Having constant anxiety about the housing situation

Lonemoresummer on 31/12/2023 - 12:51

Im nearly 36, and rent, also single.I am in a contract position that earns 144k before tax (contract role, likely to be made perm).

I have around 80k in assets (etfs, shares, bitcoin, gold, cash).

9k car loan. Car is worth about 25k if I was to sell.

I've started to feel like its probably time to buy. I live in the outer eastern suburbs of Melbourne and the prices are depressing me and I'm not sure if I can actually afford to buy anything.

Like two bedroom townhouses in Bayswater, is like 600k. To me this seems crazy but I shouldn't be surprised. I am constantly thinking about how I can't afford to get into the market. I only need a 2 bedroom, something modest but feel like all these new builds are starting off from 600k+ minimum for a basis townhouse. Like I'm not trying to buy a fancy apartment in richmond, willing to sacrifice a social life to live in the burbs.

Am I right to feel anxious about finding something reasonable to buy? It keeps me up at night thinking about where the hell i am going to live. I also think about having to sell the investments in order to afford a deposit as well and wonder if that is the right move.

Financial

Comments

  • Protractor on 31/12/2023 - 14:14
    +11

    Don't waste anxiety on capitalist first world aspirations. There's wars,pandemics,climate Armageddon and social collapse to fill your dreams at night.

    Also, have you thought about buying a 200K car?

    • prisonmike on 31/12/2023 - 15:01

      I concur considering this decision.

    • ihfree on 31/12/2023 - 17:17
      +1

      There's wars,pandemics, climate Armageddon and social collapse to fill your dreams at night.

      All likely to have an impact on interest rates

    • JIMB0 on 01/01/2024 - 10:24
      +1

      I had a 200k+ car. It was nearly a 300k car before it broke.

  • T-rex on 31/12/2023 - 15:02
    +1

    144k is a high income I think. You should be easily able to afford a house in outer suburbs, or townhouse /apartment closer to the city. If you buy a place, it’d be better than renting for sure. Worse case scenario, you lose your job, you can just rent out the place.
    The first place you buy may not be the ideal place you want, you have to start somewhere. House prices will only keep going up so just bite the bullet a buy something. Also, interest rates though high currently should be on the way down from next year some time.
    Buying a house is good way of forced savings also….but of course buy what you can afford.

    • onemoresummer on 31/12/2023 - 15:28

      I guess i need to wait until my contract is extended or made permanent to begin looking?

      • T-rex on 31/12/2023 - 15:39
        +1

        Speak to a broker to find out what you can borrow. When I was self employed it was 2 years of tax returns they wanted to establish income. Not sure if contracting is the same. Melbourne has not had a good increase in prices for a while so I think now to next 12 months is a good time to look.

      • us3rnam3tak3n on 01/01/2024 - 11:32
        +1

        I've had no trouble securing loans as a contractor, though I go through an agent so maybe the bank considers them my employer. As others have said: smash that car loan, adjust your budget to save a bit more, and speak to a broker.

  • Ocker on 31/12/2023 - 15:28
    +11

    Seriously, if you don't drink, smoke or go clubbing where does your money go?
    I estimate you are likely clearing $90.000-$95.000 a year, take out $22,000 pa for rent and you still have about $70,000 left.
    You should be able to save at least 50% of that amount - the fact you seem to have minimal savings at the age of 36 just does not make sense.

    • foxmulder on 31/12/2023 - 15:55
      +7

      This. if you're not getting a second job to increase income, you should cut down expenditures to build savings:
      1. see if your bank is not screwing you around with monthly fees and close to nothing interest? You should pay nothing and be with one with 5%+ interest now.
      2. get a flat mate(s) to share the rent cost.
      3. cut down outside food/drinks - bring from home or make yourself.
      4. cut down annual expensive holiday
      5. pay off that car loan/credit card loan if its interest is a lot higher than saving rate
      6. bitcoin is high risk product - this one is like gambling - I would avoid it if i'm you.

      • Rako on 31/12/2023 - 16:36

        Great advice

    • onetwothreefour on 31/12/2023 - 16:44
      +2

      Agree, could easily save $20k a year and still have a good life. Assuming he did save that much each year plus interest for the past 10 years then he should have over $250k by now.

      OP I recommend you setting a monthly budget and sticking to it so you know where your money is going.

      • onemoresummer on 31/12/2023 - 18:41

        Thanks. How can I determine a good budget.

        Is eating out once a week acceptable?
        How much should a single spend on groceries per week?

        • onetwothreefour on 31/12/2023 - 19:07

          Just write it down and figure out how much your necessary expenses are like rent, electric, groceries etc then come up with some other categories. Don't forget to have a savings category.

          Something like:

          Monthly income: $10,000
          Savings: $2000
          Rent: $2000
          Bills: $1000
          Groceries: $750
          Car: $1000
          Subscriptions: $500
          Etc

          Just work it out and adjust it where you have to, you can also cut some things out if they take up too much of your budget.

