hi, hoping for some sort of advice.
I'm a single parent of 2 children, in my late 20's, currently working part time and have a year left of my degree. I was lucky enough to be able to live in my uncles house for low costs after leaving my ex husband so was able to save a decent chunk of money (he is often travelling for work). Its been in a couple of years but in that time i was able to cancel and pay out anything of his that was put in my name by my ex, pay off my car, buy $25,000 worth of ETFs, and have $35,000 in my savings right now. Because my ex was financially abusive i got very into my finances. I also have a years worth of bills ie. kids activities, mobile phone, car rego and so on, sitting in an account and put a regular amount in it each week so i never have to stress.
My problem is, i have been thinking about buying a house but i am trying to realistic if i could even afford it. I live in in western sydney and everything is very expensive except horrible looking apartments in not so great neighbourhoods. I am happy to look elsewhere but i'm very worried about being away from family. would you put the dream of buying away for a few years until able to work full time again and hopefully have a decent paying job and rent ( i want to move out of my uncles next year). I know there is single parent schemes available and a new one starting next year but i am stressing out about what my next move should be.
sorry i should have asked, if i decide to wait a few years until i'm in a better situation should i go ahead and buy shares with my savings instead?
Single Parent Considering Buying First Home in Sydney
Comments
but i am trying to realistic if i could even afford it. I live in in western sydney
You can't afford it. (If you could, you wouldn't have enough doubt that you'd even ask.)
would you put the dream of buying away for a few years until able to work full time again
You absolutely can't afford a western Sydney house.
I know that probably sucks to hear, but if you're set on staying close to family in western Sydney then your next move is to get back onto your feet first.
I can't help with the housing situation but I want to congratulate you on getting your life back. A family member works in DV and from the stories I've heard you are an exception to the rule. Rarely do DV scenarios end like yours.
Awesome job my friend.
thank you. it was very hard, and took me a few goes but so glad i left. nothing more soul destroying.
If you can get into the market and live comfortably with the repayments with few rates rises. Go for it.
Unfortunately you have hard choices to make. If you can't afford it then you have to buy somewhere that you can afford or wait until your finances are better.
Wait until you are working full time and have been for at least a year. Even if you find a house you could afford you wouldn't get a loan for it. By that time house prices will be down a bit and hopefully stable?
If you are doing a proper degree, then you have done at least 2 and you write a post like that.
As such you should bet everything on the ASX.
At least two what?
One alternative if you are in a holding pattern, is that you could buy a cheaper investment property, rent that out and continue living at your uncle’s place? That way you could at least build some equity for when you are ready to take that next step.
Only problem is the market at the moment - it’s probably a horrible time for buying at the moment.
Well done OP.
If you have to move out next year, and have to choose between rental and buying (assuming you can afford it), buy it.
With the current rental rate, very unlikely you could rent and save money to get your own property. Especially kids are growing up and you will need more money for the meals and hobbies.
And mortgage isn't more expensive than rental anyway.
If you're not earning 6 figures you wont be able to afford mortgage payments in Sydney. As for savings, your ETF and savings put together would barely even pay for stamp duty i’m afraid.
One thing I've started to think is you should only buy a house when the interest rates are at their highest point (factoring in some further rises too). The people who got very rich over the last 3 years of record house price growth are those who bought circa 2008 at the last high interest rate level. My thinking is high interest rates mean:
-> Property prices are low because other buyers have little borrowing ability (as do you).
-> When interest rates do drop that will take the financial pressure off, rather than what is happening now with mortgage costs rising in step with groceries and other essential consumables.
-> When rates drop, your property value will go up too.What shares should you buy at the moment? With inflation and impending falls in discretionary consumer spending I do not know what to invest in? Last in the GFC essential stores like Woolworths were a good choice - but they are already crazy high from pandemic buying. 12-24 months ago an energy provider would've been a good choice but these may be at a high too.
looks like you are in a spot where you have some money cause you are in a low rent situation, why in a time of extreme high prices for anything houses these days, and with interest rates going up every so often with projected rates of 3.% touted would you even consider buying?
I dont know your financial situation re your ex and any maintenence agreements. but I'd be shitting myself in your place if i gave up a low rent place and committed myself to a mortage for xx years with kids and part time work and got sick or interest rates went to silly levels and just priced you out of a place to live?
Don't do it you dont need a house, you already have a place.
thanks for your reply. i will stay here as long as i can but i don't want to live here forever. I was never planning on buying in Sydney until i saw the new shared equity scheme and thought perhaps i could afford a unit but then again i look at the strata fees and i'm turned off again. I will put the plan on the backburner for a year or so until i'm back at work full time.
I would say stay at your uncle's house for as long as you can.
I would not buy at the moment. Wait a year and see what happens to prices
EDIT - as MSPaint says below, kudos to you. Maybe take a year to chill and reflect and enjoy the kids before embarking on home ownership !
:o)