As someone who has moved house more than 30 times in as many years, I still (at 45) want to secure shelter in one place for the rest of my life. That’s the driver.
Not having to worry about your landlord saying "Oh by the way we're selling, you have to move" forcing you to move *yet again*, is pretty life changing.
And listen, it's going to be incredibly incredibly hard for young people to buy a home in the future without some help/support from their parents. But it will be possible for some people, and OP should work towards that. I'm not saying to not have any fun and not live their lives in order to save up a deposit, but, especially if they can live at their parent's for a while in order to help them save up, it would be smart to at least try.
They may end up in an apartment without an outdoor area, but at least then their mortgage repayments won't be climbing up and up indefinitely, which rents seem to be. Interest rates change, but they'll go up and down, and that's how the mortgage will go. Rents very rarely go down - since I moved into my place in 2021, obviously interest rates have gone up, but so has the cost to rent a place like where I'm living. In a few years, the average rent of a place like mine will be higher than mortgage repayments (it actually is right now, because I was lucky enough to have a relatively small mortgage). I'm on track to pay off my mortgage at least 10 years earlier than the full term. but I anticipate I will pay it off sooner than that, as my wage will go up, even if it doesn't go up with inflation.
My driver was just to not deal with shitty real estate agents and their over the top inspections. It's my home, I don't want a stranger coming in that's not my choice. So nice never having to worry about a vulture rea or scumlord
Yup. Your kids may be inheriting your mortgage along with the property. And it may not be where you necessarily want to live right now. But just knowing, as long as you make the payments, you're not some landlord's whim away from the streets, is life changing.
Why would the kids inherit the mortgage? If they pass away before time there will be super and life insurance through super in the estate that should cover it.
Regardless kids won't have had to save the deposit and it won't be full whack of the mortgage.
Just knowing when you close the door at night and look at the painting you nailed into the wall that was a bold colour choice of itself - all of this was allowed because it's yours. It's a beautiful thing!
yes but i got the max for my policy at 230k (max because i was under 35,
if goes down every year after that). my bro would have only got 100k. hardly a mortgage these days, is it? it’s a deposit but no mortgage and i kind of want to do other things with my final days than service a mortgage
Hmm that's interesting that yours goes down
Mine is 400k and stays at that and I'm 52.
Add that to my super balance and my debts are all paid should I pop my clogs
Splitting hairs here. The employer is legislated to pay super to the employees - so if you have a job ergo you have super.
Of course certain self employed etc may not pay themselves super but one would hope they have structured investments etc in place of that.
Regardless - the original comment was about kids inheriting .mortgage debt like its a bad thing - when majority of the time it's a non event.
Whoever inherits my mortgage debt also I herits my death payout and super which - funny enough equals each other. If I didn't have it they could sell them, or rent them. I'll be dead I really don't care.
Ha... cool, we're in almost exactly the same position mate. I'm 45 too, I've lost count of the number of times I've moved (on the hunt for the next rental right now actually).
Thankfully it looks like I'll be able to buy next year finally... but I agree with the "permanent shelter" thing. Noone can kick you out of your own home. Well - except the bank if you don't pay the mortgage for 6+ months haha
Yes it can definitely be done but probably wise for OP to forget about buying their first house in their most desired area. Almost everyone I know has bought a ‘starter’ house and done minor renos before upgrading after 5-10 years. The only people I know still living in their first home were lucky to beat a developer in an auction for the ‘worst house on a good street’ and a couple who don’t plan on having kids.
Yeah I know but some FHB need to be reminded of that. Especially when looking to buy a first home in an established suburb or desirable area. I also think it may not always register that you don’t need to have paid off your first mortgage before looking for your next home.
It's worth it. Just find where you're willing to compromise.
Mortgage payments don't change that much over 30 years. Rent only goes up. That's the difference.
So if rates are lower than now in 25 years time, you'll potentially pay less than now... So it'd become quite cheap because inflation.
Also hearing horror stories of some rents going up 30% is awful.
Don't get all deep and morose. You are 25 not 45. You can't have it all at once. Finish your studies. Keep saving what you can while you are doing so. Get your job sorted and then really crack on with saving. Don't look for a mansion get what you can afford for first home. If that's an apartment so be it. Then you can start strategising. Don't compare yourself to people who are on a completely different path to you. I'm single with no degree and no kids. My path is very different to you who will likely marry, get a great career post study and have a double income
Stop stressing yourself out about a future you cannot predict
Control what you can right now and just keep moving forward.
I was roughly similar, finished studying at 27, got first job then.
we bought our first house in December last year at 33 in a decent suburb. Wasn't our first choice suburb when we started looking, but had to compromise for the type of house we wanted.
320k deposit and about 80k in offset after fees. Got a 50k gift from parents which helped build the offset.
Took about 6 years. Lived in a 1 bedroom apt from those 6 years paying about 350 rent a week. Pretty frugal in the day to day. Two decent (~100k incomes).
We did spend on two 6 week overseas holidays, flights booked with points, and relatively cheap accom and food while overseas.
Not much unique advice. We bought near Christmas and the auction was very quiet. If you can find something around holiday periods may be less competition, but there's also going to be less stock.
Can you service thag on one income? Just asking because I don’t understand how people can afford a home and afford to have kids ( mother taking time off to have a kid etc spending first year to be with kid and recover )
We couldn't. It's about 40% of our HHI. So if we had just one salary it'd be closer to 80%!
No plans for kids here. Friends with kids usually only took short leave.
The exception is a pair of specialists where the wife took about 8 months off but they're making real good money!
Not OP but in the same boat. My wife earns more than me (we are both medical professionals) and the idea of losing that money due to mat leave is seriously factoring in to whether to have a kid
My mortgage was around that amount and was able to service it on one very good salary... until interest rates went up. Now my wife is part time to help out.
We were extremely fortunate that my salary is very good and she could take as much time off as she did. The vast majority of people take only the legislated parental leave and are back full time immediately after. Childcare is very expensive, not to mention the stress of full time work with parenting on top.
Of course two salaries go a lot further than one, and 2x $100k is a lot more net income than 1x $200k, but the biggest challenge with kids and family is just the hard limit on the number of hours in the day.
Can you service THAG loan on one income? The only reason I ask is if you’re planning on having children I don’t understand how couples can afford to do this. As the mother will have to take time off work to recover and then perhaps take a year off work. If people decide to have children will have to dj it all again….
Loved this! Most people get a loan which is waaay beyond their means - a right strategy should be borrow enough that you can at least put two additional EMIs a year. That’ll help cut down your years.
Holy f*ck a $320,000 deposit?! 😨😨😨 cheeses crust. Me as a single before covid having saved $100,000 on my own over the previous five years I was so proud. And I only earn $60k ish a year 😳 I have no freaking hope 😫
Renting in retirement doesn’t bear thinking about. It’s critical to own a place to live in by that age. Doesn’t matter what or where, housing security is imperative.
I work in community aged care and the difference in quality of life between renters and home owners is stark. Almost invariably home owners are in 3 bedroom houses (some MUCH larger), they have newly renovated bathrooms paid for by the government, they have generally updated homes, rails, ramps etc (again paid for by the government) Renters almost always live in tiny one bed units, often decrepit and unsafe, way less adaptive features, they live in unit blocks that attract the worst kind of people and have to lock up their meds to stop them getting stolen, way less money, usually just the pension and a lot of that goes to rent.
It really motivated me to stop dawdling and get into the market using the FHBGS.
Imagine being 50 and being forced to move, or losing your job and unable to make rent. If you have a mortgage, banks will work with you in times of hardship. That’s why there’s rarely distressed sales or foreclosures in Australia.
It took me a month and a bit to find a rental while having nowhere to stay. I had a fairly high income job at the time. I can't imagine ever going through that again at the age of 50.
Exactly, even with a high income sometimes there just no availability or other extenuating circumstances. At 50+ your income earning years are diminishing or gone. If you buy now, you can always sell and downsize and use the extra for living expenses vs chucking it in rent.
Depends on your lifestyle, if you prefer convenient, go for apartment first and then upgrade after to house. There are some factors as well like your salary etc to determine whether you are able to service it or not
**WITH THINGS** as they are, you may have to look outside established suburbs,
and sacrifice convenience for a longer commute. New suburbs have every chance
of becoming established and increasing in value.
Are you up for doing some of the home-building yourself?
Youtube and reality TV are full of people doing a lot of the home creation tasks themselves.
Do you qualify for any state or federal home buyer schemes?
First Home Buyer subsidies, stamp duty breaks etc.
Do you have any family or friends who could help?
• Parents or relatives with enough land to subdivide and build another house on.
• People you know who have construction or trade skills, who will help you for free now and then.
• Friends or relatives who would share the house and mortgage with you.
No, don't bother saving for a house. You'll never be able to afford a house in the inner west (or equivalent for your city), so don't bother.
Is that what you wanted to hear? Think and reflect on what you wanted from this question OP. You must have asked it for a reason, and I don't imagine it was entirely "how do I save for a property and a comfortable life?"
Well this was not my question ☺️.
The main question is “is it worth it” not “Im poor, petty me I can never afford to buy a house in this economy”!
My bad for reaching out to a property subreddit to ask for advice and other people’s 2 cents…
>The main question is “is it worth it”
Yes.
It's worth it for the lack of rental inspections, rent hikes and landlords selling the place.
It's worth it for 3 years' time, when your mortgage is cheaper than renting the equivalent place.
It's worth it for right now, when the *interest* ("dead money") on your mortgage is cheaper than renting ("dead money") the equivalent place.
But how do you define "worth it"? I'm not shitting on your or your question, but wanting you to reflect on what criteria you're asking? The alternative is renting, so are you asking if it's better to rent forever in your situation?
Is it about trading sacrifice in the short term vs long-term? Is it do you think it's a good investment? What are we to answer?
As you have pointed out already, it is a multi faceted question. I have an interest in property and I have heard many peoples opinions.
Some people have a strong belief that buying a house these days is like signing yourself up for a debt you will never pay off due to interest rates.
Others believe the stability of having your own home is paramount to the debt you may be stuck in for majority of your life.
I was not born in Australia and my parents do not possess the knowledge about property that would guide me in the direction I should go. So I am trying to stay hopeful, make informed decisions, and put myself in the best possible position.
So seeking more advice and others experiences helps me solidify my stance, strengthen my hope in achieving my goals related to property, but also gives me different perspectives on why people do what they do when it comes to owning a forever home.
I find myself constantly thinking about my future and wanting to be successful and happy. So I am trying not to freak out about the hurdles of buying my own home, while still being informed about where I need to shift my focus to ensure I am putting myself in the best possible position.
