Hi All,
Australia in spiraling into amazing debt levels – in 1995 interest rates were 16% or there abouts (how old were you then?)
Where do you see the problems or a crash as so many predict, i mean just look at whats happening in the states will it flow over here. Australians are the highest in the world for debt per head of population.
Do you see any problems and what age group do you fall into when you answer ie; 20's 30's 40's etc
D
Age: Early 30s.
Outlook: The end of this recent period of easy money and hyper-debt expansion is going to have a profound influence over my life. This is not a normal state of affairs:
But credit card debt is trifling compared to mortgage debt:
Courtesy of Steve Keen: http://debtdeflation.com/blogs/Cheers, F. [cowboy2]
I am 30 and only just starting to head down the investing road. 6 months ago i believed that if you bought a house it will double in value every 7 to 10 years. Now i know there are other drivers that control prices and none are looking that great for the next few years. But if i was given the chance not to buy my IP 6 months ago i still think i would have as my goals are long term and im more concerned of its value in 10 to 20 years. My immediate plans are to pay my PPOR of completly in the next year and also pay about $50,000 of my IP in the following year thus making it cash flow neutral and not a burden on my personal cash flow.My job is very secure and i may have kids in say 3 to 4 years.If the above plan happens a bust will not effect me greatly and i should be in a position to snap up a bargain if one presents itself. I considered jumping in now to buy another property but i feel reducing debt at the moment would be a smarter move for me.
I have no other debt like store cards,credit cards or car loans.
I owe $100,000 on my PPOR and $300,000 on my IP at the momentdevo76 wrote:I am 30 and only just starting to head down the investing road. 6 months ago i believed that if you bought a house it will double in value every 7 to 10 years. Now i know there are other drivers that control prices and none are looking that great for the next few years. But if i was given the chance not to buy my IP 6 months ago i still think i would have as my goals are long term and im more concerned of its value in 10 to 20 years. My immediate plans are to pay my PPOR of completly in the next year and also pay about $50,000 of my IP in the following year thus making it cash flow neutral and not a burden on my personal cash flow.My job is very secure and i may have kids in say 3 to 4 years.If the above plan happens a bust will not effect me greatly and i should be in a position to snap up a bargain if one presents itself. I considered jumping in now to buy another property but i feel reducing debt at the moment would be a smarter move for me.
I have no other debt like store cards,credit cards or car loans.
I owe $100,000 on my PPOR and $300,000 on my IP at the momentGood plan Devo, except I think that as soon as you are able to SAFELY service another I.P you should do it. Make sure your PPoR repayments are never in jeopardy though.
(by the way; is your name from Devo – the band?) Whip it good!
I am 46 and I think I'm one of the oldest bas***rds here, judging by what I read about the gloom and doom of the future in property.
I started buying properties in 1984 (first PPOR @ $92k) and have seen some monumental disasters worldwide, high interest rates (Bob and Paul era), 2 property booms and 2 "busts', wars, 2 stockmarket booms and crashes, high unemployment, droughts etc, etc. All stuff to make you worry.
At the end of the day, property was always hard to buy for the first home buyer, petrol was always too expensive and the wages never seemed to go up in line with the cost of living.
But one thing has always kept happening; well positioned, good quality housing (units or houses) or land, always went up in price. This is because it is a life necessity; people need it whether they rent it or buy it. The 7-10 year double in price rule still works.
I agree, there are horror stories of people going to the wall through property, horror media reports on market slumps, but this is usually "operator error"; they over-extend, or get over-exposed in LVR, pay too much, don't factor in life in their expenses, their money habits are bad, buy an off-the-plan speculative apartment at the wrong time etc. No-one forced them to buy, but for various reasons they have to sell, and sell low.
Market demand and "ability to buy" will always determine the price – nothing else will, from my experience. When credit is tight and the buyers disappear, prices slow down for a while. When credit is easy, jobs are plentiful, prices go up.
The wild card in today's world is the (consumer) debt levels. Personally, I think this will only affect the market short term like any other factor I've mentioned. There will always people with out of control spending and no financial intelligence (sadly; 90% of the population) and there will always be people who are financially solid.
The finacially challenged will crash and burn as always, have to sell their homes, or be evicted for not paying the rent, or just continue to scrape by, living pay check to paycheck.
But the housing will still be there and there will always be someone who can afford to buy or rent it.
I am 39 years old and I was 27 when we had to have the recession we had to have. Property prices fell when interest rates rose to 19% if the rates keep going up in the future the first home buyer or first property investors are going to be under financial stress.
With loans being so much larger than in 1995 I think we will see a lot of pain and foreclosures of loans in the future.
Even our leaders were discussing it in parliament yesterday about how families will cope with rising child care costs, rising petrol costs, rising food costs and rising mortgage costs.I am 30,
we have PPOR purchased 4 years ago. Owe 20% of market value. We have plenty of disposable income (me + wife) but sinking it all in PPOR. Will pay out in 12 months. Still live without furniture and TV Want to be debt free when / if real estate market burst. This way we will be able to snap good deal paying cash and not be effected by high interest rateComparing to what our company pay general factory laborers i do not see how people can support the loans if interest to go up. Not to mention that guys have loans and drive $50K cars ( borrowed money) and this is all on $40K wage.
