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Australian Housing Crash


Jimmy123

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I am in my mid 20's, living in adelaide and will be buying my first property sometime soon.

my parents are pushing for me to buy before June 30 so that i can get the full $14k FHG, but i am thinking of holding out a little bit longer as i feel prices should drop. I am looking at the $300-$400k range, inner suburbs.

 

from what i believe, after June 30, the grant will drop back to $7k and i am of the belief that property prices in my budget should drop, leaving me in a better position of buying a cheaper property with a lower grant, than buying at a higher price with a higher grant.

 

does anyone share my way of thinking, or have i got it all wrong?

 

cheers

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I'm in a similar position in Melbourne.

 

As long as unemployment keeps rising and interest rates are dropping I don't see any hurry. I've also heard to wait until interest rates go up and then lock in a 5/10 year mortgage.

 

It would be good to get Kahuna's thoughts. Kahuna you out there?

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BB

Don't know anything about the Adelaide market but my thoughts are inline with Mark's. If things are still gloomy at the end of June, they will extend the grant period. It is more than likely imo, that prices can/will go a lot lower Aus wide, to more than make up for the lower grant if they don't extend. Apartment prices close to Brisabane city are still going backwards atm.

Cheers

 

 

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Hi Bam

 

Most large companies announce bonus, pay increases, staff levels and project budgets early April (they close the books 31st March as it normally takes 3 months to finalise)

 

With this in mind I think by late April, early May you'll see how bad it's going to get for the next 6 months.

 

As to the grants and all that... try thinking about them as %

 

So your question is (based on $400K) buy now and get 3.5% in grants or buy later and get 1.75%. IMO really don't see the markets droping 1.75% between June and July.

 

For example the last house we bought, we drove by the open inspection on the way to another open inspection (this house wasn't even on our radar). After looking at the house I said to the better half "I love you but no" as it was out our price range. 3 weeks later I bought the house at action (it sold for less then we expected)

 

I think the point I'm making is long term a 2% difference is NOTHING... the bigger issue will be finding the right house.

 

Cheers

Matt

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hi duster,

Hope it works out for you.

In Florida,prices peaked in 1927 and did not recover (in dollar terms--not inflation adjusted ) until 1957.

There are many reasons for home ownership:not sure if "as an investment" is one.

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wren: When you think in terms of handing property to the next generation and possibly the one after and so on, a "wait" of 30 years is really not that big an issue. Longterm thinking at work. Does not do it for all of the people, of course.

As Dr. Marc Faber recently mentioned: "Cash has risk as well. Eventually, all paper money will be worth zero everywhere." At least brick and mortar will have some real value. All JIMHO, of course.

wasa

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Bam Bam, am in exactly the same position...kind of.

 

Im late 20's, in Adelaide, fairly average wage, but Im not looking to spend upto 400k. Thats just rediculous IMO. How long are these homeloans that everyone is getting? 30, 40 50 year loans! It was less than 20 years ago that interest rates were, what 18%???

 

My missus wants us to grab this 14k from Rudd before June ends. But unlike mminion I dont see it as hes does. That difference is a difference you have to fund, and more than likely you will be paying interest on it, so its not that simple.

 

The Aussie gov't is seriously worried about housing. They know that we are about the only developed country not to have a massive housing asset re-evaluation, and they are throwing money at the only people who dont know any better, the first home buyer.

 

If you dont get in by end of June you may miss 7k from K.rudd. Will houses fall that much by end of this year? Almost certainly. Im betting on it, Im betting that 7k on it in fact!

 

We see it in the paper everyday now. First home buyers hold up market, first home buys investing in their first home blah blah.

 

Now most of us in this forum are somewhat educated stock market investors, and we all know that the big money stops buying near the top of the market as mums and dads pour their savings into the market, and loose it, only to have the big money move in and bargain hunt.

 

What phase do you think we are in with housing? It's so obvious! I can already see the no-name economists on tele saying "Oh of course their were signs, we warned against it" blah blah.

 

We are at the top, almost certainly on the way down. You watch as real estate industry people start to be known as the rogues they really are.

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