I have given up buying a house

[theasxgorilla]

I have also decided on gearing my superannaution, which is exactly the same as buying an investment property.

How does one gear their super? I thought it was against the rules for a superfund to borrow?

 

[krisbarry]

I sleep very well at night and come monday I am dumping another $500 into my super account.

No morgagte stress for me, no working 7 days a weeks for me.

I have learnt the art of living with less, pity the rest couldn't.

Naaah...they are too damn dopey and have to max everything to the limit...buy as many investment properties as they can, max out every credit card they can then work 7 days a week to keep up with the loan repayments, then wonder why they are so sick.

Meanwhile their kids never see them, their marraige fails, then they end up spending thousands of dollars seeing a shrink to sort out their problems, then later die of a heart attack due to all this stress.

WHAT KINDA LIFE IS THAT...A WASTED LIFE, BUT VERY TYPICAL, AND THAT SAD FACT IS IT IS BECOMING A SERIOUS ISSUE WE CANNOT IGNORE.

I CALL IT ILLEGAL LENDING PRACTISES!

 

[nizar]

Off course I could buy a house right now and possibly 1 to 2 investment properties as well, but as Smurf mention, this is damn high risk, lending at such extremes. Buying at the top of the market, and gearing with invesment properties is just down right foolish in this current climate. Even the most dopiest of dick_heads could see that.

There is no way in the world I would risk working up to 7 days a week just to support a loan of this size. I have worked 7 days a week before and all it did was make me sick. What fun is life if ya working 7 days a weeks, no time for your own mental health, no time to socialize with friends or family etc etc.

Thats where Australian's are F-cked!

We are so obsessed with owning bricks and mortar and have forgotten about the art of having fun.

In most countries around the world most people rent, and have way more fun. It really is sad to see so many people with morgagte stress in this country trying to live the great Australian dream.

ITS THE BIGGEST CROCK OF SH_IT TO OWN YOUR OWN HOME....meanwhile you are crying yourself to sleep, or not getting any sleep due to skipped morgagte payments.

Some things in life require patience.
Sometimes you have to make sacrifices.
Sometimes you have to suffer a bit now, work hard, but then enjoy the rewards later.

You cant have everything at once.

A good friend of mine (i consider him my mentor) spent a good part of his 20s working like a dog, i mean, close to 100hours per week. Now he owns 2 businesses, earns about 500k a year, and goes overseas every 6 months with his family. He's 37. And yeh - he owns his own home.

So maybe time to stop complaining, and time to do something constructive??

 

[tech/a]

We are so obsessed with owning bricks and mortar and have forgotten about the art of having fun.

So you cant do both.

Interesting,I had a ball when I was younger,I sure as hell am having a ball now.

Buying at the top of the market, and gearing with invesment properties is just down right foolish in this current climate.

I've shown you so many ideas and so have others. I have friends who's kids are in co ops pooling their $$s and getting further ahead than their piers.
Mind you at least your not frittering your hard earned away on rubbish.

There is no way in the world I would risk working up to 7 days a week just to support a loan of this size

Hell neither would I.

Work smarter not harder.
Grab your $2k and turn it into $4k (You seem to believe thats pretty easy on stocks). Then to $8k then $16k you've got the idea.--Cant that be done either? its the top of the market no doubt!!!

ITS THE BIGGEST CROCK OF SH_IT TO OWN YOUR OWN HOME

To you it is. Remember due diligence.
You can have it all particularly in this country----but like those penniless immigrants who came years ago and who DID something about it---you have to start somewhere.

If you start at the bottom you have little to lose!!

 

[krisbarry]

If my memory serves me correctly tech/a, didn't you go bankrupt in the last housing bust, or the previous, or was that your small business?

I do remember a conversation in which you went under.

See you can be king of the castle and lose it all too.

Plenty are beating their chests at the moment, saying look at me, look at all my wealth, I've done this so you can too.

I have already done it too, only 4 years ago I had $8 grand in my super and by weeks end I will have well over $40,000. Its all relative! I now have 5 times my wealth!

...I also suspect that in 4 years time I will be another 5 times richer too, thanks to the compounding effect and gearing.

...and I have done it all by never touching a bank, nor a house, nor a morgagte, nor an investment property nor a real estate agent, nor a tennant.

...time others worked outside the bricks and mortar square! Its a new generation now, a new breed of people, with new ideas, and new ways to make money, and smart ways to make money, without ever touching real estate.

 

[The Red Baron]

I'm kinda at the crossroads are the moment.

24, living with parents and have saved a $50K deposit (but its barely a 10% deposit now in the Perth market) and trying to add $300 a week while I can.

But my problem is my earning capacity, which is $30k a year. Short term i'm applying for Nightfill positions just to get a bit extra a week. Taking the good old pushbike to work, oh and toasted sandwiches for lunch

Long term i'm off to Europe on a Contiki holiday for 2 months in August, then come back and look at studying or a new career path.

There seem to be alot of younger people in Perth realising the need to do something to get ahead.

 

[krisbarry]

50k is a great deposit, but I feel for you living in Perth, you might even have a better chance buying a house in Sydney

Be careful buying at the top of this market, especially in Perth, we could see a double bust their with the commodities and the housing market crashing at the same time. Then you know what comes next...you turn your 50k deposit into negative equity and the bank takes the house and you are left with nothing.