          • Rako on 01/01/2024 - 08:49

            @onetwothreefour: I like the way you put the savings at the top of the list, pay yourself first is the way to go otherwise by the time you pay everyone else there is nothing left!

        • MagicMushroom on 01/01/2024 - 17:00

          It depends on what you find acceptable and how fast you want the house.

          If eating out is important to you, find cheap places, use apps like eatclub and liven.

          For groceries, you can restrict yourself to only 1/2 price items from colesworth and try to find cheap stores near you.

          You can keep, reduce or change to other personal training to save some money.

        • gavt on 03/01/2024 - 13:52

          Have a look here for a start…

          https://moneysmart.gov.au/budgeting/budget-planner

    • 7ekn00 on 31/12/2023 - 20:57
      +2

      where does your money go?

      Uber Eats, most millennials can't cook to save their lives ;)

    • R-Man on 04/01/2024 - 11:23

      Bro was probably not earning $144k every year prior

  • boomramada on 31/12/2023 - 15:43
    +1

    You single and your options are:
    * Buy a shit box, live there for year then rent it (investment)
    * Find a better job
    * Move interstate
    * Buy small apartment instead of house

  • try2bhelpful on 31/12/2023 - 16:22
    +2

    For $600,000 you can buy an apartment in Richmond.

    Think about what you are trying to achieve. Real estate is a trade off. On a bang for buck the better the location the worse the property. Houses tend to appreciate better than apartments. At the moment there are a lot of high density apartment blocks going up in the inner city suburbs so there should be a decent amount of stock available. The trade off is you are in a high density block of apartments which is probably noisy. Parking might also be an issue, especially for friends visiting you. Also there is a lot of stock so appreciation of the property might not be great.

    The thing to remember is that whenever you buy people think that house prices are outrageous. In 1980 we were appalled when my other half’s brother paid $54,000 for a small Victorian cottage in Richmond. Of course now we wish we’d bought several houses back then but the stress when interest rate rises took off would’ve killed us.

    My suggestion is sit down with an accountant and sort out what you can afford and your investments. Clear out anything with expensive interest on it. Look at what you can pay off a week on a property. It is only people who can fall back on Mummy and Daddy bank who get their dream property first off. Maybe look for an apartment in a small block in an established suburb. Something that has stood the test of time. The interior doesn’t need to be flash, you can renovate it. However, be cognisant that moving supporting walls is nigh on impossible and a lot of the real old ones are solid brick internal walls.

    Best of luck.

  • Rako on 31/12/2023 - 16:34
    +1

    I expect the interest you are earning on your cash is much less than you are paying on your car loan. Perhaps you should discharge the car loan.
    As for your bitcoin, gold & other investments if you priority is housing perhaps you should convert these to cash. If you are thinking of selling these when you find a house to buy that will be when the prices of those items will be down, they are long term investments you have a short term goal.

  • Gunnar on 31/12/2023 - 17:38

    Move to Sydney and you’ll feel a lot less anxious about the prices of housing

    If you’re worried about the size of your mortgage, change the location you want to buy in or the type of house you want. Unfortunately compromise is the reality you have to go through when looking at housing to buy

  • altomic on 31/12/2023 - 18:16
    +1

    You're right to feel anxious.

    Sell your assets to get the deposit you need for a place.

    • onemoresummer on 31/12/2023 - 18:41

      How much am I gonna need roughly?

      • altomic on 01/01/2024 - 04:06
        +2

        More than $20.

        Depends what you want to buy and where

  • Drakesy on 31/12/2023 - 19:40

    Eastern states property has been declining recently, only ones with anxiety should be investors.

  • freefall101 on 31/12/2023 - 20:00
    +3

    The reason everything entry is around $600k in Victoria is that it's the highest amount for maximising all the government benefits so houses are selling at that price no matter how bad they are. You can put down a 5% deposit (so $30k), pay no stamp duty and get a house. $750k you're paying closer to $80k in deposit and stamp duty (government owns 25% of your house in either scenario). Once you get above $950k you need well over $200k up front to avoid paying LMI.

    The government will own 25% of your property though for that $30k deposit, you put 5% down, the vic govt does 25%, you wind up with a loan closer to $400k. But you need to pay the govt back at some point and they want a % of value at that time, not what they lent you.

  • elgrande on 31/12/2023 - 20:00
    +1

    I'd reccomend Melton. Its still ultra affordable and has all the facilities and stores you need with a hospital on the way. The area is improving significantly and you could get a house for under $400k.

  • aimpacc on 31/12/2023 - 23:06
    +3

    Sydneysiders : you guys are getting 600k 2 beddie townhouses?

    • Minimum chips on 01/01/2024 - 09:11
      +3

      Yeah I found some!

