Renting vs Buying

[bennymacca]

One thing I will add is the advantage I see is that Buying a house is also investing that money, whereas renting is paying someone else's investment.

The counter to that is the market is pretty flat at the moment, and this isn't as attractive as it used to be.

[Booney]

One thing I will add is the advantage I see is that Buying a house is also investing that money, whereas renting is paying someone else's investment.

The counter to that is the market is pretty flat at the moment, and this isn't as attractive as it used to be.

People with multiple properties, one I know of in particular, have other people paying their investments off as well as a very nice place at West Lakes that they domicile in.

The comment regarding contributing to someone elses future rings true for me the most.

[Lightning McQueen]

it's hilarious...my banter is world class

I'll get one of the girls from work to set it up for me then.

[Lightning McQueen]

One thing I will add is the advantage I see is that Buying a house is also investing that money, whereas renting is paying someone else's investment.

The counter to that is the market is pretty flat at the moment, and this isn't as attractive as it used to be.

Absolutely, I had the best intentions at one stage, now I'm just going for a bit of damage control.

[Q.]

You also pay the bank a **** ton of interest.

Contribute to your own future by investing the rent/mortgage differential into the ASX etc

[Booney]

You also pay the bank a **** ton of interest.

Contribute to your own future by investing the rent/mortgage differential into the ASX etc

Risk / reward and bricks and mortar investments aren't as popular as they are for no reason.

[bennymacca]

You also pay the bank a **** ton of interest.

Contribute to your own future by investing the rent/mortgage differential into the ASX etc

This is another option. Putting this money u to your super for instance would be a pretty good option at present.

[Booney]

You also pay the bank a **** ton of interest.

Contribute to your own future by investing the rent/mortgage differential into the ASX etc

This is another option. Putting this money u to your super for instance would be a pretty good option at present.

Risk there too, many self funded retirees aren't having much fun at the moment with cash rates as they are.

[heater31]

Not that I'm a home owner yet.....

but I think the best thing you can do is take an interest in some preventative maintenance to keep those unexpected big outlays at bay.

Regular termite inspections would only cost hundreds of dollars as compared to $10000s when your timber framed walls turn to dust

Servicing mechanical items such as air-conditioners/heating appliances at least you will be warned of when the thing is past its use by date.

general clean ups of gutters and roofs can give you a chance to inspect the major points where storm damage can occur.

[Psyber]

what about selling of airplanes and helicopters ?

I never got into those but I did once manage to sell a second hand Porsche (930 Turbo) for 40% more than I'd paid for it .
(I'd bought it when it was 5 years old and sold it 4 years later.)

That is the only vehicle that ever made me a profit though, and that was a special car and I was helped by Paul Keating's economic policies at the time.

[HairyGiant]

House prices have doubled in south Australia at an average every 9.25 years.
Nothing else would come close to that as an investment

[bennymacca]

House prices have doubled in south Australia at an average every 9.25 years.
Nothing else would come close to that as an investment

As a home owner for 8 years I'm quite sure this hasn't been true of late!

[HairyGiant]

House prices have doubled in south Australia at an average every 9.25 years.
Nothing else would come close to that as an investment

As a home owner for 8 years I'm quite sure this hasn't been true of late!

Correct, but that is not what I said, play the long game and history shows it will happen!

[Q.]

House prices have doubled in south Australia at an average every 9.25 years.
Nothing else would come close to that as an investment

Past performance is not indicative of future results

[Psyber]

House prices have doubled in south Australia at an average every 9.25 years.
Nothing else would come close to that as an investment

Past performance is not indicative of future results

True - the dramatic rises I experienced were somewhere in the 1974 to 1975 period (late in the Whitlam government), and in mid-1984.

They were both followed by a period when prices slumped a little and stayed down, from 1975 to early 1984, and from 1987 to beyond 1996.

I managed to do well in the first by sitting on the empty property until the boom in May 1984 when prices more than doubled again suddenly, but needed to sell to move elsewhere in 1996 and took a small loss - I came out of that one down by the agent's commission and advertising costs - fortunately I was only paying him 2% and the advertising and signs only totalled $1000.

[Psyber]

I came across this today relating house prices not to wages but to mortgage repayment costs...
https://au.finance.yahoo.com/news/798497-220715204.html

House affordability.jpg (50.06 KiB) Viewed 305 times

[Pag]

The decade average is almost spot on for my mortgage repayments.

[Magellan]

House prices have doubled in south Australia at an average every 9.25 years.

Unfortunately wage growth hasn't kept pace with house prices over the years. The corollary that house prices will simply keep growing and growing ad infinitum is a risky one to rely on, as others have indicated. Continued unabated rises in property values will ultimately reach a point where it becomes unsustainable.

House prices have bubbled in south Australia at an average every 9.25 years.

Edited for accuracy.

[Psyber]

I've been around real estate most of my life as my older sister was in the business. There has overall been a steady rise but here are fluctuations and there have been transient boom and bust periods.

Prices were fairly stable from about 1956 until 1971 or so with only a slow and fairly steady rise. They almost tripled between 1972 and 1975, but after late 1976 there was a slump so that many could not get what they had paid back right through until early 1984 especially in outer areas.

Then the marketable price of my place in Prospect more than doubled in a few months, but by 1987 prices were down a little again and stayed flat through to about 1996, but building costs were escalating rapidly throughout that period. Building costs are now lower than 1987 because construction methods using less expensive materials and less labour intensive techniques have evolved.

Next slump I recall was mid 2003 - at least in Victoria when I sold there. I was in SA just after that for 6 months and during that time agents here were still looking for unrealistically high prices and clearances were down. I looked at a place in Wayville then and the agent said the vendors may take $850K. I said it was worth no more than $650K. Six months later it was still unsold and the agent rang to say his vendors would look at my offer. I advised I'd just bought a place in Victoria.

That place did well for me when I sold in January 2009 but the market was already in a slide and later that month I bought my place in the Adelaide hills at less than the council valuation.

That sort of rise followed by agent and vendor over-enthusiasm for continuing rise followed by slumps when people stop buying is likely to continue, but I don't expect any big collapses here. Current valuation have risen steadily but not dramatically here though new house prices in peripheral areas have risen disproportionally.

Obviously rising interest rates are always a factor in the market going off the boil, and I think we may enter that cycle again soon.