Forum Replies Created
- Originally posted by peterp:Originally posted by Salubrious:
In the 4 Crn’s story they interview a Gentlemen who purchased a new home in the then new sub-division of Mt Druitt, he paid 10k for the property, his gross income was 8.5K!!!!
What would be the situation today? Mt Druitt 3 bedda 320k income 35k……wow simple but effective.
IIRC, the $10k/$8.5k example was from the early 1960s. $8.5k would have been a huge wage back then, and the average wage would have been nearer $2k pa.
So the house was worth about 5 times the average wage.
Assuming an average wage of $35k, then a multiple of 5 becomes $175k. But if we assume both partners working and a household income of $60k, then the house beocomes $300k.
Relative to household income the real price of property has increased, and it appears more expensive relative to household incomes than in the past. But maybe only 20-50%, no more (to the disappointment of spruikers that claim 10% cap growth per year). And the big city markets are maintained by the steady flow of migrants, the largest number of whom want to live in Sydney.
Another thing is that finance now is easier to get than 30 years ago and you can get low-doc loans, high LVRs, FHOG, etc.
Prices are set by what people are willing to pay. Willingness to pay is determined by what people can afford. What people can afford is determined by how much the banks are willing to lend. Thus the banks control house prices.
If the banks said ‘You must have 20% cash deposit and can only borrow up three times your annual income’ you can bet that this would kill the housing market as only first home buyers with good savings and investors with significant equity could afford to buy.
Peter
It was 1974 Pete so I guess you may as well start again.[biggrin] Also, he was the bred winner for the family which is another important factor. Today, unless both are working in a family situation, the chances of ever owning your own home are very restrictive.
Life is getting tougher because we all get sucked into the plastic perpetual puke of media advertising. I want more…………pitty communism sucked cause this idea aint workin either[blush2]
We are all made from Stars
So what you are saying Aussie is “screw commercial advertising”!!!![baaa]
Who says i need a Coca Cola to feel fookin good!
This is why it is what it is brothers and sisters, its an evil money driven society with rooms full of boardroom directors scheming up new and improved ways to pilpher and plunder our pockets.
How many bills drop in our letterbox’s each month? How many cent do we lose everytime we swipe the eftpos let alone the credit side of things? Who says we need that car, those earings and that flavoured ice cream? Who makes aware of all these amazing things?
It would be intersesting to conduct a survey on the spending habits of a single couple who are blind and compare it to a couple who can see………….
[suave][blink]We are all made from Stars
Auto sweep is also good for reducing loan debt.
We are all made from Stars
The big bang theory. Do you remember that clean up Australia guy? I cant place his name but I do remember seeing him on 60 minutes telling us how he once had over 2 or 3 hundred properties and lost the lot in the recession we had to have (thanx Paul)
We are all made from Stars
Parliment House and everyone in it…..
Reality TV
Fast Food
Credit Cards
Banks
USA
& bloody Ray Martins hair!We are all made from Stars
Originally posted by AusProp:it’s all about perception… I went to the shops for the first time in ages last Saturday – OMG! people were in a consumption frenzy – cars dumped all over the pavement, couldn’t get to counters… it felt like Christmas. it sure feels like boom times to me.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
My perception of what you have described John would be refected as more consumer debt, remember for every Aussie dollar earnt we borrow $1.30!
Think about all the traps set for the not so money smart, credit card ad’s, 48 year interest free ad’s etc etc. Then go to the next level like our youth who are not being taught much at all about saving.
What about the “Me” generation who still live with mum and dad at the age of 35? No savings no house no nothing!
Then we have good ol uncle Sam[medieval] financing a war at the tune of $6 Billion a week???? What do you think the outcome will be? When was the last time all these elements were tuned such as these?
Do the big guns really give a toss when they screw it all up again and again?
A very senior advisor for a certain government told me 10 months ago, “dont owe to much in 3 years time” meaning some heavy duty shit would go down in 06. Then the same date comes up 10 months later on 4 Corners?? Did the chills go down my spine!!
How many predicted the last bust?? Most were all roses and coffee before the bust, complacent go-getters most of whom got burnt, just like the next bust looming.
Property has doubled nearly every 7 years on a rough average, but if you monitor the situation now you will more than likely realize that the wage to borrow ratio is out of orbit! But then averages are averages. In the 4 Crn’s story they interview a Gentlemen who purchased a new home in the then new sub-division of Mt Druitt, he paid 10k for the property, his gross income was 8.5K!!!!
What would be the situation today? Mt Druitt 3 bedda 320k income 35k……wow simple but effective. i think the one thing people loose sight of is who is really the asstute investor? us[eh] or the Banks?[evil4]
What was that old saying? “when the shoe shine boy starts talking about share trading then it’s time to get out”[skull]
We are all made from Stars
Very true Purse. Im actually pondering the the idea of selling my residence off and investing the cash awaiting the crash so that I will come out with a nice little stash out of the property ash!
Yo
We are all made from Stars
Only the smart will prosper. Its always the way with life, just like a pyramid. The ones in last always get burnt.
Get ready for 13%
We are all made from Stars
Good One
We are all made from Stars
No worries Jo, your da greatest!
