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as a first home buyer in waiting i am staying out of the worlds most unaffordable housing market for at least another year. mainly because the TOTAL amount of debt is what worries me ($800K+ for avg perth house). low interest sucker rates were fine when their inevitable rise to 7-8% would not lead to you losing your house but at these prices it will definately happen.
another reason of course is the economy and recent workplace 'reforms' which have left me with a 'permanent' job that really is nothing more than an annually reviewed contract. through no fault of mine the (Chinese) company may decide, with a months notice that my services are no longer required. that coupled with what i have said above leaves me with little choice other than to wait until the prices return to a level that will mean i can, in quick time, build up savings to protect me from this eventuality. which means i must wait for a return to 'traditional' price levels for housing (3 times income) but i wil accept four times if i can get a low fixed rate for 5 years. (so that i can build up a buffer against job loss).
i have heard all the rhetoric about Asia propping up the Oz economy as the US and EU fall but i have also read todays Japan figures which show its economy contracting at an annualised rate of 12% !!! With China's two export markets shutting down (US & EU) i expect similar figures to emerge from those guys too. This will decimate Oz economy and i am confident that as there will be no buyers of property at the current $420k average a return to affordable housing in Oz will not be far behind. Quite a relief really from along term view point as do we really want our children to rent for life? And/or do we really want to send the message (to immigrants that we will wnat to encourage if/when things turn back up) that as they have no family here they will forever rent?
any thoughts most welcome
all the best
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potential first home buyer
2/03/2009 10:38:00 PM
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Im an investor and I try to view things in perspective. I do alot of research and try to make informed decisions. But I cant help thinking the saturation of negativity in the press. Is it REALLY that bad?????
This is a great market if you're a buyer and I get the feeling Jimmy is one of those people talking the market down.
I agree there may be more correction to the property market but not 40%. Im not sure by how much it will adjust. Sure theres a credit squeeze and people are now very cautious but Id like to have a chat with Jimmy in 12months and see if his opinions come true.
Bank failures in OZ??? Big call Jimmy!
Interesting times...
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peter
30/01/2009 11:11:00 PM
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This is just so out. You guys should back off or you will have egg on your faces.
Perth is by housing price to income one of the most overinflated markets on earth.
It is also the most isolated place on earth so if people lose their jobs they have to move city, not just job.
Plus the great bank failures havent even started in OZ. Those crazily expensive properties have mortgages that people cannot pay. The banks will lose money, refuse to lend just like in the UK and US, and so credit will crunch here like everywhere else.
You will see corrections in the order of 40 percent this year as the global recession gets going, which will, even then, leave Perth housing as expensive when comparedwith a whole lot better places to live on earth. |
Jimmy
22/01/2009 3:14:00 PM
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There is a lot of uncertainty in the market caused by the economic factors overseas. This has resulted in a lack of confidence by property buyers hence the lack of urgency and really low offers being made.
I'm still struggling to understand how the world has gone into an "economic crisis" literally overnight and why nobody saw this economic train wreck coming! Is it really as bad as they say it is or is everyone talking themselves into doom and gloom???????
Locally, I think property prices have been quite resilient and have not adjusted dramatically to the extend the mortgage belt suburbs have. This goes to show that locations close to the city and/or inner city hubs eg. Leederville, Mount Lawley etc will always be in demand and be good investments.
Is it time to buy? Definitely!
I am! And like any good investor being counter-cyclical is the way to increase your wealth!
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Claude
24/12/2008 12:50:00 PM
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