Browse Forums Home Finance 1 Oct 14, 2009 10:14 am http://www.news.com.au/business/money/s ... 51,00.html *gulp* I think I'm going to be stuck renting forever! ~W~ Building our forever home - Lilium Estate Clyde - Land due May 2019 Built our first home - Pakenham - 2011 Re: House prices set to rise 20% within 3 years 2Oct 14, 2009 10:58 am This increase in property prices in conjunction with expected interest rate rises will make it increasingly more difficult to get into the property market. Rents themselves however will most likely follow the trend and increase proportionately also. Getting into the property market may be something to look at sooner rather than later while costs are a little more comfortable and their is a little more freedom to save funds. For those that dont have the savings at the moment there are still options in the market for lending. There are still some lenders that will do non genuine savings up to 90% and some that will still do 95% non genuine savings. The option of using a family members property to alleviate needing deposit are still around also. Speak with your broker about these options if you are looking to get into the market. In cases where the purchase price is $200,000.00 the $10,500.00 first home owners grant is still enough to cover your 5% deposit and legals. Minimal savings would be required to cover the mortgage insurance and fees on top however. These options are available for squeaky clean credit only. But other options exist beyond these. Dont feel like you are doomed to renting all your life. Speak to someone in the know . Regards, Trent - Finance Specialist Brisbane Re: House prices set to rise 20% within 3 years 3Oct 14, 2009 10:58 am House prices in Australia are already some of the most expensive in the world by reference to income, so personally I can not see any large increases over the next three years. So you should be OK Of course, I could be totally wrong Re: House prices set to rise 20% within 3 years 4Oct 14, 2009 12:09 pm free will House prices in Australia are already some of the most expensive in the world by reference to income, so personally I can not see any large increases over the next three years. So you should be OK Of course, I could be totally wrong Yes, Key Word you raised some. I like measuring house prices via a formula, Property Price/Net HouseHold Income. Now on this formula which can be used around the world, places such Hong Kong/Singapore/New York are pretty expensive, however some places such as Gold Coast, Townsville are higher than these places on multiples of about 6-7 times net household income. However, there are quite a few places in Australia that you can buy on 2-5 times Net Household Income. Ive bought a place on 3.8 times Net Household Income Re: House prices set to rise 20% within 3 years 5Oct 14, 2009 12:22 pm Thanks for your replies! We looked at doing the 95% loan a little while ago, but it was going to work out that my parents where going to need to put in alot more then I was comfortable with, and that was for a new build around the 270K. Our situation is a little more complicated (DH has gone back to uni to his masters/phd) and whilst I've resigned myself to waiting at least 12 months before we can purchase anything, These reports are a little scary. What are prices going to be like when our kids are old enough to purchase property!! ~W~ Building our forever home - Lilium Estate Clyde - Land due May 2019 Built our first home - Pakenham - 2011 Re: House prices set to rise 20% within 3 years 7Oct 14, 2009 4:21 pm Like I said on another thread if interest rates go up houses will follow. Interest rate rises as we know, are used to put the brakes on, or pedal to the metal A phase we have just been through. ...and with our $$$s parity moving closer to US and will soon over take IMHO.... If we have parity our houses become cheaper not more expensive, so ppl will be coming here in their droves ...if they can afford it so with lots of money. Last year 600,000 new faces...in Oz with our prosperity Oil,gas,ore gold/iron .... what a place to live Though some areas will remain the same price for many years The pressure on the cities to provide housing will be extreme... The bigger the block the more the value (subdivisible) Decenralize I say. Where you are coming from is where you are going to... Re: House prices set to rise 20% within 3 years 8Oct 14, 2009 5:01 pm onc_artisan Like I said on another thread if interest rates go up houses will follow. Interest rate rises as we know, are used to put the brakes on, or pedal to the metal A phase we have just been through. ...and with our $$$s parity moving closer to US and will soon over take IMHO.... If we have parity our houses become cheaper not more expensive, so ppl will be coming here in their droves ...if they can afford it so with lots of money. Last year 600,000 new faces...in Oz with our prosperity Oil,gas,ore gold/iron .... what a place to live Though some areas will remain the same price for many years The pressure on the cities to provide housing will be extreme... The bigger the block the more the value (subdivisible) Decenralize I say. onc_artisan If the AUD is strong and reaches parity this makes Australian property more expensive for foreigners not cheaper. Methinks you got the calculation the wrong