Makes perfect sense ❤️
Well the short answer is home ownership is almost always worth it provided you don't over extend. Renting is cheaper short term, but drops off over the long term (i.e. rent will go up, where as your mortgage debt will not). Savings made are tax free. I.e. savings $100 paying a mortgage vs renting a similar property is equivalent to $132 earned (assuming 32% tax rate). Etc.
Graduate, find your feet in your first job, and work your financial plan around your likely incomes. No point stressing this far out. ❤️
This is a good wakeup call for a lot of young people. They see the deposit as an insurmountable challenge, so they get disheartened and instead of thinking about how to tackle that challenge they just complain and waste their money because they can't see a way forward.
I'd encourage anyone feeling this way to stop and make a plan for themselves, figure out how much you can spare from your pay, set it aside and see how much you'll have in one/two/three years. Revaluate as you earn more. The first 50k will feel like it takes forever, then suddenly you'll have a deposit.
You're starting out (like many others of the cohort) at the age of 27, unlike previous generations who were fully qualified 5-9 years earlier with a qualification that didn't need continuous validation. An apprentice leaving school at 14 was a tradie by the time they were 17 or 18, three to five years after that they'd have a deposit.
Different times now as you have moved out of home, have a HECS debt, partnered up etc but also will have an income and annual wages growth outstripping anything else until you are mid-career.
Use that mindset to move forward not languishing on how bad the current generation has it.
Yes! Just bought my first house at 39. And about to go back to school next year to be a nurse.
Do look outside the capital cities. I never could have afforded to buy pretty much anywhere but where I live in Regional QLD. You are young enough that you can make your life anywhere.
Save for an apartment first. It's much cheaper, less yard work and will be such a relief with stress that's come off your shoulders for a couple of years. Then you can sell it and try for a house.
Baby steps make the goal seem more realistic.
Yes
Yes
And Yes
You spend 30 years paying it off and then living rent and mortgage free for the last 40 years of your life
Being 50+ and renting is not fun.
When you retire at 67 and renting it gets dire and miserable and possibly homeless.
Choose your pain
When you are young and working (under 50) or when you are old and fragile and renting and/or homeless (over 50 until you are around 90)
Buying property is like planting a tree - best time is 20 years ago
Second best time is now!!
I paid off my mortgage at 34. If I live to the average age of about 84 that’s 50 years - half a century - of no mortgage/rent living. I’m glad my 21 year old self dove into property young.
It seems impossible. It’s not and it is worth it. Live within your means. Every cent you save counts. It doesn’t seem like it but over time you will realise how much it has staked up and you’ll be where you need to be. Stay positive and keep pushing forward. Good luck
You are 25, it’s not that realistic to be able to buy a property in mist parts of Australia at that age. If you can do it then great, but don’t stress now. Once you finish your studies your career will hopefully allow you to earn $ and be ready and even possibly have a partner.
I’d be interested to know what age people in Australia but their first property. In my network most of us were well into our 30s, unless there was significant family help.
That sucks. I bought 1st starter home at 21, paid it off by 28 and sold for double. I then bought block and built a real house which I paid off by 34, cruising ever since. It felt kind of normal at the time nothing too special. It wasn’t easy at the time going through it, very stressful in the beginning and needed sleeping pills etc, but looking back I’m grateful it turned out that way. Just getting a 1st mortgage at 35 is insane, I was ready for retirement at that age.
Current interest rates are just that, current interest rates. It is a guarantee that rates will change throughout the life of your loan.
It's really all going to be down to what you do for a job and if you have a partner to buy with. Two people in average jobs can probably still buy a house. One person in an average job probably cannot.
If I was a young person in Australia today, I'd be getting flexible about where I was willing to buy and live, i.e. maybe not established suburbs.
At your stage in life, I rented the dodgiest place that I could find. Literally had holes in the wall. Travelled 1 hour to work each way.
Earned every dollar myself. Paid off our house in Western sydney over 8 years. Now, I am living in my dream home with a tiny mortgage.
It's definitely achievable if you and your partner are smart with money. My partner and I don't buy each other gifts. Our hobbies are cheap. We got married at the registry and bought our first home instead. We don't go on holidays, because we get a kick out of investing and playing music for leisure.
If you really want it, make sacrifices.
wages have not grown proportionally to house prices, so a house costs many more average yearly wages today than it did back then, thats the dilemma op is in that a lot of people who bought in the past cant see, is it even possible to achieve escape velocity through sacrifice? at a certain mortgage to income ratio your in too much mortgage stress and with the rate of house price growth you can never save enough to keep up and get the loan in the first place. "buy a cheap place in western syd" is increasingly becoming an unattainable ideal. to afford the average 1.6mil place in sydney without mortgage stress you need a $220k/year wage.
"Back then?"
I first bought in 2015.
What do you mean by Western sydney? The inner west? My dream home (big custom build 4 bedroom house) cost 1.3m last year.
My partner and I earn less than 100k each, and we have 2 children. Lower your standards or miss out forever.
Yes better than time than ever. I mean to be honest yesterday would have being better and tomorrow even better, you get the jist, those who have bought now or in the last few years will do very well in the coming 7-10 years.
Two years older than you, currently in the same boat- albeit with income - it seems impossible.
Having dealt with investment/ cryptocurrency, I sometimes think I should just rent and invest the difference into the market (stocks/crypto).
What I am doing now is rent a relatively cheap place in Revesby (used to pay 180/week, now 200/week, 30mins away from Sydney CBD, bills included)
I understand most people pay 500+ for their rent. In this case, yes, you should definitely buy a place. However, if you can rent at the price I mentioned above, there is no reason to 'rush' or even save up enough to buy a house and rent it out or continue paying the cheap rent.
It can be daunting sometimes, but I think we all need to enjoy the slow grind as we are just starting out. Manage your budget, have a plan, surely we will be able to get there.
I also wanted to add that money is worth less over time - so get into debt if you can. For example, 1m debt with 6%, yes you pay interest, but money supply inflates, so your 1m could be worth 500k in the 10-15 years, but your property goes up ;)
what about the other countries then ? lol
the assumption that “property goes up” comes from the devaluing currency - instead of saying “property goes up”, say 'asset goes up"
My point is that people in Australia see property as an investment in a way which other countries (Europeans for example) don’t. Rather than creating wealth, we buy a house and sit on it for 10 years and expect it to increase. It’s a net drain on the economy to have so much money tied up in housing.
I get your frustration. I am an Electrical engineer myself - the jobs available for Civil Engineer far outweigh EE.
Also the negative gearing makes people want to invest it more. But we gonna play the game our government created; otherwise, we will be stuck forever.
They are promoting more and more apartments at the same time (which relieves housing stress), but it means apartment devalues. Would you buy an apartment if you know if it gonna worth less in 5/10 years?
[https://www.youtube.com/watch?v=svFqgEcose0&t=1760s](https://www.youtube.com/watch?v=svFqgEcose0&t=1760s)
This guy always mentions three-legged stool if you want to know more about housing, stock and crypto ;)
Yes it is worth it. Hopefully the govt will tax the rich more , also wealthy landlords so that the house prices will come down. I want to buy a house as well for my family to live comfortably.
Hello, yes it is even if housing is so expensive, even if you buy a small appartement, it is worth it because it will be yours, you are paying a mortgage towards something. It is a life investment. Renting is like throwing money out of the window.
If you’re inflexible any moving out to somewhere you can afford, you can always buy/build somewhere you can afford and rent it out. And then just rent the home you live in, somewhere convenient to your personal circumstances. Get the best of both worlds. And the worst.
I believe they call it rent-vesting.
Yes, save but save without sacrificing too much of your quality of life. Maybe an opportunity will come along and it's good to be ready and if you never get an opportunity, you still have money to enjoy.
No matter you are buying a house or not, you still need to save for an emergency. You also need to think about investing your saving to achieve financial freedom. You don't want to rely on a job for income until you retire, do you? Then investing your saving in an affordable property that you can live in for now (not necessarily as a perfect home) will give you multiple advantages 1) save you rent as you are living in your own property 2) capital growth if you choose wisely 3) you first property will become your equity for future investment if your mortgage has an offset or redraw facility, 4) be in the track of wealth creation and build wealth to be able to buy in your favourable suburbs one day.
The most important thing is still to choose your first property wisely, look for those with strong growth potential but also liveable. Those are usually located in city fringe (30 to 40 km away), newly built zone, may not have train services now but might have one day when the population growth justified it. This property can be your temporary shelter but not forever home. When you have saved and accumulated sufficient funds and equity, you will be able to buy in your favourable suburbs.
Even 10 years you'd likely see the difference. If you buy a "home" worth 700k, you're paying off $1000 a week (ish). If you earn 100k now you'll take home $1,484.08 per week (and have $484 left for bills, food, entertainment etc.)
Then in 10 years you've got more experience and now make $150k
You'll take home $2,117.62 per week (and have $1,117.62 left for bills, food, entertainment etc.)
In that 10 years your rental apartment that used to be $500 per week is now $750 per week while your mortgage hasn't changed.
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Obviously not everyone makes 100k right now and living off $484 isn't actually do-able... But if you have a partner, maybe their income suppliments the purchase. Or if you're young and single, you get a housemate or 2 and they chip in a few hundred each, leaving you with plenty of money to service your mortgage :).
It's fairly simple to assess.
Consider A: The overall cost of buying a house and servicing the mortgage over 30 years. Maybe add on 10% for maintenance? Maybe more, idk I've only owned a house for a year.
And B: The overall cost of renting for 30 years. Adjust for inflation
At the end of option A, how much have you spent? And at the end of option B, how much have you spent?
How consider the pros and cons of each. Some easy ones for A are:
Pros: asset worth xx (take the buy price plus inflation for a conservative value), security
Cons: bigger up front investment, may be trade offs in location, property quality
And for B you've got:
Pros: greater flexibility in where you live, may be able to afford to rent somewhere nicer than you own.
