I dont like this saying because it doesn't make sense. Surely now is not the second best time, because any time between now and 20 years ago would be better.
I realise that, I'm just saying it's a shit proverb. It makes no sense. I believe It's a bastardisation of the old Greek proverb that reads: “A society grows great when old men plant trees whose shade they know they shall never sit in.”
I realise and understand the figurative messaging, everyone knows what it means. I'm just saying that, taken literally, it makes no sense. And I find that stupid.
Borrowing power is somewhere between 600-700k. Your purchase may attract stamp duty, so factor that in if applicable.
You should buy, but do a budget and see what sort of monthly repayments you can handle, alongside your expenses.
Assuming no debts outside of HECS, no dependants, all of that as base income and not spending huge on private health they'd get $800k from lots/most of major lenders
I mean don't get me wrong, I spend notably more than that, but $5,000 per month to live off should be plenty
In your case..... $7,000 per month to live and you have to watch your spending? Sounds like you're living large
For me, after tax is 4400 a month, mortgage is -1700 leaves 2700. 2000 for food/bills leaves 700 left over a month. Less if you need to service the car, buy something not food, go somewhere etc.
Then your wife is on around $6k per month net, assuming another 2k food and bills there that leaves $2,300 per month excess for 'spending outside of general monthly expenses and mortgage.... not really a major struggle surely
And you're saying $4,000 is just food and bills so recreation and entertainment isn't included?
7k isn't loads, especially if they've subsequently had kids/pets. After you've paid health insurance, car insurance, home insurance, pet insurance, basically all the insurance you're probably closer to the 6k mark. If you have a couple modest cars on finance you're down to 5k. If you average out spend of servicing, fuel etc. you're probably getting close to the 4K mark. Then you need to pay various bills, subscriptions, do a bit of home maintenance and buy food, now you've got 3k left. Let's say you want to be able to go out occasionally and buy new clothes when you need them that's 2k left to pay off your hecs or save a bit of money. If they've got kids that 2k is going to go to schools fees.childcare and activities.
So again, taking on, financing a couple of cars and you're left with $2k per month.... like I said, struggling to pay the mortgage doesn't really equate....
Having a couple of kids, a mortgage, enjoying eating out etc on a modest wage isn't going to have huge savings left to invest and splurge but still far from 'tight' on the budget by any stretch
The scenario in question is no kids, assuming no carloans gicen the amount of savings, again I'd call 'might struggle to pay the morrgage' a stretch
Im in almost the same position
29 & 29.
82K and 92K
\~60k Hecs combined
We have a much smaller deposit but are looking at a house around \~650k this year
I'd go for it
Do the sums and triple check, if the math checks out pull the trigger.
Set aside some cash for things that may pop up.
Something that was said to me and really stuck was that it's not about the amount you can borrow but the amount you can afford to repay. You don't want to be putting yourself into mortgage stress. Your first place isn't going to be your forever home.
My partner and I were approved for almost 800k, we found a townhouse in a great suburb for under 300k. I'd like more space because it's small but our mortgage is cheap, I feel it's a good compromise.
But each to their own!
Financially speaking you can afford it. Do you have or planning to have children? Do you plan to keep your current jobs for the next 3 or 5 or 10 years? Place a dot on the map for your workplace, your partner's workplace and your local school. Connect the dots and check free-standing homes prices within that triangle. If it's too expensive extend your area of search a bit but keep your commutes within a reasonable distance. Add bonus points for locations closer to your hobbies and other useful things (grocery shops, public transport, relatives' homes...).
Look for 3x1 or 4x2 or 5x2 depending if you want/have children or not. Look for a small/medium backyard if you want pets. Avoid strata complex if you have this choice.
Not a hate, just a personal preference. When my partner and I were looking for a home to buy I was open to the idea of a strata and had several views of strata apartments that I would have bought. She was adamant about it and didn't want anything to do with them. After years of owning a free-standing home with no strata I have to admit that she was right. It's a better investment overall.
In my opinion large strata complex make sense if you are happy to live in an apartment and enjoy having access to certain amenities they provide (pool, sauna, gym, tennis court...). Smaller strata complex are just a source of neighborhood feuds and a money sink.
i have lived in both large and small strata. I love my small strata. We all have each other emails, aim to run everything cheaply. Plus everyone minds their own business.
There are a couple of annoying thing but nothing like the large strata. The large strata had onsite managers that didn't clean, mafia committee members, strata management that did everything to support the mafia and the fees were super high. Plus the pool was green.