BE VERY CAREFUL

 

[nomore4s]

Stop the clock,

That's not entirely accurate, the bank will only take the property if he/she fails to make the repayments, if he/she keeps debt levels managable, he/she can ride out the downturn for the next boom. This is especially true if its just a residential house and not a investment property. My advice would be to find a property he/she considers good value and he/she wants to live in for a number of years(depending on his/her circumstances of course). And don't rush into anything. There is also the option of renting rooms out for extra income.

 

[krisbarry]

Stop the clock,

That's not entirely accurate, the bank will only take the property if he/she fails to make the repayments, if he/she keeps debt levels managable, he/she can ride out the downturn for the next boom. This is especially true if its just a residential house and not a investment property. My advice would be to find a property he/she considers good value and he/she wants to live in for a number of years(depending on his/her circumstances of course). And don't rush into anything. There is also the option of renting rooms out for extra income.

Sorry mate but its just not true, banks right around Australia are checking market prices suburb, by suburb. When they find a house that is worth less than the mortgagte, they repossess it. Even if the person has made all payments on time. God you only have to watch the usual trashy ACA or Today Tonight to see this happening, at least once a week they show this sorta crap.

It will happen more and more now with all these 100% finance loans, no need for a deposit, but the banks will come knocking if the property prices fall.

 

[krisbarry]

...anyway I started this thread a while back...playing the victim role, poor me etc etc. It is quite amazing to step back now and look at it from a survivor role and to see the progress I am making.

Everytime I dump money into my super, it makes me feel better and better.

I am not that victim anymore!

I am also making sure I stick a few fingers up at others that have a hard time understanding my logic

 

[nomore4s]

The red baron already has a good size deposit

 

[nomore4s]

...anyway I started this thread a while back...playing the victim role, poor me etc etc. It is quite amazing to step back now and look at it from a survivor role and to see the progress I am making.

Everytime I dump money into my super, it makes me feel better and better.

I am not that victim anymore!

I am also making sure I stick a few fingers up at others that have a hard time understanding my logic

lol fair enough

 

[nioka]

...anyway I started this thread a while back...playing the victim role, poor me etc etc. It is quite amazing to step back now and look at it from a survivor role and to see the progress I am making.

Everytime I dump money into my super, it makes me feel better and better.

I am not that victim anymore!

I am also making sure I stick a few fingers up at others that have a hard time understanding my logic

Are you still living at home rent free? or bludging on your mates for a place to live as you said in opening post.

 

[krisbarry]

The red baron already has a good size deposit

As he stated though: (but its barely a 10% deposit now in the Perth market)

...also its pretty easy to lose 50k on a property if the prices go south by 5% a year for a few years.

 

[krisbarry]

Are you still living at home rent free? or bludging on your mates for a place to live as you said in opening post.

I am not bludging..I am paying rent, so therefore I am a tenant...I have moved up the ranks now

 

[nioka]

I am not bludging..I am paying rent, so therefore I am a tenant...I have moved up the ranks now

Good to hear it. Was it voluntary or imposed?

 

[krisbarry]

Good to hear it. Was it voluntary or imposed?

Voluntary, but what does it matter?

 

[Smurf1976]

We are so obsessed with owning bricks and mortar and have forgotten about the art of having fun.

In most countries around the world most people rent, and have way more fun. It really is sad to see so many people with morgagte stress in this country trying to live the great Australian dream.

ITS THE BIGGEST CROCK OF SH_IT TO OWN YOUR OWN HOME....meanwhile you are crying yourself to sleep, or not getting any sleep due to skipped morgagte payments.

I don't agree with your comments about OWNING your own home. OWING a lot of money to the owner (lender) is another matter...

But a question came to mind as I read this. It takes 6 - 7 years of average earnings to buy an average home in this country at the present time.

But does it actually take 7 years of labour to build a house? That includes clearing the land, producing materials as well as actual construction. But not including maintenance, repairs or financing which aren't included in the initial purchase price.

Obviously there are costs for materials etc that are set by global markets but the overwhelming cost of actually building a house (and clearing the land etc) is ultimately the labour of Australians. It's not as if the average house is built from anything other than 90%+ local materials.

If it does take that much time to build a house then it suggests that around 17% of Australians are employed building houses (assuming an average working life of around 40 years). Possible, I don't have actual data, but it seems unlikely.

If it really is that high then a formal inquiry is warranted as to why the productivity of the building industry has dropped 50% compared with established performance over several previous decades.

If it's not that high then we're paying far more for established houses than their underlying replacement cost (on the basis of a generic average location). When the cost of production plus reasonable profit is far less than the selling price then either you set up a cartel (illegal in Australia) to artificially restrict supply or the inevitable price falls will eventually occur.

 

[Smurf1976]

Sorry mate but its just not true, banks right around Australia are checking market prices suburb, by suburb. When they find a house that is worth less than the mortgagte, they repossess it. Even if the person has made all payments on time. God you only have to watch the usual trashy ACA or Today Tonight to see this happening, at least once a week they show this sorta crap.

It will happen more and more now with all these 100% finance loans, no need for a deposit, but the banks will come knocking if the property prices fall.

I wasn't aware of that happening but I note that at least one major lender in California has stopped offering 100% loans as the housing market downturn gathers steam in the US.

Also 20 or so sub-prime lenders have gone bust in the US in just the past 2 months. That's nearly one every 2 working days.

A credit tightening would seem to be underway in the US. It's hard to believe that it won't spread to Australia in some form sooner or later.

 

[krisbarry]

I don't agree with your comments about OWNING your own home. OWING a lot of money to the owner (lender) is another matter...
.

completly agree, its a myth to say you own your own home. The bank owns it for the entire life of the loan. Until that very last dollar is paid it is never yours.