Australia housing bubble - Page 20

**FairmontGS** · 06-06-2018, 09:34 AM

Quote:

Originally Posted by b0son

Here's one... on housing though...

https://www.macrobusiness.com.au/201...g-boom-really/

Paul Keating says the housing boom is over (but what would he know, right? he only instated some of the most profound economic changes in our country's history).

Articles finishes with

Anyone thinking about getting into property, wait. You're going to be buying in at near the top of the market, and we've potentially a long way down....

A socialist-left anarchist tip blog and (another) failed ALP PM's recommendations - yep, that'll do me! Where do I invest?

ford71V8 · 06-06-2018, 12:18 PM

Quote:

Originally Posted by GO FURTHER

With young people and couples priced out of the housing market, especially in suburbs close to the city and available work, I can see the future trend will become a popular option...

Parents that have a home on a deep block with large backyard, applying for dual occupancy subdivision, then allowing their children to build a townhouse/unit at the back.

People directly across the road from me did pretty much that.
Used part of their backyard to build a self-contained unit and daughter was to live in there. Unfortunately just as it was completed the father died so she never did get to move in there and now cares for her mother in the main home. Poor buggas, they jumped through a few hoops to get that thing built for her, and then just as they were about to enjoy what they had done, everything went pear-shaped.

**GO FURTHER** · 06-06-2018, 06:25 PM

Quote:

Originally Posted by ford71V8

People directly across the road from me did pretty much that.
Used part of their backyard to build a self-contained unit and daughter was to live in there. Unfortunately just as it was completed the father died so she never did get to move in there and now cares for her mother in the main home. Poor buggas, they jumped through a few hoops to get that thing built for her, and then just as they were about to enjoy what they had done, everything went pear-shaped.

That's unfortunate, but if they don't sell the home, they can always rent out the self contained unit, and provide some extra income security for the mother.

**GO FURTHER** · 06-06-2018, 06:30 PM

Quote:

Originally Posted by b0son

We're at a RECORD LOW cash rate of 1.5% ... that's a tiny 1.5% margin the government have up their sleeves (well, the RBA strictly speaking, not the government) with which to prevent the economy tanking.

Control of official interest rates by the RBA is the only "tool" they have to control inflation.
But it is a bad tool... If they ever dropped the interest rate to 0%, as some other countries have done, then its no longer a powerful tool to control inflation.

danzvtil · 06-06-2018, 08:19 PM

APRA is causing banks to assess their potential loans much more closely, the ability to borrow funds for a lot of people is slipping away. There is now a softening of prices in many markets. The problem with waiting for a house to be 25% cheaper is that you won’t qualify for a loan to get it.
Some friends of mine bought a vacant block 2 years ago to build on, because they have kids, the banks are now reluctant to offer them a loan for the construction.

b0son · 06-06-2018, 08:23 PM

Quote:

Originally Posted by danzvtil

Some friends of mine bought a vacant block 2 years ago to build on, because they have kids, the banks are now reluctant to offer them a loan for the construction.

They're lazy and they dont want it enough. /s

MITCHAY · 06-06-2018, 10:11 PM

A bloke from work has tried to refinance but inbetween getting that loan and now the lending criteria has gone up and he would not have got it these days so now is pretty much ripe for rape by his bank as they see fit. Yet another trap to be aware of.

**FairmontGS** · 08-06-2018, 08:45 AM

Wrong thread

DoreSlamR · 08-06-2018, 11:08 PM

Quote:

Originally Posted by danzvtil

APRA is causing banks to assess their potential loans much more closely

Maybe this is why I’m struggling to get even a measly $315,000 mortgage with a $65,000 deposit?

Even the mortgage broker is baffled why I’m being rejected.

It’s frustrating because I’m in Karratha and we’re on the brink of another (mini) boom and prices are super low at the moment. I’ll be super ****ed if I miss out due to some pencil pushing muppet decides my fate.

I can easily service the mortgage, the repayments are marginally less than what I’m paying in rent, but they don’t care about that sort of thing.

