How Are People Affording Properties?

Ljam-donuts on 18/05/2024 - 21:29
Last edited 19/05/2024 - 10:45 by 1 other user

I am genuinely confused and wondering if someone can explain to me how people in Melbourne and Sydney are affording properties. I rent in the eastern suburbs in Melbourne and see a near 100 percent clearance of houses sold at auction for at least $1.7mil+ around me in the Monash area. That is 11k in repayments over 30 years! You wouldn't be able to afford that even with a salary of $250k.

Where is all this wealth coming from? Is the average income of an Australian $400k or am I missing something? And is the only possibility of homeownership for an average OzBargainer (with a salary of $200k -$250k) to buy a property in crime ridden suburbs on the outskirts of Melbourne or Sydney?

Financial

Comments

    • Grunntt on 19/05/2024 - 18:45
      +6

      According to recent stats, it's mostly 2 cohorts:
      - cashed up boomer investors, buying their 3rd, 5th, 10th property

      Why use these alarmist figures apparently pulled out of the air?
      Make your point, but it's more convincing to use real figures.
      eg
      71.5% of investors hold 1 investment property
      18% of investors hold 2 investment properties
      9.7% of investors hold 3, 4 or 5 investment properties
      0.8% (or 19,895) investors hold 6 or more investment properties

      Any chance you could point to an authoritative link that can prove your 10 properties claim?

      • MrThing on 20/05/2024 - 13:23

        3 2 1 a link to news.com.au, sky news, dailymail

        • Grunntt on 20/05/2024 - 14:15
          +1

          3 2 1 a link to news.com.au, sky news, dailymail

          Here's something from the definitive reference to get in before news.com.au quotes.

          AustBureauOfStatistics

          One in five households (21%) owned one or more residential properties other than their usual residence. Of those that owned another residential property, almost three quarters (68%) owned a single property, while one in twenty-five (4%) owned four or more properties.

          • LFO on 22/05/2024 - 19:19

            @Grunntt:

            definitive reference

            Statistical data provided by the censused ones.
            Is it actually factual?

            Doubting Thomas here.

    • FlyingMiffy on 19/05/2024 - 21:52
      +5

      Really… quoting dailytelegraph??

    • MrThing on 20/05/2024 - 13:22
      +1

      It's a pretty small percentage of the population with more than 3 investment properties or more, so don't make it out to be some huge number, it's so small it's irrelevant

      https://propertyupdate.com.au/how-many-australians-own-an-in…

      Stop reading trash conservative journalism like Daily telegraph who like Sky just push to get people angry and divide people into haves and have-nots

      • Thinkscape on 23/05/2024 - 09:12

        No need to read that.
        It's already divided, literally.
        I've been pushed out of the market for good, I'll never be able to afford anything in any major metro area, even on above average income, while the "haves" are retiring early b/c the property income exceeds income from labour.

  • lknight on 19/05/2024 - 12:01
    +1

    most of the homes matching median prices and above are being bought by those who are selling their apt/townhouse purchased in the last 5 years or so. So this property is mostly paid off so a median apt price in a good suburb would fetch up to 1mil so they can easily loan another 600-700k on a dual income to buy a 1.7mil home. Plenty of big block homes in Western Sydney for 1.7mil in the so called nicer suburbs.

  • Cluster on 19/05/2024 - 12:32
    +2

    There is another solution to the problem: Don't buy in Melbourne or Sydney. If people are willing to enter one million dollar debts on the salary of a teacher or police officer, then let them eat beans and rice for 30 years. Don't join them in debt servitude.

  • Typical16-bitEnjoyer on 19/05/2024 - 12:41

    Family generational wealth with a sprinkling of nepotism.

  • Jaduqimon on 19/05/2024 - 13:27

    Plenty of properties available 400kish in Canterbury bankstown area of Sydney.

    • morse on 19/05/2024 - 19:30
      +4

      “Properties” = 1-2 bed units

      • CheapskateQueen on 19/05/2024 - 20:32
        +3

        built with paper

        • tonka on 20/05/2024 - 15:30
          -1

          Actually, they are really solid brick buildings, older and tested by time, and usually renovated, unlike some of the newer disasters

          • CheapskateQueen on 20/05/2024 - 17:51
            +2

            @tonka: well i speak as an ex owner of a piece of crap build from 2013 in canterbury.