Attitude is wrong, it will burst somewhere as situation is not sustainable.devo76 wrote:I am 30 and only just starting to head down the investing road. 6 months ago i believed that if you bought a house it will double in value every 7 to 10 years. Now i know there are other drivers that control prices and none are looking that great for the next few years. But if i was given the chance not to buy my IP 6 months ago i still think i would have as my goals are long term and im more concerned of its value in 10 to 20 years. My immediate plans are to pay my PPOR of completly in the next year and also pay about $50,000 of my IP in the following year thus making it cash flow neutral and not a burden on my personal cash flow.My job is very secure and i may have kids in say 3 to 4 years.If the above plan happens a bust will not effect me greatly and i should be in a position to snap up a bargain if one presents itself. I considered jumping in now to buy another property but i feel reducing debt at the moment would be a smarter move for me.
I have no other debt like store cards,credit cards or car loans.
I owe $100,000 on my PPOR and $300,000 on my IP at the momentGeeeeezus how much are you earning if you plan to pay off your $100k debt on you PPOR in ONE YEAR??? You must be grossing nearly $200k?
Sorry i forgot to add i have another asset that i will sell reducing my PPOR to around $50,000 in a couple of months.Still probably a bit optimistic but thats the plan im trying to achieve.$200,000 i wish. About half of that
L.A Aussie wrote:devo76 wrote:I am 30 and only just starting to head down the investing road. 6 months ago i believed that if you bought a house it will double in value every 7 to 10 years. Now i know there are other drivers that control prices and none are looking that great for the next few years. But if i was given the chance not to buy my IP 6 months ago i still think i would have as my goals are long term and im more concerned of its value in 10 to 20 years. My immediate plans are to pay my PPOR of completly in the next year and also pay about $50,000 of my IP in the following year thus making it cash flow neutral and not a burden on my personal cash flow.My job is very secure and i may have kids in say 3 to 4 years.If the above plan happens a bust will not effect me greatly and i should be in a position to snap up a bargain if one presents itself. I considered jumping in now to buy another property but i feel reducing debt at the moment would be a smarter move for me.
I have no other debt like store cards,credit cards or car loans.
I owe $100,000 on my PPOR and $300,000 on my IP at the momentGood plan Devo, except I think that as soon as you are able to SAFELY service another I.P you should do it. Make sure your PPoR repayments are never in jeopardy though.
(by the way; is your name from Devo – the band?) Whip it good!
I am 46 and I think I'm one of the oldest bas***rds here, judging by what I read about the gloom and doom of the future in property.
I started buying properties in 1984 (first PPOR @ $92k) and have seen some monumental disasters worldwide, high interest rates (Bob and Paul era), 2 property booms and 2 "busts', wars, 2 stockmarket booms and crashes, high unemployment, droughts etc, etc. All stuff to make you worry.
At the end of the day, property was always hard to buy for the first home buyer, petrol was always too expensive and the wages never seemed to go up in line with the cost of living.
But one thing has always kept happening; well positioned, good quality housing (units or houses) or land, always went up in price. This is because it is a life necessity; people need it whether they rent it or buy it. The 7-10 year double in price rule still works.
I agree, there are horror stories of people going to the wall through property, horror media reports on market slumps, but this is usually "operator error"; they over-extend, or get over-exposed in LVR, pay too much, don't factor in life in their expenses, their money habits are bad, buy an off-the-plan speculative apartment at the wrong time etc. No-one forced them to buy, but for various reasons they have to sell, and sell low.
Market demand and "ability to buy" will always determine the price – nothing else will, from my experience. When credit is tight and the buyers disappear, prices slow down for a while. When credit is easy, jobs are plentiful, prices go up.
The wild card in today's world is the (consumer) debt levels. Personally, I think this will only affect the market short term like any other factor I've mentioned. There will always people with out of control spending and no financial intelligence (sadly; 90% of the population) and there will always be people who are financially solid.
The finacially challenged will crash and burn as always, have to sell their homes, or be evicted for not paying the rent, or just continue to scrape by, living pay check to paycheck.
But the housing will still be there and there will always be someone who can afford to buy or rent it.
Hi there. The name refers to my own name STEVEN. STEVO, DEVO. i also have a few other names from my friends but there probably not appropriate ha ha ha.
Great post, makes me feel a little better as i feel the same way. Population is growing and they all need to live somewhere.
I also believe the people that suffer in a slow down are the ones skating the edge of survival in the first place. If they have nowhere to move then they are going to fall. Very sad. I personaly feel i will be safe as my PPOR debt is very low even if i dont pay it all off and my IP is in a very desirable central location leaving me with the feeling it falls into the safer catagory of property investment.So i hope i will ride out any wild property ride in the near future and be ready to expand when i believe its time.I will add i bought my PPOR 5 years ago and up until 6 months ago i paid NONE OFF, NADA ZILCH. I wasted my money but had a ball doing it with no regreats. Life is for living. But luckily another investment has paid back what i have wasted and now im getting ahead.If i didnt stuff around i would own my house now but i have no regreats, I have a circle of friends that i have done amazing things with.now its time to get ahead
Want to be debt free when / if real estate market burst. This way we will be able to snap good deal paying cash and not be effected by high interest rate
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