Oh dear... socialists think that can manipulate the market

[lisa jones]

But someone on even $150K per annum would find it hard to pay such a mortgage unless he is renting the place out.

Hmm .. not really. It largely depends on the size of your deposit and how much your wife earns as well.

What COULD possibly make this scenario tricky is if/when baby no 1 comes along. Babies tend to inject a lot of uncertainty into the equation of life.

[lisa jones]

As a matter of fact .. sudden illness, a sudden loss of job etc can also inject further uncertainty into this scenario.

But just like anything in life you HAVE TO PREPARE ANDTHINK AHEAD by factoring in these types of contingencies. How?? A number of ways .. insurance policies .. for starters to cover you and your wife for loss of income situations. Also by buying in the right position/area. The worst case scenario is that you will have to sell before you want to.

Of course you'll still make SOME money (although probably not as much as you could have .. had you stuck it out).

[Robina]

These days do you even need a deposit? (You should have a hefty deposit, I am asking about bank requirements.)

[lisa jones]

These days do you even need a deposit? (You should have a hefty deposit, I am asking about bank requirements.)

Of course you need a deposit. You need at least 20%.

I personally recommend 30% <-- if you intend living in the home.

[lisa jones]

But someone on even $150K per annum would find it hard to pay such a mortgage unless he is renting the place out.

Hmm .. not really. It largely depends on the size of your deposit and how much your wife earns as well.

What COULD possibly make this scenario tricky is if/when baby no 1 comes along. Babies tend to inject a lot of uncertainty into the equation of life.

I just remembered that a few of our friends ( married couples ) .. did rent their new home out for a few years ( effectively negatively gearing their home ) .. so that kinda helped because they earned a bit of rental income which they threw back into their million dollar mortgage AND they were able to fix the place up and obtain some tax deductions on those repairs as well as other expense items like council rates etc. Mind you they were hit with a huge NSW land tax bill each yr so that made them think twice about continuing with this idea. Also .. if they ever sold .. they would still be up for CGT .. so again .. that made them think twice about continuing with the idea. A lot of people don't realise that negative gearing isn't really a money spinner at all until they actually give it a go and see it for themselves.

These couples moved in with their in-laws during this time <-- which was ok .. because they worked long hours and were hardly at home so they didnt have to put up with the oldies.

They subsequently moved into their home and had a child.

[Leftwinger]

you're looking at and relying on misleading figures there.

The data merely tells us what it tells us Lisa - that around half of the houses in the 4.5 million person metropolis called Sydney are valued at less than $600 000. Which is still very expensive for the person of average means.

we HAVE to exclude the "bogan" regions from the equation BEFORE we begin any worthwhile analysis.

You cannot exclude millions of people from the analysis simply because some of them are decked out in flanelette and ugg boots. If you do, then you are referring only to what average property in the upper half costs and you and I are therefore not even talking about the same thing. When I say "Sydney", I mean the whole thing, not selected, better off areas.

Buying real estate to live in or rent out .. is and will always be an impt business venture

Well I would agree that buying to rent out would be considered a business venture. I would not consider simply seeking ownership of the roof over my family's head as such but this would be a whole other topic in itself.

Oh and million dollar mortgages are nothing new here in Sydney right now. Most of my friends and rels (including myself) have one.

Yes, you've said this before. However, you've also said that your friends all have university qualifications (from the same univesity that prime ministers send their kids to?) and are mainly employed in building and teaching (I'm thinking more along the lines of engineer and university lecturer rather than brickie and classroom teacher at a public school?), law and medicine. Exactly what portion of households do you think might have one of this high-earning professions as a breadwinner? Of course lawyers and doctors and engineers have much bigger mortgages than most - they have much bigger salaries than most. As a percentage of income earners, they constitute a minority.

I think JM is right regarding affordability. First, $150 000 is quite a lot more than your average household with both partners working brings in. Second, does this person actually have all that money available to spend? We almost universally refer to taxable income as though it were what we actually see in our hand. It is not. Looking our income on our payslips, at first glance my wife and I could fairly easily afford a $500 000 mortgage. But immediately, something doesn’t seem right. We just don’t have that much money per month because the tax man takes a chunk of that headline figure, leaving us with significantly less. A person with a real, after tax disposable income of $150 000 would be earning a headline amount a lot greater than that.

Of course you need a deposit. You need at least 20%.

I personally recommend 30% <-- if you intend living in the home.

I couldn't agree more with your reccomendation. However, you most certainly do not need a 20% deposit to get a mortgae loan (though the recent NCCP may have altered this somewhat). Prices are now so high that the average income earning couple would struggle to be able to stump up such a deposit. What are the chances of an average earning couple with a real, disposable combined income of $90 000 being able to save up a $100 000 deposit?

[lisa jones]

I don't know where to begin with all this Mr Leftwinger.

I guess I should start by saying thank you for not being an abusive little s.hit .. coz that's all this board has been entertaining since last night's raid by 2 insecure/insane right-wing ding bats from hell.

Secondly .. I should probably apologize for their behaviour and request that you not smear me with their taint. I am a moderate right-winger who appreciates and embraces the opportunity to engage in respectful political debate/discussion with those who represent an opposing view.

Thirdly .. thank you for addressing my posts in a methodical manner because it's injected a sense of structure into this discussion.

Fourthly .. this notion of "affordability" keeps coming up. I think we ought to explore this further because I am of the opinion that we're seeing the same word but understanding a completely different meaning.

[Leftwinger]

I guess I should start by saying thank you for not being an abusive little s.hit

You're welcome

I should probably apologize for their behaviour and request that you not smear me with their taint.

There's no need to apologise for a couple of arseclowns and I would never tar you with the same brush.

Yes it would be good to explore the notion of affordability further since I feel it's the key to whole situation beginning to unfold across the country. But first - if I may - could I ask your advice on something?

Suppose I were looking at buying a house. This would not be an investment property as such so it's future market value would be fairly inconsequential to me. It would be a holiday home and perhaps eventually a place to retire to. Prices were falling sharply in the area due to various reasons, namely overinvestment foremost. Since I wouldn't be intending to sell until (God forbid) my body gave out and I was put in a nursing home, I would want to make sure that the local market had bottomed before I thought about buying. As someone with experience in property, what signs would you look for tell you that the market had probably bottomed, prices probably weren't going any lower and that it might now be a good time to buy?

[Monkey Magic]

I don't know where to begin with all this Mr Leftwinger.

I guess I should start by saying thank you for not being an abusive little s.hit .. coz that's all this board has been entertaining since last night's raid by 2 insecure/insane right-wing ding bats from hell.

Secondly .. I should probably apologize for their behaviour and request that you not smear me with their taint. I am a moderate right-winger who appreciates and embraces the opportunity to engage in respectful political debate/discussion with those who represent an opposing view.

I've just checked... there was no abuse in this thread until you came along and posted the above. Therefore... there was no need for you to apologise for any kind of behaviour in this thread until now.

Secondly... you are the one who dared to abuse the real person in a private message, not I. I would never dare do that! And notice that no one who has had the rare experience of a PM from me challenges that.

Such is the difference between decent and despicable behaviour. Heck... you are so despicable that you don't even apologise for your privately conducted abusiveness.

And then you dare to drag it into this thread... lowering the tone... forcing a response and involvement from a forum member who has nothing what so ever to do with our dispute.

[lisa jones]

I guess I should start by saying thank you for not being an abusive little s.hit

You're welcome

I should probably apologize for their behaviour and request that you not smear me with their taint.

There's no need to apologise for a couple of arseclowns and I would never tar you with the same brush.

Thank you Mr Leftwinger.