I.R. Laws will crash the housing market

hello

interesting one on whether house prices are overvalued.

i bought in 1999 and are now looking for next step

is extremely interesting doing the figures on the buy vs rent equation over this 7yr period

if you are saving the difference between mortgage and rent then the outcome between buying and renting is very close (and highly dependent on savings return).

if your looking for correction then good luck, recent sales in my area indicate very good prices

cannot see the drivers for big lift in capital growth though on your "average" property,

thankyou
robots

robots said:

hello

interesting one on whether house prices are overvalued.

i bought in 1999 and are now looking for next step

is extremely interesting doing the figures on the buy vs rent equation over this 7yr period

if you are saving the difference between mortgage and rent then the outcome between buying and renting is very close (and highly dependent on savings return).

if your looking for correction then good luck, recent sales in my area indicate very good prices

cannot see the drivers for big lift in capital growth though on your "average" property,

thankyou
robots

Click to expand...

Heaps heaper to rent. You can rent a two bedroom decent townhouse or detached unit in melb or QLd for 180$ . Do the math, after paying off all the bs stamp duty etc and even if you are a first home buyer with 7k ,. the repayments are more than renting if you were to buy at say average price of 160K. this is for a 10yr + basic abode whhich will probably need maiontenance. Add another 2k for council rates, then water rates, insurance etc etc, it just is not worth it. Oh and don't forget body corporate if you have it, there's another 1.5k gone.Already you are down 3k conservatievly per year and what you end up with a slice of land and some bricks and mortar. What a joke.

I don'tt care what the rampers say. real estate is over valued and crunch time will happen
. i bought my first property at 22, it was a run down dump but i paid it off in three years. that was when interest rates were approaching 15%

Now you can buy the same sort of dump and you might be lucky to pay it off in 15 years. That's with interest rates at 7%. Go figure., Good luck to all the spruikers. No sour grapes here I got out of property 3 years back.

http://www.homepriceguide.com.au/media_release\Home Price Guide Media Release 0506.pdf

An interesting link. Bottom line is that houses have been a dud investment even compared to cash over the past 12 months except in Perth and Darwin. Prices actually fell in Sydney and Hobart.

And observation that I've made about capital city house prices several times is that Hobart is following Sydney more closely than the other cities are. Once again this seems to be the case here.

Why is a good question but I expect that it has quite a bit to do with priced-out first home buyers from Sydney coming to Hobart in search of cheap housing. Once Sydney prices become more affordable they go back. Anecdotally it seems to be becoming rather common for them to leave before the house in Hobart is actually sold, presumably due to needing to move by a certain date for work etc. So I can't see why existing house prices in Hobart would do anything other than fall, especially given that it's cheaper to build than to buy in some suburbs now as building charges have come down.

Smurf,

To some extent I agree with you in that those under 25 may not have had the chance to purchase property, but I would have to say, what parent would be telling them to save money as oposed to invest it?

I only wish my parents had drilled into me more serverly the importance of investing as opsed to saving. When you account for tax and inflation (on historical terms) saving really only achieve money in the bank. Many under 25's could have bought into property (even as a joint venture) but have not simply becuase they are to busy living it up. I guess though if you can get your kids to at least save these days you are doing very well, most cant even keep out of debt.

In terms of the IR laws being taken advantage of by companies such as coles woolworths etc etc I can only speak for coles (my employer). There has been talk around the traps for quite a while now about this being the last EBA that will be negotiated (expires in two years I think). Who knows what it will mean, but one thing is for sure, Coles will do all they can to make it work for themselves (and the shareholders) and not the employees.
As for rewarding those that work the hardest, if only.