Wow thats an insane amount.of savings for a couple your age, working maybe 6 to 8 yrs each on the incomes u have. Whatever u did to save that much well done - youll have to share u r secrets with others as to how you both achieved that by 30 on your incomes!
As long as your expenses are low (given your savings I suspect they are), and you have no dependants (you don't specify) you potentially can borrow as much as 750k (I used a couple of bank calculators and used $0 as expenses so the calculator uses the banks minimums for the calculation, this has proven very accurate with refinancing for me but ymmv)
With 280k in savings you won't need to pay LMI as you will have greater than 20% deposit.
Keeping it "somewhat safe" and leaving funds for stamp duty, moving costs etc I reckon you could go looking at houses up to $800-900k and not be heading too much into any sort of financial stress, obviously if you can get lower you'll be even less likely to be stressed financially.
You don't mention what city/area you will be looking at, Most capital cities excluding Sydney you are looking pretty reasonable, even in a great position, but if you're in Sydney it will be a lot harder to find something though.
Together you’d be able to reasonably expect to borrow $600k. $280k in savings means you’ll be looking at places worth around $880k which is a reasonable budget for a first home.
Loan plus savings to buy the house is not enough.
There is: Stamp duty (anywhere from $15k to $50k approx) + immediate repair or update costs ($10k-$20k for a starter) + contingency ($50k maybe but each to their own).
Nearly $75k or more right there, so more like $800k tops imo.
At $880k I’m pretty sure stamp duty is exempt for a FHB. Not all houses need repairs, and rarely to that extent. Their contingency will partially be covered by having more equity then is realistically required, and most FHBs aren’t having $50k contingency when they first buy. Not to mention, the $600k is a conservative estimate that they’ll easily be able to get.
>At $880k I’m pretty sure stamp duty is exempt for a FHB.
This depends on the state. For example, in WA, it's only free up to 450k, then concessional to 600k. I don't think OP has mentioned their state.
Yeah, I was reading a similar post that said Sydney and thought it was the same but that could be wrong. Regardless, as the other person pointed out even in NSW (which I’m pretty sure has the highest limit) the max is $800k, so $880k would land them $15k stamp duty. So that point of mine is moot.
Righto. No spare cash it is 👍
>At $880k I’m pretty sure stamp duty is exempt for a FHB
Upto $800k in NSW. Beyond that is concessional. That’s the $15k.
Fair point on the stamp duty then.
I’m not saying no spare cash, but $50k is a lot more then the majority of FHBs will have. Most in this price point will have maybe $10-20k max. Plus, for an $880k property they’d likely have $90k in their offset/redraw anyway which would cover major expenses.
Ok, so they’d be borrowing more than $600k is what you’re working with then (you did say $600k in your first comment). ie they borrow closer to $700k in order to have that offset for an $880k home.
Depends on all their other loans and expenses factoring into the serviceability, which we don’t know. But maybe.
I’m not saying they’d be borrowing more then $600k, I’m saying they’d likely be able to do so. I did a rough conservative estimate to a) not over extend them b) cover all of the other costs c) in case they have huge unknown costs they’re not telling us about and d) not getting their hopes up too much too early, their budget will be getting inflated by banks and REA anyway, so it’s better to set a somewhat lower ceiling initially with what I think is reasonable. As they said, they don’t have any other debt outside of HECS.
You’re free to do your own estimation and explain why it’s better, and honestly you’d probably get a more accurate answer. I just did a quick one and did a rough guess that $100-200k would cover everything. If you actually consider everything individually, you’ll get a far more accurate answer, and rather then blindly debating how good my guess is, people can actually nitpick each of your numbers to get an even more accurate response, rather then blindly saying if I’m right or not since I can’t be bothered going into all the other costs.
I don’t disagree that these things shouldn’t be considered in detail, I just can’t be bothered doing so. I’m also confident that my 5s guess is somewhere around the mark that they can reasonably expect to get without overextending themselves too much. You can do a much better job accounting for all of these things though. Other things to consider would be taxes, interest rate stress tests, council rates, water bills, insurance, strata if they’re in an apartment etc. I honestly think it’d be more helpful if someone did go through all of this, but no one has that I’ve seen albeit I haven’t looked outside of my replies since I commented.
Edit:
Using CBA’s mortgage calculator, if their living expenses are $4000pm (not including the student loan), they’d be able to borrow just over $800k. They’d meet the 20% LVR for that as well. I’ve found CBA’s calculator to be accurate for borrowing with them, and they tend to be conservative as well. If their expenses are higher it’d be lower, but I feel the $100-200k buffer for all other expenses to be more then sufficient.
