The next 10 years: Prediction of the market

All the genYs have to do is cut out the iphones/internet/laptop/bali holidays/new cars and they will be all set to afford a deposit just like the prev generations did without.
 
whats everyones take on my views

throughout history the aust property market as a whole, the long term trend has been a constant increase, (excluding mining towns and extreme environmental/economical factors)

the property market has been doubling every 10 years on average, give or take

we are currently in a midst of a significant rise in QLD, WA, NSW, VIC which represents most of the country

due to a higher increase in CG vs CPI, due to higher expectations of lifestyle and associated costs for every day life especially for the younger gen, therefore its harder on perceived value for first home owners to get a foot in the door to what they 'think' is acceptable (thats another argument). ie property is now unaffordable, so we arent/cannot going to buy

ive heard a lot of people say "the time of doubling property prices is now non existant"

however, history is no guarantee of future perforamnce

I personally think we are in just another regular cycle, but the difference is that since its now deemed unaffordable to get anything decent for under $800k in sydney (to the younger gen's persepective)
I think that the 10 year cycle may now become a 15 year cycle, with more subdued long term average growth,

plus when the slow down/decline will come within 1-7 years, I think it wont be a as large drop or plateau as we have seen in the past, but it will be far less as extreme, ie in the past. where there has been a 10% drop for example, may now be a 4% drop, whilst a plateau for 5 years might be a plateau for 2 years or a 1% increase per year

All the genYs have to do is cut out the iphones/internet/laptop/bali holidays/new cars and they will be all set to afford a deposit just like the prev generations did without.

I hear ya! and I agree,

that being said, a iphone, internet, data sim for ipad is now a simple necessity, when I was growing up, phones werent around, internet wasnt around, our only telecommunications cost was $30 per month for line rental plus calls, all calls were local and fixed at 20c, now we have iphone for $60 per month, internet for $60 per month, ipad data for $20 per month, which is $140 per month ,

it would be pretty cruel to tell a young person, no smart phone for you, no ipad for you, in fact id probably rather be in solitary confinement then give you up my smart phone, life has simply changed to need those devices,

as for holidays, yes, I go overseas 10x as much as I used to because its accessible and cheaper! if I didnt go OS for more then 5 years then id probably feel below the poverty line
 
All the genYs have to do is cut out the iphones/internet/laptop/bali holidays/new cars and they will be all set to afford a deposit just like the prev generations did without.
Prev generations didn't have to compete so much with an army of property investors. It was easier to buy 20 years ago when I bought my first place, I was the only person bidding at the auction, Sydney east. That place has gone up 4 times, I don't expect anything like that growth in the next 10 years, it's even possible prices will be where they are today after a slump triggered by recession, taxation reform and interest rate increases.
 
This Gen Y has been saving around 30% of his net income from professional graduate work for more than 4 years now. Finding it very difficult to get in :(
 
Brough up with the right mindset you dont need the money, that will come. Try getting that through to someone who comes from generation after generation of handouts though and the whole concept seems alien. Dont be hard on gen Y be hard on their parents and grand parents for never putting 2 and 2 together.

You can raise a child with all the financial education you want, that does not guarantee that they will actually live within their means, and invest. Of course, should they actually choose to put that education to good use, they will do very well.

At the same time you will find that there will be some Gen Ys, that decide that they just don't want to live like their layabout instant gratification parents, & decide to learn about how to manage their money.
 
This Gen Y has been saving around 30% of his net income from professional graduate work for more than 4 years now. Finding it very difficult to get in :(

Hmm....lets see. Let's suppose you are earning $55k, although you are probably earning a darn sight more than that. So, 30% of $55k is $16500. Multiply that by 4 years = $66k.

So, minimum you should have in the bank is $66k, and you are finding it difficult to get in?

Here's something that looks nice, is a reasonable commute from Melbourne & is cheap. Really cheap! I've never looked at this area before, Wow, you get a lot for your money. You could leave a 20% deposit on this beauty.
http://www.realestate.com.au/property-house-vic-melton-116497975

Want something closer? Try this. Oh, it's brand new too & yes, you've got enough for a 10% deposit & closing costs for this one.
http://www.realestate.com.au/property-house-vic-sunshine-115733435
 
This Gen Y has been saving around 30% of his net income from professional graduate work for more than 4 years now. Finding it very difficult to get in :(

Im gen-Y too saved this in 7 years on 30k - 40k income. with only 3 or so years @ 7% intrest

jx0g1ZJ.png


Prev generations didn't have to compete so much with an army of property investors.

In 2009-10, 21% of households owned property other than their own home, up from 19% in 2003-04. thats not to bad. It wont all be resi property either.