            • tonka on 20/05/2024 - 21:09
              -1

              @CheapskateQueen: Fair enough, I guess they exist too. Thought they may be a bit more with the $400K ones being the 3 storey brick walk ups.

    • ribze1 on 20/05/2024 - 14:07
      +1

      Punchbowl is $1.2m. Merrylands (drive by capital) is also $1.2m.

      • Jaduqimon on 20/05/2024 - 14:56
        +1

        Lakemba apartments 2bedder 400kish

        • ribze1 on 20/05/2024 - 18:30

          Is it too much to ask that a family would like a house to live in?

  • LFO on 19/05/2024 - 13:35

    How Are People Affording Properties?

    Mostly with a big fat mortgage.

    And a big fat hope that they will be able to pay. And as it is actually happening … hence convincing other to do it too. Rinse. Repeat.

  • justworld on 19/05/2024 - 13:40
    +5

    the main thing you are forgetting is that properties only have to be affordable to the small group who buy properties - that is, generally, established double income households. Those on the fringes buy flats/units, and those further down the ladder rent.

    Using average (and, a fortiori, median) income figures actually distorts your understanding of the housing market, because a market is weighed towards the high-end - not the average, and certainly not the median - and using individual rather than household figures distorts your understanding even further.

  • JimmyF on 19/05/2024 - 14:04
    -1

    houses sold at auction for at least $1.7mil+ around me in the Monash area. That is 11k in repayments over 30 years!

    Sounds like a steal paying back $11k over 30 years for a $1.7m house! Just $1/day!

  • Ononono on 19/05/2024 - 14:34
    +1

    Have you tried being born 20 years earlier and stopped drinking lattes? Stop being so entitled…

  • ZloyKrys on 19/05/2024 - 14:40
    +4

    I fail to understand the connection between salary and price of home you live in. Idk anyone who bought their dream home where they want to live straight out of uni or tafe. I live in a 1.4M house which is rundown but when I finish renovation it will be around 2M. But it took me 21 years and moving over 4 different properties on the ladder to get there and my first place was 1br rundown flat bought for $170k at 9.5% interest rate. Just start somewhere you can afford and work your way up like everyone else.

    • hasher22 on 19/05/2024 - 15:22
      -5

      It's not the 80s, 90s or early 00s anymore. I assume you're a boomer.

      If you fail to understand why, look up salary to home price ratio now vs in the 80s and 90s and maybe you'll understand why people can't even to afford moving far away.

      Even homes in the outer west of Sydney is crazy high.

      Past indicators is not a true indicator of current or future indicators.

      • ZloyKrys on 19/05/2024 - 16:02
        +4

        It's not the 80s, 90s or early 00s anymore. I assume you're a boomer.

        Yes, it's 2024. Nah, your assumption is wrong, I'm Gen Y

        If you fail to understand why, look up salary to home price ratio now vs in the 80s and 90s and maybe you'll understand why people can't even to afford moving far away.

        Well, the same people don't even use options available to them that were not available to me when I bought my first property in 2007:
        - 5% deposit loans
        - cheap loans - you can get a loan at 6-6.5% now which is 3% less than I paid for my first property years ago
        - Fantastic way to reduce the tax and save for deposit through First home super saver scheme at 15% max tax rate
        - Shared equity schemes

        Also my salary was like 35 grand in 2005 and my partner earned about the same (we started saving a deposit in 2004, she didn't work), now the same job pays at least 60k, whereas in the same complex an already renovated, not rundown apartment was sold for about 400k which is far more affordable than it was for us in 2007 (when we bought) considering the deposit hurdles (20%) and interest rates.

        Even homes in the outer west of Sydney is crazy high.

        I didn't have money to buy in Sydney whether it's outer west or not, and I don't consider it's a God-given right to be able to afford to buy a first property in the most expensive market in Australia

        Past indicators is not a true indicator of current or future indicators.

        Yes sure but as outlined above, the future can be even better and with current options I'd bought the same starting thing even faster now.

        • FlyingMiffy on 19/05/2024 - 21:58

          @ZloyKrys well done mate and totally agree. Sounds like theres a bunch on here who dont know how to make sacrifices or unwilling to take things one step at a time. My first was an apartment, then a Townhouse, then a old house, then a KDRB. You can definitely get there over time and with commitment.

