House prices now.The word on the Grapevine!

[sueoc]

As we are looking at buying now,we have spoken to lot's of people regarding this.Many Australians are saying that they feel it is best to hold off buying for a few months yet,as they feel house prices will fall a fair bit yet,AND interest rates will rise.None of us has a crystal ball,so what do you think personally?Thank's.

[Guest Guest5035]

if you see your dream house in the location you want, why wait.

 

stevo

[sueoc]

if you see your dream house in the location you want, why wait.

 

stevo

Yup,can't argue with that!

[Riponian]

if you see your dream house in the location you want, why wait.

 

stevo

 

I need this argument with my husband... We are hoping to buy this year but he thinks we should wait!...

 

We have also spoke with Aussie friends and they say to wait

[Guest guest569]

but if interest rates are to rise then even a cheaper house will hurt the pocket. Like said by others, if you see your dream home go for it !!!

[csobrien1966]

I agree with Stevo and Passionate.

 

I do think where you are looking to buy is a factor. Seaford Rise and Seaford Meadows will be interesting to watch. With the rail extension and duplication of the expressway on it's way it is very hard to read down here. Anything 360k and under the east coast are buying up as investments.Then anything above is hanging around a bit longer but is still selling......eventually.

 

I do think the next interest rate rise will have a big impact though.

[Anne B]

The general opinion is that house prices are on the way down, even among the mainstream media now (see http://www.news.com.au/money/david-and-libby-koch/david-libby-koch-property-slide-is-on/story-fn7kicty-1226052283453).

 

So if you wait, you will probably get more for your money. It all depends on whether they fall a little or a lot, which nobody knows. If they fall as much as they did in the UK, which some people believe (around 20%) then that is big bucks. However, if you see your dream home and intend to live in it for the long term, then it doesn't matter so much. I hate renting and can understand the attraction of buying your own home!

 

However, do bear in mind the following;

 

- Many sellers are struggling to sell at the moment, so make sure you drive a hard bargain - it's a buyer's market so negotiate the price down as much as you can.

 

- The general consensus is that interest rates are going to rise, so don't overstretch your finances with your mortgage. Work out what the repayments would be at 1% or even 2% higher and make sure you can still afford it.

 

- Don't take out a huge loan in proportion to the value of the home. If you have a 90% or 95% mortgage, you put yourself at risk of negative equity if house prices drop. If for any reason you then need to sell, you will be in trouble. I am talking from experience here having suffered negative equity in the early 1990s (with a 95% mortgage).

 

- I've heard the building trade is suffering at the moment, so there may be some good deals to be had. Some friends of ours who had a quote on building a house said the builder recently came back to them and offered to do it cheaper than he had previously quoted, just to get the business.

 

At least you can take your time and look around without any urgency. Don't let anyone convince that you need to buy now before prices start rising again as that is just a load of bull. I hope you find something nice - happy house hunting!

[Guest BurgessFamily]

If you are going to buy, you should allow for x4 25pt interest rate rises as a minimum - thats another 1% (doesn't sound much I know).

 

Prices are falling, they could fall a little or a lot. If you are planning to stay in your 'new' home for 10 years or more, then this is probably not an issue anyhow.

 

A BIG unknown will be the impact of BOTH the CARBON TAX, and the MINERALS TAX. These could be a BIG drag on prices and send prices crashing.

[Guest guest4504]

If you are going to buy, you should allow for x4 25pt interest rate rises as a minimum - thats another 1% (doesn't sound much I know).

 

Prices are falling, they could fall a little or a lot. If you are planning to stay in your 'new' home for 10 years or more, then this is probably not an issue anyhow.

 

A BIG unknown will be the impact of BOTH the CARBON TAX, and the MINERALS TAX. These could be a BIG drag on prices and send prices crashing.

 

Hi. could you give an explanation to these 2 tax's and how they are going to work ( or not ). Just curious as I have read a few posts mentioning them. I will have a google to read up. thanks.

[trevorpayne]

We to are looking but from what I have read it does seem the housing market is dropping.

Especially now the government have withdrawn the subsidies for 1st time buyers which I believe was upto $21,000.

So I would expect them to drop a fair amount.

It seems the same as the anywhere if 1st time buyers can't afford to get on the market then the hole market ladder has to drop accordingly.

 

Then again Australia seems to be doing well as a hole so who knows.

Good luck either way.

[tina&steve]

we are looking for a 2nd home I have watched the market for some time seen a lot of houses stay on the market a lot longer than they were 2 years ago and seen a few drop their price. I have a few friends with their house on the market and they are not moving:sad:.

 

If you see something you like and can afford it buy it but if it was me I'd wait xx.

[Pesty650]

Interest rate rises aren't the only problem. Peoples finances are being hit from all directions - increases in food, petrol, water, electricity, flood levy are combining to make a noticeable difference in household expenditure & who knows what impact the carbon tax will have. Immigration numbers are also down considerably, so less demand. Uncertain times for sure and a hard one to call. NOBODY knows for sure what will happen to house prices, it's a gamble, but if you plan to stay a while, you might as well be paying off your own mortgage rather than someone elses. A rent of $350/week is $18200/year you are giving to someone else. If you have PR/Citizenship you can still get a first home owner grant of $7000 if the value of the purchased house is less than $575000, plus another $8000 if you purchase or build a new home and the market value is less than $450000. http://www.revenuesa.sa.gov.au/fhog/index.html

[Guest BurgessFamily]

you might as well be paying off your own mortgage rather than someone elses. A rent of $350/week is $18200/year you are giving to someone else.