.:4:. · 09-06-2018, 12:08 AM

Quote:

Originally Posted by DoreSlamR

Maybe this is why I’m struggling to get even a measly $315,000 mortgage with a $65,000 deposit?

Even the mortgage broker is baffled why I’m being rejected.

It’s frustrating because I’m in Karratha and we’re on the brink of another (mini) boom and prices are super low at the moment. I’ll be super ****ed if I miss out due to some pencil pushing muppet decides my fate.

I can easily service the mortgage, the repayments are marginally less than what I’m paying in rent, but they don’t care about that sort of thing.

I'm not saying go behind you mortgage brokers back, but maybe consult another. Not that brokers can be in bed with banks per say for better deals, however a different broker may have different contacts with different financial institutions. I had to pay an additional 12 grand for loan insurance and only 1 bank would accept my application at the time after that. I was 25 and was asking for a larger loan then what you are seeking . Plus a 5% deposit. So to be fair it was high risk for a bank.

b0son · 09-06-2018, 12:09 AM

Possibly the location .... boom busts or never eventuates, and they're stuck with a mortgage for a property worth less than what was lent.

davenl5l · 09-06-2018, 07:39 AM

Location can be a major issue with finance .a friend of mine is trying to sell a beautiful house in Point Turton oon Yorke Peninsula SA and no one can get finance because there are too many houses/shacks for sale in the town so it is seen as a risk. He has been told this by sevveral banks

au350hp · 09-06-2018, 10:54 PM

The amount of pitfalls I read about paying your own mortgage Vs paying rent is staggering. I am glad the topic's not Australia vehicle bubble...

danzvtil · 10-06-2018, 07:53 PM

Quote:

Originally Posted by Roostercam

The amount of pitfalls I read about paying your own mortgage Vs paying rent is staggering. I am glad the topic's not Australia vehicle bubble...

How’s this for a pit fall..... you pay rent for 25 years, and own NOTHING.
If you do nothing more than pay the minimum on your mortgage, you then own an asset you can live in for free when you retire, or leave it to your kids when you die.

nstg8a · 10-06-2018, 09:24 PM

Quote:

Originally Posted by danzvtil

How’s this for a pit fall..... you pay rent for 25 years, and own NOTHING.
If you do nothing more than pay the minimum on your mortgage, you then own an asset you can live in for free when you retire, or leave it to your kids when you die.

That's the big thing that many of those on the pro-rent side seem to ignore.
How are they gonna keep paying market rents when they're old and decrepit? Who wants to be spending their hard earned super on paying someone else's mortgage?

**FTE217** · 10-06-2018, 09:48 PM

Quote:

Originally Posted by nstg8a

That's the big thing that many of those on the pro-rent side seem to ignore.
How are they gonna keep paying market rents when they're old and decrepit? Who wants to be spending their hard earned super on paying someone else's mortgage?

Oh, I think they know very well what position they are in.....
I'm sure everyone has their logical reasons/mishaps/negatives/hard luck/good luck stories........but I know what side of the fence I'd prefer being on.

BENT_8 · 10-06-2018, 09:50 PM

Quote:

Originally Posted by nstg8a

That's the big thing that many of those on the pro-rent side seem to ignore.
How are they gonna keep paying market rents when they're old and decrepit? Who wants to be spending their hard earned super on paying someone else's mortgage?

Easy, raise you kids well enough, provide them with the required deposit so that they can own an investment property, rent said investment property from them, claim the pension and rent assistance, have the government pay off a 3rd of your kids investment property without the stress of renting to some random...no landlord.
Buy a caravan and travel.

I know someone who did this 15 years ago and hasnt looked back, sold her house, gave her son the deposit he needed to buy her a unit, banked the rest, rented the unit from him, she claims the pension and rent assistance to pay his mortgage.
When she's dead its his, swings and roundabouts..