      • ZloyKrys on 20/05/2024 - 17:45

        Where did you get your bullshit from? I relied on my 35 grand in savings and traded through 20 years over 4 properties, it's written in the post, give it a good read

  • djsweet on 19/05/2024 - 16:19
    +1

    In most cases people buying houses have been the beneficiary of 1-2 housing booms and have been able to sell their house for a 5-10x profit. Those booms have basically priced everyone out of the market who didn’t already have a house unless:

    • dual high income or
    • inheritance.
  • Herbse on 19/05/2024 - 17:02
    +1

    If you bought a house before the boom. You can afford more in the future.

    If you didn't. You're (profanity)

  • curtturtle on 19/05/2024 - 17:36

    They don't send that much on a house. You buy something smaller and more affordable. I bought a 3br in Rezza for $750k.

  • furyou on 19/05/2024 - 17:44
    +3

    Well, didn't you see that 8yo landlord in the news earlier?
    All you have to do is like the 8yo, save up $6k pocket money (I'm guessing a few months for an 8yo) then your rich parents act as guarantors for the other 3mil you need. Easy.

    • liongalahad on 19/05/2024 - 19:25
      +2

      wat

      • zorodluffy on 19/05/2024 - 19:26
        -4

        stop typing, start saving

        • liongalahad on 19/05/2024 - 19:28
          +4

          25k to buy a 1.2mil property? 2k/month repayments? In what era? in what planet? are you trolling? or just being sarcastic?

          • zorodluffy on 19/05/2024 - 19:28
            -3

            @liongalahad: 25k and my parents helped me out a bit too

            • liongalahad on 19/05/2024 - 19:30
              +7

              @zorodluffy: aaahh… a tiny detail you missed lol

              how much did they help you with to get a 2k/month repayment mortgage? 800k?

                • Ughhh on 19/05/2024 - 20:01
                  +7

                  @zorodluffy:

                  just takes some sacrifices

                  Yes, sacrafices from your parents.

                  • CheapskateQueen on 19/05/2024 - 20:36
                    +4

                    @Ughhh: lol you've got to be taking the piss about your "25k" contribution to your parents "850k"

                • capslock on 19/05/2024 - 20:46

                  @zorodluffy: Do you have siblings? Will they also get $850k?

                • liongalahad on 19/05/2024 - 20:53
                  +1

                  @zorodluffy: HAHAHAHAHAHAHA

                  This must be a joke. You come here preaching about saving and how you bought your 1.2 mil house thanks to your hard work and doing sacrifices, and omit to say that your parents basically bougth the whole property cash in hand for you. You cannot be real, Please tell me you're just trolling

                • Drakesy on 20/05/2024 - 15:17

                  @zorodluffy: You really need to append an /s to your comments.

          • newbo on 19/05/2024 - 22:22

            @liongalahad: 0.5% interest rate on a 99 year mortgage.

  • liongalahad on 19/05/2024 - 19:24
    +1

    That's why the best thing to do is to buy an investment property (or more than one) - apartments with low strata fees are the best - then you live in a rental in the area you want to live

    • tonka on 19/05/2024 - 19:37
      -1

      Yep, this. I even suggest buying that investment property in an area you could envisage retiring to, then you can negative gear and not pay the CGT later. Rent close to work, or where you like to party, or in preferred school catchments etc. If you're single, board through somewhere like Flatmates.com and don't even get tied to a lease.

  • Darude Sandstorm on 19/05/2024 - 19:38
    +1

    ey dude, I live and rent in Box Hill, 4 bed, 2 bath, paying $550 a week. My brother lives in Dalyellup (Shithole 2 hours south of Perth) and is paying $650 a week for similar sized property etc but there's no jobs there besides FIFO.
    10 years ago, the place he is in would have been $250-$300 a week and the box hill place would have been $400+. Melbourne is Cheaper than WA.

    • KaTst3R on 20/05/2024 - 10:21
      +1

      Then the question is why is your brother living in a FIFO town unless he is making the mining dough which is likely to be $200k pa plus bonus. Totally different economics here.

      • Darude Sandstorm on 20/05/2024 - 17:20

        Fair point.
        I worded it poorly, the township isn’t that small and isn’t exclusively for FIFO workers.
        I’m a white collar worker and office-style jobs there are few and far between, approximately 3 jobs a year in the IT space (predominately where my skillset lies and the other 200+ people they shit out at TAFE a year there), anywhere from a developer role, manager, or the sole IT person at a school.

