Browse Forums Real Estate 1 Jun 07, 2015 4:48 pm Would like to get this forums opinions on my real estate dilemma. I sold my place in Sydney over a year ago. Since then I have been looking...and looking...and looking. Made an offer a few months ago but someone else with more money came along - such is the current Sydney market. I am now looking at moving out of Sydney. Not just because of the crazy prices, but because of the lack of houses to even look at in Sydney. I can move south. Prices not that much cheaper so still need a decent mortgage. Will be 40 minutes from family and friends and about an hour from work. Or I can move north. Prices better, smaller mortgage. Will be an 90 minute minimum to work and 2 hours to family and friends (though have quite a few family up coast as well as friends). I work shift work so no peak hour drives. And could stay with family in Sydney to go to and from work. Then go up the coast on days off. The bigger mortgage means working longer to reduce/payoff. The smaller mortgage would mean the option of reducing my work hours or going part time and an earlier retirement! I am not prepared to borrow more money to stay in Sydney. I saw a couple of TV a couple of weeks ago talking about their home purchase. They bought a townhouse, in an OK suburb, and they went $300,000 over their budget because, like me, they have been looking for so long! So with costs, they have paid almost $1.5m for a three bed townhouse. With people that desperate, and believe me I am desperate too, and who are willing to extend themselves financially that much - I have to give up! I am asking for the advice of "strangers" here on this site because I am sure you all know that friends and family will tell you what they think you want to hear and take the softly softly approach "something will come along - just wait". Work mates have said to buy where I would like to live in the future - when I retire. So what do you all think? What advice would you give someone in my position? What would you do yourself? Regards Re: Real Estate Dilemma - opinions please 3Jun 07, 2015 6:49 pm Thanks d@n. You are not the first to say that! Re: Real Estate Dilemma - opinions please 4Jun 09, 2015 11:05 am How old are you? If you are young don't live in a house for 30 years in an area that suits for when you retire. That's crazy. Things change. If it were me I would sit tight for a few years. You will lose nothing in not buying in Sydney in the next 4 years. Property goes in cycles and this boom cycle will finish, as have all the others. When it does, prices will come off the boil. Demand will drop and prices will soften (and will drop in some areas). Now I'm not talking huge drops but opportunities will arise. As you noticed, people are over paying on what the property is worth. If it;'s WORTH $700K and people pay $1M it is not unlikely that it will drop to at least $700K as that is what's it's REALLY worth. If demand is poor it may even drop below that. Scary. As you have noticed, there are many people over committing and a 1% increase in interest rates will hurt some people. A 2% rise may be crippling. People don't calculate that at 5% interest rates a 2% increase means their payments have gone up 40%. In 200-2004 Sydney peaked. In 2008 there were many bargains with not many buyers. I put in some crazy offers that were laughed at, only to be called back a few weeks later. Desperate times. So if you really want to buy in Sydney wait then be ready. I'm getting my finances in order with anticipation to start buying in Sydney again in 2019. Of course others may disagree with me. Re: Real Estate Dilemma - opinions please 5Jun 09, 2015 1:00 pm Wise words travelbug! I think you have the right strategy for Sydney at the moment. I hate to think what people are borrowing. I have worked out my finances to be able to cope with repayments at 7%. Could still pay at 8-9%. Can't wait for the market to drop. I am a few years off transition to retirement. To wait would mean I cannot borrow. Also, I would have to rent in Sydney in the meantime which not only is expensive but the is little out there to rent. So to move where I would like to be when I actually retire is a financial as well as a lifestyle choice at my age. Perhaps forced into it earlier than I would have liked due to the current Sydney market - but thats how it is! Leaving Sydney I can work full time to pay down the mortgage. Go to part time work for a while. Then, all things being well, retire! In the past people with average mortgages cheered with joy that they had an extra $25 in their pockets when interest rates dropped. With the huge mortgages that I imagine people take out now because of low rates, I do wonder how they will cope with extra going out of their pockets if interest rates rise. I lived through the 16/17% interest rates of the late 80's. Only got through with the charity of family and friends - even for food. I know of people who lost their homes and never financially recovered. Though I do not think interest rates will ever reach such heights again, I do know the pain of just a small increase to repayments when you are already stretched. Wouldn't wish it on anyone! Thanks for your input! Cheers Re: Real Estate Dilemma - opinions please 6Jun 10, 2015 8:22 pm You've answered your own question in your 4th,5th, and 6th paragraph. your weighing up the pros and cons of getting in over your head mortgage-wise to have the convenience/proximity to work, as opposed to being further away yet being in a better financial situation. When you have worked that out and struck the balance that suits you, you'll