Will first home buyers be locked into apartments forever?

Discussion in 'Property Market Economics' started by Jezzah, 16th Jun, 2019.

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  1. MWI

    MWI Well-Known Member

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    I didn't mean to imply you were in such position what I wanted to point out is that you can have a life you desire if you dream enough and progress there.:)
    Personally I never count on inheritance I just take responsibility.
    Trust me I constantly learn too, I was not always so positive or knew much especially about investing in a capitalist world coming as a child from a communist country. The major change of direction for me was when I discovered 'personal development', which encompasses not just financial aspects of my life.
    Over time I also learned to worry only about things I could change or which were under my control but since then learned I can only change myself and my circumstances to make things better.
    So if I were you don't worry about things you cannot control.
    Financial aspect is just one part of my life but there are many other aspects such as what constitutes a good life to me to my family and those close to me.
    We are all unique with gifts:) but there is enough abundance in this life for all who wish to attain or be more!
    And trust me I know a lot of people at various ages who actually choose to live in an apartment instead of a house. We cannot assume what we aspire to or want means the rest of us wish as well. Some of my closest friends own and live in apartments as that is their preferred choice.;)
    So what you need to do is to change your 'philosophy/attitude/thinking' instead of saying some will or some won't say... what can I do to get what I want, what my family wants!;)
     
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  2. albanga

    albanga Well-Known Member

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    The reality is that what your discussing is not just bound to housing, it’s everything in life. Everything will remain the same out of reach distance until your position changes. That can be house, cars, holiday destinations.etc

    So how does your position change? Well really there are endless ways but some of the most common I can think of:
    - Change of employment (A lot has been said about wage growth but what about upskillkng, moving jobs, changing industries)
    - Going dual income (At some point most people meet someone. Consolidated living is a heck of a lot cheaper).
    - Inheritance
    - Investing (Dahh :p)
    - Winnings

    And of course business. Almost all my friends who have taken the leap to “rich” was through business. Either being a beneficiary of a larger business or starting their own OR inheriting the family business.
     
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  3. Marg4000

    Marg4000 Well-Known Member

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    And interest rates dramatically lower!
    Marg
     
  4. Gockie

    Gockie Life is good ☺️ Premium Member

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    Back to the thread. People have a lot of choices. I think people who want to live in a bigger property without being out in the sticks may go from apartment to townhouse to house, rather than directly from an apartment to a house if the price gaps are too big and/or move a little further out.

    Having said that, i’d say currently the price gaps between houses and apartments in some areas currently aren't stupidly big. Say in Darlington (2km out from city centre) you can buy a 1br apartment for 600k, but you can buy a terrace house in the suburb from 1.1 to 1.2mill.
     
  5. sumterrence

    sumterrence Well-Known Member

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    Love all the quotes there!! :)
     
  6. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Here's the bad news...

    Lots of people want to live close to where they work and do everything else, but there's a limited number of properties. Therefore only people with more money than the others can afford to buy those properties. Sorry, but that's the simple reality of supply and demand.

    Here's the good news...

    If you're on an average income, that means that you're earning about the same as most people who also want to live in that location. The question is what are you going to do about it? What sacrifices will you make? How will you out find ways to get what you want that others haven't?

    I can give people plenty of examples where people were able to go outside their comfort zone and find ways to make things happen. The problem is most people can't see the opportunities available to them.

    The other problem is that people want to live in locations where they grew up, not appreciating that population pressure has priced them out of the locations that were once affordable for their parents. It's really not that hard to afford your own patch of dirt, but it may not be the one you really want. Work with the resources you have.
     
    Last edited: 17th Jun, 2019
  7. MWI

    MWI Well-Known Member

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    Yes me too, I constantly refer to them.
    Below is the link to 101 quotes of Jim Rohn (IMO, he was a great human being!):
    The Top 101 Jim Rohn Quotes of All Time
     
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  8. Angel

    Angel Well-Known Member

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    Sorry, but I think $500k to $600k is a pretty big price gap
     
  9. Gockie

    Gockie Life is good ☺️ Premium Member

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    But you get something around twice the size for that price gap (possibly 2-3 bedrooms) and some sort of yard! So it's really value for money in that sense.
     