      In Mount Druitt.

  • Ace26 on 31/12/2023 - 23:22
    +1

    Doable with discipline and running a strict budget. Consider buying a house in the west or north. 600k can buy you a nice 4 bedder, rent out room or two to help ease the mortgage burden. Gather atleast 12% deposit and be willing to pay a small LMI. Speak to a broker to put a plan together. Worrying won't help. Good luck

  • SpicyStew on 01/01/2024 - 00:18

    did you buy your stocks at the top as well?

  • mrvaluepack on 01/01/2024 - 00:32

    There are plenty of apartments for single people for around the $350k mark in eastern suburbs.

  • Cherry12 on 01/01/2024 - 05:48

    With your salary you should be able to buy right now.

    Unfortunately, house prices most of the time go up and if you wait a year or so, it may be unaffordable then.

    I would compromise and buy a 3 bedroom house with a yard in the outer suburbs, they are under $600 K. There are a few suburbs where you can still buy at this price, they are only far from the city (30-45 min drive).

    You have everything you need in the suburbs, hospitals, shopping malls, entertainment, etc. Buy, let the property increase in price and if you don't adjust, sell in a few years in buy an apartment/townhouse in an area closer to the city. You could also rentvest.

    I would sell enough shares to pay the 10% deposit and stamp duty and start looking for a house now.

  • brettski on 01/01/2024 - 06:33
    +5

    If I were you, I’d buy ASAP. Additionally I would:
    - Sell off your gold and bit-coin to boost your savings: These are market driven assets unlike shares which are driven by the economy and the performance of the individual companies.
    - Sell off your car for more savings and less liability: The second-hand market is going down, so time for an old Toyota or Mazda. Having one less loan will be very favourable when getting a new loan.
    - Go to a mortgage broker: They should be able to help your mortgage strategy and set expectations. Mortgage Choice is fine.
    - Stop going on expensive holidays: You can’t afford that sh!t any more. You’ll survive.
    - Buy a house rather than a flat or townhouse: Freestanding 3 bed houses on 500sqs+ will increase in value much more than flats or cookie cutter townhouses. Reason being that these are being built all the time and constantly dilute the market value of existing (and older) dwellings. Get a structurally sound house that’s a bit of a beater and DIY the renos yourself. For your budget, I’d target areas like: Boronia, Keysborough, Noble Park, Dandenong North, Wantirna etc.

    Once you’re on the property merry go round, you’ll have leverage to slowly upgrade to the dream location over the next decade or so if you’re willing to eat sh!t now in the short term. Good luck, mate!

    • Rako on 01/01/2024 - 08:50
      +1

      Well said

    • onemoresummer on 01/01/2024 - 11:43
      -6

      Bitcoin has increased 124% in 2023 and is likely to do the same this year. There is no chance im selling that or the car.

      • brettski on 01/01/2024 - 12:00
        +2

        Fair enough. I just stated what I would do if I were in your situation.

        • sakurashu on 01/01/2024 - 19:19
          +3

          This was good advice brettski - but you can't help some people

      • GachaGamer on 01/01/2024 - 18:36
        +2

        The problem with this logic is that bitcoin - being a crypto currency - is far more volatile. Comparatively if you were to liquidate it at it's current sky high price (which has been largely fuelled by institutional investors both forcing the price up, and by those same investors (different side) being forced to liquidate their short positions throughout the year) and invest that into the housing market - like you want to do, that would be arguably a much more tried and true method of wealth generation that you can later pass on far more easily (and with greater ease of mind).

        Now, I'm not going to explicitly give you advice on whether or not you should exit the crypto market, but I need to point out that compared to traditional investment instruments, crypto currencies are entirely at the whim of whether or not the market wants it's price high or low - and something that the government's around the world could very easily rapidly crack down on. Just remember that these currencies were initially designed to be an alternative form of currency, and now they're just speculation vehicles - they've entirely lost their initial purpose and unlike traditional currencies (or even stocks), there aren't any safeguards or guarantee's by a government or institution otherwise to at least try and guarantee their value.

        And so you honestly need to ask yourself what your end investment goal is as well as whether you're willing to accept continuing your exposure to the crypto market. If you want that house, prioritise it.

        • May4th on 01/01/2024 - 18:53

          it's currently sky high? we are not even at halving or SEC approval for ETF.. the bull run is yet to come

          • GachaGamer on 01/01/2024 - 19:02

            @May4th: Given the state of exchanges, and what has happened over the past year yes. Again I need to point out that bitcoin as a crypto currency, has no intrinsic value or body to back up said value. It's entirely at the whim of speculation, and that's what it has become, speculation. Now is the price at it's highest point ever? no it's not. Will the price likely change around late March and into April as the halving approaches? yes. But all this does is introduce artificial scarcity into a product - that as stated, has no intrinsic value and no longer properly functions as a medium of exchange.