have your answer. At least you are thinking about it, that's the main thing. On a side note, the property bubble in Sydney is going to burst soon, it cant go on much longer, factor this in to your calculations. IMHO, its best to rent, or buy as cheap as you can if you insist on owning - if you want to weather the impending crash. Re: Real Estate Dilemma - opinions please 7Jun 12, 2015 9:50 am Thanks for your reply qebtel. Though I don't doubt that the Sydney market will continue as it is, I do doubt that properties will bounce back to their once affordable levels in the areas I have been looking at. In the suburb I was focusing on, prices have spiralled upwards as fewer properties have come onto the market. There are few rentals available in the area and watching the market in this suburbs, I notice that few of the houses that sell are rented, as opposed to surrounding suburbs. Interestingly in some suburbs houses that have sold to investors are still awaiting tenants! Would hate to have taken out a large loan to fund these $1M prices, only to find that no one is willing to rent them, at least not at the prices they are asking. I cannot rent as I have pets and finding a property that will allow pets is almost impossible and with many people having pets means fierce competition. Now if I had an investment property, a house, I would be advertising as pet friendly then asking a slightly higher rent. Almost guaranteed you will have interest! Renting in Sydney would cost me too much. Am relying on bunking down with family at the moment. If I did rent, I would still look outside of Sydney where I could get a three bedroom house for the price of a two bedroom unit backing onto a railway line in Sydney. That is of course I could find a house with the pets! To wait for any bubble to burst could cost me finding any house within 2 hours of Sydney as I am approaching an age where lenders would not be willing to lend enough to purchase anything! And should I gamble on pricing dropping soon and they don't, then the ripple effect that is already being experienced by those areas just outside the metropolitan area will probably turn into waves and I would not be buying for much less! It is great to get feedback on my situation from those who can see the problem as it is and without personal influences. Though I don't expect anyone to make up my mind, I do appreciate ideas and musing of those who might put themselves in my position. Re: Real Estate Dilemma - opinions please 8Jun 12, 2015 4:48 pm Hi strata struggler. It sounds like you've made up your mind. You are right to consider your borrowing power and not hold off. I'm at that stage too. Getting my finances in order before I retire. Finding a nice place to retire too sounds like a great plan. Then just sit back and enjoy life. Re: Real Estate Dilemma - opinions please 9Jun 17, 2015 11:43 am stratastruggler To wait for any bubble to burst could cost me finding any house within 2 hours of Sydney as I am approaching an age where lenders would not be willing to lend enough to purchase anything! And should I gamble on pricing dropping soon and they don't, then the ripple effect that is already being experienced by those areas just outside the metropolitan area will probably turn into waves and I would not be buying for much less! Then these things are extra factors for you to consider that all become part of your equation. And its not a gamble of whether prices will drop - they will, Sydney median prices are not sustainable, you only have to look at our household level of debt . The gamble is just when prices will drop. Re: Real Estate Dilemma - opinions please 10Jun 17, 2015 8:30 pm qebtel Then these things are extra factors for you to consider that all become part of your equation. And its not a gamble of whether prices will drop - they will, Sydney median prices are not sustainable, you only have to look at our household level of debt . The gamble is just when prices will drop. You forgot to add "in my opinion". Don't get me wrong, I agree with you but there are those that don't too. After the last boom there were those that said prices would not recede and others who predicted a 40% drop (haha!). It varies by area as well. I've sold a few that I think won't sustain their price but others I doubt will drop much so holding. I'm keeping the money liquid to take advantage of drops. Time will tell (4 years I reckon). You can drag this up in 2019. Re: Real Estate Dilemma - opinions please 11Jun 23, 2015 1:04 pm travelbug qebtel Then these things are extra factors for you to consider that all become part of your equation. And its not a gamble of whether prices will drop - they will, Sydney median prices are not sustainable, you only have to look at our household level of debt . The gamble is just when prices will drop. You forgot to add "in my opinion". Don't get me wrong, I agree with you but there are those that don't too. Its not so much an opinion , as an interpretation of a multitude of economic indicators. It is going to happen, our government doesnt have the guts to implement radical reforms needed to prevent our economy going into complete doldrums. Its happened int he USA since 2007, in Japan since 1990, etc. http://www.dailymail.co.uk/news/article ... claim.html Hi We have finally decided to complete a KDR on our corner plot in NE Melbourne suburbs. Given its a corner plot approx. 400 sqm just a standard design may not fit the… 0 8568 Thankyou so much 😀 I've decided on White on white for doors and trims, White on white 50% on ceiling and Mt buller for walls. Fingers crossed it will look OK 😀 2 7158 |