Hi all
The new FHOG top up, designed to stimulate the economy & stop falling house prices has the potential to inflate prices beond there current real value. Its a sad state of affairs when the Gov. gives FHO 14,000 more in the hope it will save a sinking ship. However, first home buyers beware. The real estate agent who have had a slow down in buyers are now spruking out load again. " get the grant while you can" " property is on the way up again". Then to the vendor "this is the time to sell" "You will get 10k more for your place as the FHOG will bring more buyers" "Ask for 10k more, you will get it now" Builders are putting in extra bonus offers to get you in to build a new home. Lets face it now is not a good time to buy or build. The world economy is in free fall, if not its in at least bad shape. Job losses and rising unemployment. FHO dont forget you have to pay the money back after you have been approved for the loan. Its OK to get it on the back of the new extra 14.000 but what about the next 25 years.(who wants a 350,000 ball & chain or a life sentance) Do what you have to but dont get sucked in for the sake of the extra few k. Man its only going to cover your landscaping. Good luck & keep renting.
Regards to all.
T…………….Tony B wrote:Good luck & keep renting.Regardless of the FHOG, I'd be encouraging people to get off the rental roundabout, Pretty Basic Tony.
Skip101 wrote:Tony B wrote:Good luck & keep renting.Regardless of the FHOG, I'd be encouraging people to get off the rental roundabout, Pretty Basic Tony.
Not until the prices are what the renter can afford long term. Renting currently makes more sense for many reasons, including;
1) It's cheaper than buying.
2) The FHBG is going to stay doubled until at least July 2009.
3) House prices have far more chance of dropping than going up at the moment.
4) The renter can start or make their deposit larger.$350 PW rent x 52 weeks = 18200 PA. Borrowing $320000 will set you back around $500 PW or 26400 PA. That is $8000 PA that can be saved, not including insurance, rates and so on. The average renter is still (even with grossly overvalued rental prices) around $10000 PA in front of a home owner in a similar sized property.
Worst case scenario for a renter is that entry level home values increase by more than $10000 over the next 12 months. But hands up (even the Bulls) that think it is likely in current markets?
There is currently more to loose buying than renting. What is more, any of you renters out there, if the govt. gives you some Xmas money either put it towards a deposit or pay off some debt with it. Buying a new tele, like the governement wants you to do, may keep a salesman employed for a few weeks but is only prolonging the inevitable. There is already so much stock to clear at the big tele stores that you will get a killer deal next year or the year after – and housing is exactly the same.
Patience grasshoppers, patience… and don't believe the hype.
Get into it
1st homebuyers have never had it so good.
No stamp duty less than $500K
21K for a brand new home. 14K for your first home. I wish I'd had this opportunity when I bought my first home. This candy won't last. It's expected to be removed in June 2009. If you don't take this opportunity you're crazy. Rent and wait is crazy if you can afford the repayments. The bottom of the market is nigh. The government is giving you 21K for a brand new house. I bet your parents can't afford to do that? Get on the gravy train. This won't lastThe alternative is to rent and watch the property market reverse and live in regret for the rest of your life. It's a deal, it's a steal, it's sale of the century
CHIS wrote:Get into it
1st homebuyers have never had it so good.
No stamp duty less than $500K
21K for a brand new home. 14K for your first home. I wish I'd had this opportunity when I bought my first home. This candy won't last. It's expected to be removed in June 2009. If you don't take this opportunity you're crazy. Rent and wait is crazy if you can afford the repayments. The bottom of the market is nigh. The government is giving you 21K for a brand new house. I bet your parents can't afford to do that? Get on the gravy train. This won't lastThe alternative is to rent and watch the property market reverse and live in regret for the rest of your life. It's a deal, it's a steal, it's sale of the century
Even if what you say is true, it is better to wait until June 2009 (or close to) than jump in now.
The 14 or 21K will still be there in June and I for one would preffer to wait and see if the Australian property market follows the US and UK market on the downward spiral. If it doesn't, well April/May next year will be the time to buy – more vendors will be desperate and easy to talk down. If it does, then let the governement keep their 14K, the savings when the market hits bottom will be heaps greater.
Trying to pick the bottom of the market is difficult. It isn't going down where I am. Prices have fallen over the last year by 5-10% but people are buying houses again. Waiting for property to come down in value may be overly optimistic. I remember in 1983 in the recession we had to have that people were expecting prices to plummet. Let history tell the story. Property has had the dip in value and although spectacular gains are unlikely for 5 years, the trend will be slowly up again. The world goes on. Inflation will take the prices up. Never look a gift horse in the mouth
Despite all the claims that the FHOG has pushed up prices I have yet to see that translate into sales at inflated prices.
I have a house on the market that, at the time I started building, was worth $350,000, put on the market at $330,000, about 6 weeks ago dropped it to $300000 and still haven't had ONE offer on it, despite it being on the market for about 3 months.
Vendors can ask whatever price they want, but the truth is, the purchasers will determine what property is worth.
Cheers
K
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