            You are effectively betting on the belief that you and others will continue to want to see it's value increase, for an asset that could easily blow up from regulatory interference.

      • dowhatuwant2 on 02/01/2024 - 09:34

        "and is likely to do the same this year"

        Just as likely to drop to under 10%

    • whitepuma on 03/01/2024 - 09:55

      I think the only other thing to factor in here is that the OP is on contract….the borrowing capacity for people on contract is peanuts….It might be worthwhile for OP to consider taking on full time permanent work (even if its at a bit of a pay cut). Will give them that job security, as well as improve their borrowing capacity.

  • Prosp24 on 01/01/2024 - 07:59
    +6

    Like many other comments:
    - it seems clear and likely that you would benefit more from improving on your spending side than on your income side.
    - based on your car loan it seems that you could improve your financial literacy, and learn to prioritise paying off/avoiding certain debts.

    Like many, i would suggest:
    - a deep analysis of your statements/transactions to find out where your money is going.
    - finding ways to reduce/eliminate unnecessary or unfulfilling spending.
    - while some on ozbargain could call your spending excessive, ultimately, money that is spent and brings fulfillment is a good thing. Instead do some internal thinking on other ways to find fulfillment without spending money and whether or not you may have become dependent on some bad/expensive habits that can be cut. This could be as simple as eating out, unnecessary snacks at the store, spending to maintain appearances or to impress others etc.

    If you cannot eliminate an activity, look for ways to cut spending in general, for example, can you holiday at cheaper destinations (e.g. bali instead of europe?) Can you tolerate 3 stars instead of 5 stars, a hostel instead of a hotel etc. You are on ozbargain which is a good start.

    I've always been a fan of the "happiness" concepts of connection to people, nature and gratitude (all of which are free) and feel that people are becoming more reliant on material/comercial spending to boost their mental health. A deep dive into yourself and where your priorities lie is just as important as that of your finances.

  • Thinkscape on 01/01/2024 - 08:58
    +2

    Join the club. Either you joined the Ponzi years back, or shit out of luck and will have to live out in the sticks if you want to own…

    There’s a widespread mortgage and rental anxiety/crisis, with major cities at record level vacancy rates (around 1%), so yeah, you’re not alone.

    https://youtu.be/Xb3XAAmGndY

  • dylan345 on 01/01/2024 - 09:07
    +6

    So times like this it's good to practice positive prospect. I.e you live in a great country, you have a good income and a job, you aren't staving and you have freedom.
    I'd say even without your own home you are much better off than alot of people who are struggling much more somewhere else in the world and even better than alot of people in Australia.

    So on topic though you have a income that I would consider good.
    Some savings.
    And more government insentives for buying a home than ever before.
    I think you may have to realise that having your own home may mean making compromises that you probably don't want to.
    For example increase your savings rates, consider moving to another city, consider changing jobs, consider getting a older home, a townhouse, a apartment, less bedrooms, downgrade the car, less holidays, rent out a room… Ect ect

    If you aren't prepared to make compromises you will never get onto the property market ladder without winning the lotto.

    Go buy some down to earth books on Australian finance/banks, Australian property, Australian budgeting, ect ect knowledge is your best weapon to fight anxiety here.

    For perspective I'm 31 and have 3 properties on a income of 90k a year. I've never had inheritance or gifts and only ever got stamp duty exception( what the government offers now is heaps better). I got here by making compromises, the main one for me was I've always had housemates to provide rental income even if I really wanted a house all to myself. Besides that I actually have a terrible savings rate lol

  • Bilby s on 01/01/2024 - 09:37
    +1

    Look to buy in outer emerging areas of Melbourne, 2 bedder near a train station. Rent one of the rooms out. Get rid of the car loan/credit card debt and buy an unrenovated apartment with good bones. Slowly do the place up and you’ll be ok. Make sure you are building your super as you will need it to pay off any remaining mortgage and cut back on eating out, travel, lifestyle expenditure.

  • Protractor on 01/01/2024 - 10:28
    +2

    Find a random shopping site online, seek advice and go from there. This is the winning formula that has created the multi millionaire population Australia has a base of our population. The cost of living crisis is a con. We are all rolling in it. Those homeless people are just actors.
    /s

  • ForkSnorter on 01/01/2024 - 10:56
    +9

    The entire Australian housing market is now a scam that benefits existing owners with small/no mortgages, wealthy investors, and flippers. That’s about it. Everyone else struggles or has to deal with housing anxiety.

    When I compare what my parents and grandparents were able to buy/build in their 20s and 30s on modest single-job incomes, with what I could afford in my 40s, it just doesn’t make sense considering I was far more educated and overall more successful than them.

    But with $80-100k assets, $144K income at age 36, you’re doing better than I was. I suggest you look around the country and compare what you can get in other areas for the same price as Melbourne.

