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I find it interesting that one of the themes for the older posters is to say, you should start out small and work your way up. Very logical advice, and easy in theory.

The problem in my situation is that starting out small is still ridiculously expensive in some cases.

Here are my figures, and why I believe home ownership is not a realistic option for me in the near future.

I earn about a median wage ~60k at the moment at age 25.
I work in a professional job, reasonably long hours at times, and I often work til 9 or 10pm in the CBD, hence I want to live close to the CBD, or somewhere that has safe and reliable public transport options.

I have been looking within about 10km of the CBD, and most 1 bedroom units are still about 500k. So the smallest starting price is about 500k.

So if I am bringing home ~$1000-$1100 cash a week, and require a 450k loan to buy a 1 bedroom unit, then that is a loan repayment of about ~800 a week. 80% of my median wage to go on a below median property, a small 1 bedroom is pretty rough.

If you rely on dual incomes, its very tough when pregnancy and children come into play, and a 1 bedroom apartment with kids would also be a bit cramped.

So for me, starting out small is still very hard. I don't really mind, as I prefer to invest my cash into the share market, and am not in a rush to buy property, rent is dead money, but at the moment its a much cheaper option if the surplus cash is invested wisely.

Another big difference between my parents generation and my situation is transport and job centres. They moved out west and worked out west not a problem, they could drive to work cheaply and quickly as there was little traffic. Moving far out of town was an easy option. If I want to drive to work parking costs $100 a week, and my job is only available in the city, as are most professionals. So if I want to move a long way out of town somewhere affordable I am looking at 20 hours a week commuting, and I did that for 5 years, its not fun or healthy.
 
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I find it interesting that one of the themes for the older posters is to say, you should start out small and work your way up. Very logical advice, and easy in theory.

The problem in my situation is that starting out small is still ridiculously expensive in some cases.

Here are my figures, and why I believe home ownership is not a realistic option for me in the near future.

I earn about a median wage ~60k at the moment at age 25.
I work in a professional job, reasonably long hours at times, and I often work til 9 or 10pm in the CBD, hence I want to live close to the CBD, or somewhere that has safe and reliable public transport options.

I have been looking within about 10km of the CBD, and most 1 bedroom units are still about 500k. So the smallest starting price is about 500k.

So if I am bringing home ~$1000-$1100 cash a week, and require a 450k loan to buy a 1 bedroom unit, then that is a loan repayment of about ~800 a week. 80% of my median wage to go on a below median property, a small 1 bedroom is pretty rough.

If you rely on dual incomes, its very tough when pregnancy and children come into play, and a 1 bedroom apartment with kids would also be a bit cramped.

So for me, starting out small is still very hard. I don't really mind, as I prefer to invest my cash into the share market, and am not in a rush to buy property, rent is dead money, but at the moment its a much cheaper option if the surplus cash is invested wisely.

Another big difference between my parents generation and my situation is transport and job centres. They moved out west and worked out west not a problem, they could drive to work cheaply and quickly as there was little traffic. Moving far out of town was an easy option. If I want to drive to work parking costs $100 a week, and my job is only available in the city, as are most professionals. So if I want to move a long way out of town somewhere affordable I am looking at 20 hours a week commuting, and I did that for 5 years, its not fun or healthy.

be prepared to be bombarded with criticism my dear friend. i know exactly how you feel, and know what you're saying, but allow me to attack you before everyone over 40 on here does.

1. there is perfectly good public transport 50 minutes out of the cbd:rolleyes:(woohoo - as you said everyone loves travelling for almost 2 hours everyday)
2. all you young guys need to stop focusing on the 'mcmansion' in the cbd and settle for a beaten down old shack in the sticks with more issues than you can count.
3.we(the over 40's-45's) had it just as hard as you do know so suck it up and stop having such a defeatist attitude.

thats just a few, there no doubt will be others.

now back to the point. IMO you're right to wait.do not buy or consider buying any form of property in the coming months, possibly year. for the love of god. you will be rewarded by waiting.

i too was investing in the market but given my lack of 'day trading knowledge' the current market wasnt doing anything for me :S
 
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well, well well, being in the over 40's group....
no advice given here...
all I can say is....it just looks like a straight forward stalemate to me....

so in this case...I am really, really looking forward to the 'under 40's replies'
to address this dilemma......
 
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$60K as a professional? you must be very junior or in a crappy job. Most professionals i know get paid nothing for a few years while working 60 hour weeks then move onto descent salaries. Most tradies make more than you and dont have a hecs debt.

What industry are you in so I can tell my kid to avoid it.

i work in the cbd and travel from parra every day, people in my office come from campletown, central coast etc. The big difference is we work reasonable hours.
Its beyond me why anyone would work free overtime, your gettng paid like $20 an hour.

