Interest rates just gone up.

[MW]

Why rent and pay someone elses mortgage?

[Punk Rooster]

Why rent and pay someone elses mortgage?

Because $230 is my maximum outlay/week
$330 for a unit would be minimum outlay/week
Quite simply, it was a lifestyle decision.

[Wedgie]

Why rent and pay someone elses mortgage?

Because $230 is my maximum outlay/week
$330 for a unit would be minimum outlay/week
Quite simply, it was a lifestyle decision.

As I mentioned before, its not even just a matter of that, people don't take into account when some disaster happens.
I miss the days of being able to ring up the landlord and telling them to fix something.

[Pseudo]

Stupid people stretch themselves to follow "the Great Australian dream" when they'd be better off renting.
A couple stretched by their mortgage only needs a gas heater to go, termites to invade or their car to blow an engine and they're stuffed.

and what irks me most about that is that everyone suffers as a result.

Cheap low interest loans not only available but being rammed down our throats = people spend more on housing & mod cons

Johnny Jackboot gives free money to new homebuyers = people spend more on housing & mod cons

Johnny Jackboot gives free money to breeders = people spend more on housing & mod cons

... and when people spend more on housing & mod cons, the prices skyrocket. Supply and demand. The most simple law of economics.

In sum: The presence of stupid people in the marketplace simply makes life harder for the rest of us. Those who will spend as much as their credit limit allows them will simply drive up prices, affecting everybody. The same stupid people then require more money to compete, and thus borrow even more, and the cycle repeats. I have little sympathy for those halfwits who drive themselves to the wall with their own reckless spending.

[Booney]

"In sum: The presence of stupid people in the marketplace simply makes life harder for the rest of us. Those who will spend as much as their credit limit allows them will simply drive up prices, affecting everybody. The same stupid people then require more money to compete, and thus borrow even more, and the cycle repeats. I have little sympathy for those halfwits who drive themselves to the wall with their own reckless spending."

stupid people!

[Dutchy]

Stupid people stretch themselves to follow "the Great Australian dream" when they'd be better off renting.
A couple stretched by their mortgage only needs a gas heater to go, termites to invade or their car to blow an engine and they're stuffed.

and what irks me most about that is that everyone suffers as a result.

Cheap low interest loans not only available but being rammed down our throats = people spend more on housing & mod cons

Johnny Jackboot gives free money to new homebuyers = people spend more on housing & mod cons

Johnny Jackboot gives free money to breeders = people spend more on housing & mod cons

... and when people spend more on housing & mod cons, the prices skyrocket. Supply and demand. The most simple law of economics.

In sum: The presence of stupid people in the marketplace simply makes life harder for the rest of us. Those who will spend as much as their credit limit allows them will simply drive up prices, affecting everybody. The same stupid people then require more money to compete, and thus borrow even more, and the cycle repeats. I have little sympathy for those halfwits who drive themselves to the wall with their own reckless spending.

agree - but its never going to change

[Dutchy]

You talk about choices, Dutchy. It has to be made clear that these choices are BAD ones. But who's standing up and saying it where it counts? No one. THAT is where the blame lies - lack of guidance and education. It's like the old saying - "There's no such thing as a free lunch". There's also no such thing as free money - contrary to what a lot of credit card belters think!

But surely at the end of the day EVERYONE has choices whether to borrow, rent, buy, sell etc etc - the educations is there for all if they seek it (tv, papers, magazines, parents etc)

excellent points Wedgie - Im the same as you living in Flaggy (Bought in '96 - you?)...small house but does the job, nice quiet young area and also away from the city to a degree and property value has gone up nearly 300%...finally decided to upgrade and bought a block of land (in Flaggy) and building on it but still not 100% comfortable with the decision as it mean going outside the comfort zone as far a mortages go (even though I know we will be fine)

[MW]

It's very easy to sit back now after buying your homes 10 years ago, and now have small if not no mortgages, and say that young people should not be going out and getting $300,000 loans. Put yourselves in their shoes and think how it would feel knowing that owning your own home now is just a pipe dream.

