The next 10 years: Prediction of the market

Hmm....lets see...

I appreciate the ideas. In regards to your calculations, it's best to account for tax as well. In regards to your suggestions, the first one is too far out and sunshine is literally one of the worst suburbs I could think of to live in. This is for a PPOR not an IP. I plan on being there for more than five years and I have to want to live there. While I won't live in the bottom of the barrel, I don't consider my criteria too picky (within 11km of cbd, 2br, has balcony, has car spot, easy train acccess etc.). For me its a constant mental battle between getting in now with something that I simply don't want to live in, versus waiting, saving and hoping I'm not outpaced by the market.
 
I'm gen-Y too saved this in 7 years on 30k - 40k income. with only 3 or so years @ 7% intrest

That's impressive, well done. Is that while renting?

I like to think I'm in the middle ground of frugality (i.e. saving 30% of my net) and enjoying myself (gym membership, good diet etc.). Going to go out on a limb and say I'm well and truly in the top quartile income saver category in my generation.
 
I appreciate the ideas. In regards to your calculations, it's best to account for tax as well. In regards to your suggestions, the first one is too far out and sunshine is literally one of the worst suburbs I could think of to live in. This is for a PPOR not an IP. I plan on being there for more than five years and I have to want to live there. While I won't live in the bottom of the barrel, I don't consider my criteria too picky (within 11km of cbd, 2br, has balcony, has car spot, easy train acccess etc.). For me its a constant mental battle between getting in now with something that I simply don't want to live in, versus waiting, saving and hoping I'm not outpaced by the market.

And there's the rub.

While not specifically picking on you, you have just put into writing, what a lot of first home buyers want & the reason they don't actually buy.

Rewind the clock backwards to when I was young. I would have LOVED to buy in a better place, closer to where I WANTED to be, and a home that was simply nice, not luxurious. BUT, I had to face up to reality. If I wanted to own a home, it would be old, not at all nice, and in a neighbourhood that I wasn't that fond of. In fact a real renovators delight, that in all honesty, these days, I'd demolish.

But, it was mine. The stepping stone to the future. An end of paying someone else for my accommodation, with the knowledge that I could upgrade in the future.

Sometimes you just have to be realistic, or compromise, in order to get what you want, or where you want to go. Within 11km of the CBD, for a young person is a LOT of money, especially if your income isn't that large (OK, I have no idea what your earning capacity is). Think about how this could compromise your wealth going forward. You could buy now, have it mostly paid off within a short period of time, and have oodles of equity going forward for your future.

There are a heap of mostly younger people both on the forum & outside of it, that constantly whinge and complain about the baby boomers & their supposed wealth. OK, granted a lot on here do have wealth, but we are not typical of the community at large, being that this is an investment forum. Anyway, back to the point I was trying to make.

If you are not prepared to do what we did, in order to get ahead, you may not ever get what we have.

We 'oldies' lived through 17.5% interest rates & all kinds of other nasties that hopefully you guys won't, but of course, there's no guarantees in life. We bought crap properties & second hand furniture. Hung sheets as curtains, etc. We did all this because the cost of living was high, wages were low, and interest rates higher. But we didn't let that get in the way of us buying our first homes.

Anyway, this is not a personal dig at you. You have done well with your savings, if my original estimation is anywhere near the mark, this is just my observation of many who want to buy a first home, then complain that they can't, because their expectations are too high. ANYONE who is employed in a full time job in Australia CAN buy a home. There's plenty of affordable properties out there, but they aren't necessarily the homes that the first home owners want, or they aren't prepared to live within their means to save the deposit.
 
^^

I personally dont think ive whinged about baby boomers, or gen x or gen y ever before (im 38), but I can start now :)

I do get annoyed when baby boomers who bought a single IP in a crappy area ages ago because thats all they could afford, and now its worth millions, think they are property experts

and

I do get annoyed at Gen Ys or lets say youngsters, who say they older gens had it easier because they cant afford to buy a 3bdr home in a trendy suburb for less then $600k in Melb for example, if the median price in melb was $550k, and a FHB is expects to buy something for $600k, who the hell is going to buy below $550k!!!!
 
I do get annoyed at Gen Ys or lets say youngsters, who say they older gens had it easier because they cant afford to buy a 3bdr home in a trendy suburb for less then $600k in Melb for example, if the median price in melb was $550k, and a FHB is expects to buy something for $600k, who the hell is going to buy below $550k!!!!

This gets my goat too but I think even 30 years ago there were whingers like that. Maybe more now since every Gen Y is a university graduate who thinks that they are so clever yet get paid $50k in their first job.
 
I do get annoyed when baby boomers who bought a single IP in a crappy area ages ago because thats all they could afford, and now its worth millions, think they are property experts

Haha, yep!

I do get annoyed at Gen Ys or lets say youngsters, who say they older gens had it easier because they cant afford to buy a 3bdr home in a trendy suburb for less then $600k in Melb for example, if the median price in melb was $550k, and a FHB is expects to buy something for $600k, who the hell is going to buy below $550k!!!!

