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  1. #91
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    Quote Originally Posted by BigRedV View Post
    Borrowers need to use common sense. When my husband and I first got pre approval in 2007 for our first home loan they said we could borrow $900k. That is ridiculous. We borrowed $365k and moved a away from the area we were living to buy in a cheaper area and a smaller house.
    Of course they *should* but do they? The USA housing market crashed because banks lent money to people who couldn't afford it. And that ended up hurting everyone.

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    Quote Originally Posted by babyno1onboard View Post
    Of course they *should* but do they? The USA housing market crashed because banks lent money to people who couldn't afford it. And that ended up hurting everyone.
    Before 2008, the banks in America hardly even checked incomes. That doesn't happen here. Before the crash in the USA, approximately 20% of mortgages there were subprime mortgages. The percentage of subprime mortgages here is minuscule.

    If people don't think ahead then they're foolish. Plus the banks only go by what they are told. I heard on the radio that there is a huge amount of people not giving honest answers when applying for loans.

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    Quote Originally Posted by babyno1onboard View Post
    Of course they *should* but do they? The USA housing market crashed because banks lent money to people who couldn't afford it. And that ended up hurting everyone.
    The regulations are tighter here than the US but I agree that there are a lot if people that will not be able to afford their mortgage repayments once interest rates rise.

    When we bought the bank told us a figure that we could borrow and we ended up borrowing less than half of that. Even if rates rise we will be able to afford the repayments - we also have managed to pay off more than minimum for the last few years so we have a bit of a buffer there too.

    As for helping out my kids - we will open a bank account for them on the year they start school. They will get regular deposits from us. I have not yet decided when we will give them the money - but it will be a choice for them whether they want house/car/holiday.

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    My kids are 22 and 19. Mr 22 rents and wants to buy a house so is trying to save a deposit but he struggles and I often have to give him money. In the past 2 yrs I've probably given him close to $5k . At one point I was literally working and giving him my whole pay to help him. It's been a nightmare. I've now had to say there's no more money.
    DD 19 lives with their dad interstate and works and goes to Uni. We ( stepdad and myself) will buy her , her text books each semester to help her out

    Unfortunately I can't give them money each to set them up in a house but when my mum and dad ( divorced) pass away the kids will inherit some money which will either help them get started or go towards their mortgages .

    My dad gave my then H and me $25k as a deposit on our house .. this was in 1998 .when I divorced we both paid my dad back the deposit .50% each

    After reading all these posts and how many of you lovelies have set up accts for your kids I feel so guilty that I can't help my 2 get into a house .

  5. #95
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    Quote Originally Posted by BigRedV View Post
    But Sydney and NSW isn't relying on one industry.

    It is the best in business investment, retail spending and dwelling starts. The list also includes unemployment (NSW has lowest rate) population growth, construction work.

    My husband and I are selling our house in Sydney this year and going to make a huge profit. We are hoping nothing happens between now and then. I can't really see it crashing at all. I think there will be a down turn or correction but not a crash like USA and Ireland.

    while its true Sydney isnt as focussed on one sector - it is still very over-hyped and the entire housing sector is due for a big let down.

    Perth's population has not diminished. We still have a huge demand for houses. Its just that the supply of money is less, so people have less to spend. Therefore the top price they can buy a house for is much less.

    In Sydney - its only going to take one thing to spiral to the bottom. An international incident, Trade talks, the gas issues that are currently causing headlines, currency issues ...

    The problem with bubbles is - they burst. And I do think Sydney will burst at some point soon. I dont think it will be a massive down spiral - but a bit like Perth will be an easing of prices, and be flat for a long time.

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    My DD has a bank account and I should get around to setting one up for DS. My parents set one up for me when I was a kid but that went to paying for uni and that's what I was intending with these accounts.

    However, if they decide not to go to uni, I'm happy for it to go towards a house or car. FIL has also established investment accounts for both of them so hopefully that can also go towards a house deposit for them.

