House prices to stagnate for 'years'

[krisbarry]

My 2 cents worth.

krisbarry, save , save , save . And put your head down and your bum up, Go without some things and DO the hard yards, Like each and every other house investor / owner.....

Over the years , Nothing has changed .. there are Always opportunities to do and get anything you want in Australia....Done winge! Get stuck in and do it, And when youve been there and done that , you can sit back like the rest , and tell the young ones the same story... " We did it tough once, So can you" Smile and go for it......

The other Road aint worth it...

I am saving and damn hard, just the prices around me rocketed up far beyond my wage.

But I compensate by these methods...

My weekly food shopping....

Almost all homebrand foods and marked down meat, stale bread ,cannot lower that bill anymore!

Mobile phone...I have not paid for credit on the phone for 2 years, I fill out surveys and are credited with cash on the phone

I fill out competitions on the web to win free movies, cd's etc, so there is my enetertainment covered.

I drive less, and use fuel vouchers where I can

I work weekends, weeknights and public holidays to get more money for less work.

Most of my furniture is from garage sales and I wear clothes from St Vinnies.

I fill up my printer cartridges with food colouring, instead of ink

I eat free food at work, save cooking at home

Every fortnight when payday rocks around, I buy more shares, thats my invesment.

Can I go out without anymore?

I did just pay my fees off so that is why I am almost stripped of funds!

Give me a break....oh the stress of all these money hungry greedy investors is driving me mad.

They all rant and rave how good it is on the other end.

I am just another struggling young person doing my best.

 

[krisbarry]

Well I looked for the definition of a snob. Couldnt find anything about champange or BMW's. But did find these 2.

"One who affects an offensive air of self-satisfied superiority in matters of taste or intellect."

"a person regarded as arrogant and annoying"

Yep, your definately a snob.

LOL, you got me laughing on this one!

 

[Smurf1976]

Adelaide is one of the most spread out cities in the world, with such a small population, why extend it further? (some 150km-pop 1.3 million)

Going off topic for a moment. Last time I was in Adelaide (2004) I decided to have a bit of a look away from the normal areas that tourists end up in. So I got on a train that went, well, I'm not sure but it was somewhere South I think and the track was literally right next to the water in parts.

Anyway, there's plenty of unused land (just grass) within walking distance of that rail line. My point being that anyone who believes that land prices in Adelaide are in some way justified by lack of supply is kidding themselves.

Of course there are the nice spots, but your run of the mill suburban block is realistically worth what it costs to clear the land, put in the services etc. It just ain't scarce. Flying into Adelaide you have to remember that it IS a city because there's trees, trees and more trees everywhere if you look down. PLENTY of land. (And no I'm not talking about the green belt around the CBD).

Same in Hobart and any other low population area and yet there are plenty of property types in Hobart saying that "they don't make land anymore". Maybe, but when you can stand in the city centre and see natural bush then you know that land isn't scarce!

So I do think this bubble's going to burst... Indeed it must already be doing so in some parts. The rates that builders charge are such that if they would agree to it (they wont since there's some sort of price fixing in the industry from what I can tell) then you could bring mainland builders to Tassie, put them in a top hotel and still get the job done cheaper than using locals. The bottom has just fallen out of the prices they charge on the mainland (some states at least) so all can't be well with the property bubble.

 

[krisbarry]

Must have been on the suburban trains, city to Noarlunga, I am guessing.

Or if it headed into the hills (south-east direction) it was the city to Belair line

Yes true there is much land.

A new sub-division has just opened up down the street from me and blocks of land start @ $500,000 for a 650sqm block and up to $750,000 for a 900 sqm block.

Add on the cost of a normal sized house of between $175,000 to $300,000.

Now you can see that, that even for the wealthy it is starting to get out of control.

The problem with Adelaide is its population is very low for such a wide expanse, hence its infrastructure is stretched to such great distances.