    • onemoresummer on 01/01/2024 - 11:45
      -5

      No corporate careers outside of Sydney or Melbourne - no point in looking elsewhere.

      Sure I could buy a 2 bedroom flat in Cairns for 250k but doing what - working in a cafe?

      • sakurashu on 01/01/2024 - 19:21
        +5

        I have a great corporate career in Brisbane; while it's true that there are more positions in Sydney and Melbourne it's pretty obtuse to say there are none elsewhere

      • Yukari Yakumo on 02/01/2024 - 11:45
        +3

        This is the sort of attitude keeping you down, the idea that the mysterious world outside your own comfort zone isnt even worth exploring, even as a mere idea to consider while brainstorming for alternative options.

        As an example, the typical going rate for a contractor in Canberra is double what Smellbournians make (assuming your 140k rate is typical), and make that triple if your skillset is something rare like COBOL or Oracle Fusion Middleware, and the house prices are considerably cheaper than Sydney and Melbourne as well (at one third the commute time to work too).

        But alas, people in your bucket are all the same. Why would you give up the HUSTLE and BUSTLE of Collingwood and Carlton's soulful streets and rich culture? After all, everywhere else is boring, and full of roundabouts.

        • machej on 02/01/2024 - 21:04
          +3

          Well to be fair Canberra is full of a lot of roundabouts but I digress.

    • ymmf on 01/01/2024 - 14:19

      Agree. But it is unlikely to change anytime soon given the majority of voters are owners and there is no visionary politician who is prepared to make unpopular decision.

  • afah0447 on 01/01/2024 - 11:22
    +5

    Mate…you are worrying about nothing. You are in a good position versus many other people even older than you.

    Sell the car, buy a beater, sell all your assets and use the cash for a deposit for a townhouse. You will also be able to apply for Commonwealth FHOG and get LMI covered by the government. Your salary will easily cover the mortgage.

    Just pull the trigger.

    • onemoresummer on 01/01/2024 - 11:46

      Why would I sell the car now im finally about to pay it off?

      • nomoneynoproblems on 02/01/2024 - 15:34
        +1

        Well then use some of those saving and get rid of the loan. Otherwise he's (or she) isn't wrong. liquidate your assets and use it to buy a place. A modest home for circa 600k is still doable in the south east suburbs. I know that anxiety feeling btw. I'm only a few years younger than you and have recently purchased my first home.

  • GourmetFoodie on 01/01/2024 - 11:47
    +2

    Welcome to the housing ponzi scheme. Supported by the government so it never goes bust.

  • Zacsik on 01/01/2024 - 12:36
    +1

    OP, budgeting is hard but I think it is a good idea. I am bad at it. I am the same age as you.

    However, keeping track of your expenses is a great first step. It takes about 5mins a day to enter in the money you spent that day into something like - https://play.google.com/store/apps/details?id=com.bookmark.m…

    I've been using it since 2017 to understand where my money is going. It can help identify waste and having to enter in the money everyday helps keep you somewhat accountable.

    I am not saying you waste money, but its good to understand where it gets spent.

    Also if your skills are transferable, and you don't have any family keeping you in Melbourne, why not consider moving cities? You could get a 600k townhouse in Brisbane not that far from the city.

    For those saying the OP should have saved more. They haven't clarified how long they have been on that salary - so I do feel that piece is missing before you make that call?

    • onemoresummer on 01/01/2024 - 13:20

      Thanks, I would love to move to Brisbane but how is the corporate life there compared to Melbourne? I work in finance and not sure it's easily transferable outside the big cities?

      • Zacsik on 01/01/2024 - 14:09

        I mean, I can't really answer that question. I work for a big mining company in corporate, and it seems okay to me. I don't work in finance, but have a lot to do with them as an input provider.

        They seem fine I guess? You could try looking for jobs as a start and it see if it aligns to what you want and you skills.

        Sure Brisbane, Perth, Adelaide are not big cities - but I wouldn't diminish the opportunities available here.

      • sakurashu on 01/01/2024 - 19:23

        Can you be more specific than general finance? Brisbane is a base for some big companies (i.e. Suncorp) but the nature of your role might preclude them

  • mlburnian on 01/01/2024 - 14:01
    +3

    Get real! Houses in Melbourne have hardly moved since 2017 peak. Also Melbourne is far more affordable compared to Sydney. It’s due for a boom

  • 9hundred on 01/01/2024 - 14:07

    $144,000 so RICH!!!

  • akl977ad on 01/01/2024 - 14:52
    +1

    1. Pay off your car loan

    2. Get into the property market doesn't need to be the biggest place but anything will do. You should be able to pay off a 2 bed 2 bath 2 car easily.

