The Great Aussie Housing Bubble - Reality or Fantasy?

[TimeISmoney]

So what are the options?
I have a few but interested in others' ideas first.
You've really got to think well out of the square (Conventional thinking).

 

[Value Collector]

The grass is always greener on the other side of the fence.

An Aussie woman has shared her struggles after becoming a homeowner​

“Buying a house was a bad investment. My partner and I couldn’t afford a house close to the city so we bought way out in the suburbs,” she said.

“I’ve just had to start working a second job at a local pub a few nights a week due to rising interest rates and needing to afford mortgage payments.

“House maintenance is expensive — no more calling up your landlord, that’s your problem now.”

“Honestly owning a house has been the worst thing for my mental health,” one person shared.

“Prior to buying, I had money for anything, constantly travelled, shopping sprees, brand new car etc — was not under any financial pressure whatsoever since buying however sooo much of my money goes on the house.”

A third said: “I regret buying a home. I could have done so much with that money, everyone lies — a house is a liability.”

I think those people need to just push through the first 7 years, by then the savings start to mount up. They will be better off in the long term.

Especially the one talking about they used have money for anything they want, her house is now forcing her to save, it will be good for her.

 

[systematic]

I’m not a property person. But, I came to appreciate:

Most Australians (2 out of 3) will be using a part pension.

Owning a home has been, currently is, and probably will be(?) favourably treated in retirement, in Australia.

There’s even a window of asset level where you’re better off having more in your home, than invested elsewhere.

Lastly, and probably most importantly, when talking about ‘real life’ and not just numbers: it’s insurance against rental risk. That was the biggest one I came to appreciate.

I don’t think many 70,75,80, 85yo’s really want to deal with rental risk.
(a) rental inflation risk. This is the time to enjoy a little bit of ‘certainty’
(b) rental kick out risk. Nobody is kicking you out of your house (barring airports etc)
(c) rental-can’t-do-whatever-I-want risk. Maybe in your older age, you’d like the freedom to have your place the way you want it.

House prices are amazing (for want of a better word) in Australia. I’ve been awaiting a price to income compression back to ‘normalcy’ for over 2 decades, contrarian that I sometimes am. Just hasn’t happened. So, I couldn’t be a property investor.

But, I don’t look at principal dwelling as anything like an investment. It’s an expense. You either rent or buy. Or live off grid in the bush. For a lot of Aussies, it’s a great ‘investment’ when you’d like to leave a financial legacy to your kids (ie we’re spending everything but you guys get the house).

Personal finance is just that; more personal than anything else

 

[tech/a]

But, I don’t look at principal dwelling as anything like an investment. It’s an expense. You either rent or buy. Or live off grid in the bush. For a lot of Aussies, it’s a great ‘investment’ when you’d like to leave a financial legacy to your kids (ie we’re spending everything but you guys get the house).

Not necessarily
you can reverse mortgage so leaving very little if you spend up!

 

[Value Collector]

@systematic

Yes, your own home is an expense, but buying your own home is still an investment, it’s just the capital provides a return to you by offsetting costs you would normally have to fund another way.

For example if you didn’t buy a house, you would have to put that capital to work in another investment, pay tax on the earnings then use the remainder to pay rent.

 

[Knobby22]

Also it's tax free and you can downsize it when you are older and use the difference.

 

[macca]

Also it's tax free and you can downsize it when you are older and use the difference.

Plan A

 

[TimeISmoney]

Not necessarily
you can reverse mortgage so leaving very little if you spend up!

Then when you need money to cover ill health, the Govt oops sorry you spent all your money, ya kids sorry you spent all you're money can't help you.