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The advices listed below are from real Sydney home buyers. Read and
Learn before you decide to buy a house in Sydney.
Remember that a loan today is a very different beast from the loan
your dad signed, or a loan of 10 or even 5 years ago. Certainly a paid
off house is a fine financial goal, but at 8x wages and growing, and
average homes no longer affordable on average wages, a loan today
means a typical family will live in mortgage stress with little or no
savings buffer for 10-15 years. Don't forget that overleveraged
mortgage holders have less ability to negotiate with a bank. This also
assumes the economy does not change, interest rates do not go up,
and job security stays where it is. Australia has the most overpriced
housing in the world. Renting provides a means to live and accumulate
cash, which can be used in any number of ways, good times and bad.
You might think that the past few years market performance indicates
future performance. If that pattern is to continue a $500k house in 03
will be worth 3 million in 2015. A standard 8% 25-year 3 million dollar
mortgage will cost $23,154 per month. Total interest payable
3,946,345.97.
Buying property is paying off somebody else's dream while believing
you have achieved your own. Australia has the highest-priced housing
in the Developed World. Did the wealthy make their fortunes by
buying ANYTHING at the top of the market? Australian property is
currently a fool game. The smart money left a while ago, the followers
are on their way out and the sheep, as always, console themselves
on the way to the slaughter. Tips to get in to the property market at
the all time high of the property market in the regional market that is
higher than any other market in the world.
I remember hearing that a "crash was coming" within a year back in
2003, and what happened? House prices continued going up and are
now in some cases double from even a couple of years ago. Yes, if a
"crash" happens it will suck having negative equity, but favour will
always fortune those who own their own house. Doors open up which
are just not possible when renting. eg with sickness or loss of job let
see how understanding a landlord would be not getting income? A
bank you can always negotiate the terms as ultimately they just want
their money back, and they'd rather get it from you than through a
foreclosure sale as it's far easier. The other fact is that you will always
need a place over your head. Once the loan is finished that's it. Rent
on the other hand never ends. And remember you will always need a
place to live.
The whole mindset of the advice given in this article is upside down, it
assumes that a lifetime of debt is a good thing, and that property is
an asset. Home ownership is highly over rated in Australia, and prices
spiral as a result. Renting can be cheaper in the long run, especially if
you work from home.
All things financial eventually revert to the mean. Arguments along the
lines it is different here or it is different this time or new era have
been proven false time and again in every type and location of Market.
The increased levels of required personal debt to maintain the current
rates of real estate growth are not possible, at any interest rate. Do
not forget that interest rates that...wait for it...reverting to the mean.
Put another way; if you have a child, what proportion of wage-to-debt
do you believe they will need to pay for a simple 3 bedroom house
within an hours drive to work?
Return to the Buying a Sydney property from the practical advice on
buying a Sydney property.
Learn before you decide to buy a house in Sydney.
Remember that a loan today is a very different beast from the loan
your dad signed, or a loan of 10 or even 5 years ago. Certainly a paid
off house is a fine financial goal, but at 8x wages and growing, and
average homes no longer affordable on average wages, a loan today
means a typical family will live in mortgage stress with little or no
savings buffer for 10-15 years. Don't forget that overleveraged
mortgage holders have less ability to negotiate with a bank. This also
assumes the economy does not change, interest rates do not go up,
and job security stays where it is. Australia has the most overpriced
housing in the world. Renting provides a means to live and accumulate
cash, which can be used in any number of ways, good times and bad.
You might think that the past few years market performance indicates
future performance. If that pattern is to continue a $500k house in 03
will be worth 3 million in 2015. A standard 8% 25-year 3 million dollar
mortgage will cost $23,154 per month. Total interest payable
3,946,345.97.
Buying property is paying off somebody else's dream while believing
you have achieved your own. Australia has the highest-priced housing
in the Developed World. Did the wealthy make their fortunes by
buying ANYTHING at the top of the market? Australian property is
currently a fool game. The smart money left a while ago, the followers
are on their way out and the sheep, as always, console themselves
on the way to the slaughter. Tips to get in to the property market at
the all time high of the property market in the regional market that is
higher than any other market in the world.
I remember hearing that a "crash was coming" within a year back in
2003, and what happened? House prices continued going up and are
now in some cases double from even a couple of years ago. Yes, if a
"crash" happens it will suck having negative equity, but favour will
always fortune those who own their own house. Doors open up which
are just not possible when renting. eg with sickness or loss of job let
see how understanding a landlord would be not getting income? A
bank you can always negotiate the terms as ultimately they just want
their money back, and they'd rather get it from you than through a
foreclosure sale as it's far easier. The other fact is that you will always
need a place over your head. Once the loan is finished that's it. Rent
on the other hand never ends. And remember you will always need a
place to live.
The whole mindset of the advice given in this article is upside down, it
assumes that a lifetime of debt is a good thing, and that property is
an asset. Home ownership is highly over rated in Australia, and prices
spiral as a result. Renting can be cheaper in the long run, especially if
you work from home.
All things financial eventually revert to the mean. Arguments along the
lines it is different here or it is different this time or new era have
been proven false time and again in every type and location of Market.
The increased levels of required personal debt to maintain the current
rates of real estate growth are not possible, at any interest rate. Do
not forget that interest rates that...wait for it...reverting to the mean.
Put another way; if you have a child, what proportion of wage-to-debt
do you believe they will need to pay for a simple 3 bedroom house
within an hours drive to work?
Return to the Buying a Sydney property from the practical advice on
buying a Sydney property.
| Need a practical advice on buying a Sydney property? |