I'm forced to insure my home for 'like for like' rebuild. But in a new house I wouldn't require a hard wood frame, or hardwood floors. I'd be happy with the modern equivalent four bed house that would be a lot cheaper to rebuild.
Zaph Good advice.
My point was that if a mortgaged home is uninsured and burns down, they the 'owner' will quickly find out who actually 'owns' the property.
Insurance fraud is a crime - probably the main reason it does not happen.
FWIW, I believe most houses are substantially under insured for improvements. I find the replacement cost models for most insurers are inadequate - which is anther way of keeping their premiums competitive. I asked my insurer to increase the $ coverage every 5 years or so (as replacement costs rise another 15% or so).
I would encourage every homeowner to talk to a builder about the true cost of replacement of their home - including all of the hidden costs such as site clean, residual demolition, rubbish removal access / site costs, DA fees, consultants, fixtures & fittings etc.
Agreed.
I also increase values every few years to ensure I am completely covered. Some policies include the concept of 'self insurance', whereby if you insure your house structure for, say, 50% of it's replacement cost, that you are deemed by the insurance company to be accepting 50% of the risk yourself (and thus self insuring). In such a case, insurance will only pay out 50% of the cost of any damage or problems, as you are deemed to have accepted the risk of insuring the rest yourself.
Not good to find out if you have a genuine problem.
I'm forced to insure my home for 'like for like' rebuild. But in a new house I wouldn't require a hard wood frame, or hardwood floors. I'd be happy with the modern equivalent four bed house that would be a lot cheaper to rebuild.
Have you built before?
If you haven't built before, you may be surprised at the cost of replacement
So Pauk - if I have a house (title in my name), and also have a mortgage of say $300k, BUT also have $300k cash sitting in an offset account linked to that mortgage, am I an "owner" or a "buyer" in your books??? Also do you think I count in that 31% stat you are quoting? Should I be in it?
I still haven't been given black and white for the decade, shit I haven't even been given 2013 yet.
For 2013 ABS are stating a median house price of around 570k and an average gross earnings of $1500, or $78kpa before tax and stake home of around $60k. That is black and white figures that suggests the wage price ratios are around 9-10 times, not the 4-4.5 times Shadow states so either he is lying or he is suggesting every household in Australia has dual incomes for the life of the loan??!
For 2003 the median price was around 295k and the gross median wage pw was $960, or approx $50kpa with a take home of $40k. That's closer to 7 times net earnings for an individual, which is still unaffordable but more affordable than it is today.
It appears that prices have been unaffordable for more than a decade.
How's this for simplicity, if the median house price in Sydney is roughly $800k, you are stating that the average wage (or household income) net is $200k plus. That's 4 times isn't it???
Or is this wrong?? The maths is pretty basic and the fact you can't get it means you're right, we are on a completely different level!!!
OK Chris, just for you I took the time to compile all the Sydney data into a nice black and white table, as well as a chart.
Note that in all cases I have divided the dwelling price by NSW wage as I can't find Sydney specific wages on the ABS site.
Also, obviously since this is single person wage the ratios to household income would be lower.
Everything, basically! What work have you done to produce the stats that you are looking for? You snipe Shadow's efforts but provide nothing yourself? Makes it look like you are just clutching at straws after losing the argument.
For Aussie property bears, "denial", is not just a long river in North Africa.....
ABS are stating a median house price of around 570k and an average gross earnings of $1500, or $78kpa before tax and stake home of around $60k. That is black and white figures that suggests the wage price ratios are around 9-10 times, not the 4-4.5 times Shadow states so either he is lying or blah blah blah
Also, I never claimed the average house price to after-tax single earnings ratio is 4x. You made that up.
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