This too!
 
This gets my goat too but I think even 30 years ago there were whingers like that. Maybe more now since every Gen Y is a university graduate who thinks that they are so clever yet get paid $50k in their first job.

Yes, I think there's a lot more now & I agree, too many uni grads, all expecting to be able to afford to buy something trendy.
 
This gets my goat too but I think even 30 years ago there were whingers like that. Maybe more now since every Gen Y is a university graduate who thinks that they are so clever yet get paid $50k in their first job.

Yes, I think there's a lot more now & I agree, too many uni grads, all expecting to be able to afford to buy something trendy.

Yes, not as much now but before the gfc when all was rosy


So many youngsters were complaining that they weren't getting pay rises within 6 months , carparks, and weren't happy that they weren't able to boss around people 40years+, like their parents and uni had told them they would be able to once they got out of uni

Lucky this mentality seems to have become far mire subdued since the gfc
 
ANYONE who is employed in a full time job in Australia CAN buy a home. There's plenty of affordable properties out there, but they aren't necessarily the homes that the first home owners want, or they aren't prepared to live within their means to save the deposit.

Anyone can buy a house its just that most people in this upcoming generation will never own them. theyll be working for the bank there whole life.
 
Anyone can buy a house its just that most people in this upcoming generation will never own them. theyll be working for the bank there whole life.

If those who buy decide to pay P&I, they will own it in at least 30 years. Actually inflation will make it quite easy.

In suburbs where houses which can be rented for $300pw five years ago get $400pw now. It would have costed 400pw to buy them 5 years ago. Those who bought 5 years ago are paying equivalent to market rent now. In another 5 years with inflation wages, house prices and rents will increase. They will be able pay more than their required weekly payments. 15-20 years is enough to pay off. Anyone can own a house if there is determination.
 
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Those who bought 5 years ago are paying equivalent to market rent now. In another 5 years with inflation wages, house prices and rents will increase. They will be able pay more than their required weekly payments. 15-20 years is enough to pay off. Anyone can own a house if there is determination.

Exactly, its how the economy works. If you want that dream house then you gotta work your way up.
 
I appreciate the ideas. In regards to your calculations, it's best to account for tax as well. In regards to your suggestions, the first one is too far out and sunshine is literally one of the worst suburbs I could think of to live in. This is for a PPOR not an IP. I plan on being there for more than five years and I have to want to live there. While I won't live in the bottom of the barrel, I don't consider my criteria too picky (within 11km of cbd, 2br, has balcony, has car spot, easy train acccess etc.). For me its a constant mental battle between getting in now with something that I simply don't want to live in, versus waiting, saving and hoping I'm not outpaced by the market.

You think I like living in Forrestfield and spending 4hrs a day on public transport? Man up and get yourself a place, wait for some equity and then buy more places. Soon enough you can upgrade the PPOR you something you prefer.
 
For me its a constant mental battle between getting in now with something that I simply don't want to live in, versus waiting, saving and hoping I'm not outpaced by the market.

You most likely will be outpaced by the market.

Best to suck it up, get on the ladder and start (climbing) now!

Then I'm sure you will get what you want, eventually.

It's what we did and we just sold off the "old dog" late last year for a great price.
That place was the cornerstone in our early investing years, we did everything possible to grab it and build equity and then borrow to the hilt for more IP's.

Now we have options and have decided to use PPOR as cornerstone.

But without buying that "dog" I seriously think we would still be renting and whingeing about property being too expensive.
 
Anyone can buy a house its just that most people in this upcoming generation will never own them. theyll be working for the bank there whole life.

Bollocks!

There are homes available for around $300k or less in the outskirts of every major city in Australia. Yes, you might have to commute to live there. No, they might not be new, they might not be big & they most certainly won't be the dream home. What they will be is an average home in an average condition, suitable for an average person/family.

The average person, with no intentions of owning IP's could easily pay this off using P&I, just like every generation had done. Of course, it goes without saying that things might be tough, again like the generations before. No new cars, overseas holidays, movies, dinners, foxtell etc. Over time, it gets easier as your income increases & the mortgage reduces.

The only reason they would need to be paying for it indefinitely is if they draw equity to fund lifestyle choices, but hey, that isn't just the upcoming generations that do that. There's a heap of older people driving new cars, going on expensive holidays etc, all funded by the equity in their home.

The problem is that many people wanting to buy a home expect it to be the dream home, in the dream location AND then still expect to have the new cars, overseas holidays & throw money around, all this while on an average income.

Well.....news flash.....if you have an average income, then you can't do all that. It's really as simple as that.
 
You think I like living in Forrestfield and spending 4hrs a day on public transport? Man up and get yourself a place, wait for some equity and then buy more places. Soon enough you can upgrade the PPOR you something you prefer.

Or rent where you want to live and buy an IP :)
 
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