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Sydney's average mortgage $600k; Up 33% in four years!!
Topic Started: 11 Jan 2017, 05:34 PM (4,660 Views)
Rufus
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herbie
12 Jan 2017, 06:35 AM
I once asked "How can tenants in middle ring Brisvegas afford ta pay $400 plus per week in rent?" - Wif anywhere up to $25,000 pa ta put a roof over ya head sounding like a lot ta me.

Woz told "Wif hubby 'n wifey both working in tha city on $80K pa each, $25,000 pa just isn't a big deal ta 'em." (As in Ya behind tha times herbie ole mate! - LOL)

Sorta begs tha question of "Why tha f*** don't they buy" I 'spose? - Wif 'em being able ta buy for maybe $550K.

Wif tha only answer ta that one being "'Cause they don't want to" ... I 'spose? (For wotever tha specific reason/s might be in their case.)

But Sorries, I got all distracted - We're 'sposed ta be cryin' about Sydvegas prices here hey? - LOL
A young working class couple without children have a household income of about $100K.
Forget about what the census tells us, the calculation is simple. A male working as a Truck Driver or a Mechanic will earn $55K to $65K and a female working at Kmart or in the local Bakery will bring in $36K to $45K or thereabouts.

That isn't enough to take on a $600K mortgage in Sydney especially if they have credit card debts or a car loan, but if they are in an OK position thy can take on a loan of $300K to $350K and buy in Brisbane, Hobart, Adelaide, or Perth, or throughout rural Australia.

A couple who are two professionals will easily pull in $150,000 pa between them, and up to $300K is more common than you would think, but you would be amazed at how much personal spending they do.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Chris
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Matthew
12 Jan 2017, 01:47 AM
The question Chris is not what is the average mortgage, the question is what is the income of the household with the average Mortgage.

If that income is over $150k (split somewhat equally for tax purposes), then what is the problem?
Well, it's very complex as you know. For starters a $150k sounds reasonable given the current median is around $160k, until you remove tax then we're closer to $100k. Over $150k we hit another tax bracket or at least one of the incomes do. To reduce some or all of the tax liability people in these income brackets tend to NG property or shares, mostly leveraged off their heavily mortgaged liability. As Shadow has stated earlier in this thread most of these people use IO low LVR loans to do this.

But I'm sure you can't see a problem with any of this.
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Sydneyite
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Rufus
12 Jan 2017, 08:08 AM
A young working class couple without children have a household income of about $100K.
Forget about what the census tells us, the calculation is simple. A male working as a Truck Driver or a Mechanic will earn $55K to $65K and a female working at Kmart or in the local Bakery will bring in $36K to $45K or thereabouts.

That isn't enough to take on a $600K mortgage in Sydney especially if they have credit card debts or a car loan, but if they are in an OK position thy can take on a loan of $300K to $350K and buy in Brisbane, Hobart, Adelaide, or Perth, or throughout rural Australia.

A couple who are two professionals will easily pull in $150,000 pa between them, and up to $300K is more common than you would think, but you would be amazed at how much personal spending they do.
The working class Sydney couple would just buy a flat.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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herbie
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Sydneyite
12 Jan 2017, 08:28 AM
The working class Sydney couple would just buy a flat.
"Condominium" or "apartment" or at least "unit" if ya please ... Sheesh, "flat" just sounds so Boganish ... LOL
Edited by herbie, 12 Jan 2017, 08:42 AM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Rufus
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Sydneyite
12 Jan 2017, 08:28 AM
The working class Sydney couple would just buy a flat.
That's fine if they buy early before they have children. Then when they do have kids and need a larger house they can sell their flat and upgrade.

The one's that I think get stuck in their situation are the ones who have kids and then think about buying. Because of the cost of having and raising children it's hard to save, and their cost of living has jumped so much they can't meet the repayments.

People who don't plan ahead cost themselves a lot of money.
Take risks - if you win you will become wealthy, if you lose you will become wise
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herbie
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Rufus
12 Jan 2017, 08:53 AM
That's fine if they buy early before they have children. Then when they do have kids and need a larger house they can sell their flat and upgrade.

