We're better off ... according to Commsec

[LynnH]

An article in today's Courier Mail (p 7) argues that many Australians are better off than they were a few years ago. A study by Commsec economist, Craig James, has found that:

Compared with today .....

If you took out an average mortgage in July 2002
- your repayments would be up by $299.16 pm
- cost of living would be up by $287.20 pm
+ but your after-tax wage would have risen by $1014.00 pm
= which means you would be better off by $427.64 pm

If you took out an average mortgage in July 2005
- your repayments would be up by $304.39 pm
- cost of living would be up by $191.32 pm
+ but your after-tax wage would have risen by $546.91 pm
= which means you would be better off by $51.20 pm

The article goes on to say that only people who have taken out loans in the past 2 years would be struggling with higher interest rates and increased living costs. Those who took out loans more than 3 years ago would still be in front, despite the number of interest rate hikes.

Perhaps the media has (again) exaggerated the extent of the problem for the population as a whole???

Would be interested in others' views.

Cheers
LynnH

 

[boomtown]

Im very bullish. I think the whole country has been tarred with the same brush as Western Sydney.

 

[Player]

Im very bullish. I think the whole country has been tarred with the same brush as Western Sydney.

I'm with boomtown. I am also bullish and sharpening my horns to charge at all the deals out there.........and they do exist.

Our cost is the time investment and due diligence needed to optimise our purchases. In this doom and gloom market that most of the media are constantly portraying, there are good value purchases to be made.

Bad news and negativity are more emotive headlines and so sell more newspapers, magazines, etc. People also asssociate more pain to negative press than they do pleasure to favourable news stories.

What we focus on expands and ends up becoming self-fulfilling in our lives. Don't go out and buy just anything, but do your homework folks and be open to the opportunities all around.

 

[Ausprop]

broad statements such as 'it is a bad time to leverage into property' are crazy. you just need to be looking at the right deal in the right area

 

[weg]

I agree it's a good time to be investing.

Infact, even though I'm a new at property investing, I feel confident in doing so regardless of what is happening in the market, so long as I understand what it is, do my DD, and crunch my numbers right.

Agree with Commsec on all but cost of living. I believe heaps of people out there are spending $191 pm more, just on fuel in the last two years. Add groceries and other transport/fuel reliant products to that, and it amounts to a fair bit more. And it's going to get worse.

Having said that I also believe people won't go under because of these rises, unless there are job losses.

Spending on doodads has been excessive in the last few years, and what I think we'll see happen is simply a curbing of peoples excessive spending instead. Less dining out, takeaway meals, holidays and doodads for people with big morgages. Just like the old days .

 

[BayView]

+ but your after-tax wage would have risen by $1014.00 pm
Perhaps the media has (again) exaggerated the extent of the problem for the population as a whole???

Would be interested in others' views.

Cheers
LynnH

I don't reckon they have exaggerated it.

How does Commsec come up with the AVERAGE wage going up by $250 p/w - AFTER TAX, since 2002?

I reckon if you went down to Chadstone or The Glen or one of those malls on a sat morning and asked 100 people if their wages had increased that much per week since 2002, 99 of them would laugh in your face.

But on the investing point; it's still a good time to invest as there are going to be some cheaper deals coming up.

The media tend to focus on the average person's house values, and don't include the investor's mindset.

 

[wylie]

Timeisnow.... do you mind if we ask what your previous name was?

 

[allblack]

Oh well, we can't all be winners....

Why are you a winner?.

 

[boomtown]

Boomtown and MichaelParis are going to be in for some nasty surprises in the next few years.
The Boom is finished, gone, never to return for a very long time.....

Oh well, we can't all be winners....

Go for it Chicken Little - I like my vendors pre-conditioned.

*edit* I feel inspired - time for a new signature.

 

[Player]

Boomtown and MichaelParis are going to be in for some nasty surprises in the next few years.
The Boom is finished, gone, never to return for a very long time.....

Oh well, we can't all be winners....

I always do today what others don't,
to have tomorrow what others won't.