People hate the labour party? they may have made some poor decisions but at least they value peoples lives. If workchoices was in and all public assets sold we would all work like rats for peanuts.

IMO housing prices very closly linked to wages and employment, hence why top end doing it tougher currently than median level. Unemplyment not so bad sharemarket and investments taking the pounding.

talking to my bank manager the other day they believe most risk in property >800K and in QLD / WA
 
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I find it interesting that one of the themes for the older posters is to say, you should start out small and work your way up. Very logical advice, and easy in theory.

The problem in my situation is that starting out small is still ridiculously expensive in some cases.

Here are my figures, and why I believe home ownership is not a realistic option for me in the near future.

I earn about a median wage ~60k at the moment at age 25.
I work in a professional job, reasonably long hours at times, and I often work til 9 or 10pm in the CBD, hence I want to live close to the CBD, or somewhere that has safe and reliable public transport options.

I have been looking within about 10km of the CBD, and most 1 bedroom units are still about 500k. So the smallest starting price is about 500k.

So if I am bringing home ~$1000-$1100 cash a week, and require a 450k loan to buy a 1 bedroom unit, then that is a loan repayment of about ~800 a week. 80% of my median wage to go on a below median property, a small 1 bedroom is pretty rough.

If you rely on dual incomes, its very tough when pregnancy and children come into play, and a 1 bedroom apartment with kids would also be a bit cramped.

So for me, starting out small is still very hard. I don't really mind, as I prefer to invest my cash into the share market, and am not in a rush to buy property, rent is dead money, but at the moment its a much cheaper option if the surplus cash is invested wisely.

Another big difference between my parents generation and my situation is transport and job centres. They moved out west and worked out west not a problem, they could drive to work cheaply and quickly as there was little traffic. Moving far out of town was an easy option. If I want to drive to work parking costs $100 a week, and my job is only available in the city, as are most professionals. So if I want to move a long way out of town somewhere affordable I am looking at 20 hours a week commuting, and I did that for 5 years, its not fun or healthy.


Time for an attack by someone your age...

You got to look harder for both a job and a 1bed unit.

A 1 bed unit around docklands is 400k. Still majorly expensive by my chart but not 450k loan like you claim and if you want 10k from the CBD, a house in Newport in currently for lease for under $300 a week - 3bed

I don't know about you, but office jobs suck balls! I worked in one once, didn't get paid any overtime, got paid a weekly salary and when I asked if I could get paid by the hour instead - the boss said No and told me he pays 'fairly' and if you work hard he'll give you a bonus. I found out the secretary was sometimes working 15hr days and only getting $200 bonus a week (if she was lucky). I kept telling her how wrong that was. I left after 1 month, she was working there for over 2 years....

I work in the city, not professional, in Richmond. You want to save up for a house, live with your parents. It takes me 1hr to drive to the city. 1hr45min to ride my bike which is fun and healthy.

Find a job with good work/life balance and give your boss the finger - unless you are the boss, which is a whole different matter
 
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Hey Maffu,

I am 29, so not too much older than you.

There is no need to rush into property, If you have a good investment operation going just keep at that.

When you decide that the time is right to buy a property, I would recomend buying one with a high land content, eg. Not a single bedroom in a tower in the sky, Bedrooms in the sky are easily replicated, land is not.

Maybe buying a house that you eventually want to live in and have a tenant help you pay it off till you and your mrs are ready to move in and breed is an option.( thats what I did any way ).
 
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I'm 29 bought my place 5 years ago it's still up 25% which is good considering the size of the investment , leverage and risk. What investment is going to do well now ? I put all my savings into cash ATM. Today will prob be the start of a new crises I wouldn't want to be in shares at all
 
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This kinda sums it up for me...

Here you have a suburb where it takes a household income of around 120K (with minimal other commitments, car loan etc and assuming a 20% deposit) to buy the median house. Yet look at the income distribution, over 95% of the suburb could not buy the median house if they where starting out with a minimum deposit of around 20% (say 150K).

To me this just looks extreme in terms of affordability.

Mentone.jpg
 
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well, well well, being in the over 40's group....
no advice given here...
all I can say is....it just looks like a straight forward stalemate to me....

so in this case...I am really, really looking forward to the 'under 40's replies'
to address this dilemma......

i was only referring to those that would produce nothing constructive but rather complaints about our generation - we would all appreciate guidance or advice, or even constructive criticism(some would argue it has been given).

my advice as previously stated - dont buy now, or in the near future, anywhere.

60k is above average for current office jobs is it not? making it not so bad? i personally couldnt make it work but as stated by others you will advance and be promoted shortly if you're good at what you do.
 