    3. Look outside the CBD. I'm from Sydney so there's absolutely no stigma buying a flat in the suburbs (actually it's the case now where there's literally no houses as more get demolished closer to amenities irrespective of how far from the city you are)

    4. Slowly pay off the loan, again doesn't need to be big but make sure you get an offset account - this will be important later

    5. Once you have the capital/asset you can move to another property. Because you've lived in your first place for more than a year you get 7 years where CGT is not applicable.

    6. Change the now investment property to interest only, remove all the "savings" from your offset to your new property so you reduce the loan on that. Negative gear all the interest, depreciation etc. this will save you alot of money.

    So in short 144k is nothing because you're getting raped by the ATO.

    1. I hope you've bought health insurance with the minimum bronze level and extras if it suits. This removes the stupid Medicare levy surcharge, and you'll be able to claim back on some extras you use.

    2. I'm not sure where the money has gone? 144k and only 80k in savings? Do a budget.

    3. So you're in a contracting role how are you only on 144k a year? That's permanent wages, contractors you should be paid way higher because you have to pay your own insurance, super, you don't get any leave and the uncertainty because you have to keep applying for an extension.

    For comparison my boss was getting close to 1000/day as a contractor and this was 10 years ago. That's the wages you should be aiming for otherwise switch back to a permanent job.

    Needless to say no need to be loyal keep looking and jump ship when an opportunity with better pay comes along.

    Best of luck.

  • belongsinforums on 01/01/2024 - 14:58

    find someone to go halfsies in a place and get land

  • vchar on 01/01/2024 - 17:18
    +2

    my employment income is in your range but I'm employed full time, and I've bought a house two years ago by liquidating my investment.

    owning a home is a good choice if you don't have other uses of your money. in your case, you should consider the cost of opportunity when it comes to liquidating your investments for buying a property. you could probably earn more with your investment and free to roam as you wish but renting is getting worse nowadays, so it is quite tricky to decide what to do. without your own home, you may feel insecure and you may one day become a homeless.

    owning a home makes you feel a bit more secured when it comes to shelter but it doesn't guarantee that you won't be homeless if you can't pay your mortgage; however, it comes at a cost of opportunity. plus, owning a property also means increasing your expenditure like body corporate for apartment or council rate for a house, home maintenance cost, mortgage interest. adding all these expenses together will probably cost you more than renting. having said that a property may probably be appreciated in value but taking all the expenses into consideration, the appreciation doesn't quite give you a surplus unless your property value hikes insanely. worse yet, you lock your big junk of earning in your property, you lose all the opportunity you would have otherwise.

    taking everything into consideration, I wanted to sell my current property because the cost of opportunity is way to high for me. but I have emotionally attached to it so I don't want to let it go. I've been pretty much (profanity) up.

    see if you have other opportunities, otherwise, owning one is not a bad idea at all.

  • onemoresummer on 01/01/2024 - 17:23

    I did a NAB 'borrowing power' calculator. With a right now 50k deposit I can afford a 200k house (doesn't exist) but they can lend me 700k..lol
    Also, am I correct in saying First Homebuyer Grant is for new (off the plan) or new builds only?

    • PeppermintGrove on 03/01/2024 - 17:04

      Your issue right now is gathering a large enough deposit. Your income is high enough to service a pretty high mortgage, so once you have saved for the deposit, you'll find the figures much more favorable. You would probably want to aim to put down a 20% deposit, so there's your saving goal starting point.

  • RefusdClassification on 01/01/2024 - 17:31
    -3

    I wouldn't worry. You are earning considerably above median income. You are much better off thank 60% of the population. Besides, Albo is running the country. Albo is going to fix everything. Personally I haven't seen much evidence of this happening, but people tell me Anthony Albanese is our greatest ever leader. He's somehow going to simultaneously make housing more affordable and increase capital gains for investors.

    • JIMB0 on 01/01/2024 - 18:36
      +1

      I'd worry. The last government hung their hat on a surplus that never came.

  • Camelface on 01/01/2024 - 19:51
    +2

    You'll be fine. Start looking for house. They are expensive, and there's nothing we can do about it. In the meantime, start having conversations around getting the job perment. Before 3 months would be ideal, but no harm letting them know that you're keen on continuing.

    Its normal to be anxious when you have to buy the most expensive item you ever buy.

  • AustriaBargain on 01/01/2024 - 19:52
    -1

    WFH is probably going to become way more common, despite headlines. And there's a lot of talk about dramatically increasing supply and high density housing. If we one day did end up oversupplied with housing then prices will come down, unless you really want a big house in inner Sydney.

    Housing at the moment is untenable and something will be done in the next 10 years. Tent cities are election poison and I think the ALP/Coalition probably see the Greens as big enough already.

  • worldpc on 01/01/2024 - 20:17

    Have you heard of Victorian homebuyers fund, if you are eligible, your deposit problem is solved, and with your income you should be able to afford property around $600k

    • onemoresummer on 02/01/2024 - 08:47

      i'll look into it - the idea of the government owning 25% does scare me though.

