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Will your children be able to afford to buy a home in Australia?
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Topic Started: 14 Jan 2011, 12:42 PM (3,771 Views)
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nuff_ced
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14 Jan 2011, 12:42 PM
Post #1
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In the other topic of a similar name there are lots of posts about how people started out on a small single wage and worked their way up the property ladder and how many can afford to buy now but refuse to.
This got me thinking and the next logical question for me then is will our kids have the same opportunities our grandparents, parents and we did. Or will our kids require
FHO grants
FHO boosts
Dual Incomes
Cash gifts as deposts
Parents as Guarantors
Gifted deceased estates
Basically everything we and generations before us managed to do without.
Is it possible?
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catnap
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14 Jan 2011, 01:06 PM
Post #2
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- nuff_ced
- 14 Jan 2011, 12:42 PM
In the other topic of a similar name there are lots of posts about how people started out on a small single wage and worked their way up the property ladder and how many can afford to buy now but refuse to.
This got me thinking and the next logical question for me then is will our kids have the same opportunities our grandparents, parents and we did. Or will our kids require
FHO grants
FHO boosts
Dual Incomes
Cash gifts as deposts
Parents as Guarantors
Gifted deceased estates
Basically everything we and generations before us managed to do without.
Is it possible?
Good question. A question that is part of my personal reason for being on the sidelines regarding buying property. We've got about 500k in savings to put towards a house, so even in Sydney we're not totally priced out. We're probably in the same boat as many up-graders. However, without a good deposit we'd have no hope in hell of buying a house even with a good salary. I don't know how people manage now. Either things will have to change - a crash or slow deflation - something that brings houses back in line with wages or there is no way my children will be home owners in this country. Personally, I hate to think I'd be encouraging my 20 year old to knuckle down to save money for their first crappy house, just to get onto the property ladder. I want them to have the opportunity to study, travel, enjoy life. But even that wouldn't be the way into property ownership if house prices run further from incomes.
Interested to hear other opinions on this.
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Deleted User
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14 Jan 2011, 01:28 PM
Post #3
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Deleted User
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YES. Without going into too much detail, it is very likely that they will be true home owners, not a mortgage holder as most are today. Our outright ownership rates have dropped dramatically over the last 30 years and that will be reversed.
Please stop calling mortgage holders as home owners. They are not. Home owners are the outright owners only.
Mortgage holders do not hold the title unencumbered, simple as that!
There will be a day when you look around an average suburb and the houses will be full of the young again. Just not soon as it will take the great death of 2030 to 2050 transpires, as the BB all die. It is likely that 6 million will die or twice our current deaths per year in 2010.
Please do not buy until 2020.
Rent, save, invest and get a 100% deposit together.
The investing will help build a real country, not a house full of straw.
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Frank Castle
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14 Jan 2011, 01:33 PM
Post #4
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Business As Usual
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- pauk
- 14 Jan 2011, 01:28 PM
Please do not buy until 2020.
I do hope you offer up your head on a plate to those who may be fucked over by your advise.
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The T.A.M.P.O.N effect - A NEW whinging bear acronym emerges
Timo And Moops Protest Over Nothing
Proof that moops is a simple minded hypocritical turnip
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Black Panther
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14 Jan 2011, 01:44 PM
Post #5
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- Frank Castle
- 14 Jan 2011, 01:33 PM
I do hope you offer up your head on a plate to those who may be fucked over by your advise.
Agreed, the next up cycle in prices is ratcheting up. NOW is the time to buy.
THERE IS NO CRASH IN SIGHT!
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BLACK PANTHER
Preying on the Stupidity of the Bears
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Ray White
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14 Jan 2011, 01:59 PM
Post #6
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Mc_Gusto
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14 Jan 2011, 02:11 PM
Post #7
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mcgusto
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yes they will. who will own the houses if our children do not? a constant influx of cashed up overseas investors? i doubt it. It is logical that housing will be freed up when the bb's move on and likewise when we move on. prices cannot and will not continue to rise for ever and a day.
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Silence of the BULLS
HA HA
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davel
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14 Jan 2011, 02:15 PM
Post #8
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- Black Panther
- 14 Jan 2011, 01:44 PM
- Frank Castle
- 14 Jan 2011, 01:33 PM
I do hope you offer up your head on a plate to those who may be fucked over by your advise.
Agreed, the next up cycle in prices is ratcheting up. NOW is the time to buy. THERE IS NO CRASH IN SIGHT!
BP, you love the phrase "up-cycle" 
Just to be clear, what constitutes an up-cycle to you? Nominal growth of 4%, 5%, 7%, 10%, 10%+??