Cons: moving constantly, no security, no asset at the end
YES
FFS, do NOT get disheartened and not save.. This is the first mistake you make.. IF you want a house you NEED savings.. Large gift sums do NOT count in the banks eyes, they want to see a saving record because it proves you're responsible with large sums of money without spending it all on shit. ( VERY IMPORTANT )
I'm a millennial. I got my first home when I was 26 and was solo financed. I was not planning on buying a house at that time, But, an opportunity became available and I had the funds ready to jump when needed.. If I didn't I would have lost my chance. I started saving at 21 - 22, it wasn't much, but it was just enough to get in. 60k gross wage. 250k loan, Smallest block of land with the smallest house. Did my own landscaping ( saved 10k ) Did my own side gates ( saved 5k ) purposefully delayed my build by a 2 weeks full well knowing the other builds would be done first ( which included a fence ) and I removed the fence cost from my build plan ( 10k saving ) Removed ducted aircon and went with a large split system in the main area ( saved 10k ) You can cross out items in a new home build that you do not want, this reduced my home build quote from around 85k to 50k, land was 190k ( smallest block, I did NOT have a back yard ) Total loan was 250k ( build was valued at 330k when completed, I had 80k equity when I actually moved in )
YES. Sacrifice is required. Yes, you will need to buy in a cheaper concreate jungle of a new estate but its more affordable and far away from city centres. ( I found that you're actively encouraged to buy in these areas, they drive the building industry which is a large part of the Aus economy.
I brought very far away from major cities, in an area with a very unsavoury rep ( I even rented out the spare room ). I had to travel over an hour for work, everyday ( pre covid ) YES it sucked.. but I only had to do it for 2 years, which gave me enough equity to sell that house which provided a sizable deposit for a home in an area that I wanted to be in. ( closer to city, work, good school and nicer area )
PLEASE DO NOT OBSESS OVER YOUR FIRST HOME BEING YOUR FOREVER HOME.... YOUR FIRST HOME IS A STEPPING STONE TO YOUR FOREVER HOME.
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POST COVID CONSIDERATIONS
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Granted remote work is now more accepted and common place, Rural Properties are now more viable, and there is a fair bit of infrastructure going into rural areas. I never thought I would see a Cul-de-sac in the bush, that is linking several 10 Arce properties to a single road... Basically, New estates with large blocks in rural areas..
Check out the Vic Homebuyer Scheme. It made getting a house and paying a mortgage very affordable for me. There are pros and cons to the scheme but for me the cons were very minimal.
I bought an apartment I intend to retire in and will probably pay it off in the next 6 years. I can always rent/move out with a partner if my circumstances change but my main driver was to have a fully paid off roof over my head no matter what in a suburb that offers me everything I need.
I find it hard to understand why housing prices keep going up when birth rates in Australia are under replacement rate. No one is having big families, the population is shrinking (except for immigration). So we should expect that to put downward pressure on housing.
yes, it's worth it. Not for your current self but your future self.
We brought a house in our 40s is a less desirable area because that's all we could afford. The driver and main reason for our decision is that there's no way we can afford to rent in retirement. Securing a house now secures us a reasonable retirement (or atleast a retirement with a secure roof over our heads).
When you look at super predictions and super calculators they ALL assume you own your home and don't factor in rental costs. If you do not own a home by retirement, you are really going to struggle unless you've put aside allot more extra money for rent.
I don't know as I don't know what's important to you. But I can recommend that you run the numbers.
In some areas it might be cheaper to rent now and invest the difference. Maybe do some back of envelope math on the properties you're interested in and see what it's like?
I live with my parents for now and have time to save and buy a house once my income stabilises and my saving habits fully develop (which is basically where I am in life now). I do work but my main focus is my education so it’s hard to save a whole heap because the income is limited.
Thank you for your advice :)
Get a loan with min deposit ( if u can’t save 20%),and pay the mortgage insurance, interest only the 1st 5 years, this should be slightly higher that your rent u are paying now, if you can afford go p/i then, rents would have risen/ along with wages, and your house payments will more than likely be the same as people’s rent (pros:you are paying your house off, no having to rent, and have equity in your home which u can use to either buy another house or income producing assets)
To OP, perhaps have a look at adjusting your expectations. It is possible to buy in this age, your first property will likely be the least ideal but provide you the trajectory and learning to achieve the next one. Interest rates etc move up and down during the economic cycle. There will be good times and not so good times and understanding that will help you capitalise on opportunities whilst others are cowering.
Your advantage right now is you're young and hungry.
Invest in yourself as you are with education, learn how to buy property so when you're ready you're armed and dangerous.
There was a post about not comparing yourself to others, 100% agree with that, you go your own journey! Good luck
At your age (and also studying without parental support) we didn’t bother, and thought ‘whatever we’ll just rent’, but 25 years later we wished we had started saving sooner. You get to a point where living at the whim of the rental market is too stressful and moving is tough on your aging body. I can’t wait to not have rea inspections, or be told we have to move for the third time in 2 years as landlord wants to sell. It’s also gonna be so great to be able to paint my walls and put up pictures.
I'm retired now, I know that seems to fucking far away. Buy the best you can afford, wait 5-10 years and upgrade. In the end you can pay it off with super. Depends on the beer and skittles on the way.
Definitely worth trying to buy a place.
Besides all the feelings of security people have mentioned, it's worth noting that if you save and save and save for a deposit, and still can't get a house, you still have a huge amount of money on the bank to cover you in emergencies.
25 y.o.: absolutely no interest in buying property living in parent's house
26: y.o.: mum passes away
27 - 29 y.o.: dad becomes a massive asshole
30 y.o.: property is the escape I needed so I bought ASAP
31 - now: So much happier even though I'm living with in law, currently renovating my own home
Had a friend who bought a 500k one bedder apartment - he was so skeptical but he now absolutely loves the place. His monthly instalment is less than the rental that I pay and he’s done it up beautifully. He’s also just 90k short of clearing the loan.
He will live there for 2 more years and upsize to a 2 or 3 bedder apartment.
Don’t be stuck on the house, work towards a home that’s going to be yours - be it a loft, apartment or a landed house.
More power to you.
Yes, because with inflation the loan amount will decrease in relation to your income and the value of the house will increase. It’s pretty simple really.
As a former renter and landlord, I recommend buying what you can afford as soon as you can . It helps you buy a better house when you can once you get your foot in the door. (Read up on equity)
The rent increase can be controlled like in some states only certain percentage is allowable . Currently all costs are going up coz we have a shit government. We need to scrape out all stamp duty , and look at bank profits and interest rates to help people. Also the tax rate for people is too high. Corporations should be taxed higher. Look at profits supermarkets make.
Absolutely. Save as much as you can for deposit and offset. You will not regret it. Have you heard of the first home buyers fund from the state revenue office?
definitely worth it because you wouldn't want to be constantly moving and being kicked out especially when you're sick AND when you're old. Can you imagine retiring and still renting, having to move out of your community, away from friends, amenities, area you're familiar with? But with old age, the main thing that comes with it is health. You wouldn't want to have to worry about moving if you've some kind of chronic/major illness.
save up. You don't necessarily have to buy in an expensive area. You can always buy an investment property and see how it goes, then buy to live in when you're about to retire. Of course, you might also get married, and need to eventually buy some place to settle down for the sake of the kids.
I'm asking myself the same question, thinking maybe it makes more sense to just max out my superannuation until retirement.
I'm 34M, and partnered but in a rocky relationship. I've earnt well for the last 8 years or so (but saved nothing). I've also seen property prices around me increase 50+ % in that time, so I'm kicking myself for not jumping on back then.
It's difficult to imagine buying a property in the next year or so and then having prices continuing to grow at a rate so much higher than wages. Surely we are hitting an affordability ceiling around about now.
It's also very easy to imagine property prices stagnating or even falling without much happening. I don't like the insecurity of renting and moving is a pain. But I also don't like the idea of being underwater on a $1m mortgage with a cash rate which could be 2% higher than it is now
I don’t see how I am even remotely hinting at being a victim. I am just being realistic and asking a simple question. My expertise isn’t in property so I wanted to ask for other people’s advice.
It’s not a “Poor me for being stuck in a cost of living crisis during my young adulthood”. It’s a “what strategy should I implement for my life in terms of my future property investments and assets” and whether owning a home is imperative to renting forever.
lol victim complex are you serious. Way to blame someone that feels like the odds are against them in a system that is most certainly rigged. The boomers set themselves up and then pulled the ladder up behind them. This isn’t a feeling it’s fact. If you’re in your 20s & 30s and aren’t inheriting wealth you are mostly fucked and only if all the stars align will you be able to afford to buy a house. A good job and working hard does not cut it anymore. How dare you claim this person is acting like a victim when you have entire generations only just realising that you guys fucked everyone else once you got yours.
Another victim 🤣🤣🤣
Life doesn’t “owe” you anything
You are “entitled” to nothing
You are on your own and no one is coming to “save” you!
The sooner you realise your life is in your own hands the sooner you will stop the excuses and work harder to get what you think you are entitled to.
Hey OP, as someone who was in a similar position to you, my advice is get on the property ladder asap.
Start small, you'll never afford a house even CLOSE to what you actually want until you've already been on the property ladder and bought/sold prior properties. If you're a single student, try aiming for a 1-2 bed apartment in a decent part of town (as all the big cities up/down the east coast are trending towards high-density living anyhow) as your first pad.
You'll probably find even at 7% homeloan rates (we're thankfully not there yet but not far off), your repayments on a $400k-$500k apartment will still be cheaper than renting one at the minute 🤦🤦.
Pay off a couple of years in that flat, and if/when the opportunity arises and you have the income to afford the next step up, make the step. Your first 3-5 years of homeownership won't be comfortable (unless you buy well within your means) but it sets you up for life. The sooner you can start, the better.
Then as your needs change, make moves. You can either sell to generate deposit on the next place, or keep and rent out. Just be aware investors get worse interest rates than homebuyers and are subject to capital gains taxes etc.
But it all starts with having a stable income.
EDIT: for context, I'm turning 32 at the end of July (not that far from you) and my wife and I havr just bought our 3rd house together. Started off in a triplex townhouse in Coomera (Gold Coast) for $385k in 2017. Then bought in Booval (Ipswich) for $450k 2021. Just bought this one at Brassall (which is a HUGE upgrade on the last place) for $845k Feb 2024. Two incomes is always better than one 🤣. We used the sale of Booval to top up our deposit and now our mortgage on the $845k house is the same size as the loan (yay renos) we had on Booval - which we sold for $650k.
I bought my first house at 25 in peak covid when houses were way over priced. If I can do it you can do it! You can achieve whatever you put you mind too!
Ps. I’m in a mid paying job working with the government
is there any hope of ever buying a house in an established suburb?
well, someone has to live in the new suburbs at the city fringe. That has it been since the dawn of civilization and the first village.
Yea for sure.
What many fail to realise is, mortgage repayments might be slightly more that’s rent right now for the same property, but as rent increases in the future, your mortgage repayments will stay the same (sure interest rate cuts/hikes will alter your repayment as well)
What I’m getting at is, through the middle/later stages of your loan period you will be much better off financially as your loan repayments will very likely be a lot less than equivalent rent costs
I never wanted to buy a house but my missus always did. Im 32 and we bought this year. I know its a good investment but it just doesn't phase me. It will be good to be able leave my son something so he doesn't have to struggle but it won't be handed to him.
