Something to keep in mind when the next housing affordability beat up story makes the news:

http://www.news.com.au/business/story/0,23636,22208735-14302,00.html

Households are spending about the same on housing as they have before, but a lot more on the air-con, 2nd fridge, dishwasher etc…

Interestingly less is being spent on food and clothes to support this habit it seems!

Discuss!

A few people have mentioned giving books to a partner to get them inspired/converted What about for the parter that doesn't read much?  I would love to have my girlfriend on board but unless theres a version of 'Rich Dad' that is presented by Tyra Banks (she loves Next Top Model) then I don't see it happening…

I'm interested to hear experiences of anyone who has a negotiated an option on a simple residential deal?  In theory it sounds great… especially for developments because you could get the approvals happening without having the holding costs eating away at you.  But I wonder how you would get an regular old vendor to agree to this.  What sort of option fee would be considered reasonable?

Here's my take and I am climbing into my flame suit as I write it.

I don't think the government should be held responsible for providing affordable property.  Accomodation yes, property no.  People need to stop thinking that they are 'owed' a choice of nice houses in nice metropolitan suburbs that can be bought with a first home loan.

There are a lot of other investments that are out of reach of the average Joe, but no-one is calling for the Govt to make them more affordable!  Why should it be different for houses?  The performance of the housing market is evidence of a strong economy and good financial policy for the Government, for which they should be commended if you ask me.  Any effort to artificially make housing 'affordable' will just upset the market balance and benefit no one.

But you can't live in other investments you say, everyone needs a home, a man's home is his castle etc.  So rent!  Save the money you would have paid into a mortgage and when you have enough, invest it.  Invest in something that you have considered on its financial merits ONLY, not clouded by the emotions of find a 'home' to nest it.

/rant over!

I think Beenleigh is a great investment choice

I bought a 3 Bed house in Eagleby in late 03 for 185k, rented for $190.

Signed contracts to sell it a month or so ago for 265k, tenant in there is paying $240 pw.

Good times.

Yikes I am getting confused here.

Elkam could elaborate on what you mean by planning ahead and using an offset account?  Sorry just not following there.

I would have thought that whichever house your are not occupying could be considered as an investment property in the eyes of the ATO and therefore any interest accruing against would be deductible.  Not that simple? 

ie

1.  Refinance PPOR for purchase costs & deposit of new PPOR

2.  Move into new PPOR

3.  Rent out old PPOR transforming it into an IP

4.  From day one that IP is tenanted, interest accrued against it is deductible

This leads me to another question …Does an IP have to be tenanted to deduct interest?  Can you negative gear land for example?

Good explanation v8ghia, cleared some things up for me.

What do you think about the strategy of going to the 'strict' lenders first, then working your way down to lenders like Rams who are fairly lenient?

I've been living in Adelaide for over 3 years now, and the market has continued to surprise me.  If you look at the fundamentals, the picture is not good, but this has not stopped house prices moving up steadily over the last couple years.

Some of things that worry me about the market:

– Small overall size of market compared to other capitals
– Weaker & less diverse local economy
– Very small annual population growth, mainly dependant on international immigration (interstate migration is -ve)
– Oversupply of dwellings forecast to deepen (new approvals vs new dwelling requirements)

HOWEVER… in the face of all that, well located properties near the city and/or beach are doing very well. Plus… and this is the clincher I believe… houses are much more affordable here than other capitals.  Where I live in Prospect, basically the first suburb north or the city, I'm renting a new-ish house that would be worth mid 300's.  Try and find that in Melb or Sydney!

I think it's a valid question.  From my limited experience most agents don't like offers with any non-standard terms included and I've heard more than once 'I don't think the vendor will be interested in that so I'm not inclined to pass it on…'

I'm not sure what the answer is.  Threatening the agent usually doesn't work… you need them on side to make the deal most of the time.  Maybe putting your offer in writing, clearly explaining the terms, could be a good way to go.  Easy for the agent to pass on and you get to decide how to present the offer to a degree.

While we're myth-busting… anyone care to bust this one?

I've heard… that once a company has 2 years of financial history showing some profit, the company can borrow without any of the directors needing to provide guarantees or declare their personal income.