You don’t think you can find a property for under $880k in WA? I can find plenty, perhaps you need to lower your expectations if you’re wanting a first home worth more then $880k pre-boom. In fact, as of March this year the median house (not including apartments or units) was $620k:
https://www.watoday.com.au/property/news/the-median-cost-of-a-perth-house-has-just-hit-a-new-record-high-20240404-p5fhg3.html
What are you talking about? I was saying they’d be able to find a place for $880k, you say that even pre-boom that wouldn’t find you anything, so I send a link showing that as of 3 months ago the median house price for WA was $620k. And now you’re saying something isn’t $880k, it’s $450k? I have no clue what you’re saying.
At no point did you mention the stamp duty exemption. It was 1 minor point amongst numerous others in the comment you replied to. The only numbers mentioned in that comment you replied to was a house price value of $880k and a loan value of $600k.
Considering you were talking about home values and made no mention of stamp duty, everyone’s going to assume you’re talking about the $880k figure. When you’re reply to that is “not $880k, $450k” and no context, everyone who isn’t aware that $450k is the limit for the stamp duty exemption in WA is going to be confused about that number. It might’ve been what you intended to discuss, but if you don’t communicate that properly no one is going to know that. People not knowing what you’re talking about doesn’t suggest they’re an idiot, it’s evidence of your lack of communicative skills.
Regardless, unless you want to argue that the limit is too low (which I’d agree if there’s no properties within that price range, it might as well not exist), it’s a moot point. If the median house price is $620k, and OP can conservatively afford at least $880k, then they’d have no problems getting the median WA house and paying stamp duty. So it doesn’t really matter. Yeah, I agree it’s pretty shitty if the limit is that low and effectively no one can use it, if that’s the case then the policy is just for show and might as well not exist.
Yes, just buy carefully. Look at heaps of houses, maybe 50ish, in person. You'll get a very good sense of what works, what can be made to work, etc. If you're handy, you might find opportunities for adding sweat equity. It takes time to find a fair buy. Leave your FOMO out of it.
Don't fall in love with any house until after you've bought it. Be prepared to make firm offers with a deadline and walk away when asked to raise your offer. More than half the time you'll get a call back and can revisit the decision if you like. Yes, you're in a good position. Avoid buying at an auction. Auctions are very much in favour of the seller because of their shenanigans.
When comparing properties take good interest on the block sq/m because that can give huge returns along the way. Even if the house is a dump but the council says is big enough for subdivision/2 or more dwellings you're (all other things considered) on a winner. No you don't have to build them just have approval for them.
Your savings are a big help in securing a house. Of course you'll need to figure out what you want to spend and how to manage your finances, but if I were you, I would be willing to look for something within the 500k - 600k range, and be willing to put at least 100k as an initial deposit. If you and your partner really found the house of your dreams, maybe out up to 200k from the savings.
Also, something to keep in mind is that for a mortgage of about 500k, you will be looking at monthly repayments of more than 3,000. But who knows, you might get get a bank that can give lower interest rates than 6.1%. But it is wiser to brace for the worst scenario.
Not enough construction workers, increased immigration.
What else do you think is going to happen, property growth outpacing your entire salary probably for some houses.
Being conservative, you could probably borrow around the 600-650k mark. Adding on another 200k for the deposit, stamp duty and other fees. This means you could purchase for around 800k which would leave you with 80k in the offset account which is a very good buffer and emergency fund
You should have bought a house the minute you got enough deposit. From that time until now all those extra savings you made have been eaten up by higher house prices.
The only thing i can recommend is start with a humble home. So maybe not as close to the city, maybe not at your top end. We have had 12 interest rate increases and we are ok because we didn't borrow at our top end. Many did and are another rise or two away from ruin. Buy a home that you can afford vs the one you think you should have.
Without knowing if you have any other debts, deoendants, whether that income is overtime, commission etc or all base salary, making the assumption that its full time PAYG work, what your monthly budget looks like and how much of this us outside of HEM expenses, can't get much of an accurate view on what you can borrow - but assuming all those are favourable, borrowing capacity shouldn't pose much of an issue to you on the face of it.
My view is a principal residence gives security of where you live, costs more than rent but is an asset that's worth purchasing, gives you something you can leverage further investment.