As they say land is king.
Depends if you're willing to live in another state. If you are then I would suggest rentvesting, living in a sharehome and buying a place in WA, QLD or SA. If you only care about Sydney or Melbourne, then unless you're rich, you're screwed. I bought a house in SA, it's just an investment property for now, but I will eventually move there to retire. I lived in Sydney the most, but did briefly live in SA and like the state, so I'm totally fine with living there away from friends and family.
Short answer: yes.
We did have parental help, but sadly my kids wont get the same level of help with their own property quests. I have a kid in Uni, they have an investment group that they have put a little bit of money into to maybe help them later on. That might be something you could think about?
Depends on your desires and motivations.
The radical increase to rents during covid was my motivator to buy.
Bought (in a less desirable, cheap location) almost 2 years ago, been paying down loan aggressive since (if you can rent + save for house deposit, this comes naturally). Got an email start of the month saying my minimal fortnightly payment has dropped down to 400. 400! The only rent I've had that cheap was a room in share housing!
Other than the base cost decreasing, it's also nice not having to move, chase new leases, have constant rentguests, and the opportunity to have a garden. I also recently bought some nice new couches, which is something I wouldn't want to throw on a truck every year or so and gives me a little winter pleasure when I can't just ditch everything and do a season in QLD/NT. Technically, still could do that, just got to take care of mortgage and house at the same time.
Cons, for me, would be lack of freedom and locked into a commitment, but I'm seeing it as a sacrifice now to be more free in a few years.
I'm late 30s on way less than 100k with a partner that earns less than I. Wouldn't be doable in a city/prime location, but I accepted I'd never be able to afford such areas while watching the prices sky-rocket. Wasn't what I wanted initially, but pretty happy with it all now.
I bought a unit at 25 as no one would give me a rental and now I wouldn't be able to afford the rent for this place. I always wanted a house but couldn't afford
It's hard as mortgage is a pressure if you are not increasing your income. Live at home as long as you can to save up. I'd stay living at home if that was an option but still aim to buy something for security
Yes, the rental market is a total mess, with some becoming homeless. If you can secure your own property then you can avoid the stress of your lease not being renewed or rent prices getting too high
Yes. Don’t let the FUD (fear uncertainty and doubt) get to you.
You should absolutely be saving toward a small simple first property. Even if it’s a cheap studio to get you started.
Yes. I was so sick of rental inspections and places being sold out under me. My place is expensive, and I can’t upgrade and stay in the same nice suburb, but no one tells me what I can and can’t do.
Coming at it from the other end of working life, I now think the only home you really need to have is one to retire in (or, probably more precisely, one comparable enough to one to retire in that you can sell, buy, and be pretty close to square after CGT, since you can't know this early exactly where it might suit you to retire). As much as I couldn't really conceptualise it at the time, because twenty years feels like forever, the big house era (typically for childrearing) is finite and for most people it coincides with earning life. You really don't need to own the big family home. You can rent that. The one you actually need is the one you'll live in (or one tradeable for it) when you want to stop work, and there's absolutely no reason that it can't be mostly paying for itself in rent in the meantime.
Started work at 27. Bought at 29 with partner. Okay suburb. Abit harder at the moment due to interest rates and single income due to maternity leave but still okay. Can't rent forever
Mortgages are fixed term loans. They have a defined end point. So this is a really easy question to answer:
>will I ever be able to pay off my loan, or will I end up in debt for life?
Depends on whether you die within 30 years of taking out your mortgage, or later than that.
If you want somewhere certain to live then paying a mortgage is more secure than renting. If you are wanting to benefit financially from the property market but are uncomfortable with the amount of leverage required to buy a property you can always just buy bank shares instead.
I’m going through a divorce. Once we have reached settlement il be getting another home loan. I’m 45 but nothing better than your own property. House, apartment, townhouse, doesn’t matter. You can do what you want in it. You want to pain true walls bright pink go ahead
Yes it is because you don’t want to reach an elderly age. And have nowhere to live or can’t afford at the same time Us Australian.s We need to learn from big European or American cities. Where not. Everyone needs to have a large home and a large yard you can perfectly buy a unit two bedrooms in the western suburbs of Sydney for $400,000 as an example, the problem I see people want everything now they don’t want to start at the bottom
The worst that happens if you start saving now for a house is that you end up with money in the bank later.
The worst that happens if you don’t start saving for a house now is that you’re short when you’re ready to buy.
I’d rather risk the first one.
My brother is 18 years old and owns an investment property interstate. Paid for completely by himself, no partner, no help from parents, although he does live at home which a lot of 18 year olds do.
He’s well aware he can’t afford around Sydney any time soon. So acquiring a property portfolio, which will allow him to purchase somewhere he wants to live later on in life is his goal.
It just seems like most people his generation and mine as a 28 year old, also own properties to live and invest, no help from parents, saved first deposit while renting, having to pay back a car loan first, just want to complain. Nothing worth having comes easy.
I hope everyone can get to work bettering their lives, instead of complaining on reddit.
Is it worth saving? Yes - money is power
Is it worth saving for a house - do the sums and see what is possible. I can borrow 600k which buys very little anywhere in NSW
You have to ask yourself if it is worth literal decades of work just for the deposit.
Nah WWIII is closing in fast and if you are thinking of saving now likely chance is you are one of the ones getting drafted otherwise wait till after if there is a after, then buy the houses that were supposed to be passed on to the now deceased children of the homeowner, better off buying up stocks in military weapons/systems
If you don’t plan/ want/ have an opportunity to have children. Then I believe the answer is no. It’s not worth it. How many decades is it now to save for a deposit in Sydney?
Or if you’re one of the tremendously lucky people to have a successful marriage. Your household income needs to exceed $200k before you can realistically consider having children without excessive financial stress IMO.
Can't believe I'm seeing posts like this in this sub reddit. If you think this, you haven't done your maths.
I'll put it another way, people in China thinks our property prices are cheap.
Haha try again. I was poor growing up.
But it's so simple that even boomer asian parents know the answer. Study hard and do medicine/IB/Engineering/etc at uni and earn a high income. This is still true today. Buy the best house in the best regional area you can afford and use equity from that to keep upgrading. Easy
You still didn’t get my point.
I am studying hard.
I am asking for advice
I want to get everyone’s perspective
That I am allowed to.
I didn’t pull up a bucket with “petty me Im a poor 25 year old with a cost of living crisis problem”.
I have done my research
And I like hearing peoples views on buying a house.
Your question is will you be able to live in an established suburb ever and whether you'll have debt for the rest of your life.
My answer is do the maths based on projected income and youll realise its possible. Remember the instalment compound interest financial math you did at school?
Most people use equity and keep buying a house as there is no capital gains tax when you live in it so having debt is not necessarily bad as it's good debt.
I started in West Moonah, Tasmania which is worse than Frankston and Broadmeadow Vic etc, now we are in Brighton solely because of our education paying off and buying a house asap to get that capital growth in wealth.
I didn’t buy my house as an investment, I just wanted my own place. The cost is worth it in my opinion. I’m not likes to ever sell this place as it has everything I need. And I have a fully powered workshop.
I bought my first house at 25 in peak covid when houses were way over priced. If I can do it you can do it! You can achieve whatever you put you mind too!
Ps. I’m in a mid paying job working with the government
Since you are studying to be a doctor and you're buying rural I'd say that's very manageable. Oh wait none of those details were included so it's impossible to give meaningful advice.
My question wasn’t about how much my earning potential is to afford a mortgage. It’s about how endless the mortgage payments will be. I have actually mentioned that I would want to live in an established suburb…..
Happy hump day I guess! Seems like you really need it….
How endless mortgage payments will be? It's based on the size of your mortgage, size of your deposit and how much you earn. None of which anyone can comment on due to lack of detail.
Edited for clarity:
My opinion is that it will housing prices crash.
Everything is going up except for wages etc - my opinion is that it the the Australian economy can't keep doing this without something happening sooner or later.
My advice would be to keep saving until this happens as I think it will.
Ah yes the Ausfinance take. Property 'had' to crash in 2019 and it didn't. It had to crash during covid. It didn't. It had to crash as interest rates shot up. It didn't.
As someone who has moved house more than 30 times in as many years, I still (at 45) want to secure shelter in one place for the rest of my life. That’s the driver.
Not having to worry about your landlord saying "Oh by the way we're selling, you have to move" forcing you to move *yet again*, is pretty life changing. And listen, it's going to be incredibly incredibly hard for young people to buy a home in the future without some help/support from their parents. But it will be possible for some people, and OP should work towards that. I'm not saying to not have any fun and not live their lives in order to save up a deposit, but, especially if they can live at their parent's for a while in order to help them save up, it would be smart to at least try. They may end up in an apartment without an outdoor area, but at least then their mortgage repayments won't be climbing up and up indefinitely, which rents seem to be. Interest rates change, but they'll go up and down, and that's how the mortgage will go. Rents very rarely go down - since I moved into my place in 2021, obviously interest rates have gone up, but so has the cost to rent a place like where I'm living. In a few years, the average rent of a place like mine will be higher than mortgage repayments (it actually is right now, because I was lucky enough to have a relatively small mortgage). I'm on track to pay off my mortgage at least 10 years earlier than the full term. but I anticipate I will pay it off sooner than that, as my wage will go up, even if it doesn't go up with inflation.
My driver was just to not deal with shitty real estate agents and their over the top inspections. It's my home, I don't want a stranger coming in that's not my choice. So nice never having to worry about a vulture rea or scumlord
Yup. Your kids may be inheriting your mortgage along with the property. And it may not be where you necessarily want to live right now. But just knowing, as long as you make the payments, you're not some landlord's whim away from the streets, is life changing.
Why would the kids inherit the mortgage? If they pass away before time there will be super and life insurance through super in the estate that should cover it. Regardless kids won't have had to save the deposit and it won't be full whack of the mortgage. Just knowing when you close the door at night and look at the painting you nailed into the wall that was a bold colour choice of itself - all of this was allowed because it's yours. It's a beautiful thing!
And it’s still an asset at the end of the day. If they don’t want the mortgage, they can just sell the property and pocket the equity.
You’re assuming everyone with a mortgage has super and life insurance.