      • SBOB on 02/01/2024 - 09:42
        +5

        the idea of the government owning 25% does scare me though

        As opposed to the bank owning it?

      • worldpc on 02/01/2024 - 12:39
        +1

        You can buy it back later, look at this more like interest free home loan with conditions -lots of them, but it solve the deposit problem.

      • Name on 03/01/2024 - 10:11

        I wouldn't be. They control so much of your life already that it's trivial.

        If it was available to me when I first bought, I'd of jumped at that deal even if I didn't need it. It frees up your money for other things and any extra cash, you can put towards paying down the loan. if you're tight one month it's less stress than if you had a extra 25% loan.

  • frostman on 01/01/2024 - 21:24
    -1

    Blame Wuhan Dan,
    Gave foreign investors a red carpet entry into Melbourne and they bought up all the properties at huge mark-ups which inflated the surrounding places
    Add to the fact that Melbourne, like Sydney, is a thriving place for money-launderers, they buy > demolish > rebuild > sell.

    • TightAl on 01/01/2024 - 22:34
      +2

      Foreign investors were coming into Melb and buying properties during COVID?
      LmAoOOoo
      Take your tin foil hat off, it's not good for circulation.

      • frostman on 02/01/2024 - 10:18
        -1

        Go learn something called 'macroeconomics' , the collateral effect plus demand, then come back to me.

        Throwing vapid, half-funny insults like that doesn't make your argument any stronger, in fact you come across immature and rather stupid.
        Especially the age-old immature/teen trick of throwing in a 'LOLLLL' ' LMAAOOO' as a means to somehow cast huge doubt on one's statement.
        You're one very cringe person.

    • Name on 03/01/2024 - 10:20
      +2

      I don't think it had anything to do with "wuhan Dan" or money laundering, it's an under-supply issue all over Australia. My IP on the gold coast went from $450k to $800k over the past 4 years.

      I think the issue is at a national level, there needs to be a reduction in the amount of immigration that is occurring for a few years until infrastructure (housing, roads, rail) has caught up with the latent demand. There also needs to be be less incentives to purchase property. Government "co-buying" 25% of a property is further pushing up lower value homes to the $700k cap.

      • frostman on 05/01/2024 - 09:54
        -1

        I don't think it had anything to do with "wuhan Dan"

        it does

        or money laundering

        it does

  • Dollar Dreamer on 01/01/2024 - 22:28
    +2

    I was in your position, was also depressed, single, early 30's, worked hard sinch I was 16 and saved and saved but saving mean't nothing when houses were doubling in price every 6-7 years. So instead, I went all in Bitcoin in 2016, had multiple heart attacks along the way as crypto pumps and dumps but eventually Bitcoin is the bloody reason I own a nice house in Sydney (a proper house with a front lawn and a large backyard, not a tiny slim grey box). Now, did I get lucky? Of course, I entered by default at one of the best time in Crypto history and held on to the crazy ride for a few years before dumping it all after marriage to buy property, start a stock market portfolio (nothing too crazy) and half of an investment property paid off and the rest rental covers. Is high risk investing a good thing, hell no, I was desperate, scared, used to get panic attacks as my income was below average so I jumped in without thinking. It worked for me but I know many people that have lost everything in Crypto. I am less than 40 with 2 houses, 1 paid off, 1 half paid off and rented out, stock market portfolio and still doing my below average wage job. Crypto literally saved my life. Sometimes desperation is the key thing. For you I suggest getting hitched, 2nd income is always good and you earn pretty much double what I make so you will be ok and don't have to resort to high risk moves like I did.

    • onemoresummer on 02/01/2024 - 08:47

      Hopefully the next bull run does the same to me!

  • TightAl on 01/01/2024 - 22:33
    -3

    You sound irresponsible.

  • fry001 on 01/01/2024 - 23:29
    +3

    You can get a 2 bedroom apartment in Bayswater for $465k, don't need $600k.
    https://www.realestate.com.au/property-apartment-vic-bayswat…

  • FlyingMiffy on 01/01/2024 - 23:43
    +1

    U dont always have to start with the ideal real estate, u can always buy something more affordable and upgrade as your financial situation improves. I went from a one bedroom apartment, to a two bedroom townhouse, to a small size 4 bedder and now a really nice 5 bedder. That took about 15 years so start somewhere that your situation affords then work your way towards your goal.

    • onemoresummer on 02/01/2024 - 08:48

      A lot of people have suggested buy a basic apartment and live in it a year and rent it out.
      Given apartments don't go up in value, how would that help with 'upgrading' and would that not leave me looking at somewhere to rent again in 12 months? What are the beenfits?

      • Mugsy on 02/01/2024 - 09:29
        +2

        I bought a basic 2brm apartment for my first property in 2007 for ~$280k.