        But yeah, typically you’ve been working there for 20+ years, find a rare local job as an apprentice, get something FIFO or do what I did and move to the other side of the country.

        It was only in the last 3-4 years houses there went from 250-300 a week for a rental to 600+ and buying something nice for 300K is now closer to the 700K mark, which was due to the pandemic and people leaving lockdown states to ones where they had freedom. There hasn’t been an increase in pay or jobs created but I presume a lot of people just got WFH jobs, moved there when it was cheap AF and bought up and now have priced everyone out (e.g my Brother who grew up there now can’t afford to live where he grew up).

        My parents bought there 20 years ago for 400K and their house had devalued to sub 300K until about 4 years ago, recent evaluation has put it at 930K lol. Beach frontages that were worthless have now become unobtainium.

    • ribze1 on 20/05/2024 - 18:32

      I read this as Box Hill in Sydney and thought no way you're paying $550. It's in the sticks but not that cheap.

      • Darude Sandstorm on 20/05/2024 - 19:02

        Nah, Victoria, 25 minutes to the CBD lol

  • ChupaCabra on 19/05/2024 - 19:41

    /Australia is built on rising house prices and greedy fat cats only want it to stay that way

    Where to start with this question. First a lot of people purchasing already own another home (s) they can use rent from to offset the interest. Or sell their existing to upgrade to a new one. Secondly there's tax incentive with negative gearing if you believe the capital gains to be worthwhile. Thirdly the 'housing crisis' solutions from our governments usually end up driving up prices rather than solving anything (looking at you first home buyers grant, stamp discount, negative gearing and super dipping).

    Personally I'd like to see prices come down and have property be a lot more affordable. It's not uncommon now for kids to move away because they can't afford being in the area where their parents are even with a good salary. I'd also like to see government investigate whether limiting the amount of homes you can own would help (eg 3 homes why do you need more) and taxing foreign ownership more.

  • payless69 on 19/05/2024 - 21:22
    -4

    Jinping and Putin are never seen laughing in public.
    According to local sources they just had their longest laughing attack.
    All because they were informed that the world's best wealth equaliser named Albo has now paid Ginas power bill!

  • Rako on 19/05/2024 - 21:34
    +9

    Some people prioritise home ownership over tattoos, piercings & trips to Bali

    • Drakesy on 20/05/2024 - 15:31

      Some people want to enjoy their lives rather than be trapped in a debt laden prison.

      And yet previous generations didn't have to choose between the two when they could do both at the same time.

      • ZloyKrys on 20/05/2024 - 17:46
        -1

        Go live in the tent by the beach then

      • tonka on 20/05/2024 - 21:12
        +1

        Are you kidding, you have no idea how expensive airfares were back when houses were 'cheap'. The annual family holiday was a caravan park 200kms away. The overseas trip was a once in a lifetime.

        • Some Human on 21/05/2024 - 02:13
          +1

          Not to mention interest rates were sky high and your wage was low.

  • morebunnings on 19/05/2024 - 21:46
    +4

    Most people are not first home buyers, so they are selling their house and buying a new one at the same market value.

    I couldn't afford to buy my house today, but I could 10 years ago when I bought it. If I sold and bought somewhere else, I'd buy something of similar value and only be out of pocket stamp duty and lawyers fees.

    • fredk1000 on 19/05/2024 - 23:17
      +4

      Exact same here, I could not afford the area I live in now.
      Real estate agent knocks on the door telling me the house no so far away sold for this much… They ask when I got my house, I say over 10 years ago, they say nice capital gain. I tell them I not interested in capitol gain, I want a house to live in. I will not sell, if I do I could not buy anything in the area…
      I feel sorry for my kids, in 10 years time when they work, they have no chance in buying a house being an employee.
      They would most likely inherit the house, I don't think I will sell to downsize or for capital gain. I am dying in this house.
      Actually when the neighbour moved in 5 years ago, they asked how long I have lived hear, their response was nice capital gain… Is it that important to people?

  • newbo on 19/05/2024 - 22:21

    I imagine for the most part it is they bought other property that appreciated and sold it or generational wealth.