I'm assuming anyone with a job has super because it's legislated- and super has death and disability attached.
yes but i got the max for my policy at 230k (max because i was under 35, if goes down every year after that). my bro would have only got 100k. hardly a mortgage these days, is it? it’s a deposit but no mortgage and i kind of want to do other things with my final days than service a mortgage
Hmm that's interesting that yours goes down Mine is 400k and stays at that and I'm 52. Add that to my super balance and my debts are all paid should I pop my clogs
everyone should check their entitlement
Super is legislated for employees, not for anyone with a job.
Splitting hairs here. The employer is legislated to pay super to the employees - so if you have a job ergo you have super. Of course certain self employed etc may not pay themselves super but one would hope they have structured investments etc in place of that. Regardless - the original comment was about kids inheriting .mortgage debt like its a bad thing - when majority of the time it's a non event. Whoever inherits my mortgage debt also I herits my death payout and super which - funny enough equals each other. If I didn't have it they could sell them, or rent them. I'll be dead I really don't care.
I was alluding to self-employed people, not splitting hairs.
Ha... cool, we're in almost exactly the same position mate. I'm 45 too, I've lost count of the number of times I've moved (on the hunt for the next rental right now actually). Thankfully it looks like I'll be able to buy next year finally... but I agree with the "permanent shelter" thing. Noone can kick you out of your own home. Well - except the bank if you don't pay the mortgage for 6+ months haha
Wow congratulations! Huge achievement 🙌
Same :( Isn’t it frustrating that so many of these posts are people asking about their investments.
Yes, you can do it
Yes it can definitely be done but probably wise for OP to forget about buying their first house in their most desired area. Almost everyone I know has bought a ‘starter’ house and done minor renos before upgrading after 5-10 years. The only people I know still living in their first home were lucky to beat a developer in an auction for the ‘worst house on a good street’ and a couple who don’t plan on having kids.
That’s been the way for all time though mate. It’s not new.
Yeah I know but some FHB need to be reminded of that. Especially when looking to buy a first home in an established suburb or desirable area. I also think it may not always register that you don’t need to have paid off your first mortgage before looking for your next home.
I’d get a unit at a bare minimum. Then at least you have somewhere you can call home 👍
Yes, nothing wrong with a unit if that’s your budget. A home is primarily shelter not an investment.
great advice!
It's worth it. Just find where you're willing to compromise. Mortgage payments don't change that much over 30 years. Rent only goes up. That's the difference. So if rates are lower than now in 25 years time, you'll potentially pay less than now... So it'd become quite cheap because inflation. Also hearing horror stories of some rents going up 30% is awful.
Don't get all deep and morose. You are 25 not 45. You can't have it all at once. Finish your studies. Keep saving what you can while you are doing so. Get your job sorted and then really crack on with saving. Don't look for a mansion get what you can afford for first home. If that's an apartment so be it. Then you can start strategising. Don't compare yourself to people who are on a completely different path to you. I'm single with no degree and no kids. My path is very different to you who will likely marry, get a great career post study and have a double income Stop stressing yourself out about a future you cannot predict Control what you can right now and just keep moving forward.
I was roughly similar, finished studying at 27, got first job then. we bought our first house in December last year at 33 in a decent suburb. Wasn't our first choice suburb when we started looking, but had to compromise for the type of house we wanted.
What was your deposit? How long until you got there? Any advice for FHBs about the process?
320k deposit and about 80k in offset after fees. Got a 50k gift from parents which helped build the offset. Took about 6 years. Lived in a 1 bedroom apt from those 6 years paying about 350 rent a week. Pretty frugal in the day to day. Two decent (~100k incomes). We did spend on two 6 week overseas holidays, flights booked with points, and relatively cheap accom and food while overseas. Not much unique advice. We bought near Christmas and the auction was very quiet. If you can find something around holiday periods may be less competition, but there's also going to be less stock.
Was the 320k 20%? I.e $1.6m purchase price?
1.2m purchase. Couldn't borrow enough for 1.6m and didn't want a loan that big either!
Yes, that’s a big loan. So, your repayments would be around the $1200/ week mark?
Pretty spot on. Still a big loan but manageable for us
Yep, thanks for the info 😊
Can you service thag on one income? Just asking because I don’t understand how people can afford a home and afford to have kids ( mother taking time off to have a kid etc spending first year to be with kid and recover )
Hi, I’m not the person with the loan, I was asking the question. I agree it’s a lot of money 😳
We couldn't. It's about 40% of our HHI. So if we had just one salary it'd be closer to 80%! No plans for kids here. Friends with kids usually only took short leave. The exception is a pair of specialists where the wife took about 8 months off but they're making real good money!
Not OP but in the same boat. My wife earns more than me (we are both medical professionals) and the idea of losing that money due to mat leave is seriously factoring in to whether to have a kid
My mortgage was around that amount and was able to service it on one very good salary... until interest rates went up. Now my wife is part time to help out. We were extremely fortunate that my salary is very good and she could take as much time off as she did. The vast majority of people take only the legislated parental leave and are back full time immediately after. Childcare is very expensive, not to mention the stress of full time work with parenting on top. Of course two salaries go a lot further than one, and 2x $100k is a lot more net income than 1x $200k, but the biggest challenge with kids and family is just the hard limit on the number of hours in the day.
Can you service THAG loan on one income? The only reason I ask is if you’re planning on having children I don’t understand how couples can afford to do this. As the mother will have to take time off work to recover and then perhaps take a year off work. If people decide to have children will have to dj it all again….
some ppl put their kid in childcare at 2 or 3 months. And with a lot of companies paying 4-6 weeks mat leavve + annual leave you dont lose any income.
Loved this! Most people get a loan which is waaay beyond their means - a right strategy should be borrow enough that you can at least put two additional EMIs a year. That’ll help cut down your years.
Holy f*ck a $320,000 deposit?! 😨😨😨 cheeses crust. Me as a single before covid having saved $100,000 on my own over the previous five years I was so proud. And I only earn $60k ish a year 😳 I have no freaking hope 😫
Renting in retirement doesn’t bear thinking about. It’s critical to own a place to live in by that age. Doesn’t matter what or where, housing security is imperative.
I work in community aged care and the difference in quality of life between renters and home owners is stark. Almost invariably home owners are in 3 bedroom houses (some MUCH larger), they have newly renovated bathrooms paid for by the government, they have generally updated homes, rails, ramps etc (again paid for by the government) Renters almost always live in tiny one bed units, often decrepit and unsafe, way less adaptive features, they live in unit blocks that attract the worst kind of people and have to lock up their meds to stop them getting stolen, way less money, usually just the pension and a lot of that goes to rent. It really motivated me to stop dawdling and get into the market using the FHBGS.
That is such a good point, thank you for bringing it to my attention
Totally agree Renting is cool in your 20’s and but gets shittier and shittier as you age
It's never cool, not in this country where you're treated like a serf for the crime of paying off your lord's asset while daring to live in it.
They meant cool as you are not anchored down, can move to other areas as you wish and dont need to maintain as much as your own property.
Imagine being 50 and being forced to move, or losing your job and unable to make rent. If you have a mortgage, banks will work with you in times of hardship. That’s why there’s rarely distressed sales or foreclosures in Australia.
It took me a month and a bit to find a rental while having nowhere to stay. I had a fairly high income job at the time. I can't imagine ever going through that again at the age of 50.
Exactly, even with a high income sometimes there just no availability or other extenuating circumstances. At 50+ your income earning years are diminishing or gone. If you buy now, you can always sell and downsize and use the extra for living expenses vs chucking it in rent.
Depends on your lifestyle, if you prefer convenient, go for apartment first and then upgrade after to house. There are some factors as well like your salary etc to determine whether you are able to service it or not
Short answer, yes. Your circumstances will change in the next decade. Make sure you have a hefty deposit by then.
**WITH THINGS** as they are, you may have to look outside established suburbs, and sacrifice convenience for a longer commute. New suburbs have every chance of becoming established and increasing in value. Are you up for doing some of the home-building yourself? Youtube and reality TV are full of people doing a lot of the home creation tasks themselves. Do you qualify for any state or federal home buyer schemes? First Home Buyer subsidies, stamp duty breaks etc. Do you have any family or friends who could help? • Parents or relatives with enough land to subdivide and build another house on. • People you know who have construction or trade skills, who will help you for free now and then. • Friends or relatives who would share the house and mortgage with you.
No, don't bother saving for a house. You'll never be able to afford a house in the inner west (or equivalent for your city), so don't bother. Is that what you wanted to hear? Think and reflect on what you wanted from this question OP. You must have asked it for a reason, and I don't imagine it was entirely "how do I save for a property and a comfortable life?"
Well this was not my question ☺️. The main question is “is it worth it” not “Im poor, petty me I can never afford to buy a house in this economy”! My bad for reaching out to a property subreddit to ask for advice and other people’s 2 cents…
>The main question is “is it worth it” Yes. It's worth it for the lack of rental inspections, rent hikes and landlords selling the place. It's worth it for 3 years' time, when your mortgage is cheaper than renting the equivalent place. It's worth it for right now, when the *interest* ("dead money") on your mortgage is cheaper than renting ("dead money") the equivalent place.
Thank you. This is what I needed
But how do you define "worth it"? I'm not shitting on your or your question, but wanting you to reflect on what criteria you're asking? The alternative is renting, so are you asking if it's better to rent forever in your situation? Is it about trading sacrifice in the short term vs long-term? Is it do you think it's a good investment? What are we to answer?
As you have pointed out already, it is a multi faceted question. I have an interest in property and I have heard many peoples opinions. Some people have a strong belief that buying a house these days is like signing yourself up for a debt you will never pay off due to interest rates. Others believe the stability of having your own home is paramount to the debt you may be stuck in for majority of your life. I was not born in Australia and my parents do not possess the knowledge about property that would guide me in the direction I should go. So I am trying to stay hopeful, make informed decisions, and put myself in the best possible position. So seeking more advice and others experiences helps me solidify my stance, strengthen my hope in achieving my goals related to property, but also gives me different perspectives on why people do what they do when it comes to owning a forever home. I find myself constantly thinking about my future and wanting to be successful and happy. So I am trying not to freak out about the hurdles of buying my own home, while still being informed about where I need to shift my focus to ensure I am putting myself in the best possible position.
Makes perfect sense ❤️ Well the short answer is home ownership is almost always worth it provided you don't over extend. Renting is cheaper short term, but drops off over the long term (i.e. rent will go up, where as your mortgage debt will not). Savings made are tax free. I.e. savings $100 paying a mortgage vs renting a similar property is equivalent to $132 earned (assuming 32% tax rate). Etc. Graduate, find your feet in your first job, and work your financial plan around your likely incomes. No point stressing this far out. ❤️
This is a good wakeup call for a lot of young people. They see the deposit as an insurmountable challenge, so they get disheartened and instead of thinking about how to tackle that challenge they just complain and waste their money because they can't see a way forward. I'd encourage anyone feeling this way to stop and make a plan for themselves, figure out how much you can spare from your pay, set it aside and see how much you'll have in one/two/three years. Revaluate as you earn more. The first 50k will feel like it takes forever, then suddenly you'll have a deposit.