I cannot for the life of me see how "now is the time to buy". If from that, I take it you are assuming say 7% plus growth, then a good few of these things needs to happen:
1) Credit to continue growing yet further despite Aus having amonst the highest private debt levels on the planet.
2) To achieve 1, lending standards to sink to new lows, when they are already lax compared to just about anywhere (pls show me different if you can). And this to work i.e. enough people to be lured into mortgages they should not take
3) A favourable economic outlook, which BTW would then lead to IR rises
4) Decent pop growth, which at the mo is not happening
5) Existing stock on the market to get cleared (prob depends on location)
6) Banks to solve their funding problems esp rolling over current overseas funding at low rates (which are not available anymore)
My view is now is "not the time to buy" because I dont think many of these will come to pass.
Edited by davel, 14 Jan 2011, 03:15 PM. |
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davel
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14 Jan 2011, 02:34 PM
Post #9
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Ray, can you link to the story behind that graph so we can understand the analysis?
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Deleted User
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14 Jan 2011, 03:25 PM
Post #10
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Deleted User
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http://www.rba.gov.au/speeches/2009/sp-dg-251109.html
He calls mortgage holders, home owners. Dimwit. Had he shown out OO outright ownership rates then there would have been a real graph. Also he does not know why the under 35 s have declined. Dimwit2.
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Deleted User
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14 Jan 2011, 03:27 PM
Post #11
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Deleted User
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http://www.fahcsia.gov.au/about/publicationsarticles/research/facssheets/Documents/facssheet1.pdf
For some real data, not bank shite.
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Ray White
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14 Jan 2011, 03:35 PM
Post #12
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- davel
- 14 Jan 2011, 02:34 PM
Ray, can you link to the story behind that graph so we can understand the analysis?
This:
http://www.rba.gov.au/speeches/2009/sp-so-290909.html
Not the link pauk has posted.
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Shadow
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14 Jan 2011, 03:49 PM
Post #13
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Evil Zealot Specufestor
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- pauk
- 14 Jan 2011, 03:25 PM
He calls mortgage holders, home owners. Dimwit.
Mortgage holders are homeowners, and always have been.
The buyer is the legal owner of the property, regardless of the mortgage. The buyer is responsible for the property, pays the rates, insures it, benefits from the capital gain, and can use it as he pleases. In addition, the buyer has an agreement with a lender for the loan of a sum of money secured by the property. The lender has absolutely no claim over the property, unless the owner defaults on that loan agreement.
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Shadow's Blog - The Australian Housing Market
1 - Debunking Demographia. Demographia Survey Debunked. Australian housing is not particularly unaffordable by global standards.
2 - USA, Ireland, UK, Spain and Japan Property Bubbles versus Australia. All confirmed property bubbles had one thing in common... a particular house price/income ratio pattern.
3 - Banks can't margin call on residential property unless borrower defaults, because residential property loans are regulated by the NCCP Act 2009.
4 - Housing is the second highest taxed sector of the Australian Economy. Renters don't pay their fair share of tax, and are subsidised by high taxes incurred by homeowners.
5 - Epic Fail! Steve Keen's Bad Calls and Predictions.
Parse: A rep's spare spear pares pears, reaps as per AREPS.
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Ray White
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14 Jan 2011, 04:02 PM
Post #14
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- Shadow
- 14 Jan 2011, 03:49 PM
Mortgage holders are homeowners, and always have been.
The buyer is the legal owner of the property, regardless of the mortgage. The buyer is responsible for the property, pays the rates, insures it, benefits from the capital gain, and can use it as he pleases. In addition, the buyer has an agreement with a lender for the loan of a sum of money secured by the property. The lender has absolutely no claim over the property, unless the owner defaults on that loan agreement.
That's correct. Even in a default, the lender never at any stage owns the property. The collateral at all times remains the property of the borrower. In default the lender, through the courts, is paid out of the proceeds of the sale of the borrowers property and the surplus is given to the borrower. Repossession does not involve a change of ownership.
If, as pauk claims, the bank owns the house they would have to pay the council rates (the owner pays) and pay capital gains tax when it is sold and take all the profit on the sale. But they don't. They don't own it.
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nuff_ced
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14 Jan 2011, 05:09 PM
Post #15
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All well and good.. but back to the original question. Will your children own a house off their own back?
I have heard many a story on forums such as these ..when I was W old and earnt X wage I purchased a Y house in Z suburb..Will this formula that has worked for many a years still hold true? If so what will the variables look like?
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3:12 PM May 20