  • Poor Ass on 20/05/2024 - 06:10
    +2

    This is another one sided shit post with no interaction from OP

    Question is why hasn't anyone pointed out the $11k repayments makes no sense

  • knk on 20/05/2024 - 08:36
    +3

    Areas going to matter a lot.

    I bought in a less than desirable area in 2016 in Melbourne, 440k still own the house. Bought it with the ex, refinanced to buy her out and now with the increased mortgage,repayments post rate hikes it's pretty brutal honestly unless I can continue to consistently make 130k+ (career change incoming, so it's not happening) or budget very, very meticulously I'll be broke.

    I recently renovated my house (burst flex pipe kill me), so took the opportunity to split the house up for dual living and now I'm renting out the rear half with 2 rooms. Cost about $7k to do, new entryway / doorframe inside the house, second kitchen, dishwasher fridge TV appliances etc all inclusive. Independent / separate access to the property for me / tenants, it's perfect honestly.

    I'm automating bits and pieces, adding some furniture here and there to make it a little nicer / more practical for the tenants as I go, not mandatory but I'll probably burn about $10k getting the place to a really nice standard for the guys.

    Nice to have other people around to give you a hand with things and talk some shit with too, I've lived on my own for ages lol. But when I want to I can shut the door.

    Bringing me in around 25k a year in rental income and covering just shy of 95% of the mortgage, not including the additional expenses (electricity, consumables for their side etc very minimal).

    Obviously if you don't like to DIY and ruin your life for months at a time this isn't viable. I just thought it was a long ass story / ridiculously involved way of getting ahead in this economy and it gives some perspective. Also obviously given the costs quoted above, I didn't register the second kitchen with the council because it would've blown the cost out significantly.

    To your exact question, stop looking in areas you can't afford. You can't afford 1.7 million dollar properties, start looking in the Melton / Wyndham council areas and live within your means.

    • May4th on 20/05/2024 - 09:17

      nice work, just keep in mind you may be liable for capital gain if you lease via proper channels when you sell for the portion of the house you rent out

      • knk on 20/05/2024 - 09:44
        +1

        Very aware of all the tax implications. It's not a may be liable, it's a will be liable unfortunately….if you don't take cash.

    • JimB on 20/05/2024 - 09:53

      That's a great plan.

      Just don't get the tenants offside because council/VCAT could give you trouble for the unapproved building/quasi-dual occupancy house.

      Did insurance cover the damage due to burst flex pipe?

      • knk on 21/05/2024 - 12:59

        Yeah the dual occupancy / additional door I don't think is an issue legally, it's more the kitchen and CGT requirements that'd be an issue.

        Tenants have been good so far but you're right, need to keep them happy.

        Insurance covered the pipe but it took a complaint to their governing body. (profanity) me around a bit.

        Took the payout and diyd the Reno and did a lot more than what they were going to.

        • JimB on 21/05/2024 - 14:08

          I don't think adding a second kitchen would be an council issue as long as all the plumbing works is to code. You wouldn't need a planning or building permit for it.

          CGT- that's a headache for your accountant to work out when you finally sell.

          • knk on 21/05/2024 - 15:58

            @JimB: Yeah CGT will be complicated if this ever ends up being on the books.

            From what the plumbers I spoke to said they seemed to think the second kitchen would need to be registered with council and it'd increase my rates. A cursory google of my council now though mentions nothing of the sort.
            It does mention that if you install "lockable doors" presumably not just privacy locks that'd require upgrade to a class 1a / rooming house building. Ie there's been an internal door added and it's got an electric lock on it.

            Outside of that it actually sounds completely legal, and if that ever became an issue a passage handle is 1 bunnings trip and 5 minutes of work to install.

            I mean there's also the fact the plumbing work isn't to code on the waste side, as that would've required either a macerator (for like 6 metres, because the fall JUST misses the reqs). In practice everything drains properly and never gets remotely backed up. Pex is all to code.

            • JimB on 21/05/2024 - 16:06

              @knk: Good stuff.

              The plumbers may be correct. I'm not sure, doesn't seem logical, as you can build a new house with 3 kitchens if you'd like.

              The reason why I recommend to keep the tenants happy is that they may lag on you to the council/ATO. Also, insurance from malicious damage is unlikely to be paid, unlikely you can get landlord insurance.

