RumpledElf

First home buyers give up the dream

21 posts in this topic

Just to cancel out yesterday's news of nurses buying million dollar inner city houses.

http://www.news.com.au/money/property/first-home-buyers-give-up-the-dream/story-e6frfmd0-1225836796863

ONE-fifth of Australians will give up on the dream of buying their first home in the next two years if home loan interest rates hit between 8 and 9 per cent, according to a survey from home loans broker Mortgage Choice. By yesterday afternoon all four major banks had increased their standard variable home loan rates by 0.25 per cent, taking average mortgage rates to about 7 per cent, The Australian reports.

On Tuesday the Reserve Bank put the cash rate up 25 basis points to 4 per cent.

Mortgage Choice, which releases its first homebuyers survey today, said it found 2 per cent of first-time buyers would give up the hunt for a home if interest rates rose 25 basis point.

"As of Tuesday, these people would no longer be looking to purchase their first home," the broker said, noting that the survey had been undertaken late last month.

Share this post


Link to post
Share on other sites

Just to cancel out yesterday's news of nurses buying million dollar inner city houses.

http://www.news.com.au/money/property/first-home-buyers-give-up-the-dream/story-e6frfmd0-1225836796863

Importantly what will happen to people who bought when mortgage interest rates were 6%. I know I even thought interest rates were going to be low for a long time. We were entering the next depression afterall.

Share this post


Link to post
Share on other sites

Importantly what will happen to people who bought when mortgage interest rates were 6%. I know I even thought interest rates were going to be low for a long time. We were entering the next depression afterall.

Don't give up on that depression just yet Tom.

The RBA is reactive - like any good Public Service:) The rates are just their reactionary tool. House prices up - rates up. House prices down - rates down. House prices up... You know when your car gets the speed wobbles and the worse thing to do is try and steer your way out of it? Or if a plane starts occilating and the pilot keeps trying to correct the motion the occilation actually gets worse?

Edit - I just gotto say how funny is this comment from the article:

Darren of Sydney Posted at 8:54 AM Today

If they can not afford a home at pre GFC rates then they should not buy one. All I can say is that I am glad I am gay due to current laws both me and my partner were able to both receive the first home buyers grants so saved a fortune on buying 2 houses.

Comment 12 of 93

If he's taking the piss, it's a hoot, if he's serious, it's even better:)

Edited by ummester

Share this post


Link to post
Share on other sites

Darren of Sydney Posted at 8:54 AM Today

If they can not afford a home at pre GFC rates then they should not buy one. All I can say is that I am glad I am gay due to current laws both me and my partner were able to both receive the first home buyers grants so saved a fortune on buying 2 houses.

Comment 12 of 93

If he's taking the piss, it's a hoot, if he's serious, it's even better:)

That's hilarious!!

Wonder if any Somersofters will now come out of the closet to get a second grant?

Share this post


Link to post
Share on other sites

It just staggers me the lack of forethought given by some FHBs in regards to interest rates. When taking on a 20-30year financial commitment surely one makes allowances for interest rates rising and falling when looking at taking out a mortgage??? I mean, they can work out that anything over 6% is unaffordable, so it doesn't take much of a leap to work out if rates rise, the loan will become unnafordable.

I have a basic rule of thumb for myself, if i can't comfortably pay at 10%, I can't afford the loan.

Share this post


Link to post
Share on other sites

You get the second grant by staying in the closet.

so now we have the first home owners grant and the second closet owners grant.

Share this post


Link to post
Share on other sites

Just to cancel out yesterday's news of nurses buying million dollar inner city houses.

http://www.news.com....0-1225836796863

Re - why can't i make two posts in 30 secons and only 50 per day? not that i could do it - but it does seem a bit odd

only 20% would be out of the market? i would have thought it was much higher. how would a mortgage broker know anyway?

Share this post


Link to post
Share on other sites

Don't give up on that depression just yet Tom.

The RBA is reactive - like any good Public Service:) The rates are just their reactionary tool. House prices up - rates up. House prices down - rates down. House prices up... You know when your car gets the speed wobbles and the worse thing to do is try and steer your way out of it? Or if a plane starts occilating and the pilot keeps trying to correct the motion the occilation actually gets worse?

Edit - I just gotto say how funny is this comment from the article:

Darren of Sydney Posted at 8:54 AM Today

If they can not afford a home at pre GFC rates then they should not buy one. All I can say is that I am glad I am gay due to current laws both me and my partner were able to both receive the first home buyers grants so saved a fortune on buying 2 houses.

Comment 12 of 93

If he's taking the piss, it's a hoot, if he's serious, it's even better:)

maybe because you lied about your relationship Darren. all laws (except marriage) have now been equalised for gays.

just as easy for an unmarried hetro couple to do.

Share this post


Link to post
Share on other sites

Re - why can't i make two posts in 30 secons and only 50 per day? not that i could do it - but it does seem a bit odd

Anti-spammer. There's limits on PMs and bad logins too. Those spammers can get a LOT of posts in with the right script.

