Smashed Avocado-Gate - Bernard Salt

If prices go up, then the next generation wont be able to afford anything

 

I didn't say Investment Property, I said investments. There is a heap of different things you can invest in which if properly diversified, will make you money.

 

Yes, and those food look so delish but I couldn't part with my money for the food, vibes and view. I post pictures of my home grown vegetables and fruits. And roses!

 

Wow, a fence full of flowers! I'm impressed. Looks like you've done that for a wedding, deadset.

 

*cough* I *cough* do this too

 

My wife and I derive great joy for tending to our garden. We keep life simple really and focus on building things that last - relationships. Sure, property investing is part of the journey and that's why I'm here on this forum.

 

I didn't realise how much I loved having flowers until we moved into our new place.
Plenty of mature azaleas, camellias and rhododendrons

Land mover putting in the foundations for our Veggie gardens today

 

I miss my North Epping birds.

 

People here keep perpetuating the myth of buy where you can afford, build equity and then move to where you want to live. That's a great idea for inner/middle ring sellers. By the time you have saved for a deposit of where you want to live, the prices have moved on. All you have really saved is a deposit and you are back at the bottom rung. And then find yourself paying off your PPOR with super at retirement.

http://www.rba.gov.au/speeches/2015/sp-so-2015-09-08.html

 

That is true too LibGS. What about the idea that what was the outer ring 25 years ago is middle ring today. Would this have any consequence today or into the future?

 

Very insightful link. I posted a link around a year ago showing Melbourne prices and it pretty much showed a similar conclusion- Middle and Inner Ring (particularly Inner Ring) properties grew at a higher percentage let alone the $$$ value than outer ring properties.

I think people that perpetuate the 'buy where you can afford or buy outer ring' do so with good intentions. At the very least with interest rates at current historical lows it's better purchasing an outer ring property and having the forced savings in comparison to renting. Yet inner/middle ring property will grow at a faster rate than outer ring property so apart from saving up money while paying off a PPOR in the outer suburbs you've also got to set aside money to upgrade because relying on equity will not be in enough.

 

I understand your argument. There is a transport tradeoff too. But if someone can't afford inner and middle ring, then they can't afford it. Full stop. Better to buy where they can and get a foot in the market (they'll tend to all increase in value) than to not buy at all.

Plus, with a smaller mortgage, the repayments will be lower and less interest will be owed to the banks as there's less debt. Buying further out/cheaper might mean someone can pay it off in 7 years instead of 15 because they can pay a higher % into the home loan than if they fully stretch themselves. The interest saving may actually make up for less capital gains.

Note: Best bet. Look for the places to gentrify next.... cheaper buy in but bigger gains....

 

That's what I meant. Personally I'd always advocate purchasing property over renting unless you were only going to be in a location short-term.

 

Hehehe I look so damn young, I get a lot of people say that lol

 

The outer ring theory is great and true.....but that commute! If you commute for over an hour each way you're effectively working for 6 days and getting paid for 5.....

let alone a 2 hour commute....

There comes a point where the lifestyle tradeoff just isn't worth it.

 

Interest Rates and Populism

Here's the thread I mentioned this morning. I was expecting a discussion but that one flew under the radar.

 

That's why I urge people living in Sydney to move interstate if they are working in generic occupations and are <30 and don't own property. Apart from the opportunity cost of time you also incur real expenses living outer ring, such as increased transport costs, increased petrol, tolls (depending on the state), and car maintenance. Despite those costs it is still preferential than renting imo.

 

Darwin isn't everybody's cup of tea. But if it works for you...
Agree on commute. Had a colleague buy a townhouse/house in Prestons in Sydney (near Liverpool) and they moved to a unit closer to the city, (rented out their old ppor) simply as it was too much commuting.

Ditto, friends bought in Stanhope Gardens - nice home and everything but it's 31km from Sydney CBD. Fast forward a couple of years later and they've moved to Artarmon (6km from the city). (Made great CG on Stanhope Gardens though - not far off doubled).

You can still move closer in if the commute does your head in.

 

I was actually referring to an apartment, not a house. Also, you do realise that the median price in London is actually lower than Sydney? About 860k AUD at present. I think you'll find that most people in London and New York City live in apartments or townhouses - even home owners and well-paid ones at that.

You would certainly struggle to find an ordinary income earner aspiring to buy a house in New York that looks anything remotely like a house in Australia.

I actually can't believe you compared the above cities to anywhere in Australia as they have almost 0 in common in terms of economic diversity and importance, geographic size, population density/distribution, town planning, infrastructure, etc etc.

So did my family - from just across the Mediterranean in Cyprus. I'm guessing I grew up in the same area as you going by your description. Even my father who is one of the most stubborn people I know admits to it being easier when he was young (which is massive if you know my dad). They lived in Sydney before settling in Melbourne and he still struggles to believe me when I update him on the property market here and the areas that he and my other relatives used to live.

I was born in Melbourne but got my first permanent full-time job (and purchased my first PPOR) in Canberra along with a regional IP in NSW by 26. I am now working in Sydney but will likely move back to Canberra next year. I am not adverse to moving around. I have been living in Sydney for about three months and thought about getting a place here for about three weeks then got over it as the price of the properties I was looking at (and could afford) did not match the value that I saw in them.

Sydney and Melbourne actually subsidise the rest of Australia as they produce almost 60% of the country's GDP with about 42% of the population. So yes, they are actually quite important economic centres and wanting to live there is a logical and valid choice.

I only moved both times after I got a job offer and it's not easy to get a job in a city that you're not living in - obviously, most employers would rather hire a local and in the current climate, would have plenty of choice.

I just find it annoying that most people here seem to think it's not possible to do this while also being able to criticise things at the same time. I'm not spending all my time 'whinging' or wanting freebies - I'm trying to do the best I can by maximising the resources and opportunities that I have available.