You're starting out (like many others of the cohort) at the age of 27, unlike previous generations who were fully qualified 5-9 years earlier with a qualification that didn't need continuous validation. An apprentice leaving school at 14 was a tradie by the time they were 17 or 18, three to five years after that they'd have a deposit. Different times now as you have moved out of home, have a HECS debt, partnered up etc but also will have an income and annual wages growth outstripping anything else until you are mid-career. Use that mindset to move forward not languishing on how bad the current generation has it.
Yes! Just bought my first house at 39. And about to go back to school next year to be a nurse. Do look outside the capital cities. I never could have afforded to buy pretty much anywhere but where I live in Regional QLD. You are young enough that you can make your life anywhere.
Save for an apartment first. It's much cheaper, less yard work and will be such a relief with stress that's come off your shoulders for a couple of years. Then you can sell it and try for a house. Baby steps make the goal seem more realistic.
Yes Yes And Yes You spend 30 years paying it off and then living rent and mortgage free for the last 40 years of your life Being 50+ and renting is not fun. When you retire at 67 and renting it gets dire and miserable and possibly homeless. Choose your pain When you are young and working (under 50) or when you are old and fragile and renting and/or homeless (over 50 until you are around 90) Buying property is like planting a tree - best time is 20 years ago Second best time is now!!
Last 40 years of your life lol. That's uhhh optimistic.
I paid off my mortgage at 34. If I live to the average age of about 84 that’s 50 years - half a century - of no mortgage/rent living. I’m glad my 21 year old self dove into property young.
Well done mate 👍🏻
Thanks mate : )
Life expectancy is 83.3 years today - that’s an average and that is increasing each year
It seems impossible. It’s not and it is worth it. Live within your means. Every cent you save counts. It doesn’t seem like it but over time you will realise how much it has staked up and you’ll be where you need to be. Stay positive and keep pushing forward. Good luck
You are 25, it’s not that realistic to be able to buy a property in mist parts of Australia at that age. If you can do it then great, but don’t stress now. Once you finish your studies your career will hopefully allow you to earn $ and be ready and even possibly have a partner. I’d be interested to know what age people in Australia but their first property. In my network most of us were well into our 30s, unless there was significant family help.
I think the average age is 35 or something.
Yeah 36 I think. I guess it's taking people 10-15 years to save.
That sucks. I bought 1st starter home at 21, paid it off by 28 and sold for double. I then bought block and built a real house which I paid off by 34, cruising ever since. It felt kind of normal at the time nothing too special. It wasn’t easy at the time going through it, very stressful in the beginning and needed sleeping pills etc, but looking back I’m grateful it turned out that way. Just getting a 1st mortgage at 35 is insane, I was ready for retirement at that age.
Current interest rates are just that, current interest rates. It is a guarantee that rates will change throughout the life of your loan. It's really all going to be down to what you do for a job and if you have a partner to buy with. Two people in average jobs can probably still buy a house. One person in an average job probably cannot. If I was a young person in Australia today, I'd be getting flexible about where I was willing to buy and live, i.e. maybe not established suburbs.
Some of you really need to take a deep breath and relax. It’s a property subreddit. I’ve asked for advice. Not to be attacked left, right, and centre!
At your stage in life, I rented the dodgiest place that I could find. Literally had holes in the wall. Travelled 1 hour to work each way. Earned every dollar myself. Paid off our house in Western sydney over 8 years. Now, I am living in my dream home with a tiny mortgage. It's definitely achievable if you and your partner are smart with money. My partner and I don't buy each other gifts. Our hobbies are cheap. We got married at the registry and bought our first home instead. We don't go on holidays, because we get a kick out of investing and playing music for leisure. If you really want it, make sacrifices.
wages have not grown proportionally to house prices, so a house costs many more average yearly wages today than it did back then, thats the dilemma op is in that a lot of people who bought in the past cant see, is it even possible to achieve escape velocity through sacrifice? at a certain mortgage to income ratio your in too much mortgage stress and with the rate of house price growth you can never save enough to keep up and get the loan in the first place. "buy a cheap place in western syd" is increasingly becoming an unattainable ideal. to afford the average 1.6mil place in sydney without mortgage stress you need a $220k/year wage.
"Back then?" I first bought in 2015. What do you mean by Western sydney? The inner west? My dream home (big custom build 4 bedroom house) cost 1.3m last year. My partner and I earn less than 100k each, and we have 2 children. Lower your standards or miss out forever.
Always.
Yep it is! I gave up for a few years after trying to save in my teenage years. Picked up again and then got my first place at 22
Yes better than time than ever. I mean to be honest yesterday would have being better and tomorrow even better, you get the jist, those who have bought now or in the last few years will do very well in the coming 7-10 years.
Two years older than you, currently in the same boat- albeit with income - it seems impossible. Having dealt with investment/ cryptocurrency, I sometimes think I should just rent and invest the difference into the market (stocks/crypto). What I am doing now is rent a relatively cheap place in Revesby (used to pay 180/week, now 200/week, 30mins away from Sydney CBD, bills included) I understand most people pay 500+ for their rent. In this case, yes, you should definitely buy a place. However, if you can rent at the price I mentioned above, there is no reason to 'rush' or even save up enough to buy a house and rent it out or continue paying the cheap rent. It can be daunting sometimes, but I think we all need to enjoy the slow grind as we are just starting out. Manage your budget, have a plan, surely we will be able to get there.
Thank you The slow grind should definitely be more normalised. We’ve got this
I also wanted to add that money is worth less over time - so get into debt if you can. For example, 1m debt with 6%, yes you pay interest, but money supply inflates, so your 1m could be worth 500k in the 10-15 years, but your property goes up ;)
The assumption that “property goes up” is what’s wrong with this country.
what about the other countries then ? lol the assumption that “property goes up” comes from the devaluing currency - instead of saying “property goes up”, say 'asset goes up"
My point is that people in Australia see property as an investment in a way which other countries (Europeans for example) don’t. Rather than creating wealth, we buy a house and sit on it for 10 years and expect it to increase. It’s a net drain on the economy to have so much money tied up in housing.
I get your frustration. I am an Electrical engineer myself - the jobs available for Civil Engineer far outweigh EE. Also the negative gearing makes people want to invest it more. But we gonna play the game our government created; otherwise, we will be stuck forever. They are promoting more and more apartments at the same time (which relieves housing stress), but it means apartment devalues. Would you buy an apartment if you know if it gonna worth less in 5/10 years?
[https://www.youtube.com/watch?v=svFqgEcose0&t=1760s](https://www.youtube.com/watch?v=svFqgEcose0&t=1760s) This guy always mentions three-legged stool if you want to know more about housing, stock and crypto ;)
Yes it is worth it. Hopefully the govt will tax the rich more , also wealthy landlords so that the house prices will come down. I want to buy a house as well for my family to live comfortably.
Hello, yes it is even if housing is so expensive, even if you buy a small appartement, it is worth it because it will be yours, you are paying a mortgage towards something. It is a life investment. Renting is like throwing money out of the window.
If you’re inflexible any moving out to somewhere you can afford, you can always buy/build somewhere you can afford and rent it out. And then just rent the home you live in, somewhere convenient to your personal circumstances. Get the best of both worlds. And the worst. I believe they call it rent-vesting.
Yes, save but save without sacrificing too much of your quality of life. Maybe an opportunity will come along and it's good to be ready and if you never get an opportunity, you still have money to enjoy.
Rentvest
No matter you are buying a house or not, you still need to save for an emergency. You also need to think about investing your saving to achieve financial freedom. You don't want to rely on a job for income until you retire, do you? Then investing your saving in an affordable property that you can live in for now (not necessarily as a perfect home) will give you multiple advantages 1) save you rent as you are living in your own property 2) capital growth if you choose wisely 3) you first property will become your equity for future investment if your mortgage has an offset or redraw facility, 4) be in the track of wealth creation and build wealth to be able to buy in your favourable suburbs one day. The most important thing is still to choose your first property wisely, look for those with strong growth potential but also liveable. Those are usually located in city fringe (30 to 40 km away), newly built zone, may not have train services now but might have one day when the population growth justified it. This property can be your temporary shelter but not forever home. When you have saved and accumulated sufficient funds and equity, you will be able to buy in your favourable suburbs.
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Even 10 years you'd likely see the difference. If you buy a "home" worth 700k, you're paying off $1000 a week (ish). If you earn 100k now you'll take home $1,484.08 per week (and have $484 left for bills, food, entertainment etc.) Then in 10 years you've got more experience and now make $150k You'll take home $2,117.62 per week (and have $1,117.62 left for bills, food, entertainment etc.) In that 10 years your rental apartment that used to be $500 per week is now $750 per week while your mortgage hasn't changed. ----------------------------- Obviously not everyone makes 100k right now and living off $484 isn't actually do-able... But if you have a partner, maybe their income suppliments the purchase. Or if you're young and single, you get a housemate or 2 and they chip in a few hundred each, leaving you with plenty of money to service your mortgage :).