              Anyway if the tenants are happy with say reduced rent and you're providing a roof over someone's head during this rental crisis, I'm all for it.

              • knk on 21/05/2024 - 21:45

                @JimB: Yeah, the plumbers guidance and I got multiple opinions was: "technically you need to do a lot of work to make this compliant, but realistically it's going to be fine". They said worst case it'd drain a bit slower.

                After I had everything installed I ran the dishwasher / washer at the same time and dumped a full sink load of water from both basins (other kitchen too) while the dishwasher was emptying and it drained without issues. I really can't see a scenario worse than that.

                And yeah, I get why you mentioned it. I've been pretty upfront / honest about the arrangement with them and I'm happy to give a bit of lee-way as a result. Ie short term leases as you go.

                e.g. I had a couple of British kids staying for about a month initially who didn't like the area (young want to party etc), let them out of a 6 month agreement with a weeks notice. Happy for a bit of give and take.

                Tenants seem happy so far, and will try to keep it that way.

  • Nebargains on 20/05/2024 - 09:41
    -1

    Some people really over think this stuff. It is simple as some people have more money, whether that is from higher income, parents or grand parents, investments, previous property purchases etc. Simple as that.

    I bought my first house nearly 20 years ago and have moved since but if I was to move now and buy a house it would be very easy to say 'how do they afford this $1m+ house?' when the reality is we would be borrowing a relatively small amount and the rest would come from previous gains in property. Everyone has their own story, run your own race.

    • djsweet on 20/05/2024 - 11:23

      I bought my first house nearly 20 years ago

      This is the answer.
      You bought when the income to house price ratio was somewhat achievable for a normal person.

      • pogichinoy on 21/05/2024 - 10:29

        I bought when the property was 7x my gross income. It was just a one bedder.

        Plenty of one bedders that people can purchase but many refuse to buy where they can afford.

        • knk on 21/05/2024 - 16:00

          Yeah it's a bit of a joke. yeah property is expensive, but it is attainable you're just not going to be getting what you want in the area you want frankly.

          At least in Melbourne, Sydney sounds considerably more difficult.

  • aboogee on 20/05/2024 - 09:50

    Only 1 type of people thats coping the high interest rate well - those that don't need a loan because of intergenerational wealth.
    This include both locals or foreign investors.
    Everything else ppl say is bulls**t.

    • brendanm on 20/05/2024 - 23:22
      +3

      There are also people who purchased a place within their means and didn't over extend.

    • JIMB0 on 21/05/2024 - 19:51
      -1

      You can also avoid a loan by working hard, not spending money on fancy crap and saving.

      • aboogee on 22/05/2024 - 11:04

        the context provided by OP is property worth at least $1.7m

      • Thinkscape on 23/05/2024 - 09:16

        Hahah… It's simple maths really.
        With current ponzi price growth rate, unless you're getting consistent ~10% wage increase every year, you will NEVER be able to save for a property (even if you lived in your mum's basement).

        The hypothetical $1.7m property will be $2.0m by the end of this year. Will be around $2.3 by the end of next year.

        • JIMB0 on 23/05/2024 - 10:27

          2 people on a decent income could do it if they are careful with their spending and invest the money along the way.

          • aboogee on 23/05/2024 - 12:14
            +1

            @JIMB0: Out of curiosity, I just tried to back-solve.
            Randomly selected a borrowing power calculator
            Assuming 2 income with 2 kids (hopefully reflective of a typical family in AU)
            200k gross income each, ie 400k gross family income
            monthly expenses 2000 (now thats grossly under-stated but lets see)

            You could borrow up to 1.9m
            This should afford you a 2.2m property in sydney at 80% LVR
            (I assume this is what you need to buy an equivalent Sydney property per OP's context)

            Up to you guys to consider…. how realistic the inputs are… feel free to play around with the calculator

            https://www.ubank.com.au/home-loans/calculators/borrowing-po…

        • aboogee on 23/05/2024 - 10:29

          Agreed and the 10% increase (ignoring TAX!) is on a smaller base than property price appreciation
          Honest working class ppl who dont have additional financial support wont be able to afford a pretty basic property.
          I'm not talking about units / apartments (again per OP's context). I am talking about a house/semi/duplex/townhouse.
          However, I know people in Kellyville who appear to pool multiple incomes to buy a bigger block… not that typical for other families / culture i guess.

