And another thing that grinds my gears - in the news they're spouting the median house price as $550,000 with a median wage of $63,000. Now that's a median HOUSEHOLD wage - not an INDIVIDUAL wage. What you need to ask yourself, is what idiot with a household income of $63,000 is buying a median house of $550,000. Fools. You can find plenty of houses for $300-400K within 25km of the CBD, in leafy suburbs close to train stations. Hell, if you look hard enough you can sometimes snap one up within 10km.
Just for the record:
1. Within 25km of the city, at least for Melbourne, is pretty much the entire city of Melbourne! Even in Sydney 25km is a broad brush to be painting the picture of "close to the city".
2. I just checked around where I live (about as far from the city as I'd be willing to live) as well as some cheaper suburbs for dwellings under $400k, turns out to be a very small number of overpriced apartments and that's it. Not a single house, certainly nothing near a station.
Of course if you're spending 80% of your household wage to service your debt you're just asking for trouble. But this doesn't make housing 'unaffordable' - it just means the massive mansion you want in the inner city suburb might be *shock horror* out of reach of low income households :O Who'd have thought??? THE BLASPHEMY! How DARE i not be able to afford a big house in an affluent suburb.
Mate, you better calm down or you'll give yourself a hernia. Personally, I'm not complaining about the proportion of my household income which goes to mortgage. I am much more interested in the metric "rate of change of % of household income spent on mortgage", and what it means for the economy at large.
Let me re-iterate, not bemoaning houses being overpriced. Rather observing that these situations are structurally unsustainable and generally lead to a decreased standard of living for all.
This is outrageous. It's all the governments fault and those greedy investors and those First Home Buyers, and baby boomers and of course that damn old lady at the end of the street with all the cats.
Yes. Government subsidies of the housing market to those who really don't need it are a big gripe for me. No denying it. I would prefer the Government assist those who need it and otherwise keep their nose out.
People use these ridiculous claims about affordability, relatively constant growth in prices (which is of course alllllll because of speculative investment
) and an incredibly poor understanding of negative gearing and cashflow to spout nonsense to all those that will listen because in reality
I cut your shouting out of the quote because it was frankly, obnoxious.
Funny you say those who understand cashflow and negative gearing would of course just jump right into the perfect property market we are in right now. Because I've been following the adventures of one didactic guy who has spent an extremely large amount of his personal time coming up to speed with the property market and all its machinations so he could buy a property for income generation during his fast approaching retirement.
Guess what? He's abstaining from the market and staying in cash. He sees much better opportunities taking properties from weak hands in a year or two.
Much easier to blow all your money now, whinge that everything is too expensive and convince yourself you'll jump in once houses have dropped 40%
Taking out a $400,000 30 year loan with 80% leverage doesn't count as blowing your money...but paying a fixed monthly rent less than 20% of your net income somehow is gonna blow all your money
right now because you didn't jump into the property pool?
Nonsensical. The reality is much simpler: if the property bears are wrong, they can simply hop into the apparently healthy property market at any time.
What I've convinced myself is that if I saw a house I actually wanted as a PPOR, priced within 3-5x my gross income I would buy it. So far very very happy to continue renting on all fronts.