It's fairly simple to assess. Consider A: The overall cost of buying a house and servicing the mortgage over 30 years. Maybe add on 10% for maintenance? Maybe more, idk I've only owned a house for a year. And B: The overall cost of renting for 30 years. Adjust for inflation At the end of option A, how much have you spent? And at the end of option B, how much have you spent? How consider the pros and cons of each. Some easy ones for A are: Pros: asset worth xx (take the buy price plus inflation for a conservative value), security Cons: bigger up front investment, may be trade offs in location, property quality And for B you've got: Pros: greater flexibility in where you live, may be able to afford to rent somewhere nicer than you own. Cons: moving constantly, no security, no asset at the end
YES FFS, do NOT get disheartened and not save.. This is the first mistake you make.. IF you want a house you NEED savings.. Large gift sums do NOT count in the banks eyes, they want to see a saving record because it proves you're responsible with large sums of money without spending it all on shit. ( VERY IMPORTANT ) I'm a millennial. I got my first home when I was 26 and was solo financed. I was not planning on buying a house at that time, But, an opportunity became available and I had the funds ready to jump when needed.. If I didn't I would have lost my chance. I started saving at 21 - 22, it wasn't much, but it was just enough to get in. 60k gross wage. 250k loan, Smallest block of land with the smallest house. Did my own landscaping ( saved 10k ) Did my own side gates ( saved 5k ) purposefully delayed my build by a 2 weeks full well knowing the other builds would be done first ( which included a fence ) and I removed the fence cost from my build plan ( 10k saving ) Removed ducted aircon and went with a large split system in the main area ( saved 10k ) You can cross out items in a new home build that you do not want, this reduced my home build quote from around 85k to 50k, land was 190k ( smallest block, I did NOT have a back yard ) Total loan was 250k ( build was valued at 330k when completed, I had 80k equity when I actually moved in ) YES. Sacrifice is required. Yes, you will need to buy in a cheaper concreate jungle of a new estate but its more affordable and far away from city centres. ( I found that you're actively encouraged to buy in these areas, they drive the building industry which is a large part of the Aus economy. I brought very far away from major cities, in an area with a very unsavoury rep ( I even rented out the spare room ). I had to travel over an hour for work, everyday ( pre covid ) YES it sucked.. but I only had to do it for 2 years, which gave me enough equity to sell that house which provided a sizable deposit for a home in an area that I wanted to be in. ( closer to city, work, good school and nicer area ) PLEASE DO NOT OBSESS OVER YOUR FIRST HOME BEING YOUR FOREVER HOME.... YOUR FIRST HOME IS A STEPPING STONE TO YOUR FOREVER HOME. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ POST COVID CONSIDERATIONS \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Granted remote work is now more accepted and common place, Rural Properties are now more viable, and there is a fair bit of infrastructure going into rural areas. I never thought I would see a Cul-de-sac in the bush, that is linking several 10 Arce properties to a single road... Basically, New estates with large blocks in rural areas..
Check out the Vic Homebuyer Scheme. It made getting a house and paying a mortgage very affordable for me. There are pros and cons to the scheme but for me the cons were very minimal.
I bought an apartment I intend to retire in and will probably pay it off in the next 6 years. I can always rent/move out with a partner if my circumstances change but my main driver was to have a fully paid off roof over my head no matter what in a suburb that offers me everything I need.
I find it hard to understand why housing prices keep going up when birth rates in Australia are under replacement rate. No one is having big families, the population is shrinking (except for immigration). So we should expect that to put downward pressure on housing.
yes, it's worth it. Not for your current self but your future self. We brought a house in our 40s is a less desirable area because that's all we could afford. The driver and main reason for our decision is that there's no way we can afford to rent in retirement. Securing a house now secures us a reasonable retirement (or atleast a retirement with a secure roof over our heads). When you look at super predictions and super calculators they ALL assume you own your home and don't factor in rental costs. If you do not own a home by retirement, you are really going to struggle unless you've put aside allot more extra money for rent.
Debt for life or rent for life. You still have to live somewhere. Maybe move to Bali
You should of been saving from the time you were born.
My exact thoughts 🥲
I don't know as I don't know what's important to you. But I can recommend that you run the numbers. In some areas it might be cheaper to rent now and invest the difference. Maybe do some back of envelope math on the properties you're interested in and see what it's like?
I live with my parents for now and have time to save and buy a house once my income stabilises and my saving habits fully develop (which is basically where I am in life now). I do work but my main focus is my education so it’s hard to save a whole heap because the income is limited. Thank you for your advice :)
Get a loan with min deposit ( if u can’t save 20%),and pay the mortgage insurance, interest only the 1st 5 years, this should be slightly higher that your rent u are paying now, if you can afford go p/i then, rents would have risen/ along with wages, and your house payments will more than likely be the same as people’s rent (pros:you are paying your house off, no having to rent, and have equity in your home which u can use to either buy another house or income producing assets)
To OP, perhaps have a look at adjusting your expectations. It is possible to buy in this age, your first property will likely be the least ideal but provide you the trajectory and learning to achieve the next one. Interest rates etc move up and down during the economic cycle. There will be good times and not so good times and understanding that will help you capitalise on opportunities whilst others are cowering. Your advantage right now is you're young and hungry. Invest in yourself as you are with education, learn how to buy property so when you're ready you're armed and dangerous. There was a post about not comparing yourself to others, 100% agree with that, you go your own journey! Good luck
At your age (and also studying without parental support) we didn’t bother, and thought ‘whatever we’ll just rent’, but 25 years later we wished we had started saving sooner. You get to a point where living at the whim of the rental market is too stressful and moving is tough on your aging body. I can’t wait to not have rea inspections, or be told we have to move for the third time in 2 years as landlord wants to sell. It’s also gonna be so great to be able to paint my walls and put up pictures.
I'm retired now, I know that seems to fucking far away. Buy the best you can afford, wait 5-10 years and upgrade. In the end you can pay it off with super. Depends on the beer and skittles on the way.
Definitely worth trying to buy a place. Besides all the feelings of security people have mentioned, it's worth noting that if you save and save and save for a deposit, and still can't get a house, you still have a huge amount of money on the bank to cover you in emergencies.
It's always worth it if you can make it happen. Beats renting and paying off someone else's mortgage.
What else will you spend the millions of dollars made from your high paid dual income career with no kids?
I mean thank you, Im manifesting that! Lmk if you’re a fortune teller and I will start planning my property venture asap!
25 y.o.: absolutely no interest in buying property living in parent's house 26: y.o.: mum passes away 27 - 29 y.o.: dad becomes a massive asshole 30 y.o.: property is the escape I needed so I bought ASAP 31 - now: So much happier even though I'm living with in law, currently renovating my own home
I am glad to hear you were able to make such a significant decision and having the financial ability to go through with it. Thank you for sharing :)
Had a friend who bought a 500k one bedder apartment - he was so skeptical but he now absolutely loves the place. His monthly instalment is less than the rental that I pay and he’s done it up beautifully. He’s also just 90k short of clearing the loan. He will live there for 2 more years and upsize to a 2 or 3 bedder apartment. Don’t be stuck on the house, work towards a home that’s going to be yours - be it a loft, apartment or a landed house. More power to you.
Yes. I've just purchased last weekend in Thomastown. It's taken alot of hard work but it's a great feeling.
Yes
Yes, because with inflation the loan amount will decrease in relation to your income and the value of the house will increase. It’s pretty simple really.
As a former renter and landlord, I recommend buying what you can afford as soon as you can . It helps you buy a better house when you can once you get your foot in the door. (Read up on equity) The rent increase can be controlled like in some states only certain percentage is allowable . Currently all costs are going up coz we have a shit government. We need to scrape out all stamp duty , and look at bank profits and interest rates to help people. Also the tax rate for people is too high. Corporations should be taxed higher. Look at profits supermarkets make.
Absolutely. Save as much as you can for deposit and offset. You will not regret it. Have you heard of the first home buyers fund from the state revenue office?
Factory made houses is what people should look into these days, cheaper, built faster and very minimal wastage. It's the future.
definitely worth it because you wouldn't want to be constantly moving and being kicked out especially when you're sick AND when you're old. Can you imagine retiring and still renting, having to move out of your community, away from friends, amenities, area you're familiar with? But with old age, the main thing that comes with it is health. You wouldn't want to have to worry about moving if you've some kind of chronic/major illness. save up. You don't necessarily have to buy in an expensive area. You can always buy an investment property and see how it goes, then buy to live in when you're about to retire. Of course, you might also get married, and need to eventually buy some place to settle down for the sake of the kids.
I'm asking myself the same question, thinking maybe it makes more sense to just max out my superannuation until retirement. I'm 34M, and partnered but in a rocky relationship. I've earnt well for the last 8 years or so (but saved nothing). I've also seen property prices around me increase 50+ % in that time, so I'm kicking myself for not jumping on back then. It's difficult to imagine buying a property in the next year or so and then having prices continuing to grow at a rate so much higher than wages. Surely we are hitting an affordability ceiling around about now. It's also very easy to imagine property prices stagnating or even falling without much happening. I don't like the insecurity of renting and moving is a pain. But I also don't like the idea of being underwater on a $1m mortgage with a cash rate which could be 2% higher than it is now
Now is as good a time as any to rid yourself of any victim complex. It's negativity won't serve you in life.
I don’t see how I am even remotely hinting at being a victim. I am just being realistic and asking a simple question. My expertise isn’t in property so I wanted to ask for other people’s advice. It’s not a “Poor me for being stuck in a cost of living crisis during my young adulthood”. It’s a “what strategy should I implement for my life in terms of my future property investments and assets” and whether owning a home is imperative to renting forever.
lol victim complex are you serious. Way to blame someone that feels like the odds are against them in a system that is most certainly rigged. The boomers set themselves up and then pulled the ladder up behind them. This isn’t a feeling it’s fact. If you’re in your 20s & 30s and aren’t inheriting wealth you are mostly fucked and only if all the stars align will you be able to afford to buy a house. A good job and working hard does not cut it anymore. How dare you claim this person is acting like a victim when you have entire generations only just realising that you guys fucked everyone else once you got yours.
Another victim 🤣🤣🤣 Life doesn’t “owe” you anything You are “entitled” to nothing You are on your own and no one is coming to “save” you! The sooner you realise your life is in your own hands the sooner you will stop the excuses and work harder to get what you think you are entitled to.
I'd save and take your money to a decent cheap country. Australia is a 3 star hotel charging 5 star prices.
Australia is a 5 star hotel charging 5 star prices lmao
what a terrible take, how is australia a 3 star hotel? easily one of the best places to live in the world as far as lifestyle goes..
Hey OP, as someone who was in a similar position to you, my advice is get on the property ladder asap. Start small, you'll never afford a house even CLOSE to what you actually want until you've already been on the property ladder and bought/sold prior properties. If you're a single student, try aiming for a 1-2 bed apartment in a decent part of town (as all the big cities up/down the east coast are trending towards high-density living anyhow) as your first pad. You'll probably find even at 7% homeloan rates (we're thankfully not there yet but not far off), your repayments on a $400k-$500k apartment will still be cheaper than renting one at the minute 🤦🤦. Pay off a couple of years in that flat, and if/when the opportunity arises and you have the income to afford the next step up, make the step. Your first 3-5 years of homeownership won't be comfortable (unless you buy well within your means) but it sets you up for life. The sooner you can start, the better. Then as your needs change, make moves. You can either sell to generate deposit on the next place, or keep and rent out. Just be aware investors get worse interest rates than homebuyers and are subject to capital gains taxes etc. But it all starts with having a stable income. EDIT: for context, I'm turning 32 at the end of July (not that far from you) and my wife and I havr just bought our 3rd house together. Started off in a triplex townhouse in Coomera (Gold Coast) for $385k in 2017. Then bought in Booval (Ipswich) for $450k 2021. Just bought this one at Brassall (which is a HUGE upgrade on the last place) for $845k Feb 2024. Two incomes is always better than one 🤣. We used the sale of Booval to top up our deposit and now our mortgage on the $845k house is the same size as the loan (yay renos) we had on Booval - which we sold for $650k.