 

At this present time $350/week will likely get you a better house than buying a house at $600/week (without the maintenance costs). Plus if you are taking on the 'average' mortgage, the interest payments probably will out way any rent payments.

 

If you are concerned, how about renting a house and putting the difference (on repaying a mortgage) in a savings account - preferable a First Home Savers Accounts!!!! In 4 years you'd have a nice nest egg, with extra government incentives.

[Guest BurgessFamily]

Hi. could you give an explanation to these 2 tax's and how they are going to work ( or not ). Just curious as I have read a few posts mentioning them. I will have a google to read up. thanks.

 

The Minerals Tax will be a profit tax on all mining companies etc... This includes coal, gas, iron ore, copper, uranium - the list goes on. This will have a knock on effect on electricity prices (coal), manufacturing prices (iron ore) etc...

 

The Carbon Tax will be the first stage towards a full blow ETS (emissions trading scheme). Any 'dirty' energy/resource companies will face this heavy tax (with some concessions likely). This will push electricity, gas, petrol etc... up considerably. Note: the government is offering a small offset to the household budget, but I would expect this to fall way short.

 

In addition many states have built desalination plants (to reduce water shortages in the future). This includes Adelaide, with the plant due to go live next year. The result of this will be a minimum 100% increase on water bills in the next couple of years (it already has doubled in the last few years). Some say it is more likely to treble in price in the next 5 years. Even with all the rain we've had, the plant will still produce clean, fresh water - at a very high price.

 

The current outlook is that there is going to be a lot of pressure on the cost of living. The economy is 'two speed', meaning that mining is booming whilst the rest of the economy is close to recession (yes! they are starting to talk about it, and have been nervous waiting for each quarter results). On the positive side of things, there'll always be jobs in the mines as long as China keeps stockpiling.

 

To some this might all sound negative, but there's nothing wrong with being informed and aware of potential pitfalls when looking at spend a LOT of money on bricks and mortar (or should I say soft timber and brick veneer?).

[Diane]

In addition many states have built desalination plants (to reduce water shortages in the future). This includes Adelaide, with the plant due to go live next year.

 

 

And it's not stopped raiining since!

[jim and adel]

... the plant will still produce clean, fresh water ...

 

Off topic, I know, but the taste of desal water is typically described as 'faintly chemical and slimy'. I can't wait!

 

Jim

[Guest kerfumph]

Off topic, I know, but the taste of desal water is typically described as 'faintly chemical and slimy'. I can't wait!

 

Jim

 

 

We won't be having it, but still got to pay for it.

[jim and adel]

We won't be having it, but still got to pay for it.

 

Yep I know, and even if one drop of it isn't used the desal plant still has to be run at the cost of hundreds of $m pa or the warranty is breached.

[Guest guest4504]

At this present time $350/week will likely get you a better house than buying a house at $600/week (without the maintenance costs). Plus if you are taking on the 'average' mortgage, the interest payments probably will out way any rent payments.

 

If you are concerned, how about renting a house and putting the difference (on repaying a mortgage) in a savings account - preferable a First Home Savers Accounts!!!! In 4 years you'd have a nice nest egg, with extra government incentives.

 

Hi. What is the average mortgage ? I could only find it for 2008, but rents are showing quite a few ££,s far less than what they are probably now.

[Guest Guest75]

Off topic, I know, but the taste of desal water is typically described as 'faintly chemical and slimy'. I can't wait!

 

Jim

 

And potentially ruining the local sea ecology.:realmad:

[Guest BurgessFamily]

Hi. What is the average mortgage ? I could only find it for 2008, but rents are showing quite a few ££,s far less than what they are probably now.

 

Average mortgage is around $300,000. I believe the average rent in SA is around $300/wk.

 

For a comaprison of suburbs, look at http://www.averagerent.com.au

 

an example is Noarlunga Downs....

Median Rent ($/Weekly): 110

Median Housing Loan Repayment ($/Weekly): 997

 

A useful site for checking house price trends is :- http://www.rpdata.net.au/

[Andrew from Vista Financial]

Average mortgage is around $300,000. I believe the average rent in SA is around $300/wk.

 

For a comaprison of suburbs, look at http://www.averagerent.com.au

 

an example is Noarlunga Downs....

Median Rent ($/Weekly): 110

Median Housing Loan Repayment ($/Weekly): 997

 

A useful site for checking house price trends is :- http://www.rpdata.net.au/

 

 

 

I reckon you have put weekly for mortgage payments instead of fortnightly?

 

So $300k sounds about right based on 7% over 30 years (default term here) is approx $460 weekly.

[Andrew from Vista Financial]

Sorry just checked the link that's what they have put on their site, not sure about that.

 

Also rent $110 weekly?

[Diane]

Also rent $110 weekly?

 

Must admit I read that and thought - gosh, no wonder everyone moves south with rents that low!!

 

Not sure where that site gets its statistics from but they look way out!

[jim and adel]

Also, big difference between average mortgage and average new mortgage!

 

Jim