Share this post


Link to post
Share on other sites

Anti-spammer. There's limits on PMs and bad logins too. Those spammers can get a LOT of posts in with the right script.

fair enough - never thought of that. 41 posts to got today - it'll be amazing if i could do that

Share this post


Link to post
Share on other sites

My record I think was 30 in one day back on GHPC when I was sitting in front of the computer all day and meant to be doing a research paper.

My posts were more jaded than usual that day.

Share this post


Link to post
Share on other sites
ONE-fifth of Australians will give up on the dream of buying their first home in the next two years, then kick a puppy, and cry themselves to sleep over their shattered unfulfilling lives if home loan interest rates hit between 8 and 9 per cent, according to a survey from home loans broker Mortgage Choice.

This was sounding a little too even handed, so I improved it a bit.

Edited by hoolaman

Share this post


Link to post
Share on other sites

Yet another real estate spruiking by mainstream news media

Today, as we look up the Sydney Morning Herald (SMH), we saw yet another blatant attempt at real estate spruiking. The offending article reported,

It’s a figure to break the hearts of first home buyers: Sydney’s median house price is inching towards $600,000 – almost double what it was a decade ago.

The subliminal message to prospective home buyers is clear: buy property now before it is too late.

The article reported that ‘wherever’ you look, the supply of housing is low and prices are going up. Then it picked a few locations here and there and sought the opinions of real estate agents (of all people) as examples to ‘prove’ that point.

Really? Is it really ‘wherever?’

If you read the comments below that article, one person wrote,

I just did a quick search on the Internet for properties available in Upper North shore Sydney and found over 200 in about 5 seconds. How this counts as a shortage I’m unsure… If there is a shortage wouldn’t it be hard to find a place?

Indeed, this is journalism on the cheap. Get a median (while conveniently leaving out the details and context), spin a story by taking the biased opinions of a few real estate agents located in a few places and then hope that readers will fall for the story through a mental pitfall called lazy induction.

We have one comment about the median. For those who are initiated, the median is obtained by lining up all the sale prices in ascending order and then pick the one right in the middle.

There are two facts about first home buyers:

  1. They tend to go for the lower end of the market.
  2. Since the first home-owner grant was phased out in 2010, first home-buyer activity declined significantly.

These two facts implies that sales are skewed towards the higher end of the market. That means the median figure will move upwards by definition. Conveniently, this basic analysis is omitted from the SMH article.

It’s bad enough to read cheap journalism. It’s worse to read cheap and biased journalism. We wouldn’t be surprised if the real estate industry is one of their biggest advertisers

Share this post


Link to post
Share on other sites

I must have misunderstood Darren of Sydney- I read that as meaning that he and his partner both got the FHOG for the SAME house so saved money because they didn't have to buy 2 houses like hetero couples.

(Because the law last year didn't recognise that they can be a couple, so making them both eligible even if they bought a house together??)

Share this post


Link to post
Share on other sites
I just did a quick search on the Internet for properties available in Upper North shore Sydney and found over 200 in about 5 seconds. How this counts as a shortage I’m unsure… If there is a shortage wouldn’t it be hard to find a place?

If there was a shortage (which there is) it would be hard to find a place at a fair price. Super-rich can always find things for sale. There is never a shortage for you if you have enough money to outbid poorer people.

Share this post


Link to post
Share on other sites

If there was a shortage (which there is) it would be hard to find a place at a fair price. Super-rich can always find things for sale. There is never a shortage for you if you have enough money to outbid poorer people.

A shortage certainly makes the situation worse.

Unfortunately, adding to supply doesn't help either.

Armadale

There are now 540 properties in the postcode of 6112 that have been on the market for two months or more

Average Listings:

2001: 9,500

2010: 11,221

Median Price:

Armadale

2001 $88,000

2005 $175,000

2007 $300,000

weekly family incomes in these areas:

Armadale

2001: $805

2007: $1093

Rents

Armadale

2001: $130

2010: $300

Vacancy Rates:

1995: 4.6

2001: 4.5

2010: 4.7

Average Selling days:

2001: 32

2010: 64

Share this post


Link to post
Share on other sites

Google Trends:

"Investment Property"

Regions

1.Australia

2.New Zealand

3.South Africa

4.Ireland

5.Singapore

6.United Arab Emirates

7.United Kingdom

8.Hong Kong

9.Malaysia

10.United States

Who has been the most obsessed over the past 5 years? tongue.gif

http://www.google.co...stment+property

Nice one, just did "bubble"

Cities

1. Melbourne, Australia

2. Sydney, Australia

3. Lisbon, Portugal

4. Augusta, Italy

5. Brentford, United Kingdom

6. Toronto, Canada

7. Milan, Italy

8. New York, NY, USA

9. London, United Kingdom

10. Los Angeles, CA, USA

Guess I'm not moving back to Melbourne just yet, would like to though... frusty.gif

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now