way around. Parity makes US real estate cheap for us Australians. Agree with you that immigration is big driver of property prices Re: House prices set to rise 20% within 3 years 9Oct 14, 2009 5:33 pm Reality is that the US $ is going down in value agains the cross rates all over... Well nearly except those linked to the US $ Even the talk of the US $ being replaced buy gold etc as safe trading value.. Me thins at 1060US$ and rising there maybe some support. So yes it may look that way... I got caught out and had to cut the sumary short to go out ..for a minute sorry 'bout that! work n All So a value now in aussie $$s will grow faster( produce more US$ over time) than the sinking US$ return less growth. As the way I see it Where you are coming from is where you are going to... Re: House prices set to rise 20% within 3 years 10Oct 14, 2009 5:38 pm onc_artisan Like I said on another thread if interest rates go up houses will follow.Interest rate rises as we know, are used to put the brakes on, or pedal to the metal A phase we have just been through. ...and with our $$$s parity moving closer to US and will soon over take IMHO.... If we have parity our houses become cheaper not more expensive, so ppl will be coming here in their droves ...if they can afford it so with lots of money. Last year 600,000 new faces...in Oz with our prosperity Oil,gas,ore gold/iron .... what a place to live Though some areas will remain the same price for many years The pressure on the cities to provide housing will be extreme... The bigger the block the more the value (subdivisible) Decenralize I say. Can you back your interest rate rise and house price rise with any hard figures or facts or is it just your own opinion? Re: House prices set to rise 20% within 3 years 11Oct 14, 2009 6:05 pm Only history Inflation is risng prices... Cost of Goods, services, food, power, wages, transport, etc Resulting in profits being spent on luxury Material things and property, making the market short of them and forcing upward trends then labour shortages will require more imigration and we are back in a bubble... Prices going up... housing in short supply, ... and the government/RB increasing interest to throtle back the overheated market. At 17% ish for the punters... but housing IMHO only, will boost again. But in Localised areas... For more flying flyout (F/F) miners, welders, sparkies, geeks (computer operators) , drillers, cranies, hydrolics, builders, labourers, plant operators, service industry, and front office staff etc. Highly paid 24/7 50/50 timeshare, very mobile workers. It is coming IMHO only Where you are coming from is where you are going to... Re: House prices set to rise 20% within 3 years 12Oct 14, 2009 6:41 pm Onc, Housing is supply and demand, I agree with some of your statements but not the one about rising house prices with rising interest rates. Look at 18 months ago, rates went up, housing prices flattened. Rates tumbled quickly, along with FHOG grants, house prices increased. Go look at the 36 month quarter by quarter housing prices against interest rates, there is a clear inverse relationship Re: House prices set to rise 20% within 3 years 13Oct 14, 2009 7:50 pm Funny thing is I do not think house prices are anywhere near as unaffordable as people make out. It maybe unaffordable where your parents live within 15km of the CBD of Melbourne or Sydney but for example 20km West of Melbourne you will find bucketloads of affordable property. House and land will be approx 4 times annual household income. I'd love a home like this in Beacon Cove Port Melbourne - http://www.bigginscott.com.au/property. ... ID=1147262 But I have to pick my battles unfortunately If I won the lotto however I'd probably head to that auction in a heartbeat!!! Re: House prices set to rise 20% within 3 years 14Oct 14, 2009 8:37 pm Remember we were coming off a bubble of 10+years with houses going up 4-500% and more. Well mine did Where you are coming from is where you are going to... Re: House prices set to rise 20% within 3 years 15Oct 15, 2009 5:41 pm [quote="Zerosignal"]Funny thing is I do not think house prices are anywhere near as unaffordable as people make out. quote] I have to agree. Just maybe a shift of priorities for those who wish to enter the property market. Our generation expects to buy an expensive car, go on over seas holidays and have expensive weddings (all on finance) all before they buy a house and then have to pay off the finance before saving for a deposit. Perhaps the next generation should be a little more humble. Learn to save rather than seek credit. Look at realistic wedding budets, save cash for a car even if you buy second hand, save for a holiday. People are trying to cram too much in before they settle down and find it easier to finance and worry about paying off later. If you can afford to have a round the world trip, new car ect and still save for a wedding and house deposit before you wish to buy, then good on you. If you can not, don't complain about the affordability of housing if you seek to live a lavish life style before hand. OK rant over Re: House prices set to rise 20% within 3 years 16Oct 16, 2009 1:14 pm I don't think house prices rise BECAUSE of interest rates. Interest rates are set based on the need of the economy. When the economy is running well