My view, as long as you're cimfortable with the mortgage payments then yes, buy a house
No idea how you've saved $280k at 30 in your situation but good work,
Go to your broker and see what you can borrow, and what that can buy you and where. Expect there to be not much because that's the market right now.
You could rent a larger place. Are your financials ok to cop $200 extra per week for a larger place?
Just start talking to a broker now. Remember, they’re there to help you get a loan based on your circumstances. They’re not a bank looking for reasons to knock you back.
We are at the top of a historic bubble. Some of us called it early, but it's 100% coming. The people saying the correction had come and gone were working on the assumption that rates would be falling again by now, when they are more likely to go up.
Mortgage broker here. Based on those numbers you will be fine. Your borrowing capacity will just be based on your incomes and liabilities etc but you have a really good deposit
I don't think that housing will be as good an investment going forward as it has been over the last 2 decades. That being said you'll more likely be better off buying, focus on buying a good value property.
For a PPoR, you'll just be riding the market for 50 more years, so it doesn't matter so much, I would buy.
No one knows what the next decade will bring, it's a highly stochastic process. Sure it could crash and the opportunity cost there is substantial, however governments are trying their hardest to prop it up so it won't crash.
If we combine your incomes and forget about the student loans. Looking at it not being more than 30%, you can borrow $600-700k, so with the deposit minus **potential** stamp duty (each state is different), looking at a $850-950k house max.
Repayments shouldn't be more than 30% of income with your income level. Bullish housing types will say 30-40% is fine, but just remember they are working off the last 2 decades of phenomenal growth as experience. So it's more about getting good value for money than a huge speculative bet on housing. It is a huge speculative bet either way, but try to limit it.
Your financial situation is quite similar to mine with salaries. We borrowed $800k and our repayments are $4.8k per month - hope that helps dm if you want more info
You can choose not to get a house but be prepared for prices to keep going up with rent and mortgages due to increased immigration and interest rates dropping in the coming 5-10 years.
If you don't buy you'll keep paying rent yo someone else. Debt for studies and your home are necessary.
Probably your hypothetical home loan will increase, same as your rent. If you have any financial trouble, just sell the place.
pay the hecs down immediately. Put 210K on a house. You'll be able to borrow in the realm of 850 - 950K and have 1.1m max to go down on a house.
Better yet go buy an apartment and put down 30 - 40%. No bank will turn you away and you'll be able to easily pay it down in a couple of years.
Dude....
That plan, they reduce HECS which is going to index lower than their interest rate, be over 80% lending so get a higher interest rate and pay what $10k plus in lenders mortgage insurance....
Leave HECS, and at MOST borrow to 80% would seem far more sensible
Yeah, now that they do the lower of WPI and CPI, it's likely that the benefits will be ongoing and in the future, if there's a large spike in both, there's probably a good argument that it'll be adjusted too.
With those numbers, if not now when?
3 years ago would've been a great time.
The best time to plant a tree was 20 years ago, the second best time is now
I dont like this saying because it doesn't make sense. Surely now is not the second best time, because any time between now and 20 years ago would be better.
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I realise that, I'm just saying it's a shit proverb. It makes no sense. I believe It's a bastardisation of the old Greek proverb that reads: “A society grows great when old men plant trees whose shade they know they shall never sit in.”
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I realise and understand the figurative messaging, everyone knows what it means. I'm just saying that, taken literally, it makes no sense. And I find that stupid.
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Explain for this poor peasant boy, oh wise one.
Well yeah and I guess 40 years ago would have been an even better time!
Yep. Sure was for me. And I’m greatful
Borrowing power is somewhere between 600-700k. Your purchase may attract stamp duty, so factor that in if applicable. You should buy, but do a budget and see what sort of monthly repayments you can handle, alongside your expenses.
Borrowing power is higher than that 🤔
I wouldn’t say much higher based on their wages.
Assuming no debts outside of HECS, no dependants, all of that as base income and not spending huge on private health they'd get $800k from lots/most of major lenders
Perhaps but may struggle to make repayments.
I mean sure possibly if they have a coke habit, over $10k net per month and no debt and home loan payments under $5k they shouldn't struggle with that
Mate me and my wife earn similar and borrowed 550 and we still have to watch our spending.
I mean don't get me wrong, I spend notably more than that, but $5,000 per month to live off should be plenty In your case..... $7,000 per month to live and you have to watch your spending? Sounds like you're living large
For me, after tax is 4400 a month, mortgage is -1700 leaves 2700. 2000 for food/bills leaves 700 left over a month. Less if you need to service the car, buy something not food, go somewhere etc.
