Baby Boomers Are Evil - visit Reform Australian Housing on Facebook; I bought a house a year ago, paid some snivelling undeserving ageing hippy boomer far more than they deserved
OK, assuming you could actually buy a house in Sydney for $350,000 in 2013 ....
If the loan was P+I (5% interest, 30Y term), in the first year the borrower would pay around $14K in interest and $9K in principal. Which is $23K in the first year, divided by 0.2 gives $115,000.
Does that mean that the average FHB is earning $115K per year? That doesn't sound right. If it was dual income, that would be two people on $57,500 per year, which still seems high, but at least feasible.
That would mean that the 20% commitment is of household income, not single income. So taking $57,500 and dividing it into $280,000 gives a debt to single income ratio of 4.86, and $57,500 into $350,000 is a price to single income ratio of 6.08
That sounds precarious to me. If one person lost their job, I don't know if someone on $57K per year could cover their payments. Maybe, but they would have to cut back on almost everything else, shop at Vinnies for clothes, eat 50c instant noodles. Could have a feedback effect on local businesses and the people they employ.
Not all Australians live in Sydney, perhaps you hadn't noticed. The relevant income is household income and most young home buying couples have a combined income of over $100,000 buying their first house for around $340,000.
Purchase price is probably around the 2.7 to 3.5 times income.
Repayments at 5.2% over 30 years is $1676 per month which is about $20,112 per annum. Less that 20% of the combined household income.
Not all Australians live in Sydney, perhaps you hadn't noticed.
Lucky them.
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The relevant income is household income and most young home buying couples have a combined income of over $100,000 buying their first house for around $340,000.
Yes, that is what I said.
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Purchase price is probably around the 2.7 to 3.5 times income.
Which is 5.4 to 7 times single income, no?
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Repayments at 5.2% over 30 years is $1676 per month which is about $20,112 per annum. Less that 20% of the combined household income.
Wasn't disputing the 20% number, only that it was 20% of a single income as skamy claimed. It is obviously 20% of household income, which puts the purchase price at 5.4 to 7 times a single income as Veritas claimed.
I am making the claim that 20% of household income, is probably less than 40% of the income of the primary income earner in the family, given that on average, women earn 18% less than men, even for the same type of job. So household income is probably split more towards 60/40 or even 70/30. If the primary income earner were to become long term unemployed, I think you would see a forced sale. If the secondary income earner were to become long term unemployed, they would probably be able to keep servicing their mortgage, but there would be a drastic reduction in disposable income and particularly discretionary spending.
Oh, right. Could. Yeah. If the price gains from 1997 to 2003 are repeated for the next 20 years. Sure.
So, when you left high school or University, the country was in a deep recession and youth unemployment was 20% also? Bummer.
I agree, that is very silly. It is also irrelevant. As are hand waving predictions about future price growth leading to GenX riches.
Got link? I don't think your memory is all that reliable.
I have put it up about 3 times Miles but you wont look at it as it shows up the lies you have been told. It is in the Judith Yates article go look it up or check back through my previous posts to you. It is a graph showing new home loan payments as a % of income.
My memory is just fine -- the problem we have here is that you have been lied to for years and you find the truth very difficult to digest.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
true but that's irrelevant while they have two incomes.
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Wasn't disputing the 20% number, only that it was 20% of a single income as skamy claimed. It is obviously 20% of household income, which puts the purchase price at 5.4 to 7 times a single income as Veritas claimed.
Why is every bear a misogynist? Household income includes both incomes and we are not going back to the good old fifties,
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I am making the claim that 20% of household income, is probably less than 40% of the income of the primary income earner in the family, given that on average, women earn 18% less than men, even for the same type of job. So household income is probably split more towards 60/40 or even 70/30. If the primary income earner were to become long term unemployed, I think you would see a forced sale. If the secondary income earner were to become long term unemployed, they would probably be able to keep servicing their mortgage, but there would be a drastic reduction in disposable income and particularly discretionary spending.
Yes they will do it tough if they face long term unemployment. Luckily that's not happening for most people.
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So has FHB leverage increased or incomes?
Mainly income increase I suspect. If you look at the graph on page 10 of the Streets Ahead report you will see that the FHB loan size remained static for some time.
Wasn't disputing the 20% number, only that it was 20% of a single income as skamy claimed.
Do not make up lies. I am very familiar with ABS terminology and no one talks about single incomes when evaluating HOUSEHOLD STATISTICS.
You were the only person who brought single incomes into the discussion.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Going by the success stories of fabulously successful property investors who can barely string a sentence together or do simple arithmetic, it would seem that being well educated puts you at a disadvantage in Australia.
Well, obviously I was excluding the successful property investors of GenX such as yourself. I really just meant the GenX loser renters that skamy was referring to. Sorry if I wasn't clear on that.
You too huh? And the TV guide comes out once a week too.
It's too bad. There's some who still believe in the value of education, it provides opportunity.... why would you deny that ?
Dont try to ridicule these people. If you've actually met some of these Euro ethnics they are not as dumb as you assume. But then maybe you are so narrow minded that you've never bothered to meet those who are Italian Greek , & Slavic Born & bred & those with their heritage.
Who simply believe in the importance of family bonds & work hard ethic.
I won't bother with your last one.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
Nothing new there, this reveals your lack of historical references. They all start out on the basis of influence and when can use the boot and they succumb to it.
The weakness of the US is it is one of dumber super powers that history has thrown up. It's problem is that is has united all the Asian powers against it, China, Russia and a few others (normally these are all at each others throats). Pissy on their own but invincible when they united.....against this unity while it prevails the US has snowball chance in Hell!