If as your name suggests, the time is now.......why wait? Procrastination is the thief of time.

Be careful you don't pay too heavy a price for neglect and regret.

 

[weg]

Interest rates going up and down is not new, and nor are changes in the economy. Any stagnation or correction in the housing market is normal and does not mean doom and gloom. I'm sure there a people that have been through recessions that had no idea .

Most investors are tuned into money matters and know how to ride out these fluctuations (assuming they are negatively affected in the first place!) and most FHB with new morgages are likely to live on baked beans and reduced price bread before defaulting.

Having lived with 17% interest rates and a new morgage, let me tell you, it is no biggy. Just budgeted very carefully .

As for those figures. Are they for a two working household or for a single person, or just averages? Makes for big fluctuations. I exceded the income level for 2005 to 2008 but not for the period 2002 onwards. However, as a combined income it's very different, as is running 2 cars and having children to feed, opposed to 1 morgage, a couple with no kids and one car.

 

[wylie]

I didn't read this, but heard it discussed on 612ABC this morning. Chap talking said the average wage was $59K gross (or $47K after tax).

 

[Lukey13]

Troll Alert!!

Boomtown and MichaelParis are going to be in for some nasty surprises in the next few years.
The Boom is finished, gone, never to return for a very long time.....

Oh well, we can't all be winners....

OH NO, "timeisnow", you're absolutely right... we are all in for "nasty surprises" and we're all going to lose unlike you and your friends who are "winners". Yes, of course it's going to be pain, misery and suffering... All the doom and gloom we can imagine...

I'm so glad that you (being a "winner", of course) have the time to spend talking to we "losers". So generous.... (again...)

 

[units4me]

I think that some of the increased (after tax) income comes from the reducing income tax rates over the last decade or so.

 

[BayView]

Boomtown and MichaelParis are going to be in for some nasty surprises in the next few years.
The Boom is finished, gone, never to return for a very long time.....

Oh well, we can't all be winners....

Good that you are a winner in that case.

How about telling the forumites how you've done it, when you started etc.

Spread some education so we can all learn from your winning ways and we can follow.

I don't have problem with you guys taking a contrary stance, but back it up with runs on the board and be a benefit to the forum, rather than just repeating how we are all losers, or about to become a loser.

 

[Aaron Sice]

while i think commsec have their finger on the pulse moreso than the IMF or RBA, all i have to say to that is....

pfff.

 

[grossreal]

hi all
I like time is now.
not sure how he or she is a winner but thats not the point.
I need this type of investor.
as I see it as a barometer of other in the same boat and as long as I have these types I can use there information to
A drive down price.
B get better deals
I can even quote as per time is now on somersoft dated a very learned investor says that it time to pack up and go.
so sell to me for this as I am all heart.
so I really need people like this.
it helps me.
a word doc with all these quote with links helps heaps you will not believe what can be done with a computer with lokk what they are saying.
the end is just around the corner.
seiza has closed and it will be westpac anz and cba next.
you want 1 mil sell now for 500k if you don't believe me heres a couple of investors that would jump on the first plane if I supplied the air ticket.
goes down great.
so for me.
Timeisnow has only posted 5 to date but will follow his post with glee.
As I not sure others will use his information to great effect and in advance thanks

 

[BayView]

Can someone translate GR's post for us?

 

[boomtown]

Translation:

Use the bears to scare the vendors into lower prices. And hes 100% on the money.

 

[Player]

Can someone translate GR's post for us?

I got it until half-way and then I lost it.

I think grossreal means that people like timeisnow are useful to further spread the word of doom and gloom & giving us a guage of the market sentiment and as boomtown mentioned earlier "pre-condition" our vendors to help us justify our low ball offers over the next 6-12 months or so.

Let the games begin then.......I'll be waiting (with other somersofters no doubt) in foxy loxys foxes den to gobble up the deals that present.

Maybe grossreal is right.....keep the negativity coming......we need chicken littles; don't forget to wear a bike helmet. The pointy ends of the acorns can smart a bit if they hit you on the head.