Smashed Avocado-Gate - Bernard Salt

Yep, I can relate to this whole discussion.

My grandparents told me that buying my own home was an impossible dream, property prices were going up all the time, it wasn't fair for young people like me, I would be be a lifetime renter, ...

That was 45 years ago. Yawn.

 

My last purchase was also only twice my income in salary (at the time).

 

Fair mishmash of stuff here.

People go where the jobs are. There are entire industries that don't exist in Geelong. This is why people end up in capital cities. "Just move" to afford a house doesn't work because a job doesn't magically appear for you.

How long did it take to save your deposit? Did you receive parental assistance (money or living at home)? Do you have a job that pays higher than the average wage?

It's the details that matter and you buying a home for 7 x yearly wage is still two-three times higher than previous generations had to pay.

You're paying more in real dollars over your life for housing than they ever did. We're at 5000-year low interest rates now also - how do those mortgage calculations look at higher rates?

Previous generations had more disposable income. Yours is going to an inflated mortgage.

You should also realise that we're talking what happens to the majority. You buying a house for 7 x your income at 22 is extremely unusual. You are in a small and falling number of people.

If you managed to buy that house without parental help I'd be very surprised.

The truth for the majority is being locked out of the housing market. It takes far longer to save a deposit, it's higher in real dollars, it requires taking on highly risky levels of debt and wages are flat or declining while unemployment and underemployment are rising.

 

There is no right or wrong time to have kids. For me I became a dad at 40. This was my wake up call to start investing. I'd already had a "life". Done the travel thing (not that that ever stops), and bought the baby home to a fully feathered nest (decked out PPOR). There is nothing like becoming a parent to kickstart the provider gene. Well that's how it was for me anyway.

 

I saved the deposit entirely on my own. In terms of parental help, I live at my grandparents' place, but nobody from my family (apart from myself) has ever lived out of home until they were married. I'm Greek, it just never happens. The same opportunity was afforded to my parents back in 1990. I have a vocational degree with honours (CSP of course), so I guess I earn higher than average, but with more and more people going through uni, more and more people have access to higher earning careers.

I don't plan to ever marry or have kids, single income is where it's at for me. If things ever get tight, I will rent out extra rooms (it is a four bedroom home). 150 per week seems the going rate in this part of Geelong.

In terms of employment, I've already stated that jobs are easier to find in my field in smaller regional centres than large cities. But even if there are no jobs in the field in the whole Geelong/Surf Coast/Bellarine area, you can still travel quickly and easily from Geelong to Melbourne for work. I saved my deposit travelling the other way!

Another thing is, I bought a 600k house, but there are still plenty of 3-400k houses around to purchase here in Geelong.

 

Yeah so what's the point.... keep whining about what everyone acknowledges as a fact of life these days or take action like @G TOWN & others have done.....

Yes, there has been divergence in wage versus house price growth. It's a fact. We all know it. What some of us have done & are saying is that times have changed so adapt or be consumed by mortgage misery.

For example, Geelong is very liveable, affordable & is commutable to Melbourne.... you know that place where all the jobs are? So if people want an option rather than being a debt slave, there it is!

Every region has it's own equivalent.... those of us providing alternatives for consideration are not living in denial of wage/house price issue. Rather, we have taken action to adapt to the current environment & trying in vain it seems to offer alternative options rather than whine about everything that's wrong with the market.

Sorry, but it's just getting a little old saying the same thing over & over.... let's perhaps focus on ways to adapt to our current reality

 

Just for some comparison:

My parents bought their first home in an outer suburb in Melbourne's west in 1990. The home cost $160k total for the house and land.

Two days ago, a house on the same street sold for $560k. Both three bedrooms, two bathrooms, similarly sized land. These days, however, there's a Metro train to the suburb, and a direct freeway to the city.

My dad earned around $30k at the time, and interest rates were 17% or so. These days my dad would earn about $80k straight out of uni, with interest rates less than 5%.

If I wanted to buy in Melbourne, I would go two stops further out on the train and buy in Sunbury. I'm seeing similarly sized houses being sold for 350-400k, and that's in real Sunbury, not Goonawarra (the less desirable area east of the railway).

Sydney may be different, I don't know. But even if you are wedded to your Melbourne CBD job, there are options.

 

... and I have two kids in their early, early 30's, both married and one has a child.

Both of my kids have more properties than I had at that age, both have higher net worth, both leave me for dead with their investing knowledge, ...

Did we help them:- Yes and No.

We helped them to gain knowledge, we helped them to develop strategies, we helped them get some life experiences (work ethic, delayed gratification, ...), we helped them identify their values, ... What parent wouldn't; in facts, all parents should (mine did but, in reality, their help was minor to nil).

Did we helped them financially? No way. They will get that when we go. They have to paddle their own canoes, just like we did.