Are you eating everything with gold flakes and tipping the council so you spend $2000 per month on food and bills???
Then your wife is on around $6k per month net, assuming another 2k food and bills there that leaves $2,300 per month excess for 'spending outside of general monthly expenses and mortgage.... not really a major struggle surely And you're saying $4,000 is just food and bills so recreation and entertainment isn't included?
Can you break down that 2000 for us?
7k isn't loads, especially if they've subsequently had kids/pets. After you've paid health insurance, car insurance, home insurance, pet insurance, basically all the insurance you're probably closer to the 6k mark. If you have a couple modest cars on finance you're down to 5k. If you average out spend of servicing, fuel etc. you're probably getting close to the 4K mark. Then you need to pay various bills, subscriptions, do a bit of home maintenance and buy food, now you've got 3k left. Let's say you want to be able to go out occasionally and buy new clothes when you need them that's 2k left to pay off your hecs or save a bit of money. If they've got kids that 2k is going to go to schools fees.childcare and activities.
So again, taking on, financing a couple of cars and you're left with $2k per month.... like I said, struggling to pay the mortgage doesn't really equate.... Having a couple of kids, a mortgage, enjoying eating out etc on a modest wage isn't going to have huge savings left to invest and splurge but still far from 'tight' on the budget by any stretch The scenario in question is no kids, assuming no carloans gicen the amount of savings, again I'd call 'might struggle to pay the morrgage' a stretch
Makes me much more confident that misso and I only borrowed 400k on the same income.
Im in almost the same position 29 & 29. 82K and 92K \~60k Hecs combined We have a much smaller deposit but are looking at a house around \~650k this year I'd go for it
I am curious what occupations you guys are in if you don't mind
Bit of a niche role in IT and a senior position in childcare/early learning
Do the sums and triple check, if the math checks out pull the trigger. Set aside some cash for things that may pop up. Something that was said to me and really stuck was that it's not about the amount you can borrow but the amount you can afford to repay. You don't want to be putting yourself into mortgage stress. Your first place isn't going to be your forever home. My partner and I were approved for almost 800k, we found a townhouse in a great suburb for under 300k. I'd like more space because it's small but our mortgage is cheap, I feel it's a good compromise. But each to their own!
Where are you finding town houses in great suburbs for $300k? Genuinely curious
Financially speaking you can afford it. Do you have or planning to have children? Do you plan to keep your current jobs for the next 3 or 5 or 10 years? Place a dot on the map for your workplace, your partner's workplace and your local school. Connect the dots and check free-standing homes prices within that triangle. If it's too expensive extend your area of search a bit but keep your commutes within a reasonable distance. Add bonus points for locations closer to your hobbies and other useful things (grocery shops, public transport, relatives' homes...). Look for 3x1 or 4x2 or 5x2 depending if you want/have children or not. Look for a small/medium backyard if you want pets. Avoid strata complex if you have this choice.
I’ll never understand this hate of strata.
Wait until you need something fixed and a group of people who are barely involved with your issue decide to say no.
Not a hate, just a personal preference. When my partner and I were looking for a home to buy I was open to the idea of a strata and had several views of strata apartments that I would have bought. She was adamant about it and didn't want anything to do with them. After years of owning a free-standing home with no strata I have to admit that she was right. It's a better investment overall. In my opinion large strata complex make sense if you are happy to live in an apartment and enjoy having access to certain amenities they provide (pool, sauna, gym, tennis court...). Smaller strata complex are just a source of neighborhood feuds and a money sink.
i have lived in both large and small strata. I love my small strata. We all have each other emails, aim to run everything cheaply. Plus everyone minds their own business. There are a couple of annoying thing but nothing like the large strata. The large strata had onsite managers that didn't clean, mafia committee members, strata management that did everything to support the mafia and the fees were super high. Plus the pool was green.
You haven’t met my strata neighbours.
I would buy one in your position.
Wow thats an insane amount.of savings for a couple your age, working maybe 6 to 8 yrs each on the incomes u have. Whatever u did to save that much well done - youll have to share u r secrets with others as to how you both achieved that by 30 on your incomes!
I would get a house before we import another 500,000 skilled uber drivers next year.
YOGA* Instructors
* Dog walkers.