**ebxr8240** · 10-06-2018, 11:07 PM

All the negatives on here . Retired 3 years ago . Up till then I had over $3m in real estate . Sold one rental to pay mortgage. Living on the rest . After helping our children purchase their house . I have been away in motorhome off and on since . 8 months cruising South, West coast and back down the centre . With out dabbling in real estate 20 years ago . I couldn’t have done it . Ok I may come me over as bragging. Please I’m only commenting due to negatives . Just be positive work hard .. You’ll get there . Graeme .

pottery beige · 10-06-2018, 11:09 PM

Quote:

Originally Posted by BENT_8

Easy, raise you kids well enough, provide them with the required deposit so that they can own an investment property, rent said investment property from them, claim the pension and rent assistance, have the government pay off a 3rd of your kids investment property without the stress of renting to some random...no landlord.
Buy a caravan and travel.

I know someone who did this 15 years ago and hasnt looked back, sold her house, gave her son the deposit he needed to buy her a unit, banked the rest, rented the unit from him, she claims the pension and rent assistance to pay his mortgage.
When she's dead its his, swings and roundabouts..

nice rort

roll the system

nstg8a · 10-06-2018, 11:19 PM

Quote:

Originally Posted by BENT_8

Easy, raise you kids well enough, provide them with the required deposit so that they can own an investment property, rent said investment property from them, claim the pension and rent assistance, have the government pay off a 3rd of your kids investment property without the stress of renting to some random...no landlord.
Buy a caravan and travel.

I know someone who did this 15 years ago and hasnt looked back, sold her house, gave her son the deposit he needed to buy her a unit, banked the rest, rented the unit from him, she claims the pension and rent assistance to pay his mortgage.
When she's dead its his, swings and roundabouts..

Haha, that's one way of doing it I guess.

BENT_8 · 10-06-2018, 11:48 PM

Quote:

Originally Posted by pottery beige

nice rort

roll the system

Yes...yes it is

BENT_8 · 11-06-2018, 12:18 AM

Quote:

Originally Posted by nstg8a

Haha, that's one way of doing it I guess.

Yes and its perfectly above board.

There is no law that says you cant rent to family, nor is there a law that says you cant recieve rent assistance when renting from family.
She gets cheap rent, he gets a nest egg without the stress and its all completely above board.

Hate the game, not the player.

snap0964 · 11-06-2018, 01:03 AM

Quote:

Originally Posted by BENT_8

There is no law that says you cant rent to family, nor is there a law that says you cant recieve rent assistance when renting from family. She gets cheap rent, he gets a nest egg without the stress and its all completely above board. Hate the game, not the player.

And take advantage of the tax considerations as well.
Provided everything is setup above board, there shouldn't be any issues.
https://community.ato.gov.au/t5/Gene...mber/td-p/1762

BENT_8 · 11-06-2018, 02:13 AM

Quote:

Originally Posted by snap0964

And take advantage of the tax considerations as well.
Provided everything is setup above board, there shouldn't be any issues.
https://community.ato.gov.au/t5/Gene...mber/td-p/1762

For her to be able to claim rent assistance through her pension it would need to be fully disclosed to centrelink and the tax dept.
Like i said, it was setup 15 years ago so any concerns would have been dealt with by now.
Im sure i read somewhere that our PM rents a property from his Wife whilst in Canberra which is subsidised by the tax payer, so if its good for the goose...

snap0964 · 11-06-2018, 01:48 PM

Quote:

Originally Posted by BENT_8

For her to be able to claim rent assistance through her pension it would need to be fully disclosed to centrelink and the tax dept.
Like i said, it was setup 15 years ago so any concerns would have been dealt with by now.
Im sure i read somewhere that our PM rents a property from his Wife whilst in Canberra which is subsidised by the tax payer, so if its good for the goose...