It is my belief that some people get 'knocked out' (of the race) when they hit a glass ceiling, no matter how high or low it is. Others just 'smash' through it and keep going; they then 'smash' through the next one, the one after that, etc, etc. That is probably one of the biggest lessons we taught our children.

If people (young and old) stopped whinging about how tough the world is, stopped thinking the government owes them a living, stopped whinging about how property prices are too high, stop bitching about how bad their job is, .... and put in that energy in gaining knowledge/skills/experience, put that energy into increasing their income via getting more qualifications/getting a second job/starting a business, etc, they would be well on their way to obtaining a property portfolio.

Hold a sec!!! If that happens, there would be more buyers in the market, property prices would rise even faster, ... What a vicious circle!!! What a cruel world!!!

Rant Over.

 

Please don't take my comments as it's too late to have kids in your 40s. It's great to have kids full stop. My point was more why I didn't wait and why I think it's silly to wait for financial reasons. I think you understood that. Seems like you resonate with the extra drive for wealth coming from having kids too.

 

it's not much fun for young people to see a list of the worst suburbs in Sydney and told hey these are affordable

 

And that is if you think $700k is affordable

 

@emza, are you for real?

You seem to be able to quote statistics but have no comprehension that the statistics are just one number on a piece of paper that comes from taking a broad range of other numbers and using just one from within that range.

For what it is worth, my house is a basic three bedroom one bathroom house that has always been an hour's commute from the city. It currently takes 1.5 hours by bus if one must use the horrible things.. When we first moved here, there were no busses that travelled directly to the city - you had to go somewhere else and then get a bus or train. It probably took longer than an hour as you would have to wait up to half an hour for your connecting train to the city.

No, it is beneath the above-average or expensive range as you so ignorantly and arrogantly stated. Your level of knowledge about life in the 80s and 90s seems to be limited to what you read in the latest articles. Far from reality, I'm afraid. Have you actually driven around these 16-20km out suburbs that were FHB land back when i was a stay at home Mum with two preschoolers? Would you know the difference between a 4 or 5/2/2 on 900m2 built in the Naughties and a 3/1/1 built in the 70s to 90s? Would you know the difference between the ordinary homes here that are interspersed between the second and third homes that the old Baby Boomers also built in the same suburbs at the same time? See Graeme's thread from last month about how the media has gotten their definition of BBs all wrong, and that it is not my age group who are to blame for everything that is wrong in the world..I'll find the link later.

In 1988 we acquired false payslips to give to our bank, showing Hubby's income was $25K rather than the $20K it really was. The land was $25K which we paid cash for and the house on its own was about $70k. We used another $15k cash to build the garage and finish off the property over the next ten years.

This is our second home, the first one would probably only be worth $250k these days. We paid it off in eight years, it was so far away from the City.

 

It may be true that youth earn less than previous generations but the types of jobs available have also changed, the technology/methodology used have also chaned, expectations have changed, educational requirements have increased.

Buying a house near work - as a factory worker this may have been true but who wants to live in a grimey innercity industrial suburb? eg Balmain/Pyrmont (coal power stations, docks, oil terminal), Teneriffe (docks/wool stores), Carlton/Doncaster/Ryde/Meadowbank/Ashfield (manufacturing) Suburbs have gentrified over the years and become more expensive as a result. White collar workers bought in the nicer areas, they caught trams/trains to the city

Times have changed, not the expectations of fhb - mindset adjustment or reeducation required.

Agreed

Exactly, who needs a mobile phone, internet, pay tv, netflix, daily skim shocker-chinos, take-aways for lunch/dinner, 60" tv, designer clothes, piercings etc? Previous generations didn't have disposable technology, takeaways were limited (bbq chook, fish & chips, burgers - none of those new fandangled Chinese or pizzas, who knows what's in them?)

 

I totally agree with you. I'm not even convinced that my sub$500k house is affordable. My 28 and 30 year olds are looking to move into a $350K townhouse next year, though.

 

That's the thing. 'Worst' suburbs.

People are preventing themselves from buying a first home because they can't get over their biases.

 

Out of curiosity, where abouts do you guys live?

 

Well done young man. A wise head on young shoulders. With these two comments I'm gonna have to elevate you alongside @Dan Donoghue as my most admired Gen Y poster on this forum!
Life always seems to divide people into two camps - those that just see impossible hurdles, and those that just see opportunities to do better. It's up to each one of us to decide which group we become part of.

 

Five minutes drive from where I work, golf course, Bunnings
Under ten minutes drive to train station, plus 30 minutes in the train to CBD
Ten minutes drive to Sunshine Coast Motorway

Five minutes walk from a shopping centre, school, medical centre and city bus.
Ten minutes walk from a massive sporting complex and a modern hotel and music venue

Real Estate & Property For Sale in Eatons Hill, QLD 4037 (Page 1) - realestate.com.au

 

What's everyone else's excuse if house prices in Sydney are unaffordable?