Some buses only run once an hour in very outer suburbs and trains can run hourly on the weekends too.

Adelaide has the land to building, just the lack of population growth to warrant spending the money on services, and a very aging population too.

What we do need is youth in the city and surrounding suburbs to keep it alive, vibrant, and a skilled workforce to build a better city.

We should not drive them out of the city and into rural South Australia due to housing/land costs. It just does not make any sense at all.

 

[Fleeta]

I don't understand how you can say that property prices have to slow down to allow wages to 'catch up'. People can only buy what they afford. Take me for example.

I am 25
I saved for a deposit for the first 4 years of my working life (2001-2005)
I bought a house (with my GF) for $430k - 2 bedroom, new brick house, 7kms from CBD.
I earn $70k per annum
My repayments are 32% of my salary.
How is this a struggle?

Housing is affordable to everyone who has any kind of discipline. I know that will outrage people, but you just need to look closely at your situation and realise that opportunity is there. Try buying something in London or New York and then complain. We are the lucky country remember.

 

[It's Snake Pliskin]

Its called taking control of your future!

How about trying it yourself?

A snob is one who sips on champagne ,living in a million dollar mansion and driving the latest BMW

My wealth is so far from the average 31 year old, I aint no snob, nor do I act like one.

You have been reading Mao and Lenin haven't you.

Snobs generally have personality problems. Don't confuse materialism with snobbishness. What's wrong with champagne? Enjoy life; it is short after all.

Anybody who complains about money or says it is bad, doesn't have any.

John Howard will make you richer than that other fat idiot, or the skinny tall greenie.

 

[wayneL]

I don't understand how you can say that property prices have to slow down to allow wages to 'catch up'. People can only buy what they afford. Take me for example.

I am 25
I saved for a deposit for the first 4 years of my working life (2001-2005)
I bought a house (with my GF) for $430k - 2 bedroom, new brick house, 7kms from CBD.
I earn $70k per annum
My repayments are 32% of my salary.
How is this a struggle?

Housing is affordable to everyone who has any kind of discipline. I know that will outrage people, but you just need to look closely at your situation and realise that opportunity is there. Try buying something in London or New York and then complain. We are the lucky country remember.

You're doing nicely Fleeta.

However, I must point out that $70k p/a is well in excess of average for someone of your age.

The award wage for a tradesman upholsterer, for example, is something like $30k p/a. For this privilage, one must complete a 5 year apprenticeship!!!!

Even a basic family house way out in the outer suburbs is probably about $250,000...~9x earnings including stamp duty. :-o

This is truly struggle street, no?

Cheers

 

[krisbarry]

Try buying something in London or New York and then complain. We are the lucky country remember.

Are we a lucky country?

Our RBA boss says to a whole generation of young people move out of Sydney now, you have no future there!

We have a London, or New York in our own backyard its called Sydeny.

That same disease that is affecting Sydeny is spreading right around Australia. Its called the rocketing housing syndrome...have you heard of that!

Your wage of $70,000 is way beyond that of the average folk, as already mentioned by WayneL.

How much did your parents/relatives kick in for the deposit?

You have a partner, their wages are also taken into account, and her savings too.

All factors in being able to borrow money to be able to afford a $430k house @ the age of 25.

So consider yourself lucky, very lucky!

You did this in 4 years, thats pretty good, but you are above the average!

 

[tech/a]

So find a way of being above average.

I consider myself "Average"---my performance---above average.
I'll bet Fleeta feels the same.

Its not what you earn or how you earn it it's what you do with it that will determine your financial future.
Sticking it in a bank at 2% isnt going to help when prices are even rising 5% let alone 20%.
WORSE losing it in the stock market!
WORSE denying yourself the stark reality that you'll need more and more of it to exist as life goes by.
WORSE seeing accumulation of wealth as greed!

In general terms

Anyone can be a bum---simply you can choose to be so and then choose to remain so.There are in one of the richest countries in the world Australia---1000s---no skill,no effort,no thought or even help needed---simply choose.