          My personal experience.
          Where we live, people we know are non-working parents, with multiple properties, who also confessed they were able to acquire $3/4/5m property from offshore cash. I have quite decent salary (definitely way higher than the perceived average, even though i think that average is BS too!) and i still had to get support from my parents to settle our recent purchase.
          And no, i am the frugal kind that havent gone to holiday for 10yrs+ so I dont spend money on crap.

  • tonka on 20/05/2024 - 09:53

    Why aren't people taking into account, things like, you'll get quoted 50k just for a bathroom fitout these days, and people seem to need three bathrooms all no more than 10 years old. There's an extra 100k added to the prices right there compared to a generation ago. The cost and scope of the build is completely different to generations ago.

    • Powershopz on 20/05/2024 - 10:45
      +4

      The cost of trades has astronomically sky rocketed over the past 5 years.

      I've been learning a bunch of trade skills over the past 6 months and intend to keep learning in the next few years as I refuse to pay a 300-500% mark up on stuff I could do myself with a little bit of learning.

      Huge shortage in trades so they can charge whatever they want and be picky about what jobs they want to take.

      • Grunntt on 20/05/2024 - 14:30
        +3

        The cost of trades has astronomically sky rocketed over the past 5 years…
        …I refuse to pay a 300-500% mark up on stuff I could do myself with a little bit of learning.
        …Huge shortage in trades so they can charge whatever they want and be picky about what jobs they want to take.

        At last, someone not blaming those damn boomers for everything.
        Seems to me that it's business greed that could be contributing significantly to this as well.

        BTW examine the chart at Wages lagging productivity and tell me it's everyone except businesses fault.

        • tonka on 20/05/2024 - 15:27
          +3

          Exactly, the lack of wage growth is far more obviously the problem than the oft cited tax breaks. And the billionaires lobbying for cheap imported labour to keep it suppressed. And the lack of any government action to keep jobs and profits in Aust.

        • aboogee on 23/05/2024 - 16:14

          Whats driving increased productivity?
          How is productivity measured?

  • AnyFurtherDiscount on 20/05/2024 - 10:51

    I should have bought the property when it was $10 instead of crying over a toy in kinder garden. #BiggestMistake

  • mecusherb on 20/05/2024 - 11:56

    I don't think many first home buyers are getting these properties.

    Friend of mine bought it 2010 for 550k. Sold for 1.2 and bought a 1.6 this year.

  • blehgg on 20/05/2024 - 13:05
    +1

    I just hate avocado. The amount i save!

  • reddwarf on 20/05/2024 - 13:14

    The important number is the servicing capability.
    Rates went up, cost of living went up, salaries stagnated ..
    But even considering dual income no kids household taking in 400k per year pre tax.. they can service only so much debt (~1.3-1.5Mil?)
    Where did the difference between purchase price and maximum serviceable loan come from?
    - gifts from relatives
    - pooling
    - inheritance
    - other previous properties / drawing equity
    - other previous properties / being sold
    - investments (business, crypto, stock, savings)

  • Nitrollparty on 20/05/2024 - 14:55
    +3

    built my house before covid, covid came along, almost tripled my value, sold and now building again on a 1200m2 block and bigger house…. I'm single and sub 60k salary… so in other words, covid made me rich and I'm sure covid made everyone else with a house rich

    • Thinkscape on 23/05/2024 - 09:18

      finally, a key discriminator here:
      "everyone with a house"

  • pnt on 20/05/2024 - 15:35

    It's a rational decision, even profitable, to buy whilst prices rise sufficiently, regardless of price. Which is fine for all the players. Until then don't rise. Given that, people find a way to get the loan approved.

  • imurgod on 20/05/2024 - 15:55
    +2

    I don't know how others do it but I started small. A unit here, a unit there when I could and then eventually prices tripled and rent skyrocketed.

    I honestly only ever struggled in the beginning and I started with about 5% deposit.

    It's also about living within your means. I couldn't drive luxury cars and do o/s trips back then but thanks to that, I can now.

  • mini2 on 20/05/2024 - 17:07
    +2

    Dual income helps, preferably on 6 figures ASAP.

    Starting early helps.

    Buy anything and build equity from there. Rinse and repeat a few times. It's going to be a slow slog to get where you want to be.

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