interest rates are raised (one reason to stop high inflation). When the economy needs stimulation interest rates are lowered (like this year). Personally I think the FHOG had a lot to do with some overinflated prices. So when inflation is high things (houses, food etc start rising more sharply) THEN interest rates are increased to slow it down. In Sydney the last boom started in 1999. Interest Rates Nov 99 6.8% Feb 00 7.3% Apr 00 7.5% May 00 7.8% Aug 00 8.05% Feb 01 7.55% As with all stats you can read into them what you like. Of course this is based on Sydney only. In other cities prices did not increase at this time. Re: House prices set to rise 20% within 3 years 17Oct 16, 2009 1:34 pm Tornado_ALIVE Zerosignal Funny thing is I do not think house prices are anywhere near as unaffordable as people make out. quote] I have to agree. Just maybe a shift of priorities for those who wish to enter the property market. Our generation expects to buy an expensive car, go on over seas holidays and have expensive weddings (all on finance) all before they buy a house and then have to pay off the finance before saving for a deposit. Perhaps the next generation should be a little more humble. Learn to save rather than seek credit. Look at realistic wedding budets, save cash for a car even if you buy second hand, save for a holiday. People are trying to cram too much in before they settle down and find it easier to finance and worry about paying off later. If you can afford to have a round the world trip, new car ect and still save for a wedding and house deposit before you wish to buy, then good on you. If you can not, don't complain about the affordability of housing if you seek to live a lavish life style before hand. OK rant over I don't argue that we should probably have started saving for this 5 years ago, after we got married (which by the way, costs us less then 12K including our honeymoon. Our parents helped us pay for the reception but other then that we did it all ourselves and didn't borrow any of it! And it was Awesome ). And prehaps we should have worked harder to purchase a home before we had kids. BUT we hardly have a lavish lifestyle, our honeymoon is the only overseas trip we've had. My husband has a motorbike, and we have personal loan for our car as well, but all up our debt is less then 10K (Not including HECs). The probelm is that we're on a single income, and find it very difficult to get ahead. We're actually doing a really good job at the moment, and I'm very proud of us, but it does seem a little like for every step we take forward the Banks move the goal post three steps further ahead. And I know quite a few families just like us! I worry about the increasing number of single income familes, single parent families and casusal workers who might not live the lifestyle you describe, but can seem to catch a break to get some stability either. Most of us don't want to live in a McMansion, but really REALLY don't want to move every 18 months because they're landlords keep selling their properties!!!!!!!!!! Rant over ~W~ Building our forever home - Lilium Estate Clyde - Land due May 2019 Built our first home - Pakenham - 2011 Re: House prices set to rise 20% within 3 years 18Oct 16, 2009 5:50 pm *frosty* What are prices going to be like when our kids are old enough to purchase property!! A lot higher than now, but so will be their starting income (most likely higher than your current income with years of experience). I remember my first mortgage and my dad nearly had a heart attack when I told him how much. than I did the maths on our incomes and came out ahead of him, so it is all relative. Jack Re: House prices set to rise 20% within 3 years 19Oct 16, 2009 7:30 pm jacobvz *frosty* What are prices going to be like when our kids are old enough to purchase property!! A lot higher than now, but so will be their starting income (most likely higher than your current income with years of experience). I remember my first mortgage and my dad nearly had a heart attack when I told him how much. than I did the maths on our incomes and came out ahead of him, so it is all relative. Jack My first mortgage was only 20% of what we are borrowing to build this new house and we also have tipped in bucket loads $$$, mind you that first house was in 1984! Re: House prices set to rise 20% within 3 years 20Oct 16, 2009 8:08 pm *frosty* I don't argue that we should probably have started saving for this 5 years ago, BUT Yeah, would be nice to know what we do now, when we left school. Priorites and goals may have been a little different. I decided to spend obscene amounts of money building up a muscle car, only to sell it losing a lot of money. I then turned to racing sail boats for the next decade (seriously but have sailed for 25 years now) which made the car look cheap. The last 12 months we have had to play catch up in a big way to put ourselves in a position to buy a house. It has not been easy, but worth the 12 months of pain. Some of my financial decisions have not been the smartest (cars and boats) but it was a hell of a journey. Wish I focused on a house earlier, even a unit...... But will get there soon. Joe, it depends on your certifier but we are noticing the ones we deal with are really cracking down. 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