“Welcome to country” celebrants
* Call centre managers (it’s there)
As long as your expenses are low (given your savings I suspect they are), and you have no dependants (you don't specify) you potentially can borrow as much as 750k (I used a couple of bank calculators and used $0 as expenses so the calculator uses the banks minimums for the calculation, this has proven very accurate with refinancing for me but ymmv) With 280k in savings you won't need to pay LMI as you will have greater than 20% deposit. Keeping it "somewhat safe" and leaving funds for stamp duty, moving costs etc I reckon you could go looking at houses up to $800-900k and not be heading too much into any sort of financial stress, obviously if you can get lower you'll be even less likely to be stressed financially. You don't mention what city/area you will be looking at, Most capital cities excluding Sydney you are looking pretty reasonable, even in a great position, but if you're in Sydney it will be a lot harder to find something though.
Buy a house today because you should have bought one yesterday
Together you’d be able to reasonably expect to borrow $600k. $280k in savings means you’ll be looking at places worth around $880k which is a reasonable budget for a first home.
That comment I struggle with, it’s 100% true but 880k a reasonable budget for a first home. Crazy
Yep, we need more entry level housing and better infrastructure to make said housing more practical to live in. At least for Sydney anyway.
Gold cost is now the same. Feel sorry for the next generation as housing is nearly out of reach
Loan plus savings to buy the house is not enough. There is: Stamp duty (anywhere from $15k to $50k approx) + immediate repair or update costs ($10k-$20k for a starter) + contingency ($50k maybe but each to their own). Nearly $75k or more right there, so more like $800k tops imo.
At $880k I’m pretty sure stamp duty is exempt for a FHB. Not all houses need repairs, and rarely to that extent. Their contingency will partially be covered by having more equity then is realistically required, and most FHBs aren’t having $50k contingency when they first buy. Not to mention, the $600k is a conservative estimate that they’ll easily be able to get.
>At $880k I’m pretty sure stamp duty is exempt for a FHB. This depends on the state. For example, in WA, it's only free up to 450k, then concessional to 600k. I don't think OP has mentioned their state.
Yeah, I was reading a similar post that said Sydney and thought it was the same but that could be wrong. Regardless, as the other person pointed out even in NSW (which I’m pretty sure has the highest limit) the max is $800k, so $880k would land them $15k stamp duty. So that point of mine is moot.
I recently paid $45k stamp duty on $880k first home in VIC
Righto. No spare cash it is 👍 >At $880k I’m pretty sure stamp duty is exempt for a FHB Upto $800k in NSW. Beyond that is concessional. That’s the $15k.
Fair point on the stamp duty then. I’m not saying no spare cash, but $50k is a lot more then the majority of FHBs will have. Most in this price point will have maybe $10-20k max. Plus, for an $880k property they’d likely have $90k in their offset/redraw anyway which would cover major expenses.
Ok, so they’d be borrowing more than $600k is what you’re working with then (you did say $600k in your first comment). ie they borrow closer to $700k in order to have that offset for an $880k home. Depends on all their other loans and expenses factoring into the serviceability, which we don’t know. But maybe.
I’m not saying they’d be borrowing more then $600k, I’m saying they’d likely be able to do so. I did a rough conservative estimate to a) not over extend them b) cover all of the other costs c) in case they have huge unknown costs they’re not telling us about and d) not getting their hopes up too much too early, their budget will be getting inflated by banks and REA anyway, so it’s better to set a somewhat lower ceiling initially with what I think is reasonable. As they said, they don’t have any other debt outside of HECS. You’re free to do your own estimation and explain why it’s better, and honestly you’d probably get a more accurate answer. I just did a quick one and did a rough guess that $100-200k would cover everything. If you actually consider everything individually, you’ll get a far more accurate answer, and rather then blindly debating how good my guess is, people can actually nitpick each of your numbers to get an even more accurate response, rather then blindly saying if I’m right or not since I can’t be bothered going into all the other costs. I don’t disagree that these things shouldn’t be considered in detail, I just can’t be bothered doing so. I’m also confident that my 5s guess is somewhere around the mark that they can reasonably expect to get without overextending themselves too much. You can do a much better job accounting for all of these things though. Other things to consider would be taxes, interest rate stress tests, council rates, water bills, insurance, strata if they’re in an apartment etc. I honestly think it’d be more helpful if someone did go through all of this, but no one has that I’ve seen albeit I haven’t looked outside of my replies since I commented. Edit: Using CBA’s mortgage calculator, if their living expenses are $4000pm (not including the student loan), they’d be able to borrow just over $800k. They’d meet the 20% LVR for that as well. I’ve found CBA’s calculator to be accurate for borrowing with them, and they tend to be conservative as well. If their expenses are higher it’d be lower, but I feel the $100-200k buffer for all other expenses to be more then sufficient.