To be happy with your lot,without envy or pretence,and to truely enjoy life and those travelling the same path----isnt simple at all.

Anybody who complains about money or says it is bad, doesn't have any.
How true that is Tina.
Ive also found that he with the biggest mouth (Boasting) has shallowest pockets.

 

[wayneL]

So find a way of being above average.

I used to think this way.

But missus and I took in a few street kids to try and make a difference.

Some of these are indeed capable, and have turned out, being above average...some, through reasons that are psychological, sometime biological, are below average even though they try very hard.

I feel for these people, whom we have grown to love as though they are our own.

There will always be avenues for the above average to succeed, but I'm not comfortable with a society that consigns the rest to the economic scrapheap.

Housing is historically, exceptionally expensive at the moment. The social implications will not be positive if this does not correct itself.

It all depends what sort of society we want. Presently, we are taking a turn for the worse IMO. That may not be entirely the fault of house prices, but it certainly is a factor.

Cheers

 

[krisbarry]

Dinner last night was a can of home brand Tuna (77 cents) and a dash of home brand mayo. and a glass of water.

I am sacrificing now to save for a house deposit. 4 years of hard saving will pay off!

I know its tough to save, but I am a fighter and a true aussie battler.

Ohhh how I would love to eat steak. LOL

Now where is that steak?

 

[tech/a]

Wayne while they are there these people are in the minority.
The majority wont even try to think for themselves--or take responsibility for their lot.

Those on the so called scrap heap that are disadvantaged by some mental or physical incapacity have ample avenues and options available.

THEY DONT WHINGE EITHER!!!!!

Anyway I now put these types of discussions in the enough said basket----for me anyway.

 

[krisbarry]

If you take a look at Maslow's chart below you will actually find that once the physiological needs of a human are meet, then safety and security become a priority.

Saftey and security means a roof over your head, job security,the need to feel safe and some sense of order, or structure.

If this is out of balance then a defecit of the following will occur:

* The love and belonging needs
* The esteem needs
* Self-actualization

So I support wayneL's comments completely.

With emotional or physical disabilities the road ahead is even harder!

We are doing serious harm here and not any good will come from the increase in house prices.

The safety and security needs. When the physiological needs are largely taken care of, this second layer of needs comes into play. You will become increasingly interested in finding safe circumstances, stability, protection. You might develop a need for structure, for order, some limits.

Looking at it negatively, you become concerned, not with needs like hunger and thirst, but with your fears and anxieties. In the ordinary Australian adult, this set of needs manifest themselves in the form of our urges to have a home in a safe neighborhood, a little job security and a nest egg, a good retirement plan and a bit of insurance, and so on.

Source:

http://www.ship.edu/~cgboeree/maslow.html

 

[Dan_]

I used to think this way.

But missus and I took in a few street kids to try and make a difference.

Wayne,

This is fantastic to read and I salute you for your efforts and the heartfelt wisdom in your post.

I wish you every success (it's well deserved)

 

[It's Snake Pliskin]

Wayne,

This is fantastic to read and I salute you for your efforts and the heartfelt wisdom in your post.

I wish you every success (it's well deserved)

Yes, I agree Wayne!

If only more of us could do the same.

 

[Julia]

I used to think this way.

But missus and I took in a few street kids to try and make a difference.

Some of these are indeed capable, and have turned out, being above average...some, through reasons that are psychological, sometime biological, are below average even though they try very hard.

I feel for these people, whom we have grown to love as though they are our own.

There will always be avenues for the above average to succeed, but I'm not comfortable with a society that consigns the rest to the economic scrapheap.

Housing is historically, exceptionally expensive at the moment. The social implications will not be positive if this does not correct itself.

It all depends what sort of society we want. Presently, we are taking a turn for the worse IMO. That may not be entirely the fault of house prices, but it certainly is a factor.