The one's that I think get stuck in their situation are the ones who have kids and then think about buying. Because of the cost of having and raising children it's hard to save, and their cost of living has jumped so much they can't meet the repayments.

People who don't plan ahead cost themselves a lot of money.
Yep, lookin' at gettin' tha youngest inta a joint when she's maybe about 20.

Some say look ta gettin' her inta a joint wot will be 'suitable' for when she has kids (wif me goin' Ah do you know wot such stuff COSTS dudes? - LOL)

Others say get her inta a joint wot's got an extra bedroom she can rent out - 'N me goin' Nah, why tha f*** would she wanna know about tha CGT?

Hmmm - Basic little joint as a nice clean skin 'starter' sounds good ta me. (Get her in early; Inta something pretty much affordable for her; Wif no real great potential need ta be helped along LOTS - by tha 'olds'; 'N she'll be alright ('n so will tha olds); 'N she can go from there.)
Edited by herbie, 12 Jan 2017, 09:55 AM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Chris
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Rufus
12 Jan 2017, 08:53 AM
That's fine if they buy early before they have children. Then when they do have kids and need a larger house they can sell their flat and upgrade.

The one's that I think get stuck in their situation are the ones who have kids and then think about buying. Because of the cost of having and raising children it's hard to save, and their cost of living has jumped so much they can't meet the repayments.

People who don't plan ahead cost themselves a lot of money.
Yep cause a young couple in their 20's can afford a flat/unit in Sydney. Well, not just afford it but pay off a large part of principal and interest to afford to upgrade in a 'few years' when kids come along.

You are on planet kookoo where up is down and black is white
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Bardon
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Rufus
12 Jan 2017, 08:53 AM
People who don't plan ahead cost themselves a lot of money.
This is the single most reason that they are destined for financial oblivion as well.
Edited by Bardon, 12 Jan 2017, 10:58 AM.
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Chris
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herbie
12 Jan 2017, 09:42 AM
Yep, lookin' at gettin' tha youngest inta a joint when she's maybe about 20.

Some say look ta gettin' her inta a joint wot will be 'suitable' for when she has kids (wif me goin' Ah do you know wot such stuff COSTS dudes? - LOL)

Others say get her inta a joint wot's got an extra bedroom she can rent out - 'N me goin' Nah, why tha f*** would she wanna know about tha CGT?

Hmmm - Basic little joint as a nice clean skin 'starter' sounds good ta me. (Get her in early; Inta something pretty much affordable for her; Wif no real great potential need ta be helped along LOTS - by tha 'olds'; 'N she'll be alright ('n so will tha olds); 'N she can go from there.)
If your gifting her that rather than 'borrowing' her the money I think that's very kind of you. Let's hope she leverages heavily off it to buy numerous investment properties then signs up to property forums to tell random people how she's a 'self made' success.

Tongue in cheek, if you've raised her right I'm sure she will be forever grateful
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Matthew
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Chris
12 Jan 2017, 08:11 AM
Well, it's very complex as you know. For starters a $150k sounds reasonable given the current median is around $160k, until you remove tax then we're closer to $100k. Over $150k we hit another tax bracket or at least one of the incomes do.
Monthly repayments on $600k are about $3,221 a month or $38,652 per annum.

A single wage earner on $150k would clear after tax with no deductions $103,842 per annum. He or she would require 37% of their net income to service the mortgage. They would have $1,253 a week left over for fuel, food, bills and the off smashed avo on toast.

A couple with a 50-50 wage split combining to earn $150k would clear after tax with no deductions $115,056 per annum. They would require 33% of their net income to service the mortgage. They would have $1,469 a week left over for the same.

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To reduce some or all of the tax liability people in these income brackets tend to NG property or shares, mostly leveraged off their heavily mortgaged liability.
Evidence please.

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But I'm sure you can't see a problem with any of this.
I don't see any issue whatsoever with people who can afford a $600k mortgage for a house to live in taking out such a mortgage when it is clear that they can afford the repayments.
My only hope for my three boys is that they turn out nothing at all like Chris.
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