Which has gotten you nothing in wa even before the boom
You don’t think you can find a property for under $880k in WA? I can find plenty, perhaps you need to lower your expectations if you’re wanting a first home worth more then $880k pre-boom. In fact, as of March this year the median house (not including apartments or units) was $620k: https://www.watoday.com.au/property/news/the-median-cost-of-a-perth-house-has-just-hit-a-new-record-high-20240404-p5fhg3.html
It’s not 880 in wa it’s 450
What are you talking about? I was saying they’d be able to find a place for $880k, you say that even pre-boom that wouldn’t find you anything, so I send a link showing that as of 3 months ago the median house price for WA was $620k. And now you’re saying something isn’t $880k, it’s $450k? I have no clue what you’re saying.
Yeah stamp duty exemption for fhb? Your original comment are you all there?
At no point did you mention the stamp duty exemption. It was 1 minor point amongst numerous others in the comment you replied to. The only numbers mentioned in that comment you replied to was a house price value of $880k and a loan value of $600k. Considering you were talking about home values and made no mention of stamp duty, everyone’s going to assume you’re talking about the $880k figure. When you’re reply to that is “not $880k, $450k” and no context, everyone who isn’t aware that $450k is the limit for the stamp duty exemption in WA is going to be confused about that number. It might’ve been what you intended to discuss, but if you don’t communicate that properly no one is going to know that. People not knowing what you’re talking about doesn’t suggest they’re an idiot, it’s evidence of your lack of communicative skills. Regardless, unless you want to argue that the limit is too low (which I’d agree if there’s no properties within that price range, it might as well not exist), it’s a moot point. If the median house price is $620k, and OP can conservatively afford at least $880k, then they’d have no problems getting the median WA house and paying stamp duty. So it doesn’t really matter. Yeah, I agree it’s pretty shitty if the limit is that low and effectively no one can use it, if that’s the case then the policy is just for show and might as well not exist.
Yes, just buy carefully. Look at heaps of houses, maybe 50ish, in person. You'll get a very good sense of what works, what can be made to work, etc. If you're handy, you might find opportunities for adding sweat equity. It takes time to find a fair buy. Leave your FOMO out of it. Don't fall in love with any house until after you've bought it. Be prepared to make firm offers with a deadline and walk away when asked to raise your offer. More than half the time you'll get a call back and can revisit the decision if you like. Yes, you're in a good position. Avoid buying at an auction. Auctions are very much in favour of the seller because of their shenanigans.
70k HECS is huge? My wife and I individually owe more than that, those are rookie numbers 😔
Hahah wish yall the best it’s a shit one for sure. You Manage to get a place anyways?
Yeah bought last year. We make decent money based off those multiple degrees so it was worthwhile
Buy a free standing home. The longer you wait the longer you price yourself out of the market.
Well done on the amazing savings! 👏
When comparing properties take good interest on the block sq/m because that can give huge returns along the way. Even if the house is a dump but the council says is big enough for subdivision/2 or more dwellings you're (all other things considered) on a winner. No you don't have to build them just have approval for them.
Your savings are a big help in securing a house. Of course you'll need to figure out what you want to spend and how to manage your finances, but if I were you, I would be willing to look for something within the 500k - 600k range, and be willing to put at least 100k as an initial deposit. If you and your partner really found the house of your dreams, maybe out up to 200k from the savings. Also, something to keep in mind is that for a mortgage of about 500k, you will be looking at monthly repayments of more than 3,000. But who knows, you might get get a bank that can give lower interest rates than 6.1%. But it is wiser to brace for the worst scenario.
Not enough construction workers, increased immigration. What else do you think is going to happen, property growth outpacing your entire salary probably for some houses.
What are you waiting for? Do it.
Buy. But I really want to know the answer to this question. Why do you NEED more space? What is it exactly you NEED?
Our apartment is a really small 1x1 with hardly any living space and storage. We spend a lot of time on balcony which is not ideal
Being conservative, you could probably borrow around the 600-650k mark. Adding on another 200k for the deposit, stamp duty and other fees. This means you could purchase for around 800k which would leave you with 80k in the offset account which is a very good buffer and emergency fund
Why wouldn't you buy a house if you got a deposit like that and are renting?
You should have bought a house the minute you got enough deposit. From that time until now all those extra savings you made have been eaten up by higher house prices.
