FOMO and Home Ownership

Discussion in 'Property Market Economics' started by sash, 11th Feb, 2020.

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  1. sash

    sash Well-Known Member

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    A very interesting ABC program about house ownership. Some very interesting issues. Can't believe the young couple paid 900k plus for a 2brm unit in Ashfield (200k over reserve). I better hurry and put some more on the market. ;)

    A booming property market is turning home ownership into a distant dream

    This clearly shows what is happening cannot be sustainable. Will be very interesting to see. I am property investor with quite a few in the Sydney catchment (includes Central Coast), Wollongong and Melbourne/Geelong. Over 60% of my portfolio is in these areas...but even I think this is not sustainable.
     
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  2. Gen-Y

    Gen-Y Well-Known Member

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    A boon for you mate.. Sell ! Sold !
     
  3. sash

    sash Well-Known Member

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    Yep...one next week...another possibly shortly after. ;)
     
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  4. hammer

    hammer Well-Known Member

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    900k! I nearly spat out my wheaties when reading this.

    Back of the envelope calcs for a young couple....let's say they had saved 100k. That makes repayments around $800 a week depending on stamps and if they get a sharp rate (3 percent). It'll probably be more like $850...but in the interest of fairness let's say $800.

    Then there's body corp. $100 per week. Then there's maintenance, bills etc etc. Another $100.

    So more or less $1000 per week allowing for a little breathing room.

    One interest rate rise, someone falls pregnant, gets sick and things will become rather uncomfortable.

    Is that doable?

    And more to the point is it worth it?

    I can see why @sash (and not to mention anyone living somewhere other than Syd/Melb) might question the sustainability of this.....
     
    Last edited: 11th Feb, 2020
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  5. Tofubiscuit

    Tofubiscuit Well-Known Member

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    I only imagine most young buyers now are banking on prolonged low interest rate, continued employment and mum / dad equity help.

    They probably got a hand and the interest payment ends up same as if they rented.

    TB
     
  6. kierank

    kierank Well-Known Member

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    Here we go again ...
     
  7. sash

    sash Well-Known Member

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    Yep...been to a few sales and auctions...seems like a lot of FHB about.

    A lot of the investors are keeping their powder dry. This will push prices up possibly to the highs in 2017. But will get interesting...later on the year.

    Wish I can move faster and unload a few more. Prices are insane!

     
  8. Gen-Y

    Gen-Y Well-Known Member

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    The ATO thank you for your contribution Sash. :D
     
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  9. sash

    sash Well-Known Member

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    Yeah..but they aren't happy as depreciation is lowering the threshold significantly. The pleasures have having a lot of new builds..

    I was getting regular Xmas cards but since giving up paid work...they are not as cheerful.
     
  10. albanga

    albanga Well-Known Member

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    Is anyone surprised by this?
    It is and has always has been emotional owners occupiers that cause huge price surges.

    Ask a broker here and I bet the number 1 question they are asked is “what is my MAX borrowing capacity and what would my repayments be?”.
     
  11. Maximus

    Maximus Well-Known Member

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    Went to see my broker today to cancel my place in the FHLDS, not a good time to be buying at auction in the current market as i see FHB panic bidding and i dont plan on being one of them.
    Very curious to see how this will all unravel once interest rates begin climbing again in the near/far future.
     
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  12. fols

    fols Well-Known Member

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    I followed the campaign on this property. I couldn't believe the interest. There was one mid week open I went to on a Wednesday night- It must have had about 200 people go through the joint. They were lined up down the stairs and onto the yard, like they were waiting to enter the hottest new nightclub in town lol.
     
  13. Sackie

    Sackie Well-Known Member Premium Member

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    People have been saying for decades they can't believe prices are generally on an upward trajectory ( with a few twists and turns here and there).

    Im willing to bet in 20 years from now prices will still be ( generally speaking) on an upward trajectory in Sydney's most demand suburbs and near high demand suburbs.

    The amount of folks wanting to buy in Sydney is massive. Demand is huge. In demand land is limited.

    Some people just refuse to face reality.
     
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  14. sash

    sash Well-Known Member

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    Yep only mad shylocks...venture into this sort of market ...but hey make Lemonade I say..I am selling some...
     
  15. Traveller99

    Traveller99 Well-Known Member

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  16. Kangabanga

    Kangabanga Well-Known Member

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    It's Asfield mate, they probably bought it cash.
     
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  17. kierank

    kierank Well-Known Member

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  18. bunkai

    bunkai Well-Known Member

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    I've been through this building - the units are spacious but 932k is oddly high. It's an interesting example of timing the sale though....
     
  19. sash

    sash Well-Known Member

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    Yep...that is insane! I am seeing a lot of this....the musak will stop. Lets hope I get some of this on my places....
     
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  20. Maximus

    Maximus Well-Known Member

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    I should clarify, i think anything within or close to the FHB cap is going to be inflated due an influx of demand.
    You can buy a house with decent land 5km south west of Ashfield for 900k e.g. Campsie, Belfield, Belmore, Lakemba, Roselands etc.
    Im not going to speculate on what prices will do only that first home buyers are making emotional decisions, she said it herself they spent alot more than they expected.
    Plus it looks like the guy had no say in the matter haha.