We are all made from Stars
Originally posted by Monopoly:Salubrious,
You are so lucky you’re not sitting next to me right now, I’d slap your backside silly!!!! LOL
Just kidding!!!
Man, you can edit faster than I can type!!!!!!
Glad to see you’re not pissed off with me…..I meant no malice to you, or the show for that matter; I have just had a hard day, and the idiot box annoys me at the best of times.
Still love me????????? [lmao]
Jo
How could i not love you! Your not silly, I have been here and read what you have done and all that Jazz. (you may not rmember me because I have changed my user name so many times lol)
Im sure if you had finished slapping me, we would be sipping on a Tea and bickies and having a good old laugh[biggrin]
Lifes to short and did you know that there are over One Million stars in the Universe for every grain of sand on our planet? Hard to fathom but true……[offtopic]
We are all made from Stars
I have!!!! Sorry monopoly!!
But did you know that for every $100 earned in the pocket of an Aussie worker, we also borrow $130!!
We are all made from Stars
I am in the right forum???? Im just digging too Monopoly, I know your a lover not a fighter but its just been so boring in here I thought I would throw some stones and see how far the ripples travelled.
I am chilled, trust me, even Antartica puts on a jumper when I rock over. Just havin fun…
We are all made from Stars
Then why comment? The program was not based on media hype, and I certainly dont fit 4 Corners into your typical TTonight/ACA module.
We are all facing a crises on a monumental scale, and I am not talking just about your variable interest rates.
Oh, and I just thought I may add this “Plenty has changed Monopoly”..
“Plenty”
We are all facing the “life of high finance” as an acceptable part of the Australian lifestyle.
A recent example is from this forum site with this one I am sure most of you are familiar with…
“Heya guys…
Someone is bound to come up with a suggetion on here!
Ok heres the go. After several posts on the website about the problems with my mortgage broker, she has finally managed to get the finance approval through for my second property. -This took 6 weeks mind you!!
The only problem is that settlement is in 3 weeks (June 11) and they have only approved the loan to 84.99% when it needs to be approved at 86% to cover ALL costs. She has been back to the lender and they said no more.
Now I have to come up with $3800 in less than three weeks, and I have no savings (as she knows) to cover this…
Has anyone here got any suggestions on ways I could find a short term loan or anything else creative and legal? (without selling my body)
Would my normal bank give me a personal loan in that space of time? -Help!-
Thanks in advance,”
What was the answer????? Extend the credit card![blink] Up to the eyeballs. Why not suggest that one is over extending one’s situation and sit back. What ever happened to having a life?
A life that you own and not someone else?
We are all made from Stars
So what you are saying is that you have watched the program?
We are all made from Stars
Let then smoke, drink and gamble. That is the essance of opportunity right? Someone dies from 50 years of smoking and we get a new road?
The question is why do they do what they do? It would not be the fact that they were impressed by the Paul Hogan advert in the local milk bar on the way home from school with a gentle reminder to my ten year old brain back in 77 that Winfield was 5 smokes ahead of the rest?
We are all made from Stars
Just thought I would add that Kerry Packer is a smoker, Russel Crowe, Mel Gibson.
Everyone has a vice, some like smokes some like coke! If you want financial independence bad enough you will seek it. Majority are happy doing the same thing day in day out year after year, as a matter of fact, for most of their working lives.
Life is a daring adventure for others, it just depends on your racket and at the end of the day it doesn’t realy matter, as long as you didn’t piss your life away and had some fun on the journey!
130 properties or none……………..
We are all made from Stars
Its worth what ever the buyer is prepared to pay. Its just a matter of choice, not doing your homework etc. I dont have a soft spot for anyone who pays to much for anything. Except old grannies getting ripped of by door to door salesman.
Buyer Beware
We are all made from Stars
No
We are all made from Stars
Originally posted by georgisj:The discussion about headline rates of inflation and interest rates are somewhat dettached from the investors decision matrix.
Can I point out that ultimately, it is firstly real interest rates and the expectation of real rates into the future(interest rates minus inflation) that will guide an investor (whether it is property, stocks or bonds). So if interest rates go up another 1% and inflation 1%, then theoretically at least, you are no worse off.
Admittedly, there are multiple factors which re-inforce and counteract each other and it is almost impossible to know how they will play out. However, there are two key factors which will mitigate inflation increasing
1. Centralised wage fixing, has broken wage increases & wage inflation nexus, as a result of productivity related trade-offs.
2. The economy is much more senitive to rate rises today that it was fifteen years ago. The degree of borrowings across households (predominantly) increases the dampening effect on expenditure of any interest rate increases.It was also mentioned that with the depreciation of the $A, there will be imported inflation as a result. We had a $A value at $US49 cents approximately 2-3 years ago, and inflation was not affected. Ultimately, it is market forces which will dictate ability to increase prices.
Massive interest rates increases are more unlikely than most people think.
James
I am not alluding to massive hikes, you do not have to have the grey matter of Albert Einstein to realize only a small rise is needed for people to lose it all. For many, that may mean only one or two percent. Not everyone is as astute as these guys on the forum.
We will see, anyway, are you perhaps a betting person?
[shades2]We are all made from Stars