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60k is above average for current office jobs is it not?
60k gross is about $800 in the hand per week and $2300 per month for a mortgage repayment does not add up. The gap has widened due to some sectors having wage increases while others stagnate. The two speed economy thing.
 
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OK...lets start with the suburb you grew up in...that you are familiar with....or if you have moved...where do your parents live....we need something familiar....that you can get to know back to front...visit on a regular basis....most young ones like to be near family...
just because you now work in the CBD....will not always be the case in the future...as you grow, your career grows, more opportunities open up....and you can move with them......you should also factor in an increase in salary...year in year out....

I am suggesting you buy what you can afford in the outer suburbs....and rent it out....at least that way you get your foot in the door....and at a price range of only 250k to
300k limit...there will not only be growth on average at 10% per annum for you... but you will have a proven track record of a saver...for future credit.... cum finance requirements.....
you need to establish a career goal plan for youself to grow, and choose an outer affordable suburb......there are steps you need to take, with time limits on it.....
lets say...we aim for a purchase in one years time.....in the meantime, you need to set up a saving plan towards your deposit.... with a goal of xxxxx dollars to be achieved

when the older generation say start small, they mean a small purchase.....what you can afford....great trees grow from a humble mustard seed....you have you whole career and life to get into the big time....that will come later...as your career progresses...

but you must have life plan....with set goals, and use by dates to achieve those goals....

in summary, you can start in a humble place in the outer suburbs....it will grow in time...
I use a base rate of 10% per annum....now it may not grow at 10% each and every year from day one....it may even remain stagnate for 3 years...then do a small spurt and suddenly grow 20% in one year....but after 10 years ...and in hindsight on your part
it should eventually produce the results...of either a doubling or tripling in market value


I believe the lack of confidence with the current labor govnut.....will have a dramatic turnaround , once they are kicked out of office...
get ready for that ...event...
interest rates will remain low for the next year or more....they will not increase under a labor govnut.....they may increase slightly under a coalition govnut...but only after confidence has been restored to the community....after the elimination of carbon tax, mining taxes etc

then in around 5 years time....your income should have increased dramatically, the little property should have doubled in price.....and you will have made a tidy sum...in capital profits...more than sufficient to sell it, and buy a family home, of your choice

you really need to do the sums, of what you really can afford....I am assuming you are not a financial person....???
**** there are professional careers way out in the burbs, the regional centers...where houses come at a fraction of the price....
professionals do not only work in the CBD of the biggest capital cities...they are everywhere.....
think about it....
it all depends on just how hungry you are...whether you are a go getter....gung ho about your career and lifes goals....or a pacifist...content with what you have...with no goals or plans to improve your lot ?

I have just found out a relative of mine...she is just 22...earns $400 k pa....and blows it all on overseas hols etc....she is an accountant with a no 1 miner in OZ......
you have choices.....
its up to you how you apply, pursue same...
 
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there will not only be growth on average at 10% per annum for you...
I use a base rate of 10% per annum....now it may not grow at 10% each and every year from day one....it may even remain stagnate for 3 years...then do a small spurt and suddenly grow 20% in one year....but after 10 years.

are you bullish on property?:eek:
 
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in summary, you can start in a humble place in the outer suburbs....it will grow in time...
I use a base rate of 10% per annum....now it may not grow at 10% each and every year from day one....it may even remain stagnate for 3 years...then do a small spurt and suddenly grow 20% in one year....but after 10 years ...and in hindsight on your part
it should eventually produce the results...of either a doubling or tripling in market value
Yes, but so will everything else, it's relative position in the market will still be the same, unless you picked a property that had exceptional growth in comparison to the rest of the market.

And you're making an assumption that the next 10 years will produce similar growth as the last 10 years, it's possible that may not occur.

Cheers
 
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$60,000
May be ok for an office worker, but he said he was a professial, to me a professial is a working in a profession, eg lawyer, dentist, civil engineer etc. I would be pretty upset if I went to uni to to become a professional and earned less than $100k,
 
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Kincella, I think 10% capital gain per year is to much to expect.

I think if you buy you property well, a 10% total return per year is a more realistic figure, made up of the following,

3% general inflation + 4.5% Cashflow ( after cost rent ) + 2.5% actual value growth
 
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10% get real using those figures will just get you burnt. Historic house price rises are bs , how far back you go and the period you choose dramatically effects the results . Even glen Stevens gave a warning about relying on gains. I assume 3% per annum growth on property investments anyone telling you property doubles every tens years either got lucky in the last boom or has vested interest in selling property investments. Sure there may be certain areas that experience large short term growth but that's usuallybecause of external factors such as an opening a mine or a developer rebuilding a large part of the suburb. You need to have good sources, knowledge or luck to pick those areas
 
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