The next 10 years: Prediction of the market

[Truly Exotic]

LOL ......

A top of the range Sony Trinitron 28" TV cost me approx $3000 in the early 90s.

exactly! I do remember when tvs were $2000-$3000, but I was still at home,

Same with laptops, when I was in high school they were colour screens but just! and they were around the low $3ks, God I wanted one!

I bought my first one once I got my first proper job for $3800, but felt so guilty about it, I sold it a week later!!

 

[wategos]

So I would expect stronger demand for units and apartments as more affordable options.

Yes this is a better solution going forward than asking people to buy on the fringes and travel 3 hours a day. Governments should make it much easier to develop an inner city house site into 12 apartments, transformations that many cities around the world have made.

It has absolutely nothing to do with old people buying property.
...
In fact, we have a fairly large portfolio.

Hmmmmm....

It WAS easier 20-30 years ago. I bought a large flat near the beach in Sydney on an average wage in my 20s. That is just not possible now. What is very different now is the number of investors buying property in desirable areas and pushing prices up. That flat in Sydney I bought... I was the first investor in the building, the rest were owner occupiers. Now days it is over 50% investor owned.

 

[Banvard]

Funnily enough, my partner and were talking to her parents about first houses a while back. (I am 30 and live in Sydney to put it in perspective)

We both worked and both parents worked - no kids at the time. They bought in Blacktown, we bought in St Marys. Both houses cost roughly double the household income at the time.

Both were about 30 minutes further west from where we grew up.


Our house was newer. We had better cars, more luxuries. We took more holidays yet could save more money. We could also afford to buy our first IP faster than they could.



Aside from location (or proximity to the CBD) I think affordability is much better now. Not to mention, they said when they got their first loan they had to sit down with the bank manager for an interview and give personal references!

These days we send a few emails, sign some forms by post and it's done!

 

[skater]

It WAS easier 20-30 years ago.

No, timing played a part, just like it does today. It was easier to buy into Western Sydney 2 years ago than it is today. That is timing! Just like when we bought our first place & 2 years later prices had tripled. There was no way we could have bought, had we not timed it right, and then it stagnated for the next 10 or so years until it was 'cheap' again. That place, should it not have been bulldozed by the next purchaser, would be worth double again now.

Funnily enough, my partner and were talking to her parents about first houses a while back. (I am 30 and live in Sydney to put it in perspective)

We both worked and both parents worked - no kids at the time. They bought in Blacktown, we bought in St Marys. Both houses cost roughly double the household income at the time.

Both were about 30 minutes further west from where we grew up.

Our house was newer. We had better cars, more luxuries. We took more holidays yet could save more money. We could also afford to buy our first IP faster than they could.

Aside from location (or proximity to the CBD) I think affordability is much better now. Not to mention, they said when they got their first loan they had to sit down with the bank manager for an interview and give personal references!

These days we send a few emails, sign some forms by post and it's done!

Precisely!

 

[Truly Exotic]

Also dont forget, the population has doubled in 20 -30 years?

however land avaialble is still the same,

we now have double the amount of people in a fixed radius,so the city centres tend to get bigger, unless the buildings get higher and higher, which does happen,

it would suck if you worked on the other end of the city centre, thus making your travel time, twice as long

 

[WattleIdo]

That place is about 10 min walk from a zone 1 station, 5 min from the cricket and soccer Club with a Council maintained oval, play equipment, bbq, and walking track along the creek,
It's a short drive or 20 minute walk to the shipping Centre, cinema etc
there is quite a bit of development going on simular to that place with the old places being knocked down and rebuilt
There was an idea from another poster about buying an ip but renting where u like
I have a mate who brought an ip in sunshine but rents in Thornbury
another guy I work with, he is about 27, put a good deposit on a cheap place in deer park, renovated, has continued to pay it off and if he continues will have it paid off by 2020, (he is thinking about buying an IP though)

disclaimer: I was in a similar position to yourself in 2008 but couldn't afford yarraville newport Williamstown and brought and lived further out west since then

This looks like the catch of the day. I haven't been to Sunshine but I would definitely check it out if I was to move to Melbourne.

None of our cities are going to get any smaller. If we can't afford to live in them, others can.

The population has increased and the whole place has changed beyond belief. My friends and I shared run-down old shacks in Gladesville, Drummoyne and Eastwood after uni. The inner-west of Sydney was for scumbags, punks and squatters - or tradies who worked at the airport.

It's no surprise that these places are out of reach for most young people now. If you're making a decent wage and are pretty sensible with your money and you can't afford to buy where you want, then you're not the only one.

Skater, thanks for the examples that you put up. Is this the sort of thing you buy?

 

[trey]

let me ask you, how much your foxtel, mobile phone, home internet, ipad repayments, ipad data plan repayments, gym membership, store finance costs per month???? Have kids??? then multiply that figure by 50% of the number of kids you have, and then you will start to see the realty of the situation.

I dont have any of that. But i do get all my accomodation and food provided for nothing, save 3k a week have 300k ready to go for a deposit and still live with my parents at 24 (im never there anyway). Anddd i still think its overpriced..

 

[trey]

But it is good to challenge my opinion to the older people on here because you reply and thats how i learn.

