Cutting down on frivolous spending to keep up with first home mortgage wasn't easy; But he doesn’t regret the sacrifices made to enable him to get on the ladder and build wealth in Sydney's housing boom
Tweet Topic Started: 16 Sep 2017, 11:42 AM (1,823 Views)
Post-crisis home buyers ‘more satisfied’ with finances
Cutting down on holidays and weekend drinks with friends to keep up with the mortgage on his first home wasn’t always easy for accountant Hadi Prayoga.
But he doesn’t regret the sacrifices that enabled him to get into the Sydney property market and build wealth in the city’s housing boom, instead of paying rent that he sees as “dead money”.
Mr Prayoga, 30, is part of a generation of post-crisis home buyers that the Reserve Bank singled out this week as being in better financial shape than renters once they managed to take the plunge.
The RBA acknowledged worries about rising levels of household debt — even as potential interest rate rises loom that could put pressure on stretched mortgage holders — while also highlighting surprising bright spots in first-home buyers’ financial health.
Those who bought their first home between 2008 and 2014 were more likely to be satisfied with their financial situation than renters, the RBA said in a report titled “The Property Ladder after the Financial Crisis: The First Step is a Stretch but Those Who Make It Are Doing OK”.
Post-crisis first-home buyers were also more likely to feel satisfied with their finances than those who bought their first home before 2007, the RBA said.
They were less likely to make late mortgage repayments or ask for financial help than first-home buyers in previous years.
After buying his two-bedroom apartment in Maroubra, in Sydney’s southeast, with the help of his parents in 2009, Mr Prayoga worked hard to pay down his debts to the bank and his family.
He is glad to have made the decision to buy rather than rent, and now to fund a start-up business he is selling his home through Century 21.
“I grabbed this opportunity when I was 22 and now that I need more capital I have it,” Mr Prayoga said. “I was quite lucky because I was being guided by my father … Now that I’m paying off my own mortgage I don’t see it as dead money.”
First-home buyers have been coming back into the market more recently after east coast state governments offered stamp duty savings, with ABS data showing the proportion of loans to first-home buyers hit its highest point in four years in July.
Century 21 agent Nick Pappas has noticed a rise in first-home buyers “genuinely looking”. “With what the government’s been doing that’s probably helped them to get into the marketplace,” he said.
The RBA acknowledged the difficulty of getting into the property market. “Our results support the hypothesis that higher housing prices have crowded out potential first-home buyers from the market,” report authors John Simon and Tahlee Stone wrote.
The bank warned that first-home buyers were taking on more debt than in the past as housing prices had outpaced incomes.
The RBA found that some buyers who received help from their parents were more likely to face cashflow problems than those who had the discipline to save the money themselves.
Australia’s household debt is one factor in focus for the RBA as it prepares to lift interest rates from historic lows. Rates are likely to start rising around the December quarter of next year, said AMP Capital chief economist Shane Oliver and this will “have a further dampening impact on the property market”.
After people buy their first house their spending patterns change. We go through different phases in our lives and it's pretty naïve to expect the spending pattern of a young childless couple before they buy a house to remain constant after they buy a house, have children, kids grow up and leave home, and then continue into retirement.
It's difficult to predict exactly what you will spend your money on after buying your first home, but add in the cost of rates, home insurance, and some maintenance, and subtract some discretionary spending to offset some of those costs.
Generally a new homebuyer will cut down on spending in restaurants, theatres, cinemas, sporting events, and other non-essential spending, and spend more time at backyard BBQ's with friends, visits to the beach and other less costly habits.
At least that's what logical people do.
Take risks - if you win you will become wealthy, if you lose you will become wise
Here's the home truth, he brought it with help from his parents you farktard.
Another trollip story from a trollip
I'll also add by virtue of its own argument the article suggests a FHB can be frivolous with discretionary income prior to purchasing a home but reign in that frivolity once they make the purchase. Quite a ridiculous argument or statement designed to be more propaganda than factual. How can you be frivolous but still manage to save, what is currently required in Sydney, a $200-250,000 deposit.
Even if it was a $100k deposit the whole arguement consumes itself with its own propaganda nonsense.
Post-crisis home buyers ‘more satisfied’ with finances
I remember in 2008 when Kevin Rudd announced the FHB Grant Boost. The silly bears mocked the home buyers who took up the offer. They referred to them as 'Ruddprime' buyers and laughed about how they would all lose their homes when prices crashed 40% as promised by Steve Keen. Of course, house prices have more than doubled since then and the 'Ruddprime' home buyers are laughing all the way to the bank.
Here's the home truth, he brought it with help from his parents
Some of us here in Australia still value the family unit, particularly the father son relationship being the most important in engendering trust and dependence in a young man. It has been shown that this is also very good for society.
This anti family push is a relatively new things and contributes to many of the society problems that appear to be coming to the fore these days.
Some of us here in Australia still value the family unit, particularly the father son relationship being the most important in engendering trust and dependence in a young man. It has been shown that this is also very good for society.
This anti family push is a relatively new things and contributes to many of the society problems that appear to be coming to the fore these days.
No it's inbred silver spoon elitists ideals that 'keep it in the family'.
Don't kid yourself, buying houses for your children is an exercise egotistical narcissistic show boating. It's proven that by in large children who have parents assist them buy actually become financial retarded so they are actively making their children's lives worse and at the same time proclaiming they have elevated them in society.
No one is anti family, my parents are amazing people they just wont assist us taking the stance that if the system wasn't so broken they wouldn't have to, they won't curtail to a system that makes them redistribute their wealth in order to keep banks profiting off the greatest social scam in history.. Even they are smart enough to realise something you dont.
If your wealth comes from exponential house price growth but you need to give a large portion of it to your children as this growth meant it is unaffordable for them to buy are you actually anymore or less wealthy than if they were able to pay for their own without assistance?
Mr Prayoga, 30, is part of a generation of post-crisis home buyers that the Reserve Bank singled out this week as being in better financial shape than renters once they managed to take the plunge.
Nice to see that The RBA are taking a responsible neutral stance on the renting versus buying debate.
Ex BP Golly
16 Sep 2017, 10:54 PM
Somehow- spending stupid amounts of money on dangerously overvalued property (money you don't have) isn't considered frivolous
Somehow, giving around $400 a week in interest payments to a wealthy bank and wearing all of the risk, isn't considered frivolous.
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.
Nice to see that The RBA are taking a responsible neutral stance on the renting versus buying debate. Somehow, giving around $400 a week in interest payments to a wealthy bank and wearing all of the risk, isn't considered frivolous.
Somehow paying $600 per week in rent isn't considered frivolous.
Take risks - if you win you will become wealthy, if you lose you will become wise
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