wow , i'm gonna be rich

but aren't things also go UP?

using the same logic

My $50k salary today with be $2.62 million dollars a year in 2047
A commodore will be worth $1.8mill
Petrol with be $72/litre
and a loaf of bread $135

something to look forward to hey

cheers…….with my bottle of red $20 today.,……$905 in 2047

Hi spudsta

your post is a few months old, but probably still of interest.

"Does anyone know where to get proper statistics?"

Try the RBA.gov.au site for salary statistic

"Am i wrong?"

NO

"Have salaries increased along with property or has property had a large leap recently and salaries have not?"

The second one, and not just "recently".

Let me show you

In 1996, when the present government was elected, the median price house in Melbourne was $135K
and the average wages (gross) was 664.40  take away tax 161.78 and you had 505.62 Nett.

So if you had 10% deposit, your loan repayments on $121.5K at 10.5% was 263.59 weekly  or 52.9% of your Nett wage.

Today June 2007, the median house price is $420k,
and the average wages is $1091.20 take away tax of 255.20 and you have 836.00 Nett.

10% deposit, and your loan repayments on $378K at 8.05% is 673.27 weekly or 80.5% of your Nett wage.

Nett wages since from 1996 to 2007 have gone up 66%
Houses prices in the same period have gone up $211%

So one of 2 things can happen to bring back the balance

Wages increase by the same amount as property (211%)  making the current wage $1,563.15 nett or $2,274 gross per week
or houses reduce to 66%, so the median house price in melbourne today should be $224K.

So which of the 2 is most likely?

Neither

Oh well,  we'll just have to grim and bear the housing affordability problem

cheers

Well Duckster, thats partly true

But i do take offence to your statement "I feel that Labor may have learned from the last recession …………………….."

You obviously wheren't there for the Howard Recession of 1982

Let me remind you with some extracts from my local paper

June 1982
"by allowing the banks to lift morgage interest rates, it touched off a chain reaction that, despite Treasurer John Howard's absurd insistence to the contrary, has forces many young couples from their homes. Many more must be hanging on by the skin of their teeth. People struggling to keep a roof over their heads will cut back in other areas to be able to meet their mortgage repayments."

Sound familiar

Another extract from local newspaper July 1982
"rental accommodation was in a crisis situation, rents have gone up an average of 40% in the past year"

I'm sure there'll be some IP owners hoping the same will happen again

One more extract July 1982
"If John Howard insists the Government is "doing its best" to keep down housing interest rates, then its clear "best" is not good enough. If for no other reason than its own political survival, the Government must come up with a plan that keeps people in their homes"

Of course if you did a bit of research, and looked up the Hansard records of 1982 , you'll find gems like this…….

Hansard Oct. 1982

Humphrey (Griffith) "Is the present interest rate for most commercial enterprises between 17 per cent and 20 per cent and is this the most destructive force to business and the private sector."

Howard (Bennalong) "It is not possible to provide exact figures on interest costs for commercial enterprises, but available data suggest a range of about 15 per cent to 20 per cent for short term commercial interest rates. Such high interest rates are undeniably detrimental to private sector activity………….."

WHAT.,…..your the Treasurer of the country, and you carn't provide the EXACT figure"

How about…..PICK UP PHONE……RING RBA……."Hi it JH here, greatest Treasurer this country has ever had………can you ask the girls in the typing pool what the current 90 day interest bill is?"

"Its  21.39%"

repeat 21.39%. in April 1982 ..the highest of any government in the history of australia

I know…..i started a businesses in 1978….and yes I paid thru the nose………..

BUT interest rates for home loans where held at 13.5% for home loans by government regulation, and of course John Howard realised this was not substainable.

Why?

Well how can 16.5% be offered to depositors for their money,
and Home borrowers be charged 13.5%????

IT CARN'T

thats why……………………

Extract Local Paper July 1982
"Loans Hard to come by…
banks are undoubtedly diverting new applicants for loans to more expensive forms of borrowing, such as personal loans or even hire purchase."

15 – 20%….WOW……..

ALL THIS UNDER  JOHN HOWARD AS TRESURER

Hansard Mar 1982

"BANK MORTAGE INTEREST RATES
Mr WILLIS —My question to the Treasurer (J.Howard) concerns the Campbell Committee of Inquiry into the Australian Financial System and its conclusion that bank mortgage interest rates should be deregulated. Is the Treasurer aware that the Committee concluded that, with deregulation, bank mortgage rates would rise from their current level of 12 1/2 per cent to the Government bond rate, now at 15 per cent? Is the Treasurer also aware that a recent study by two economists at the Australian National University Centre for Economics Policy Research showed that at the interest rate levels prevailing last December deregulation would raise the average mortgage interest rate from 13.6 per cent to between 17 per cent and 18 per cent? In view of these horrendous interest rate consequences that would flow from deregulation and the great concern in the community about the future course of interest rates, will the Treasurer now assure the House that the Government will reject out of hand the Campbell Committee proposal for deregulation of interest rates?

Mr HOWARD —I am aware of the conclusions reached in the Campbell Committee report . In fairness to the report I think I should point out to the honourable gentleman that the conclusion was that certain interest rates would suffer the rises suggested by the honourable gentleman, other interest rates could well fall and that it could well be that the average cost of money borrowed might not vary over time a great deal at all. I think in all the debate on this issue variations in the average cost of money over a period have to be borne in mind. I have made it clear on a number of occasions that the recommendations of the Campbell report are relevant to what the Government is looking at in the housing area. I do not intend to respond to the invitation of the honourable member for Gellibrand and in any way pre-empt a decision of the Cabinet at this time or at some future time on that or other recommendations of the Campbell report."