    I do believe though, in the benefits of them understanding the value of money. I'm happy to always be there as a safety net and help out as needed - but I'd like to see them make genuine efforts to try hard, get a job and save.

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    Default Would you help your kids with?

    Quote Originally Posted by BH-KatiesMum View Post
    while its true Sydney isnt as focussed on one sector - it is still very over-hyped and the entire housing sector is due for a big let down.

    Perth's population has not diminished. We still have a huge demand for houses. Its just that the supply of money is less, so people have less to spend. Therefore the top price they can buy a house for is much less.

    In Sydney - its only going to take one thing to spiral to the bottom. An international incident, Trade talks, the gas issues that are currently causing headlines, currency issues ...

    The problem with bubbles is - they burst. And I do think Sydney will burst at some point soon. I dont think it will be a massive down spiral - but a bit like Perth will be an easing of prices, and be flat for a long time.
    Perth has the highest residential vacancy rate. Are you saying that people haven't left WA since the mining boom or that others haven't left to find work elsewhere? ETA - rents have decreased by over 8% for houses. Clearly the demand is not there.

    I agree the Sydney market will decline. That is part of the reason we have decided to move. In fact apparently Sydney house prices have fallen this month. By 0.1% lol but still. Usually when prices fall it is the upmarket suburbs that get hit the most. But I don't think Sydney will crash. Even if house prices fall by 10% it is still unaffordable for most people.
    Last edited by BigRedV; 28-04-2017 at 13:36.

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    Quote Originally Posted by delirium View Post
    It's not really about demand though per say, it's about artificial inflation of prices across the board. When every seller of a half decent Sydney property wants a million bucks, then buyers have no choice but to pay a million.

    I liken it to petrol prices. Out here, everyone complains that when oil prices go up, our petrol prices of course go up, but when prices go down, the fuel companies in the country hardly drop the price. When every servo in the area is selling fuel for $1.60 a litre..... you have to pay $1.60 lol and that's what I see happening here. Of course I'm not saying it's all RE's fault, not at all, the issues are far more complex than that. But I do believe RE's have encouraged huge blow outs in sales, particularly when the FHB's was released. Which is ironic given it's partly the reason first home buyers can't afford to get in the market now!

    JMHO
    I get what you are saying, but it isn't as simple as that. House prices slumped in Brisbane a few years back. I was toying with selling mine and buying something closer to the kid's school. I watched lots of nice houses sit on the market for months and months, with the owner's dropping the prices just to get a sale.

    If people aren't prepared to / or just can't afford pay what you are asking the house won't sell,

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    Quote Originally Posted by Elijahs Mum View Post
    We had a old house in February where the bank valued it at $1.1 as the owner bought elsewhere and was on a bridging loan , a similar home sold 3 months prior for the same money her reserve was $1,150,000 (she would have taken $1.1 ) the opening bid was $1million it sold for $1,475,000 , we had 12 registered bidders, her mortgage broker thought we made a typo on the contract on the Monday as he couldn't believe it , neither could we for that kind of house, the young couple that bought it were so excited - they were underbidders at 3 other auctions and just wanted to secure a home in the suburb, it's not usually the owners in this market, especially ones with a mortgage as they have to be realistic in what they will sell for
    That's crazy

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    Quote Originally Posted by delirium View Post
    I'm not sure I agree. of course they aren't even close to being the sole controlling factor. But someone I know that used to be in RE told me they encourage people to list at an inflated price. They may get talked down, but still get more and then the next door neighbour who is selling and sees it goes for 20k above it's worth they do they same. before you know it, prices in that area have gradually gone up and bc everyone is inflating that's now the standard price. Much the same with rentals. A few LL's put up the price, others see they are getting more so think "I can get 30 bucks a week more" and put their prices up, then bc of crazy demand, people pay it.
    But that's not because of RE. Like you said it's because of crazy demand. Supply and demand control the prices. The RE is just doing their job if they tell tell their client to put up the rental price as there is high demand


 

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