在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
Australia’s housing market by international standards is strong. If residential property growth were 9% per annum (the so called long term average) for the next 3 years what can first home owners expect to pay for median priced property in 2014?
To save a $60,000 deposit for a house now it would take a first home owner 4 years*. In 2014 a first home owner may require a deposit of $77, 700 and it would take 5.18 years to save a deposit*.
If a first home owner (FHO) purchased a property for $300,000 in 2011 and growth was 9% p.a. for 3 years the FHO would need to pay $388,500 in 2014 for a comparable property.
If the FHO can save $1750 per month it would take them 2.86 years to save a $60,000 deposit. In 2014 it would take 3.7 years to save a $77,702 deposit.
It would come as no surprise to understand that as property prices rise the size of a 20% deposit also rises.
It will take longer for first home owners and other home buyers to save a deposit.
Is 8% to 9% growth p.a. (the so called long term average) realistic growth and will affordability improve for FHB's or is it just marketing spin (BS) from lenders?
What effect would 9% growth have on a 20% deposit and how long would it take for first home owners to save this deposit.
johntaps said: ↑
If a first home owner (FHO) purchased a property for $300,000 in 2011 and growth was 9% p.a. for 3 years the FHO would need to pay $388,500 in 2014 for a comparable property.Click to expand...To me, it's crazy to assume FHB's should always be able to afford a 'comparable' property. Let's go back 200 years to 1811, to free-standing houses close to the Sydney CBD on 1000sqm or whatever... FHB's of the time might have been able to afford them.
It seems completely natural to me that as cities grow and become more populated, the properties that FHB's can afford will continually get smaller or further out. They'll never be 'comparable', that's just unrealistic.
There'll always (well for a very long time into the future anyway) be properties available to purchase for $300,000 (for example, the remote houses that are now priced at < $30,000). And FHB's will be able to get their foot in the door and buy them, before upgrading to properties that are larger and/or closer to the city.
I personally think we are not going to see 9% P.A growth in most places in Australia over the next 3 yrs.
Their is so many variables to the above stats. As a real example John, i live @ home with mother, no rent, purchased 3x places for 918k (includes reno $$$) paid probably 20k in stamp duty, legals, holding costs over 2.5yr period and still saved 70k ontop of that. (PAYG circa 80k P.A).
I think you under estamate what is achieveable when you put your mind to something
I would describe the property market as extremely weak (at best) and as prices keep falling it is getting easier for FHOs to get in. This is a compounded market as it makes sense that the market should increase in price as the town grows and FHOs should be buying at the fringe.
I believe the best approach for FHB's is the following:
to save a decent size deposit it is worth just renting a place that is not too extravagant - this way the extra saved from rent can be put into the deposit - also, don't just aim for a small deposit, aim for more than the required miminum as this will allow your repayments to be less overall.
Also don't forget the power of inflation - your avg FHB salary will be more too... i.e. their capacity to save 60,000 today is the same as ~67,000 in 3 yrs time.