what does this mean to me?
the banks own more and more real estate,people are in debt big-time.
if rent is cheaper than paying your mortgage,then i would just walk away as house price is not going to go up.
www.huffpost.com/entry/big-oil-profits_n_913452
Yes Pweet, but you seem to miss the point.
You can pay rent for 20 years and it might even be a bit cheaper than paying a mortgage, but,... at the end of 20 years paying rent you have NOTHING! ZERO ! ZILCH! S.F.A. !!
Or you can pay a mortgage for twenty years and at the end of 20 years you will probably have,.. a house owned either entirely or at least mostly by you.
Which means,.. you don't have quartely inspections by rental agents that come around and poke through all you rooms and stuff saying tut tut tut.
You don't have to find another place to live because the house you are renting has been sold from under you.
You don't have to cringe in fear every year when the rent review comes up and they might put the rent up to the exorbitant figures they are reporting in the paper.
You don't have to {lots of other stuff that comes in the same bag as renting someone elses house and helping them pay off their mortgage}.
Here's some advice from an old person, even though old people are useless an don't know anything. 
The best thing you can do to establish your independence in life is to own your own home. Didja hear that? OWN YOUR OWN HOME!!
Even if it drops in value for a few years, all that means is it will go up doubly fast after that, because the long term trend for houses is up. THAT"S UP!
I know it's a grind for the first five to ten years but that's just what it costs to get ahead in life. Because noone is going to buy a house for you.
Be like the US and Japan,
BUY IN THE HOUSING BUBBLE!!!!
Go on.......
Do it....................
Own your bit of Australia
Your a fool if you think owning your own home is 'the dream'
) or just plain piss it up against the wall. So when they get to 40 or 45 they still have nothing but a wife and 3 kids to support and put through school / uni and at the same time, try and pay the rent, or buy a house at the new inflated prices, such as now.
Just watched a great docco on the G.F.C. called "Inside Job"
For anyone vaguely interested in the economy, or how the G.F.C. came about it's a good watch.
Nothing has been learnt by what happened in the U.S. and they are once again facing some major trouble in the weeks ahead - a huge social security payment is due in mid August and it doesn't look like they have the money to pay it.
Interesting times ahead.
First priority for me was to pay the mortgage off, once I'd done that I could afford to work half time, and did so as soon as my boss could organise it.
Got plenty of windsurfing in then!!!!!
Now I'm an old age pensioner, and sitting sweet.
Believe me, on a pension you don't want to be paying rent!
Why?
Cost of cash is at the lowest levels ever seen in financial history. House interest is the same as 1959
Housing inflation in Australia (cap cities) is slowly going down (just over the peak)
Per Capita Debt is (you guessed it) at record levels,
We have a well defined 2 speed economy.
Put this all together and you have the key ingredients for a financial bubble.
If you buy now and interest rates raise an additional 5% this will almost double your current monthly payment.
Remember that interest rates will rise. 1989's peak of 16% can happen if the global (Chinese) economy slows. The RBA will have no control over this.
Tell me old timer, which young person (or couple) who have the 'dream house' and the other items (new car, new quiver of sails, etc..) can find that additional moulla?
So, to me with a partner and one child, renting makes sense. I can live near the water (there would be no chance of this by buying) and have the freedom to either move or if he financial crash happens, move to a cheaper abode (rents will raise but not as much as mortgage).
But, I have to admit that I do have an investment property. Purchased at bargin basement price with no real estate agent's fingers in the pie and the gumment pay my interest and some expenses through neg gearing.
They tax your profit and reward your debt. Silly really.
Think Real Estate.
It is like SEX. You should get as much of it as you possibly can while you are still young.
Screw being a slave to a mortgage so I can say I own four walls and a roof. I;m going to live the ****ing dream! - The real dream that is
I'm not saying don't buy.
I'm saying don't buy now.
Do you understand why I'm saying this?
be mad not to wait a bit longer, unless going sideways and can sell quick.
crawford.anu.edu.au
Sorry Guys, (I'm no academic) The introduction's a bit heavy, but it gets easier further into it...
^^^. Fiscal adjustment, it eventually had to happen, for USA, Europe.
I think the recommended 0% for Australia. Did I read it right?
I think so Poida. The two scenarios for fiscal adjustment in this paper are penned over 10-15 years. Ten years more dramatic effect, fifteen a little better.
Australia is aligned with China & relatively debt free.
China biggest lender of currency to US.
China may become less patient on getting the money back & look for higher rate of return, esp if US loses its AAA credit rating, like it looks to soon.
China's demand for commodities will decrease as US contracts it's household diposable income. Economists are already seeing this & hoping the rate of contraction doesn't spark a recession in the US, which then impacts China (which then impacts Australia)
Our Govt needs to stop squandering the cash from this mining hyper-boom before it disappears!!!
What effect on investment (for your rent money that's left over)? Dunno, but I put all my super into an Aussie cash fund on Thursday just to be safe.
I'm locking my mortgage interest rate in tomorrow were looking at likely inflation.
Seems to me it's only people who don't own a house who run around yelling "don't buy one."
Everyone who has a house and a reasonable income to mortgage ratio, meanwhile, just quietly pays it off and enjoys the benefits in the meantime.
As for pm33, mate our real estate system is TOTALLY different to the US. Nobody in Oz ever just walks away from a house/mortgage unless they are completely insane. There's no benefit to it. Stop believing everything you read and start trying to understand there's a difference between us and Seppoland.
What is a reasonable income to mortgage ratio ??
The average house price in australia is 430 grand +/- !
I rent my house out for fifty dollars less than my weekly mortgage payment.
for the extra fifty bucks a week, I think I'd rather own (pay off) a house
my old man pushed me into buying my first house when i was still an apprentice- it was the best thing i ever did. it was more of an outboard than an anchor, when i wanted to travel or run amok for a while i got tenants to pay it off and the capital still increased.
investing in stocks or term deposits sounds good but its too easy to liquidate little bits at a time when things go a bit tough. property is harder to break up and sell, its all or nothing, so it forces you to save when you are young.