And Yes, I did go thru the 1990 Keating recession

While a lot of businesses where pumping money into Commerical properties like there was no tomorrow….
I pumped it into my business…………..

St.Kilda Rd Melbourne has bearly absorbed the 1990 office construction boom.

The great thing about recessions……is BARGAINS….boy, can you buy bargains

if your hocked up to the hilt………your gone
for every loser…..there's a winner

After 30 years of booms and busts, all I can say is………………..

"For all the cr*p that John Howard has spun in 30 years in politics,
this one……is the most truthful"

(Hansard Dec1982)

"Governments do not, of course, have complete control over economic events and cannot bear sole responsibility for economic outcomes."

THANK YOU…..&   GOOD LUCK

Micheal……what did you just say…………..

“parts of Frankston make good sense as investment areas and there are some good long term development opportunities there.

We have bought 3 properties in Frankston for clients in December and have offers on 3 others out at present. Most of these have been bought by our clients with the medium to long term view of subdivision and development.”

completely different to your opinion in feb 2006

“I would not invest there, I think I could find better areas.

Its just not a great strategy for long term wealth, even if the property is well priced. Prices are low there for a reason – fewer people want to live or invest there, and this is unlikley to change for a long time.”

has it changed that much in 12 months??

or is this just flip flop???

hi
well finally i got a phone call from my local MP
and not surprisingly, the reply was “You can do it…..but you WILL pay TAX on it”

What sort of fools do people like Micheal Yardney (http://www.propertyupdate.com.au/articles/2/1/The-Tax-Benefits-of-Trust) and Dale Goss think we are???

No Dale…going to the cinema with the family and claiming it through the Trusts is a NO -NO…..
unless your in the film industry and your doing it for a work related expense.
No Dale…buying a CD and claiming it through your Trust is a NO-NO…
unless your in a relevant industry and its a work related expense.

Because if its NOT work related…guess what…TAX is payable.

Why do we have to put up with this crap??????

micheal and dale, before you spout out pie in the sky ideas, it might pay to substantiate those claim.
A good starting point would be the the ATO.
try emailing [email protected]
so that claims like those above are clarified before distributing to the public.

hb

Unreal…..your going to complete your law degree this year at the age of 22….(a course that normal takes 6 years at uni)….you must be a boy genius.
it surprises me that me that your on this forum looking for advice from a few dreamers and mortgage brokers.
How about looking outside the square….
Have you thought of starting your own Law practice……
maybe at first a small practise, charging about $250/hr….that makes about $2,000 a day….$10k a week….$500k a year.

Makes property investment look like petty cash

Then image what could happen if you expanded you practice……..

image all the properties you could buy then…..

maybe you could even specialize in property law…..

Avenged, leave the FHOG to people who really need it…you’ll make a fortune just being a lawyer…

hb

hi
just to clarify retirement………………..
when you retire FULL TIME…income earnings and withdrawals TAX FREE
but if you decide to keep working after 60 and still access your super f(or extra money) than the earnings will be TAXed at 15%…
withdrawal TAX FREE
simple hey

hb

hi
Isn’t all this advice a bit old hat now.
With the new tax rates coming into affect as of july 1st 2006, it makes trust and companies a bit parse
Heres an extract from Kel Fitzalan…Deloitte Tax Service partner.
” With the new mariginal tax rates, individuals will be able to earn about $150,000 before the effective tax rate on their income exceeds the 30% company tax rate.
The combined income for a couple invovled in a business can be up to $300,000 , before it becomes more effective to use a company.
If you use a trust, you can vary the income distributions to those beneficiaries who will pay less tax”

so there you have it, from a tax expert.

Now JL
Is setting up the company and the trust and be able to pay your kids ($700 each) really worth the expense??????

Afterall , how much to setup $$$$$$
how much to administrate $$$$$$$
are you paying to much $$$$$$$, for nothing

hb

Sadly Wagonmaster, if you didn’t have the SMSF set up before 9 may (budget night) and the property in it….your history.
why…..
Simply to stop the exploitation of this generous super system.

If your over 50 and in the transition stage to retirement, you will be allow 150k a year for 3 years max. total 450k (this idea is under review)

Under 50.. its max of 50k

receive the rent and any future capital gain tax free?

WRONG

you will now pay 15% tax of earnings…..
but you will pay NO TAX on withdrawals

under the old system…once your retired..INCOME WAS TAX FREE
but you paid 15% tax on withdrawals, except that you received a 15% rebate upto an amount which pretty well made the withdraw TAX FREE

have you noticed something……..

Under the old complicated system when you retire……
INCOME TAX FREE on EARNINGS…and generally withdrawals TAX FREE

Under the new easier system when you retire…..
INCOME 15% on EARNINGS….withdrawals TAX FREE

No wonder our treasurer was smiling so much……..

who’s conning who????

hb

Well on my calculation wezwaz is closer to the mark…..
if you bought a $400k property in victoria on 40k deposit,
you would pay
Stamp duty on transfer of land $19,660
Stamp duty on mortgage: $1,404
Registration of transfer of land: $1,074
Registration of mortgage: $59
Title search: $13
Registration of mortgage: $59
Loan application fee / package fee: $600
Mortgage insurance: $4,320
House insurance: $600
Solicitor/Conveyancing fees: $500
Building inspection: $500
Other costs including connecting utilities: $100
and whatever else i’ve missed…..
that all adds up to………………. $28,889

Had you taken that $40k and bought HZN shares 58 days ago when they where just 23 cents……
you could have sold them today. for…46 cents
making a cool 100% gain in 58 days
and only cost $29.95 to buy
$29.95 to sell

sounds so much easier…….

your right Terry
I agree it is ridiculous with the stamp duty issues. Makes you want to abondon property and invest in shares!

i have and loving it

harry