        I sold that unit for ~480k in mid 2023. Of course, most of this time the price was stagnant. But units will eventually go up… it's just a matter of time. Though I suspect they will continue to given the housing crisis atm. If I wasn't in a position where I couldn't hold onto more debt, I would have kept it. It's worth another $50k today compared to when I sold it.

        But in terms of upgrading, I bought that unit in 2007. In 2014, I bought my townhouse. The unit hardly went up in value. What made this possible? I continued to be frugal, save, increase my earnings (I went back to Uni to do my Masters… almost fully funded by work too after some tough negotiating on my own part), and throw all of my earnings into my offset account. I almost had that unit paid off after 7yrs. I wasn't throwing money away renting (and the cost of rent for the area had also surpassed my mortgage repayments so I was already ahead there). The key thing to upgrading… don't sell when there's no profit… property transaction costs are in the tens of thousands of dollars so each time you sell, you need to not be worse off. Don't feel bad about "depriving stock from first home buyers" when you rent out your unit. The rental market is in need stock just as badly.

        Today, I'm in the process of building a house with my wife. As we're living in her townhouse, most of the land purchase and construction has been funded by the proceeds from my two property sales. We'll be selling her townhouse in order to reduce our house loan.

        Note that CGT needs to be factored in… my townhouse I sold within the timeframe where I would not incur CGT despite having rented it out… but my unit will incur CGT for the period of time I did not live there and rented it out. But I'm still ahead.

        Anyway, this is but one example of how upgrading your property can be done. I know people who have been more aggressive than me… but I'm very risk adverse so I play it safe (doesn't mean that I don't do anything).

        Note that I came from very humble beginnings… I easily qualified for Austudy when at uni if that helps put things into perspective. But where there's a will, there's a way.

      • FlyingMiffy on 02/01/2024 - 11:02
        +2

        Its not always about big capital gains. Apartments tend to be about yield which more often than not gets you to positive gearing quicker. And that also means better cashflow and a faster rate of saving. For me the combined quicker rate of saving and the very minor increase in equity via capital gains was enough to get me to the townhouse within 3 years (without needing to sell the apartment). My suggestion is to think about cashflow, rates of saving, changes in cost and what to make of the equity as factors in your situation.

        • Mugsy on 02/01/2024 - 12:52
          +2

          I concur with this.

          Whilst I think there are severe issues with the way body corps in this country are set up especially when it comes to how ready they are to deal with building defects and lack of penalties for lazy owners who contribute nothing to ensuring a body corp is run properly (or penalties for bad mistakes/dodgy actions), units are an affordable way to gain security with a home so that you're not throwing money away by renting.

          Units and townhouses aren't perfect… I've had to deal a plethora of issues ranging from troublesome commission housing to building defects that body corp manager/s just weren't on top of (I wish issues were just confined to by law matters… that would have been a luxury).

          But I also I know people who've been waiting to buy a house but they keep getting priced out because they cannot save fast enough.

          For those of us who cannot buy a house as their first property, at least there's a pathway to improving one's housing security.

  • Eeples on 02/01/2024 - 08:12
    +1

    My advice.

    Liquidise your assets. Pay off your car.

    Put down a 5% deposit.

    Buy the 2 bedder over 30 years.

    Then decide to live life well or scrimp and save in order to upgrade to a better unit/house.

    If work drys up… take any job or jobs you can in order to stay in your house.

  • morebunnings on 02/01/2024 - 11:28
    +2

    Sell your shares, pay off your car loan and you have a $72k deposit.

    On a $600k house, that's a $528k mortgage. On a 25 year term using the uloan calculator at 5.99% interest, that's a $785/week payment.

    If you're clearing $90k after tax, that's $1,739/week, So after paying your mortgage you'd still have $945/week to live off.

    Budgeting $100/week for rates and insurance you'll still have $845/week to live off, with no other debts to service.

  • Alley Cat on 02/01/2024 - 14:22
    +1

    Get a camper van and find a job that lets you work remotely. Saves time for commuting and allows you to roam the country while making $$ on Boost sims. Best social life you could hope for.

  • BFPRufus on 02/01/2024 - 14:27

    First result on Domain for Bayswater is 2 bedroom $465k apartment. Manors Lakes has a bunch of 3 bedroom houses around the $480-$500k range (picked a new suburb with a train station). At this stage, your issue is probably more around wanting more than your savings will afford, but it's not that you cannot afford housing, it's that you can't afford waht you want.

    • Cherry12 on 02/01/2024 - 20:50
      +1

      Exactly, many first home buyers don't want to compromise on location and end up not buying at all.

  • Brick Tamland on 02/01/2024 - 15:13

    Not sure why you are anxious. Sounds like you have a well paying job and lots of assets you could sell to put together a deposit. What's stopping you from buying something? Maybe make an appointment with a mortgage broker

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