You can say "go out and rent instead" but what are you going to do? Rent for the rest of your natural born life? There is more to it than that and we should not be in the situation where owning your own home is out of reach to anyone.

p.s. I am currently looking for a new place and seeing every weekend what crap you get for $300,000+ nowadays When I bought 10 years ago, the agent told me "They are asking $95,000 - $105,000" and I told them "My final offer is $90,000" and I got it. How times have changed.

[MagicKiwi]

MW, that is a very pertinent post.

It's all relative. I paid 17% on a house in Prospect I bought for $120k 15 years ago. The house is sold but I would hazzard a guess that to buy it today you wouldn't get much change from $420k but of course, the interest rate is not 17%. The trouble back then was you had lower mortgage but the repayments were killing people. Since then the housing prices have gone and and rates down and all of a sudden, you've got a really high mortgage that you can afford or just...

Mr MK and I are a two mortgage couple, renting one out. Between us we earn quite well and have no dependents. This interest rate rise affects us adversely but only because we had a date in mind when it would be paid off. It will not affect our lifestyle because we made sure our comfort zone was very large when working out just how much into debt we wanted to be. When we went to the bank, we stated how much on one income and how much on two we could borrow. The amount they would give us on two incomes was quite staggering. You can see how people get sucked in. We borrowed on one income. We have our built-in risk factor I suppose.

I guess some people don't mind living on the edge?

[Wedgie]

excellent points Wedgie - Im the same as you living in Flaggy (Bought in '96 - you?)...small house but does the job, nice quiet young area and also away from the city to a degree and property value has gone up nearly 300%...finally decided to upgrade and bought a block of land (in Flaggy) and building on it but still not 100% comfortable with the decision as it mean going outside the comfort zone as far a mortages go (even though I know we will be fine)

Bought around 98/99, its not a small house, its quite large, 2 bathrooms, ensuite, walk in robes, huge lounge room, very large dining/kitchen area, big patio and was immaculate when we bought it. Also it was in Happy Valley, not Flagstaff.

You can say "go out and rent instead" but what are you going to do? Rent for the rest of your natural born life? There is more to it than that and we should not be in the situation where owning your own home is out of reach to anyone.

See, that's what I don't understand, I bought a house when they were cheap and interest rates were good, even then I often wonder if I did the right thing. I wouldn't have even considered buying a house in today's cliamte and me and the missus are on a very comfortable wicket.

Its a matter of lifestyle choice, people shouldn't committ IMHO if its going to send them close to the edge. I honestly don't see why there's more to it unless some people only feel fulfilled if they own their own home but that IMHO is pathetic.

[JK]

I only purchased my own home this year, as I'd been relcutant to part with the lifestyle more afforded with a mortgageless life ... That said, I haven't found the change to be too dramatic since I've gotten into the routine ... Even on one income I still find that I'm able to have my beers and go to events etc with careful enough planning and don't have to miss out too often.

Granted I guess that I'm old enough now to not need to do the things (or with the same regularity) as I did back in my 20's.

[Dissident]

The grass is always greener...

At the end of the day, I'm glad I bought my own home.
It's hard having a couple though... (of homes).

I met my fiance February last year as she was buying her second unit.
At the time, I was buying my first house (with a friend).

She ended up moving in to my house I bought, and renting out her two.

We were unhappy.... she was living in my house, feeling like she was renting (when she owned two houses). I wasn't happy that she wasn't happy.

So in the middle of this year we found our dream house... not too expensive (under valued actually) and exactly what we want. A mate of mine in Ingle Farm needed to move (landlord selling) so he moved in to my house.

So in our new house - with three others.

Four council rates. Four hot water services. Four plumbing systems. Four electrical circuits. Four ESLs, four Water rates.... and that's just some of it, without even mentioning the mortgage you have to play on top of the rent income...

One phone call can cost you $5000+




As it was, we sold her two units and have kept mine. One settles tomorrow and one settles in 3 weeks.
Mind you, when it's all done and dusted - we'll probably wish for them back!

[PhilG]

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