"We had to get a home" - desperate homebuyers camp out for three days to buy in Sydney; The only way to secure a property as Sydney house prices continue their inexorable rise
Tweet Topic Started: 4 Sep 2014, 08:26 AM (9,946 Views)
The only thing that lacks justification is those posters that jump to conclusion that x amount spent on a renovation is to much based on their position of ignorance. Just for starters they have no idea on the pre or post renovation valuation of the property to start with. Its an indication of the intellect of the person making the sweeping judgement.
I bet the "+" is not a couple of thousand, it's in the tens of thousands right? 410, 420, 430??
I identify quite strongly with John Frum and was in agreeance with a lot of the reasoning in this thread for why Frum should get on with it and buy... Your timeline all looks pretty reasonable until you go 400k+ further into the hole by "renovating". And what did you get almost half a million big ones? An extra bedroom and a better layout. Holy moly, enjoy the sparkly surfaces and appliances- you've paid for em!
My wife and I are within a few months of paying off our place at the age of 31. In the 12 months since we bought it (our second PPOR), we've carried out a minor cosmetic renovation under our own steam on weekends. Our materials bill comes to <$18,000. Sure, we've expended several hundred hours of our own labour, but it was time we'd otherwise be at the beach, reading, watching TV, shopping etc. In hindight, we're glad we didn't take the renovation spend up to 50k+ by doing the kitchen and bathroom. They're perfectly functional but outdated, and we know we'd be unlikely to recover the outlay.
The 6+ star eco-house we're planning to build on an acreage in a few years will be approximately $350,000. That you spent 400k+ on renovations is mind boggling. You must have an incredible household income, an this is coming from someone who's combined household income has been at least double (and maybe triple) the national median since the age of about 25.
Good luck with that...
This wasn't really about the renovation I was just trying to explain the buy price for the finished product. When I bought the house I looked at (ie actually gone to open homes) 100+ houses. I could have just bought a $1.3m house that was already renovated but instead did as above. The advantages were, less initial outlay and less stamp duty and the house was exactly as I wanted it. Every item specially chosen, cat 6 cabling throughout, every electrical plug etc in the right place. Sounds like small things but it adds up to a great place to live.
I earn more per hour than the builder so it made no sense for me to do it instead of him and he did a great job not a dodgy owner builder job.
PS not that it's really relevant but I had the bank valued through when the renovation was finished and he valued it at $1.3m so as far is the bank was concerned we got dollar for dollar uplift in value during a period of flat market in Sydney.
This wasn't really about the renovation I was just trying to explain the buy price for the finished product. When I bought the house I looked at (ie actually gone to open homes) 100+ houses. I could have just bought a $1.3m house that was already renovated but instead did as above. The advantages were, less initial outlay and less stamp duty and the house was exactly as I wanted it. Every item specially chosen, cat 6 cabling throughout, every electrical plug etc in the right place. Sounds like small things but it adds up to a great place to live.
I earn more per hour than the builder so it made no sense for me to do it instead of him and he did a great job not a dodgy owner builder job.
PS not that it's really relevant but I had the bank valued through when the renovation was finished and he valued it at $1.3m so as far is the bank was concerned we got dollar for dollar uplift in value during a period of flat market in Sydney.
A lot of people look at $400k and think it's an insane amount of money.
To a lot of Australia households it is less then 2.5 years of household income. I would assume spending $400k on a renovation puts you above average family income, so it makes perfect sense.
To a single person struggling to buy a first home of $40-$50k per year it is 10 years of income, but two dual income well established families it far less an amount of money. It is all relative.
In the new build I'm doing, spending $25k just on smart wiring and NBN connection throughout the house, CCTV cameras.
Add as many power points, TV pints and so on as you can, always harder to do later.
Just to do the concrete pool and spa is another $70k let alone the landscaping around it.
PS not that it's really relevant but I had the bank valued through when the renovation was finished and he valued it at $1.3m so as far is the bank was concerned we got dollar for dollar uplift in value during a period of flat market in Sydney.
It is relevant and puts the renovation cost into context. Those that blindly say $400k is too much without knowing this kind of information lack context.
If I were to spend $1m renovating and that say includes a project manager to run it, then some would say that you can get six dogboxes in some god awful regional area for that and also that my wife could save money by painting my woodwork and to hell with the sex life. But if I was on a $1m year package and liked to enjoy my spare time doing other than renovation type things, and that this was to be spent on a Point Piper mansion then my sex life would be splendid and it might well be money well spent.
It is relevant and puts the renovation cost into context. Those that blindly say $400k is too much without knowing this kind of information lack context.
If I were to spend $1m renovating and that say includes a project manager to run it, then some would say that you can get six dogboxes in some god awful regional area for that and also that my wife could save money by painting my woodwork and to hell with the sex life. But if I was on a $1m year package and liked to enjoy my spare time doing other than renovation type things, and that this was to be spent on a Point Piper mansion then my sex life would be splendid and it might well be money well spent.
What the bank's values thought in 2008 is irrelevant to the extent that I didn't try to sell at that point so the value was never tested.
Who knows what it's worth?
I'm more concerned what it cost me and it now only costs me about $500 per week in interest and plan on that going to zero by 2017.
FWIW bank valuers do a "Valuation for Mortgage Purposes" which isn't a "Market Valuation" - it's usually lower than a market valuation.
There are valuations and there are valuations.
Very true.
I had some recent valuations from the Bank at $1,450,000 even though numerous smaller houses with less features on the same street, 3 with in 100m of the house on the market for $1.8-2.0 million.
Valuers will always been 10-20% under current market conditions to allow for future price drops, gives that extra buffer to the banks. So it is likely on a new build if you borrow 80% LVR the true market valuation would put the loan at 60-70% LVR.
Some times valuations can be frustrating as you know the current market price, but it is also a safety net for the whole system. Conservation valuations help to keep a lid on risky lending and the overall health of the banking system.
No it's not. When people put their mind to it they can pay off their mortgage very quickly, within 10-15 years, and then those people have virtually free accommodation for the rest of their lives, aside from rates and occasional maintenance costs, which are tiny compared to the cost of renting.
Why do you keep repeating this 10-15 year horseshit claim?
You have no evidence at all to suggest this is the norm
Also if rent is dead money why is the RBA issuing high profile papers on that very subject?
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
Could have asked you and clowns like Skamy- could have put them right in 5 minutes.
Did he say its the norm, no he said its do-able Wife & I bought in Brisvegas 2008, 20 pc deposit, 850000 house, 680000 loan Friends said were nuts buying at the top, usual story Loan down to 270000 today, another 4 yrs max its gone That'll be 10 years to pay it all off, already after 6 the interests only 250 pw, a third what it would cost to rent it Bank val last year said it's woth 1.2 mil no work done except painting & bathroom reno Its not rocket science, knuckle down and do it
Did he say its the norm, no he said its do-able Wife & I bought in Brisvegas 2008, 20 pc deposit, 850000 house, 680000 loan Friends said were nuts buying at the top, usual story Loan down to 270000 today, another 4 yrs max its gone That'll be 10 years to pay it all off, already after 6 the interests only 250 pw, a third what it would cost to rent it Bank val last year said it's woth 1.2 mil no work done except painting & bathroom reno Its not rocket science, knuckle down and do it
Good on you FHB, do you mind saying which suburb you bought in?
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