Think about it.....Let's say you are looking at a $3-400K flat/apartment. You have struggled to save for the deposit for the past 1-3 years. Suddenly, our beloved leader Ruddy magically gives you $17-21K to spend. There is your 5% deposit. If you are truly nice to your friendly banker, you will tip in an extra 5% to round up your deposit to 10%. Your little problem is Ruddy is playing Santa to everyone else as well. You end up battling with other buyers with similar firepower.
Thus far, the situation in the magical Kingdom of Oz is a little bit better than USA. We don't have people forging documents. But we are getting lots of folks who have over represented their abilities to save. To make it worse, they are signing up to variable interest loans and are fully confident that their jobs are safe.
Hello ??? Did anyone notice in the past 2 weeks even the government has acknowledged that the Lucky Country may not be so lucky afterall ? Economists are forecasting 7% unemployment rate later in the year.
For the lucky winners in this property rat race in 2009.... The more you end up over paying relative to 2008, the higher the risk that you may end up with negative equity in your home if something else goes especially wrong in the world.
Tick....Tick......Tick........
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I was just saying the same thing at work this week, it's a huge bubble at the low end of the property market at the moment.
ReplyDeleteI'm a first home buyer, but I don't have a 10% deposit yet so not looking. I'm waiting for the prices to get real again after the inflations of the boosted FHOG.
Check out the unit prices in Macquarie Park/Nth Ryde for example, they have jumped 40K (yes 40) in the last 6 weeks, a combination of the new rail line opening and the massive demand for units for FHO. It's insane, how can a 375K unit now be selling for 420K?
Don't worry. I know exactly how you feel. THE property just always seems to be that little bit out of rich. In our case, every time when we manage to save enough of a deposit and something would happen to move the goal post that little bit further.
ReplyDeleteJust remember this....The way to make money is to go against the crowd. The right trade is inevitably the most painful trade. If your time horizon is long enough, things will happen in your favor.