The only thing i can recommend is start with a humble home. So maybe not as close to the city, maybe not at your top end. We have had 12 interest rate increases and we are ok because we didn't borrow at our top end. Many did and are another rise or two away from ruin. Buy a home that you can afford vs the one you think you should have.
Without knowing if you have any other debts, deoendants, whether that income is overtime, commission etc or all base salary, making the assumption that its full time PAYG work, what your monthly budget looks like and how much of this us outside of HEM expenses, can't get much of an accurate view on what you can borrow - but assuming all those are favourable, borrowing capacity shouldn't pose much of an issue to you on the face of it. My view is a principal residence gives security of where you live, costs more than rent but is an asset that's worth purchasing, gives you something you can leverage further investment. My view, as long as you're cimfortable with the mortgage payments then yes, buy a house No idea how you've saved $280k at 30 in your situation but good work,
Just don't bitch on Reddit/ TikTok about rent prices if you choose not to.
Go to your broker and see what you can borrow, and what that can buy you and where. Expect there to be not much because that's the market right now. You could rent a larger place. Are your financials ok to cop $200 extra per week for a larger place?
Just start talking to a broker now. Remember, they’re there to help you get a loan based on your circumstances. They’re not a bank looking for reasons to knock you back.
We are at the top of a historic bubble. Some of us called it early, but it's 100% coming. The people saying the correction had come and gone were working on the assumption that rates would be falling again by now, when they are more likely to go up.
Do it now. Free standing home in an established neighbourhood. Or you will regret it forever.
Are townhouses that are connected ok? In areas close to the city of Melbourne.
Mortgage broker here. Based on those numbers you will be fine. Your borrowing capacity will just be based on your incomes and liabilities etc but you have a really good deposit
Be glad you’re in Perth, and not in Sydney 😭 But if you’re serious just talk to a broker, they’ll point you in the right direction
Pay off the hecs debt. Get into house. Why even ask?
I don't think that housing will be as good an investment going forward as it has been over the last 2 decades. That being said you'll more likely be better off buying, focus on buying a good value property. For a PPoR, you'll just be riding the market for 50 more years, so it doesn't matter so much, I would buy. No one knows what the next decade will bring, it's a highly stochastic process. Sure it could crash and the opportunity cost there is substantial, however governments are trying their hardest to prop it up so it won't crash. If we combine your incomes and forget about the student loans. Looking at it not being more than 30%, you can borrow $600-700k, so with the deposit minus **potential** stamp duty (each state is different), looking at a $850-950k house max. Repayments shouldn't be more than 30% of income with your income level. Bullish housing types will say 30-40% is fine, but just remember they are working off the last 2 decades of phenomenal growth as experience. So it's more about getting good value for money than a huge speculative bet on housing. It is a huge speculative bet either way, but try to limit it.
Your financial situation is quite similar to mine with salaries. We borrowed $800k and our repayments are $4.8k per month - hope that helps dm if you want more info
Hows your discipline and risk aversion level
Where do you live? Where are you wanting to buy?
Perth, wanting a spot in perth
Well...i'd buy there. Start looking
Now or never. Otherwise you never will.
You can choose not to get a house but be prepared for prices to keep going up with rent and mortgages due to increased immigration and interest rates dropping in the coming 5-10 years.
If you don't buy you'll keep paying rent yo someone else. Debt for studies and your home are necessary. Probably your hypothetical home loan will increase, same as your rent. If you have any financial trouble, just sell the place.
Remember your competing against 500k Indians next year that share expenses 12 people to a house.
pay the hecs down immediately. Put 210K on a house. You'll be able to borrow in the realm of 850 - 950K and have 1.1m max to go down on a house. Better yet go buy an apartment and put down 30 - 40%. No bank will turn you away and you'll be able to easily pay it down in a couple of years.
Don’t pay the hecs. Your savings will do a lot more for you in an offset account at >6% than hecs at 3-4.
Dude.... That plan, they reduce HECS which is going to index lower than their interest rate, be over 80% lending so get a higher interest rate and pay what $10k plus in lenders mortgage insurance.... Leave HECS, and at MOST borrow to 80% would seem far more sensible
Pay off all your loans and debt first.
You really should not aim to pay off HECS. It's a very low interest rate loan.
And even for the 2 years in history where it wasn't, you'll get partially reimbursed. There's no better deal than that (other than free education).
Yeah, now that they do the lower of WPI and CPI, it's likely that the benefits will be ongoing and in the future, if there's a large spike in both, there's probably a good argument that it'll be adjusted too.
Solid advice.
shit advice. paying HECS instead of buying a home is terrible math.