I'm not saying don't do it, what I'm saying is you may as well maximise the benefits of this arrangement. The property is in the son's name, he may as well claim it as an investment, as he has to declare the rent as income anyway. Then of course loan interest, etc is tax deductible.
As you know, our PM and other pollies have a few sidelines going on. Not too sure about renting off a spouse - you usually put assets in a spouses name to minimise taxation. Trusts are similar.

b0son · 11-06-2018, 03:58 PM

Quote:

Originally Posted by ebxr8240

With out dabbling in real estate 20 years ago . I couldn’t have done it . Ok I may come me over as bragging. Please I’m only commenting due to negatives . Just be positive work hard .. You’ll get there . Graeme .

Being positive doesn't get around the fact that new buyers will never again see the sort of market conditions you've benefitted from. You've benefitted from quickly rising equity ... do you honestly believe the market will soar like it did over the last 20 years? If so, who exactly will pay for these homes? Its going to require mortgages longer than peoples working lives. I don't see APRA approving that any time soon.

BENT_8 · 11-06-2018, 04:57 PM

Quote:

Originally Posted by snap0964

I'm not saying don't do it, what I'm saying is you may as well maximise the benefits of this arrangement. The property is in the son's name, he may as well claim it as an investment, as he has to declare the rent as income anyway. Then of course loan interest, etc is tax deductible.
As you know, our PM and other pollies have a few sidelines going on. Not too sure about renting off a spouse - you usually put assets in a spouses name to minimise taxation. Trusts are similar.

I wasnt suggesting that you were against it, i was just confirming that it has been setup in the correct manner so that she is free to claim the subsidy via rent assistance because it is an investment property and treated as such in the eyes of the tax dept on his behalf.
Im sure he would have an accountant who would be advising him of how best to make it work for them.

The best part of it is that he is able to sleep at night knowing that his investment property is free of the pitfalls that many investors face in terms of the continual cycle of tennants coming and going whilst avoiding the risks of damage to the property which he can visist at anytime he likes to keep on top of any maintenance issues.

From her perspective, her relatively small investment in the deal has provided her with hassle free accommodation partially funded by the Government, no risks associated with living in a strangers investment property, no agents keeping an eye on her and the balance from the sale of her property 15yrs ago is collecting interest and available if/when she needs it.

CyberWasp · 11-06-2018, 05:20 PM

As a pensioner how many $$$ in assets are you able to have and what is the max you can have in the bank to be still able to claim a full pension for this to work?

BENT_8 · 11-06-2018, 07:05 PM

Quote:

Originally Posted by CyberWasp

As a pensioner how many $$$ in assets are you able to have and what is the max you can have in the bank to be still able to claim a full pension for this to work?

Google is your friend..

As of 1/1/17
https://www.choice.com.au/health-and...e-test-changes
Higher thresholds for full pension eligibility
On the plus side of the changes, the amount of assets seniors can have and still receive the full pension has gone up. A single home-owning pensioner with assets worth less than $250,000 is now eligible for the full pension. Before the change, you had to have assets worth less than $209,000 to qualify.
The full pension is also now available to:
homeowner couples with assets worth less than $375,000 (up from $296,500)
non-homeowner singles with assets worth less than $450,000 (up from $360,500)
non-homeowner couples with assets worth less than $575,000 (up from $448,000).

She sold for $150k, he bought for $120k, she gifted $30k, banked $120k, well under the limit.
She would be eligible for $98 per fortnight for rent assistance.

au350hp · 11-06-2018, 07:46 PM

Quote:

Originally Posted by b0son

Being positive doesn't get around the fact that new buyers will never again see the sort of market conditions you've benefitted from. You've benefitted from quickly rising equity ... do you honestly believe the market will soar like it did over the last 20 years? If so, who exactly will pay for these homes? Its going to require mortgages longer than peoples working lives. I don't see APRA approving that any time soon.

There are still so many property's in areas that have yet to see the highs that others have. Some of them are not great, but enough people realise the potential & ten years later, it is going through a 'high' so you sell & move up to a better place. That is what everybody has done, and continues to do so. Big cities in Australia will continue to grow simply because of migration & population growth. Live within your means or make adjustments so you are & get in the market anyway you can, would be my advice to anybody young & employed.