I repeat the basics again:
FHOB, entry level $330k unit (Brisbane):
Minus $14k - $30k deposit = $286k loan
$466/wk (7%)+$26 rates+$30 bodycorp = $522/wk
Rental Equiv: $300/wk.
Savings of $222 over mortgage put into bank x 52 weeks = $11,544
Deposit of $30k x lowly 5% interest x 0.70 (mid-bracket) = $1,050 interest
Total at end of year 2009 renter: $12,594
FHOB: 3% x $330k = $9.9k cap gain. Even a small possibility of a 2-3% fall, puts you a few behind, and likely $20k behind the lowly renter. It is quite a risk, never mind a bad case of 10% fall in 2009 were to take place.
To be honest, I doubt most FHOB do these sort of sums purely on dollars, although maybe some are starting to.
I think this, more than ever has stalled price rises this year -- there is no rush. There is no "I better buy now or it will cost me 10% more next year", or "I will never be able to afford my own place". This was the fear last year, this is what kept people buying.
Until that returns, the status quo will remain - low ballers, window shopping, but little buying. Then maybe the herd will take over, and when they see others buy in great numbers, they will buy.
As we saw after the recession in 1991, it was a good few years until that took place again.
New home buyers in New South Wales are set to get a $3,000 boost in next week's mini-budget.
The State Government will increase the first home owners grant for people buying newly constructed properties in next Tuesday's mini-budget.
It means people will now be eligible for a total of $10,000 from the State Government plus $14,000 from the Commonwealth.
People buying new properties worth up to $500,000 will also be eligible for stamp-duty concessions, meaning they will get up to $42,000 worth of assistance.
http://www.abc.net.au/news/stories/2008/11/08/2414228.htm
More text not quoted
I find it amusing that the one thing that people are saying is saving our house prices from the fate shared by other countries is a lack of supply when compared to demand...which might be true, fair enough.
Except now the Government prop of $24,000 for the next 150,000 new first home owners simply = a $3.6bn bailout to the property developers. You gotta be kidding me. They say the only thing that saving us is lack of supply so you wanna prop up the supply?!
Actually robots, in my opinion, those are the only people that should be getting handouts.
Keeping manufacturing and commodities skills (i.e. productivity) in the country is essential to stop us from ending up in the same situation as the US (although we are obviously well on our way) where now almost everyone is a consumer and the whole economy revolves around the consumer.
Obviously it's not so clear cut but you can't deny the trend.
There is already the Howard govs perpetual home owners grant (aka bailout) of $10k, Rudds finite package is just a cash injection into a market that needs to fall.
The building industry and all the industrys that supply the products to them is absolutely huge
I really don't want to appear like I'm harping on, just wanted to link an article really.
But despite the truth in what you say, you also have to consider that we can't exactly export a glut of houses to developing nations like we can with extra grain or other commods.
Even if we all believe in robots view that there is still a housing boom (or at least not a bust) going on then why oh why would you want to push the last of our industries which is in said good shape into oversupply territory?
hello,
look out great results here:
http://www.reiv.com.au/news/Economic-uncertainty-causes-house-price-volatility-
a mixed bag, look at those units pepperoni hanging in there strong man,
14.7% for st kilda I hope some of that rubbed off on the unit market
enjoy the day, spend up
thankyou
robots
BRISBANE house prices suffered the biggest fall in the country in the three months to September, dropping 5.2 per cent, according to Australian Property Monitors.
Its latest data shows the median house price for Brisbane at $415,963 down from $438,805 in the June quarter.
drop in shipments is also bad news for Australia's indebted consumers. The mining boom fueled a 30 percent surge in household incomes in the past five years, more than any other developed economy, according to the central bank.
Many households used the cash to take on debt, which almost doubled since 1999 to around 160 percent of incomes, a higher ratio than the U.S. and U.K., according to Shane Oliver, senior economist at AMP Capital Investors in Sydney. The median national house price soared about 140 percent in the same period.
``Australian households are very vulnerable, which partly explains why the central bank has been so aggressive'' lowering rates, Oliver said.
Glen have you got a link to an article - it would be an interesting read.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?