Cheers

Wayne,

You've made my day/evening. I've just spent the day dealing with the homeless, drug addicted, simply sick, and abused and felt powerless to make more than a small difference in terms of arranging payment of electricity, a week's rent etc. None of that makes much difference to their ongoing difficulty. Kris is correct in emphasising the importance of Maslow's hierarchy of needs. Some people - certainly a very small minority - cannot meet their basic needs of food and shelter. As I've said before, sometimes this is their own fault, but often it is simply that life has dealt them a series of blows.

Fleeta,

congratulations, you are doing really well. It's easy for people to say you are "lucky" because you are earning very good money. However, I have rarely seen people earn plenty because of luck - as a wealthy friend of mine sometimes says "the harder I work , the luckier I get"

Kris,

are you necessarily committed to living in a capital city where costs of housing are necessarily high? Have you considered a move to a regional area with good prospects for capital growth in housing, thus making it easier to get a modest property for a start, then work your way up, eventually returning tothe city if that's what you really want. You can trade your stocks from anywhere. Lots of regional areas still offer really good buys in housing and can offer pleasant, relatively stress-free lifestyle.

Julia

 

[Fleeta]

Are we a lucky country?

Your wage of $70,000 is way beyond that of the average folk, as already mentioned by WayneL.

How much did your parents/relatives kick in for the deposit?

You have a partner, their wages are also taken into account, and her savings too.

All factors in being able to borrow money to be able to afford a $430k house @ the age of 25.

So consider yourself lucky, very lucky!

You did this in 4 years, thats pretty good, but you are above the average!

Kris,

Firstly, the deposit that I had ($55k) was a fair chunk of my savings after 4 years - none from relatives. You are right in that my GF had a similar deposit which enabled us to borrow more. My salary is above average because I work harder than the average person...simple as that. Also helps that I entered a field of work where demand is high and supply is low. I know people my age who earn much more than me - but like tech says, earnings are irrelevant if you can't save and make the assets work for you. My strategy to save for a deposit was this simple:

1. When I got my full time salary, I made a concious effort not to change my spending habits - pretend like I was still at Uni scraping to get by.

2. Track what I spent each month - make sure it was less than 50% of what I earnt. Forget making a budget - tracking actuals is the key.

3. Use that spending to invest in shares (took out a margin loan in June 2003 - and reaped great benefits from it in the 2 years following).

I am lucky. Lucky to have parents who let me stay at home rent-free til I was 24. Lucky to get a decent job and get promoted. But surely you also make your own luck too!

Kris - if you are so conscious of what you spend - why on earth would you risk it on LVL shares!!!!!!!!!!!!!

Wayne & Julia - You are very admirable people, and remember that Karma will look after you - as long as you are doing it for the right reasons. Keep up the good work. It must be frustrating trying to help the unhelpable - which is why I could never do it. I like effort to equal results.

Tech/a - I am an average person too, its above average effort that puts you on top of the pile. Wish it was easy to get there - like being a Hilton sister - but there is no use stopping to complain when it isn't easy.

 

[krisbarry]

Well done Fleeta on your investment.

I guess there is huge differences in your circumstances to mine.

I moved out of home at 18 and started paying rent from that time on.

I have also never earned a wage higher than $25k per year.

Just the typical aussie battler, i guess!

All in time, I will be able to purchase just takes discipline, something I have much of and will continue to save.

 

[tech/a]

So find a way of being above average.

Fleeta---a perfect example.

Kris.

Do you smoke---no not a trick question.
I'll show you what you can do with the price of a pack of Fags over a few years.
For those who think making big $$$s is for the fat cats!

 

[Fleeta]

Kris - you sound like a pretty smart guy - and you are moving in the right direction. Keep making progress and don't get frustrated. I went through times pre-buying a house when I thought I would never get there...especially when I was out-bidded twice.

I assume you are a tradesman....If you wanna make some serious dough, why don't you start your own business? No guts, no glory...