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Should I buy now or wait for a bit longer?; Buying 1st home
Topic Started: 10 Aug 2014, 08:31 PM (3,658 Views)
Sweetdish
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Jimbo
11 Aug 2014, 02:45 PM


Price drops and rises don't matter if you have bought a house to live in. They only matter if you start seeing your home as an equity release plan. A lot of people fall into that trap and run up debts in the belief that that they can always sell up to cover those debts if need be. I know many who have fallen into that trap. My dickhead brother has owned his house for 30 years and is still mortgaged for 80% of its value. Never use your homes equity for discretionary spending.
True. Its when you see your home as equity rather than a place to live that you may run into massive problems down the road.
In my opinion this most recent surge in house prices is driven almost exclusively by investors. Thats why I am not buying anything now.
Its very hard to find anything of decent value.
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Jimbo
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Sweetdish
11 Aug 2014, 02:54 PM
In my opinion this most recent surge in house prices is driven almost exclusively by investors. Thats why I am not buying anything now.
Its very hard to find anything of decent value.
In Perth, anything below 400k is touted by the RE agent as being an "ideal investment opportunity". They seem to have dropped "perfect first home" from their blurb. If it is on a large block, the wording is "possible future subdivision".

They are no longer selling houses for people to live in. They are trying to sell investments.



Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Realistic
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The best time to buy is now - the key to the whole thing is whether you keep your job or not -

if you lose your job then you're screwed, but if prices crash (but you keep your job and can still afford rate hikes etc) then prices should bounce back (eventually, i.e. could take 5-10 years)

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Jimbo
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Realistic
11 Aug 2014, 03:10 PM
The best time to buy is now - the key to the whole thing is whether you keep your job or not -

The best time to buy is when you can afford to buy. If you can afford to buy today, buy today. The market can go either way so it isn't wise to hold out for falls because you could just as easily end up paying more if prices rise. But never overstretch to buy just because you think that you may have to overstretch more in a year or two.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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miw
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Jimbo
11 Aug 2014, 10:36 AM
If you are worried about the market getting away from you, monitor an area that you wish to buy in. See how many houses you can afford, what they sell for and how long they stay on the market. Keep a spreadsheet, watch the trend. This is better that just following the median price.

Ignore predictions on the future price of anything (the dollar, property etc). They are just the opinions of others. The price of anything is the price right now. If the dollar was a certainty to fall in value over the next six months, it would have already fallen.
+1. Especially the bit on ignoring predictions. If the knowledge were really out there, it would already be reflected in the market.

Jimbo
11 Aug 2014, 02:45 PM
Nobody knows the future so it is always best to have a contingency that accounts for possible rate rises and possible price drops.

Every time rates go up, some people get wiped out. They are generally the ones who have borrowed as much as they could afford when they purchased and didn't allow for rate rises. The other consideration to make is your own job security and pay level. If you are earning more for your trade or profession than others in the same field, assume that at some stage, you may end up earning less.

When I bought my first home, I factored in a 25% increase in mortgage repayments or a 25% fall in income. I then worked out what I could cut back on if such a scenario arose.
Very sensible advice.

Especially the advice of thinking about contingency before thinking about hedging.
Edited by miw, 11 Aug 2014, 05:16 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Sweetdish
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Jimbo
11 Aug 2014, 03:07 PM
In Perth, anything below 400k is touted by the RE agent as being an "ideal investment opportunity". They seem to have dropped "perfect first home" from their blurb. If it is on a large block, the wording is "possible future subdivision".

They are no longer selling houses for people to live in. They are trying to sell investments.


Yep. Similar in Sydney. An agent called me up the other day and asked if I wanted to see some new unit he was selling. It was way over priced and on a bad street.

I just laughed at him and said "no way, would you buy it"?
He responded with "I would never buy in this market". He then promised to call back when it has settled down : )

What Im trying to say is that anyone who knows anything about property is siting on the sidelines for the moment. Your fear struck mom and dads and Chinese investors on the other hand are buying anything and everything.
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Firsthomebuyer
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Thank you to all your responses, I can see a lot of different theories and brains at work on this topic of mine..

What I can see is that I should be watching on the areas around my place that I would like to live also look at my terms of employment and if I can maintain the money coming in to pay off the house, but also make sure I don't buy above my means in case of loss of employment...

I have saved 40 grand so far and I am looking at a house between that range of 320-430...

I see also that some say if I have the money to lay down a deposit I should jump in now as they don't see the rate rise anytime soon and that maybe a good way is the lock in the rates at under the 5% now for 3-5 years because possible massive rate rise next year going up and up and up....

thank you for advice..

can anyone post some links to great advice threads and also web pages that I can sit and read during my lunch break..

this will be my live in residence for atleast a couple of years until I can pay off as quick as possible and use that to make the move for a investment property ..

Thanks for more advice much appreciated.
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John Frum
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Sweetdish
11 Aug 2014, 01:10 PM
The best time to buy a property is when you can afford it.
Prices go up and they eventually also go down, but if its for you to live in long term thats all irrelevant.
Nonsense. If average prices were double what they are now and represented 20 times average earnings, rental yields were hovering around 1%, would it be the right time to buy if you could only "afford" a poxy little flat on the outskirts of bumfuck?

Choosing where, when or if to buy is always complicated and requires thought, even if you're a FHB.

Stop confusing the OP with empty slogans.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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Timo
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Firsthomebuyer
10 Aug 2014, 08:31 PM
Hey Guys/Girls..

I am seeking some advice from hopefully people who were in my position before...

I have managed to obtain more then my 10% deposit and I have no kids or debts and own my own car...My job runs on contracts over 1-2 year then I must search for new contracts but they pay fairly well..

What I am asking is what should I be doing.. I have put my money in a high return savings account but wondering if I should stay renting (my rent is very cheap) or look for a house now.. My aim was to gather enough (20%) so I don't have to pay the mortgage insurance and have that wasted money paid off the house when I choose to buy.....

I am living in Newcastle area ..

I have heard that the Aussie dollar will fall out of the ass by the end of the year and I am hearing of this housing bubble bursting (but still don't know how that will affect me)

My goal is to buy a house (not new) soonish within the next 1-2 years and then pay off as much as I can and then use that to buy and rent another house......

I would appreciate help and tips from people who have been where I am .

I am nervous to have a massive debt over my head of maybe 400.000 but also excited to start looking at a new part of my life..

Very much new to this and I am slowly reading all I can to gain information...

My ideal place and house is in the 700.000 area but my first would be between 320-420 then slowly build up to having my dream home..

Please any tips ,websites, threads to read that could help would be very much appreciated..

Your going to loose if you purchase now, which I understand is not what you'd like to hear....
After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
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Shadow
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Timo
11 Aug 2014, 11:12 PM
Your going to loose if you purchase now
That's the same advice you gave two years ago, before prices rose another 20%

What makes you so confident this time when you got it so badly wrong last time?
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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