What exactly is considered 'affordable' in the year 2011?

Consider the following:

1. Distance to CBD (eg. Melbourne or Sydney, NOT a major regional center)
2. Distance to schools, shops such as food, cafes, shopping strip or shopping centers, transport, employment (ie. walking, cycling, driving distance and if so, how many minutes)
3. Distance to parks, beach/ water's edge or other open space
4. Distance from busy main roads, commercial or industrial establishments and train lines (but NOT train station)
5. Size of the house (ie. single/ double storey, detached, townhouse, terrace, unit or apartment, number of bedrooms, bathrooms, living areas both inside and outdoors, study, type and size of kitchen, garage or carport, swimming pool, tennis court)
6. General state of repair of the house (ie. well-maintained, in need of renovation or in need of detonation)
7. Size of the land on which house resides (ie. land size in square meters)
8. Crime rate (ie. in terms of crime statistics as listed on RACV. For example, crime rate of 35 means one in every 35 houses is burgled each year, and crime rate of 75 means one in every 75 houses is burgled each year)
9. Street aspect (ie. tree-lined, quality of neighbours, general state of maintenance of houses)
10. Price range (include an explanation of why this price range is considered 'affordable')

Not a 'complete' list by any stretch, but consider the above for a start.

'Perception' usually lags behind 'reality' when it comes to reading market cycles. That is, we could perceive the market to be 'rising' when it has already 'peaked' or is in the process of 'correcting'. Or we could perceive that the market is 'crashing' when it has already 'bottomed' or beginning to 'recover'.

In retrospect this would all become crystal clear. But at the time itself things are always a bit more murky. And when large sums of money are involved and the asset being discussed is considered an 'essential', things do get heated indeed.

Good thing I kept the articles. It helped me track it down online. Here it is:

http://www.businessday.com.au/business/property/a-ring-of-confidence-20110405-1d2v7.html

Also have a read of this earlier article about Geelong becoming a popular alternative to those wanting to live on the Mornington Peninsula:

http://theage.domain.com.au/real-estate-news/the-other-peninsula-20110321-1c3bw.html

Hope it helps.

Correct, and this is why someone mentioned (sometime back, and probably on a different thread) that it's not surprising to see property prices going up the way they have. Our hourly pay rates (don't know about you, but I did get a 1.9% payrise in my old job last year, after which I promptly resigned, got a new job and secured a 30% pay rise in the process), prices of oil, energy, gold, silver, cost of food etc have all risen to some degree in recent years and going by the news, our cost of living is set to go even higher.

So, how can all these 'basics' get more expensive and property not? This statement is not directed at anyone in particular but I'm just trying to say it's hardly surprising that property is becoming more expensive as the years roll on.

Likewise I think the graph posted earlier is simplistic. It seems to suggest property is losing value in comparison to gold. Really, what it probably means is that property has not risen in price as fast as gold, and in so doing is in a bit of a flat patch or going through what the bears like to call a 'bust'. And this could be due to economic conditions. When economic conditions deteriorate and things are uncertain, gold of course goes up in value faster than property does. What I meant was that when this happens (as is happening now), then property has the potential to play a 'catch up' game in terms of value and potentially be in a position for more rapid price growth.

Glad you are, and so am I, and a number of others here. But believe me, there's also others who just talk and sit on their hands.

If interest rates dropped that low here, I'd be fixin'!

And that's a fair enough concern. People who know me in person would say I'm an absolute stress head. However in situations like this, I try to think along the lines of 'live and let be'. We can only make a decision based on whatever information we have had at any one point of time. And of course we plan for success, not plan for failure. Whatever the govt does tomorrow is beyond our control. But it would be very interesting to see what happens when negative gearing is removed.

Personally, I have done my sums and will manage even without the benefits of negative gearing. I'm sure that likewise, plenty of other investors also can. Investors that rely heavily on their tax witholding variation forms to survive day-to-day are geared to the hilt and probably shouldn't be so heavily invested anyway.

Andrew_A wrote:

I like the following similar saying

'When the time comes to  buy… you won't want to'

Which leads to another principle.

Q: When is it the best time to buy real estate?
A: When you can afford to do so.

So…who's already bought gold?

This is why perhaps, some people say that 'time in the market' is as important as 'timing the market'. It'd be great to be right on both counts however.

People can sit around waiting for the crash to happen. But when it does, the vast majority of them will be making water in their pants rather than going out and buying. Public perception always lags behind reality when it comes to investing.

Well I've read this many times before: it is investors that drive up rents and homebuyers/ owner-occupiers drive up house prices. Then there are a number of people that also say they've not had a rent rise in yonks. The corollary of all this is: both renters and their landlords are hurting…well, owner-occupiers are too, but it is actually owner-occupiers that compete with renters and are their greatest enemy, driving up home prices and preventing would be FHB from getting a foot in the door.

It's easy for renters to fall into the perception that they are servants and paying the mortgage for their landlord. The truth is that it's a partnership. Landlord and renter both have a role to play. Landlord provides the housing, renter pays 'boarding fees'. I've also read this before somewhere: to earn a million dollars, you have to provide a million dollars worth of services. It is the landlord's responsibility to provide a service to renters, and boy do I know it.

When bees invade the roof, I respond to my tenant's calls and get pest people out. When a big tree branch falls, I respond, get quotes to get it removed, or apply for a permit to get the whole tree removed. When I know the carport might be rotting and potentially unsafe, I respond and get it repaired. Carpet is breaking down and floorboards rotting? I respond again and get it fixed up. A responsible landlord is precisely this: to respond to the needs of tenants.

So tell us, who is the real servant? No, there is no servant at all in this relationship. It is a partnership.