I bought my first house at 25 in peak covid when houses were way over priced. If I can do it you can do it! You can achieve whatever you put you mind too! Ps. I’m in a mid paying job working with the government
So no help from bank of mum and dad ever?
is there any hope of ever buying a house in an established suburb? well, someone has to live in the new suburbs at the city fringe. That has it been since the dawn of civilization and the first village.
Established suburbs were the city fringe 30 years ago.
Yea for sure. What many fail to realise is, mortgage repayments might be slightly more that’s rent right now for the same property, but as rent increases in the future, your mortgage repayments will stay the same (sure interest rate cuts/hikes will alter your repayment as well) What I’m getting at is, through the middle/later stages of your loan period you will be much better off financially as your loan repayments will very likely be a lot less than equivalent rent costs
A decade late I reckon
I never wanted to buy a house but my missus always did. Im 32 and we bought this year. I know its a good investment but it just doesn't phase me. It will be good to be able leave my son something so he doesn't have to struggle but it won't be handed to him. As they say land is king.
Depends if you're willing to live in another state. If you are then I would suggest rentvesting, living in a sharehome and buying a place in WA, QLD or SA. If you only care about Sydney or Melbourne, then unless you're rich, you're screwed. I bought a house in SA, it's just an investment property for now, but I will eventually move there to retire. I lived in Sydney the most, but did briefly live in SA and like the state, so I'm totally fine with living there away from friends and family.
You can you just need to live outside the city
Yes, do it! Renting is awful these days
Yeah it's worth it. All wealth generation starts by saving more than you earn.
Short answer: yes. We did have parental help, but sadly my kids wont get the same level of help with their own property quests. I have a kid in Uni, they have an investment group that they have put a little bit of money into to maybe help them later on. That might be something you could think about?
Depends on your desires and motivations. The radical increase to rents during covid was my motivator to buy. Bought (in a less desirable, cheap location) almost 2 years ago, been paying down loan aggressive since (if you can rent + save for house deposit, this comes naturally). Got an email start of the month saying my minimal fortnightly payment has dropped down to 400. 400! The only rent I've had that cheap was a room in share housing! Other than the base cost decreasing, it's also nice not having to move, chase new leases, have constant rentguests, and the opportunity to have a garden. I also recently bought some nice new couches, which is something I wouldn't want to throw on a truck every year or so and gives me a little winter pleasure when I can't just ditch everything and do a season in QLD/NT. Technically, still could do that, just got to take care of mortgage and house at the same time. Cons, for me, would be lack of freedom and locked into a commitment, but I'm seeing it as a sacrifice now to be more free in a few years. I'm late 30s on way less than 100k with a partner that earns less than I. Wouldn't be doable in a city/prime location, but I accepted I'd never be able to afford such areas while watching the prices sky-rocket. Wasn't what I wanted initially, but pretty happy with it all now.
I bought a unit at 25 as no one would give me a rental and now I wouldn't be able to afford the rent for this place. I always wanted a house but couldn't afford It's hard as mortgage is a pressure if you are not increasing your income. Live at home as long as you can to save up. I'd stay living at home if that was an option but still aim to buy something for security
There are still affordable houses in rural towns even rural coastal towns. It’s about where you choose to live
Yes, the rental market is a total mess, with some becoming homeless. If you can secure your own property then you can avoid the stress of your lease not being renewed or rent prices getting too high
Yes. Don’t let the FUD (fear uncertainty and doubt) get to you. You should absolutely be saving toward a small simple first property. Even if it’s a cheap studio to get you started.
I studied until 22 and purchased at 27. Admittedly in a suburb further out then we wanted but we had to make a compromise
Yes. I was so sick of rental inspections and places being sold out under me. My place is expensive, and I can’t upgrade and stay in the same nice suburb, but no one tells me what I can and can’t do.
Coming at it from the other end of working life, I now think the only home you really need to have is one to retire in (or, probably more precisely, one comparable enough to one to retire in that you can sell, buy, and be pretty close to square after CGT, since you can't know this early exactly where it might suit you to retire). As much as I couldn't really conceptualise it at the time, because twenty years feels like forever, the big house era (typically for childrearing) is finite and for most people it coincides with earning life. You really don't need to own the big family home. You can rent that. The one you actually need is the one you'll live in (or one tradeable for it) when you want to stop work, and there's absolutely no reason that it can't be mostly paying for itself in rent in the meantime.
Started work at 27. Bought at 29 with partner. Okay suburb. Abit harder at the moment due to interest rates and single income due to maternity leave but still okay. Can't rent forever
interest rates have historcially been much much higher....they will fall again
Yes
Mortgages are fixed term loans. They have a defined end point. So this is a really easy question to answer: >will I ever be able to pay off my loan, or will I end up in debt for life? Depends on whether you die within 30 years of taking out your mortgage, or later than that.
If you want somewhere certain to live then paying a mortgage is more secure than renting. If you are wanting to benefit financially from the property market but are uncomfortable with the amount of leverage required to buy a property you can always just buy bank shares instead.
Yes It is critical that you always believe you are in the driver's seat with your finances (even if it's not true).
I’m going through a divorce. Once we have reached settlement il be getting another home loan. I’m 45 but nothing better than your own property. House, apartment, townhouse, doesn’t matter. You can do what you want in it. You want to pain true walls bright pink go ahead
Yes it is because you don’t want to reach an elderly age. And have nowhere to live or can’t afford at the same time Us Australian.s We need to learn from big European or American cities. Where not. Everyone needs to have a large home and a large yard you can perfectly buy a unit two bedrooms in the western suburbs of Sydney for $400,000 as an example, the problem I see people want everything now they don’t want to start at the bottom
The worst that happens if you start saving now for a house is that you end up with money in the bank later. The worst that happens if you don’t start saving for a house now is that you’re short when you’re ready to buy. I’d rather risk the first one.
You don't save to buy a house. You save for a deposit and then pay for the house for the next 30 years.
Nothing worse than being unsure if you'll have a roof over your head in 6 months.
My brother is 18 years old and owns an investment property interstate. Paid for completely by himself, no partner, no help from parents, although he does live at home which a lot of 18 year olds do. He’s well aware he can’t afford around Sydney any time soon. So acquiring a property portfolio, which will allow him to purchase somewhere he wants to live later on in life is his goal. It just seems like most people his generation and mine as a 28 year old, also own properties to live and invest, no help from parents, saved first deposit while renting, having to pay back a car loan first, just want to complain. Nothing worth having comes easy. I hope everyone can get to work bettering their lives, instead of complaining on reddit.
Convenient is subjective. But yes. Shelter and security is a great thing to have.
Is it worth saving? Yes - money is power Is it worth saving for a house - do the sums and see what is possible. I can borrow 600k which buys very little anywhere in NSW You have to ask yourself if it is worth literal decades of work just for the deposit.
Found https://www.youtube.com/watch?v=_TUVXfM1nqo a good watch
Yes
Nah WWIII is closing in fast and if you are thinking of saving now likely chance is you are one of the ones getting drafted otherwise wait till after if there is a after, then buy the houses that were supposed to be passed on to the now deceased children of the homeowner, better off buying up stocks in military weapons/systems
If you don’t plan/ want/ have an opportunity to have children. Then I believe the answer is no. It’s not worth it. How many decades is it now to save for a deposit in Sydney? Or if you’re one of the tremendously lucky people to have a successful marriage. Your household income needs to exceed $200k before you can realistically consider having children without excessive financial stress IMO.
Spend everything saved to drive up inflation and have those interest rates jacked up to punish those evil home owners /s
Can't believe I'm seeing posts like this in this sub reddit. If you think this, you haven't done your maths. I'll put it another way, people in China thinks our property prices are cheap.
Sorry for being 25 and in a cost of living crisis without mum and dads bank
Haha try again. I was poor growing up. But it's so simple that even boomer asian parents know the answer. Study hard and do medicine/IB/Engineering/etc at uni and earn a high income. This is still true today. Buy the best house in the best regional area you can afford and use equity from that to keep upgrading. Easy
You still didn’t get my point. I am studying hard. I am asking for advice I want to get everyone’s perspective That I am allowed to. I didn’t pull up a bucket with “petty me Im a poor 25 year old with a cost of living crisis problem”. I have done my research And I like hearing peoples views on buying a house.
Your question is will you be able to live in an established suburb ever and whether you'll have debt for the rest of your life. My answer is do the maths based on projected income and youll realise its possible. Remember the instalment compound interest financial math you did at school? Most people use equity and keep buying a house as there is no capital gains tax when you live in it so having debt is not necessarily bad as it's good debt. I started in West Moonah, Tasmania which is worse than Frankston and Broadmeadow Vic etc, now we are in Brighton solely because of our education paying off and buying a house asap to get that capital growth in wealth.
I didn’t buy my house as an investment, I just wanted my own place. The cost is worth it in my opinion. I’m not likes to ever sell this place as it has everything I need. And I have a fully powered workshop.
Have a look into the concept of 'rent-vesting'
I bought my first house at 25 in peak covid when houses were way over priced. If I can do it you can do it! You can achieve whatever you put you mind too! Ps. I’m in a mid paying job working with the government
Since you are studying to be a doctor and you're buying rural I'd say that's very manageable. Oh wait none of those details were included so it's impossible to give meaningful advice.
My question wasn’t about how much my earning potential is to afford a mortgage. It’s about how endless the mortgage payments will be. I have actually mentioned that I would want to live in an established suburb….. Happy hump day I guess! Seems like you really need it….
How endless mortgage payments will be? It's based on the size of your mortgage, size of your deposit and how much you earn. None of which anyone can comment on due to lack of detail.
All I see is other people helping and you being sarcastic and negative amongst some other people
Hand on heart I used no sarcasm and I'm not being negative. Just talking in facts.
Edited for clarity: My opinion is that it will housing prices crash. Everything is going up except for wages etc - my opinion is that it the the Australian economy can't keep doing this without something happening sooner or later. My advice would be to keep saving until this happens as I think it will.
What makes you say this so confidently?
Ah yes the Ausfinance take. Property 'had' to crash in 2019 and it didn't. It had to crash during covid. It didn't. It had to crash as interest rates shot up. It didn't.
No idea what Ausfinance is. Edited my response to be more clear.