Despite every man and his dog warning them they overreached themselves in Iraq and began their demise.
So I take it, India, Japan, Vietnam, Philliphines most of ASEAN, Australia and so on are not considered Asian powers.
India is certainly a rival for China. My opinion is that over the next 10-20 years India will grow faster then China, and will gain ground lost to China over the past 15 years. In the late 1980s India and Chinese economies were the same size.
Anyway wasted enough time on you, you pretty much summed up your lack of understanding with this quote "the US is one of the dumber super powers that history has thrown up". Way to go champ, great comment.
Next few years will set the trend for the next 20 years. My bet is on a much stronger US and the world returning to a situation of just how much ass kissing they do to the US. Some will also kiss Chinas ass but they do not have many Allies or Friends, even North Korea is on the slide, Chinas only Allie. Says a lot about how strong Chinese diplomatic situation is.
I very much doubt China will even get close to US military power, China will be a strong regional power but not a global power or superpower for decades, if it ever happens.
I have put it up about 3 times Miles but you wont look at it as it shows up the lies you have been told. It is in the Judith Yates article go look it up or check back through my previous posts to you. It is a graph showing new home loan payments as a % of income.
My memory is just fine -- the problem we have here is that you have been lied to for years and you find the truth very difficult to digest.
The Judith Yates chart is based on ABS data which is highly suspect.
This is the data set that says that nobody is paying any more now than they were 20 years ago and is full of magic asterixs and endnotes about changes in methodology and sample sizes and so on.
It is also entirely counter intuitive as you well now.
Let me present this WA focussed report carried out by BankWest and Curtin Uni published just a few months ago.
Mortgage cost pressures have clearly increased substantially for younger householders. for example, the median mortgage cost share paid by those aged 25 to 44 rose nearly 7 per cent to 32 per cent over the last decade, with 55 per cent committing more than 30 per cent of income to housing costs in 2011–12 (up 23 percentage points since 2003–04)
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WA households in the bottom two quintiles have historically tracked relatively closely to those in the rest of Australia in terms of various degrees of mortgage stress, but with rates a little higher over the last four years. the proportion of households in the bottom two quintiles of the income distribution and paying more than 30 per cent in mortgage repayments has been increasing over time for both WA and the rest of Australia, from just under one in ten in 2003–04 to around 13 per cent 2011–12. the proportion of households experiencing greater forms of housing stress (40/40 and 50/40) has also slowly increased across the period, and currently around 10 per cent of low income households in WA are paying more than 40 per cent in mortgage costs.
But of course its the renters ( also known as bears by some idiots around here that done realise that saving 100k for a deposit is not a walk in the park for single people or people on low incomes) who are doing it most tough. Again, this contradicts the ABS data from memory.
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turning to rental stress, greater differences between WA and the rest of Australia are observed (figure 9) across the full population. A greater proportion of renter households in the rest of Australia are more likely to be in housing stress across all three measures than households in WA. in a result that is cause for some concern, the proportion of households in severe (50/40) rental stress has nearly doubled to around 8 per cent over the last decade in both WA and the rest of Australia.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Anyway wasted enough time on you, you pretty much summed up your lack of understanding with this quote "the US is one of the dumber super powers that history has thrown up". Way to go champ, great comment.
As they say, "the only war the Americans ever won was the Civil War". They didn't even win the American Revolution, it was the French that won that for them.
Their track record ain't too good!
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I very much doubt China will even get close to US military power, China will be a strong regional power but not a global power or superpower for decades, if it ever happens.
There is long list of them in history as I previously pointed out. They never claimed they were better than when their expiry date came up! They expiry date on the US is already starting to flash.
true but that's irrelevant while they have two incomes.
I never said it wasn't.
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Why is every bear a misogynist? Household income includes both incomes and we are not going back to the good old fifties,
What makes you think I am a misogynist? If we are not going back to single income households, then presumably we should keep investing in companies providing long day care.
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Yes they will do it tough if they face long term unemployment. Luckily that's not happening for most people.
I don't recall saying it was, only that it was a risk.
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Mainly income increase I suspect. If you look at the graph on page 10 of the Streets Ahead report you will see that the FHB loan size remained static for some time.
I guess income and savings finally caught up with prices and deposit size. Leverage on offer from banks has been decreasing in the past five years right?
skamy
14 Jul 2014, 12:52 AM
Do not make up lies. I am very familiar with ABS terminology and no one talks about single incomes when evaluating HOUSEHOLD STATISTICS.
You were the only person who brought single incomes into the discussion.
Whoa Granny! Don't lose your marbles!
I must have misread your discussion with Veritas. Sorry.
Do you conceded that the average purchase price for FHBs (as per Peter's numbers) is between 5.4 and 7 times single income?
Blondie girl
14 Jul 2014, 01:32 AM
It's too bad. There's some who still believe in the value of education, it provides opportunity.... why would you deny that ?
Mostly because the last ten years has seen truck drivers and train drivers in WA earning 150-250K per annum while PhDs were earning 60-80K per annum.
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Dont try to ridicule these people. If you've actually met some of these Euro ethnics they are not as dumb as you assume. But then maybe you are so narrow minded that you've never bothered to meet those who are Italian Greek , & Slavic Born & bred & those with their heritage.
I grew up and went to high school near a steelworks. I've probably met more than you. As for their intelligence, it seems to be normally distributed like everyone else. Except for maybe Croats, those people are (more than average), batshit crazy
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