I have a couple of friends who got into the property market at just the right time. While I was just starting in my first full time job, they were buying blocks of lands or investment units. If only I could have afforded to do the same thing. In the past five years house prices have exploded and a report on news.com.au this morning tells us "couples need to earn a colossal combined income of up to $145,000 just to keep up with the mortgage payments on an average-priced Australian home, according to new research." That's HUGE!So after saving what could be, up to $50,000 for a deposit on a home (especially in Sydney), the repayments are still cripppling. What's to happen if the woman wants to have kids? How can one person afford the replayments?
The value on properties has shot up sky high. My parent's home, purchased in 2001 for $170,000 could now sell for over $400,000. Wow, that's a huge profit you say! But how on earth could they afford to buy something newer for the same price?
With the insane amount of interest rate rises in the past year, more and more Aussies are feeling the strain. Combine that with the increase in petrol prices (more than double since 1999), and other living expenses and it's no wonder so many people rent.
They say now is the time to get into the property market, and if the next five years is going to be a replica of the past five years then I say if you can do it, do it now. I am probably not the best person to come to for financial advice, but changes I have made to my life to help me save towards this goal are: setting up a regular savings plan with ING Direct, getting rid of my credit card, making extra repayments on my personal loan, and saving money on entertainment. Sure, it's not much fun sometimes, and I'd love to go out and splurge on some new clothes, but I bet the feeling of sitting in your own aparment must be pretty sweet : )
Notes on Glossy Paper
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