 

[Tano]

I found this . Its probably similar to 1965 if you include dual income (which was rare in 1965)

 

[TMNT]

I dont have any of that. But i do get all my accomodation and food provided for nothing, save 3k a week have 300k ready to go for a deposit and still live with my parents at 24 (im never there anyway). Anddd i still think its overpriced..

man, that is a ridiculous position to be in,
$3k per week, after tax savings, thats $236k salary assuming you dont spend a cent
24 years old,
still leaving at home
$300k deposit

honestly, no offence, if you think you have it hard then you are either very spoilt, need a reality check, dont know anything about the real world, or have ridiculously high standards, or you are a troll

 

[trey]

man, that is a ridiculous position to be in,
$3k per week, after tax savings, thats $236k salary assuming you dont spend a cent
24 years old,
still leaving at home
$300k deposit

honestly, no offence, if you think you have it hard then you are either very spoilt, need a reality check, dont know anything about the real world, or have ridiculously high standards, or you are a troll

Im 100 percent not a troll, im a real person sitting at the computer right now. . I dont think im hard done by at all but yes my standards are high. Im not spoilt. i have never been given anything in my life and i have worked hard to get where i am now. The thing i have done is listen to people twice my age for advice who have taught me the value of money which has helped.

 

[Singo]

The thing i have done is listen to people twice my age for advice who have taught me the value of money which has helped.

Seems they don't understand how money works. Otherwise you won't keep 300k in savings!

 

[trey]

Seems they don't understand how money works. Otherwise you won't keep 300k in savings!

i dont understand?

 

[skater]

Skater, thanks for the examples that you put up. Is this the sort of thing you buy?

I've got all sorts of stuff. Mostly lower priced homes, but not all. We've got stuff in Western Sydney, South Western Sydney, regional NSW, regional Vic. Homes, units, blocks of units. I like affordable housing because anyone can afford it.

 

[Singo]

i dont understand?

It is good that know the value of money and don't waste it. You are working hard to earn and save money. But your money may not be working hard. If you get you money work hard as well (investing), it will be easier. A forum like this should guide you!

 

[Breamster]

In terms of affordability, I think there is a lot to be said for the strategy of renting (gives much more option, location and price), and using equity / cash to leverage into investment properties, rather than a PPOR's.

More than happy to hear about the views on the pros / cons of this strategy from others.

I'm happy to share that Im in my mid 30's. About 1.5 years ago I went through a separation where, prior to separation, we had acquired lovely PPOR in Sydney. The money from that settlement was nowhere near a satisfactory amount (ie was not sizeable owing to a very high LVR on ppor). I was horribly disappointed by the lack of our financial success as a partnership. It is this that has been the motivation to be quite aggressive with my investing, to get ahead, to think about mine and the kids futures, and thus leverage into IPs. It's a bonus that I truly enjoy property investing.

The settlement money wouldn't have been enough for a 10% deposit on an acceptable property as a PPOR for me and kids in Sydney, particularly in a location where I needed to be so I wasn't too far away from my kiddies.. and despite having a good salary the amount to borrow would've been very difficult to service on my own and placed stress on my abilities to provide for the kids. However, im not saying it would've been impossible. But I was very reluctant to engage in such stress where I had the possibility of other options.

So, I've tried to work around it. I must say I find it difficult not having 'my own place'.. But I've lived with family for a while (which has been great for the company too throughout some tough times emotionally) and I've also rented.

The kicker is that the settlement money was utilised for deposits and costs on two IP's, and with good tax and depreciation benefits, cash flow from rent, and reasonable rent for my own place, I have managed to save 5% deposit for my next IP over a period of several months. Hope to buy in next few weeks. Then aiming to buy again second half of year, again from cash savings.

I've developed a plan to build a sizeable portfolio in 10-15 years, all whilst continuing to rent. In the long term my plan would be, if necessary and particularly in retirement, to liquidate and use equity to acquire a ppor at that time. And Im not talking about a mansion. Id prefer to spend my money on recreation and the kids, not a lavish PPOR. Its just a personal choice I suppose.

Who knows.. between now and then I might meet another partner or need to move around in any case which, by adopting a rent strategy, avoids unnecessary costs in buying and selling a PPOR more than I need to.

 

[trey]

It is good that know the value of money and don't waste it. You are working hard to earn and save money. But your money may not be working hard. If you get you money work hard as well (investing), it will be easier. A forum like this should guide you!

yeah thanks. thats why im here. Trying to weigh up whether i invest and buy houses and owe the bank heaps of money and run the risk bad tenants or just buy a house and chill and do whatever i want with no stress.

 

[Cruskits]

Trey,

What the hell.... It's hard to know if your serious or not. You are obviously switched on if the story so far you have given is true. I would kill to be in your position.

First of all Spend 3 months reading everything you can find about everything on this forum.

Second of all, keep reading all the bits you missed for the next 3 months after that.

Three. find an accountant who has an idea about property. You will find the questions to ask your future accountant on this forum.

Four. find a good mortgage broker who will no doubt be delighted to help you with your current financial position. You might find this person on this forum.

Fifth, kick yourself you didn't find this forum 4 years ago.

Six. keep reading this forum

Seven. send out a big thank you to everyone on here in 7-10 years.

Good luck

 

[trey]

Trey,

What the hell.... It's hard to know if your serious or not. You are obviously switched on if the story so far you have given is true. I would kill to be in your position.

First of all Spend 3 months reading everything you can find about everything on this forum.

Second of all, keep reading all the bits you missed for the next 3 months after that.

Three. find an accountant who has an idea about property. You will find the questions to ask your future accountant on this forum.

Four. find a good mortgage broker who will no doubt be delighted to help you with your current financial position. You might find this person on this forum.

Fifth, kick yourself you didn't find this forum 4 years ago.

Six. keep reading this forum

Seven. send out a big thank you to everyone on here in 7-10 years.

Good luck

Im very serious and nothing is made up. Thanks ive been on here a while now.

 

[The Fence]

Whatcha gunna do then ?