Well further down is a story about a 23 year old UNI-Student in Sydney who in Oct 2013 is buying a house for over a MILLION DOLLARS !!!!! ....
WTF is a "Uni-Student" only 23 years old doing buying a $1M Plus home but worse still she paid $120K above the asking price with the help of her parents.
Not her money or her ability to borrow that much money drove prices up & out the reach of real buyers but her parents money.
This 23 year old Uni-Student also has no place in the housing market yet is able to get a toehold & force others to compete with her.
Some family missed out on a home because this "UNI-Student" through her Mum & Dad ganged up on them and invested their money into property via their daughter. Tax Free Capital growth here to be made.
Just remember this is what is driving up house prices not real market forces & real buyers with real money
In red-hot inner-city Surry Hills, first-home buyer Claudia Crause, 23, a student at the University of NSW, snapped up a two-bedroom terrace at 45 Rainford Street, Surry Hills, for $1,094,000, $119,000 over the $975,000 reserve.
‘‘The market’s a bit hot at the moment. There’s a lot of people wanting terraces with potential,’’ Ms Crause said.
‘‘Prices are going up … I think we got a pretty good deal’’…Parents Ron and Theresa Crause, of Mosman, were happy to help…
On Linked in Claudia says she is studying Law at UNSW & works as a "Medical Receptionist" to pay the bill yet can splash out $1m plus for a Swanky Pad Medical Reception work pays less than $50K PA so how is she able to do it? ..... Sorry Claudia you have a couple more years to go & when you graduate it will dawn on you that half the graduates from years before are unable to get places in law & even then will take 3-5 years before getting decent pay.
Assuming "Claudia's" home was purchased with a 10% deposit, leaving principal of $1,030,260 to be repaid (i.e $984,600 plus $45,660 in stamp duty). At the current 5.1% discount variable mortgage rate, Ms Crause (or her parents) would be required to make loan repayments of $1,290 per week, or around $67,000 per year.
Let’s hope that Ms Crause is studying brain surgery, as otherwise she could be looking at a lifetime of debt serfdom.
Real Buyers with Real Money that were competing with this 23 year old student had to save a 10% deposit after years working in the workforce.
Our Daddys girl @ the age of 23 & studying full time at UNI has not done this & would not be able to afford the payment or cost of ownership even if she did. Don't forget the $1300pw repayment cost excludes Insurance / Rates / Maintenance etc which would make it closer to $1600 pw .....
Now when interests rates start to go North & they will because they cannot stay at these levels forever!! This little Daddy's Girl will be paying $2-$2500 PW for something she can currently rent for $600-$700pw
BTW I am not FORECASTING what interest rates will or wont be I am pointing out the FACT that historically rates have averaged 8.5-9% PA over the last 30 years this is almost twice what they are today & when they do lets see the smiles on their faces.
Look all said & done will the Housing Dream for our children have to be achieved by all of us parents digging into our retirement savings to help them get a foot on the so called "Property Ladder". What happens if you have 2-3-4 kids which one do you pick to help?
Australian house prices are going up because fools like these have every faith that nothing will stop it , scratch beneath the surface & was there a real buyer for this property who could afford it on their own merits?