious reasons.

What are those reasons ? Do you think it's better to buy when IRs are high ?

And i dont buy the 'fix your rate' line. Dont ever believe the banks are giving money away and fixing rates rarely works in favor of the borrower.

Whether it works in the banks favour or not is completely irrelevant. Fixing rates is a guarantee that the borrower will be able to afford the loan for the next 5 years. So fixing rates for the long term when you can afford it makes buying at the bottom of the IR & housing cycle the least dangerous time to buy property. And in 5 years the borrowers discretionary income is likely to have increased by ~30%. So higher IRs after 5 years should be easily handled.

Maybe nonrecourse predictions will eventuate.

I reckon a couple of them might.... but I'm pretty sure that not all of them will .

 

[ARF]

Who decides what "Mortgage Stress" is anyway? I settled on my first home a month ago and my payments are well over 30% of my income and I'm not stressed in the slightest, its actually $50/wk cheaper than what I was renting and is literally across the street! But according to this, I'm in mortgage stress

 

[BayView]

Rents have increased, house prices nationwide went UP last year - EVERYWHERE except WA. Perhaps this is why you hold your present view - you are in the midst of a slightly falling market where you live.

Actually, we have two properties in Kalgoorlie/Boulder, and both have seen continued growth in rent and property value in 2008.

Prices are still strong in the lower end in 2009, of course.

 

[BayView]

The most dangerous time to buy property is at the bottom of a rate cycle. For obvious reasons. And i dont buy the 'fix your rate' line. Dont ever believe the banks are giving money away and fixing rates rarely works in favor of the borrower.

Don't agree with this one, Ev.

It's all about attitude - if you fix your rates now at 6%, this is an historically low rate.

Based on this - and only this - you are ahead of the average, so you would (should) be happy enough.

However, if you lock in your 6% right now, and the variables fall another .25% or even .5% next month, it makes the 6% look bad - if you choose to see it that way.

Either way, 6% is still bloody good. You have locked it in for peace of mind, and unless you need to sell, you've locked in one of the lowest rates in many years, for 10 years.

Now, to me; that's good.

Another mindset; if you buy at the bottom of the rate cycle, and you have bought sensibly and are able to smash the loan down due to lower repayments than you normally would have, then you can put a very nice gap between your interest payments now and what they will be when the rates go back up.

Unfortunately, most people don't do this; they buy as much house as they can due to the lower rates, and pay off the bare minimum.

 

[BayView]

Mortgage stress is self-inflicted.

No-one ever told anyone to go out and buy too much house for you to afford.

Everyone goes to the Bank or their MB and says: "how much can I borrow?"

 

[Propertunity]

Actually, we have two properties in Kalgoorlie/Boulder, and both have seen continued growth in rent and property value in 2008.
Prices are still strong in the lower end in 2009, of course.

I am pleased to most humbly apologise Of course there is no such thing as the "WA market" - there are markets within markets.

I was merely thinking of the RPData map recently published, when I said that.

 

[BayView]

I am pleased to most humbly apologise Of course there is no such thing as the "WA market" - there are markets within markets.

I was merely thinking of the RPData map recently published, when I said that.

No apology required Prop!

It serves as a reminder to all of us that our Country is made up of many micro-markets and you can't look at it as one whole market, or as individual whole State markets.

I never have, never will.

I think these sorts of reports are handy - to give you a broad indication, but that's all.

It's sorta like saying "Frankston is full of druggies and you would never buy there".

But in Frangers there are many different little areas that are very different to another.

 

[asdlellel]

Mortgage stress is self-inflicted.

No-one ever told anyone to go out and buy too much house for you to afford.

Everyone goes to the Bank or their MB and says: "how much can I borrow?"

Exactly, it is self inflicted as people have their own choice. Though, if a person is led to believe that prices now will start to rise or stagnate and start rising, they get desperate and go out and buy. For some that might mean stretching their ability to pay. Even the cheaper end is too high or a stretch for so many, but that desire for the security of a home will lead many to stretch themselves.
If prices go up, then so will interest rates (sooner or later). If prices go down, many may be in negative equity, owing more than they own.

I guess this interesting but important topic will be clearer as we see the fallout from things like tonights budget, the end of the FOHG affects and unemployment.

Hey, well done on having a property in Kal/Boulder. I am sure you are doing very well with the rental returns.
On that topic, another 20 staff and 200+ contractors at a Nickel mine out that way (I think that way) put out of work by BHP yesterday.

 

[Token Funder]

Everyone goes to the Bank or their MB and says: "how much can I borrow?"

The issue in a nutshell.