I personally think we are in just another regular cycle, but the difference is that since its

pretty easy to under stand the cycle after you see this. were coming off the second bigger cycle.

https://www.youtube.com/watch?v=PHe0bXAIuk0

I hear ya! and I agree,

that being said, a iphone, internet, data sim for ipad is now a simple necessity
...
it would be pretty cruel to tell a young person, no smart phone for you, no ipad for you, in fact id probably rather be in solitary confinement then give you up my smart phone, life has simply changed to need those devices

Lets stop kidding our selfs. How many times have people who have a perfectly fine iphones that work fine want to "upgrade" to the new model that does the same damn thing. but its a "GOLD" colour.

to save money for a deposit
buy a cheaper android device, it does all the same things
have either a tablet or a laptop NOT both.
not get the huge data plans.
go pre-paid.

I spend $60 a year on my mobile using pre-paid. battery lasts 1 week (old school nokia)

Gen-Y can still have all that they need + the deposit too. read jan's book. These excuses were all used 30 - 40 years ago. But it was black and white TVs vs colour TVs and Two cars vs One car. ect
 
Oh yes
I agree with your phone example,
Why on earth do you need spend another 700 and get a new phone when your 18 month old is perfectly fine

Their justification is embarrassing

Another way to increase cash is to sign another contract get the new phone and sell it for 600!
 
These excuses were all used 30 - 40 years ago. But it was black and white TVs vs colour TVs and Two cars vs One car. ect

Haha, yep! I remember that.

Was young, single, renting a unit on my own. Had a very small B&W TV. Saved up $500 to upgrade to a colour one. Decided that I'd get a video player instead, so watched B&W videos.

BTW, all those things were REALLY expensive back then, compared to the wages.
 
unless you want to live 200kms west in the middle of nowhere the dream of home ownership for people who are now aged from 20 downwards is over. Its going to be very hard for the upcoming generations. ive saved 300k and im still not buying a house anytime soon because its stupidly overpriced to buy anywhere decent.

I had this same thought 15 years ago but regret not buying back then. I paid cash for my PPOR about five years ago. I now tell all youngsters to put a deposit down as soon as they are able.

And I only very recently bought my first tv - a run out 2013 clearance model at a marked down price.
 
unless you want to live 200kms west in the middle of nowhere the dream of home ownership for people who are now aged from 20 downwards is over. Its going to be very hard for the upcoming generations. ive saved 300k and im still not buying a house anytime soon because its stupidly overpriced to buy anywhere decent.

You are trying to buy in the wrong area. You dont have enough cash to buy outright "anywhere decent".

You need to borrow upon your substantial deposit thus far saved.

Just like the rest of us.

:rolleyes:
 
You are trying to buy in the wrong area. You dont have enough cash to buy outright "anywhere decent".

You need to borrow upon your substantial deposit thus far saved.

Just like the rest of us.

:rolleyes:

no ill just keep saving for a while longer and chill. the rate at which im saving is beating inflation and the rate at which houses are going up so im not worried.
 
I had this same thought 15 years ago but regret not buying back then. I paid cash for my PPOR about five years ago. I now tell all youngsters to put a deposit down as soon as they are able.

And I only very recently bought my first tv - a run out 2013 clearance model at a marked down price.

ive read a few of your posts. what do you? where is your PPOR?
 
How do you like being taxed on those savings ? should at least park them in blue chip franked div shares if you don't want property.

yeah its not the best. i dont no i havent looked into shares. its good just being safe knowing i can do whatever with cash
 
no ill just keep saving for a while longer and chill. the rate at which im saving is beating inflation and the rate at which houses are going up so im not worried.

Good luck then, & well done if you can pay cash in the area you want.
Just watch out this move up doesn't consume you.

Keep us posted.:)
 
In 2009-10, 21% of households owned property other than their own home, up from 19% in 2003-04. thats not to bad. It wont all be resi property either.
You need to go back just a little bit further, property investing/speculation took off massively after 2000.
20 years ago there were less than 1/2 the number of property investors there are today. It's that increased demand and competition that has pushed up prices and made it more difficult for first home buyers today.

page1-800px-Investor_Lending_-_new_vs_existing_to_Feb_2010.pdf.jpg
 
Last edited:
Hmm....lets see. Let's suppose you are earning $55k, although you are probably earning a darn sight more than that. So, 30% of $55k is $16500. Multiply that by 4 years = $66k.

So, minimum you should have in the bank is $66k, and you are finding it difficult to get in?

Here's something that looks nice, is a reasonable commute from Melbourne & is cheap. Really cheap! I've never looked at this area before, Wow, you get a lot for your money. You could leave a 20% deposit on this beauty.
http://www.realestate.com.au/property-house-vic-melton-116497975

Want something closer? Try this. Oh, it's brand new too & yes, you've got enough for a 10% deposit & closing costs for this one.
http://www.realestate.com.au/property-house-vic-sunshine-115733435

And he/she said 30% of net so you would have to take out tax first.
 
Last edited:
Back
Top