  10. Angel

    Angel Well-Known Member

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    Doesn't matter about the size of the house, $500k is still a whopping big sized mortgage to take on second time around. I can go from a 3 bedroom/1 bathroom house @ $500k to a 4 bedroom/2bathroom at $600k. I suspect the ambiance of my suburb is just as pretty as Epping or Heidelberg. We have koalas in the park just behind my house, for example. It is a one hour drive to the surf beach at Caloundra (we got lost in the dark when we drove you home that night) - how long does it take to drive to a surf beach from Epping or Parramatta, and park the car?

    You can go from a $500k suburban resi house to a $1m estate on acreage within ten minute's drive of my place - for that money you get a 5/3/4 with heated pool etc on 2.5 acres cleared, fully fenced and landscaped with horse stables and an all-weather driveway.

    I guess what I am saying is that outside Sydney and Melbourne, you only have to pay an extra $200k to get twice the sized house in the same suburb.

    Eatons Hill, QLD 4037 Sold Houses Prices & Auction Results - realestate.com.au

    And the cheapies on regular suburban sized lots
    Eatons Hill, QLD 4037 Sold Houses Prices & Auction Results - realestate.com.au
     
    Last edited: 17th Jun, 2019
  11. Angel

    Angel Well-Known Member

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    To the OP, when we moved up from our first home to the one we live in now, we went without any overseas holidays. In fact we went without any trips anywhere, not even to the coast for the weekend. No new cars, no dining out no alcohol and no fancy clothes etc etc.
     
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  12. Gockie

    Gockie Life is good ☺️ Premium Member

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    Brisbane is different... It would be really nice to buy a house in a good suburb in Sydney for 600k, but for that money you would find it hard to find a house in Blacktown unless it was really undesirable.

    1.1mill for a terrace in Darlington which is approx. 2km from the city centre... Ok, the properties aren't huge, but I think that they are relatively good value as long as there are no structural issues.
     
  13. Illusivedreams

    Illusivedreams Well-Known Member

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    $500,000 mortgage is currently $500 per week P and I

    Considering a single nurse make $65,000 starting salary with no over time. I would not call $500k a large mortgage at current rates.

    If you can't afford $500 per week.
    May I suggest looking to improve your skill set to make better money.
     
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  14. marmot

    marmot Well-Known Member

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    Some of those numbers bring back some memories.
    She pays in one week about the same I used to pay in monthly repayments on my first house.

    But I used to earn just less than half of what the nurse makes..
    Id take my 9% interest rate on my first l loan and day compared to 4% on $500,000.
    And I bet she wont be paying it of in 10 years.
     
    Last edited: 18th Jun, 2019
  15. 2FAST4U

    2FAST4U Well-Known Member

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    Exactly.
    upload_2019-6-18_7-47-7.png
     
  16. Jezzah

    Jezzah Well-Known Member

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    I know that salary differences between our cities aren't as dramatic as the house prices are but it would seem that if you live outside of sydney or Melbourne it would could be quite difficult to sell your home and move in.

    Also I would expect if you live outside of Sydney and Melbourne it's more likely you missed out on the investment booms and may have invested locally. Which would amplify the separation between the population in the two major capitols and those outside.
     
  17. Jezzah

    Jezzah Well-Known Member

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    Yeah I worry about a solution to large loans being longer repayments. 40 years, 50 years, eventually it becomes a working lifetime.

    If the banks offer them people will take them.
     
  18. Marg4000

    Marg4000 Well-Known Member

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    The official length of the loan is only the maximum. It’s the mindset that makes the difference.

    Once upon a time, everyone’s aim was to pay off the PPOR mortgage and be debt free. The sooner the better. Offsets, redraws and refinancing were unknown or very rare.

    Now, as soon as there is some equity the loan is extended. Or refinanced to a longer term. The home loan is seen as an ATM for buying cars and holidays. It seems there is no longer any attempt to actually pay it off.

    Of course, borrowing for investment is a different matter.
    Marg
     
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  19. Angel

    Angel Well-Known Member

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    Unless I have misunderstood something, it seems that you are discussing two different scenarios now. I would think that for those of us around the country, ie NOT in Sydney or Melbourne, it would be much easier to upgrade to a larger home, than it would be for people in the two most expensive cities.
     
  20. Gockie

    Gockie Life is good ☺️ Premium Member

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    Agree with this. And another way to look at it. In Sydney, a single person can barely buy an apartment...(600k)... On a double income you can possibly buy a house in a decent suburb (1mill). But on a single income and just your savings... I don't really think it's doable.
     
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