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The issue here then becomes what do you do at 60 when you've been unable to purchase property and can now not qualify for a standard 30 year mortgage? If you've
by PebblesHD 9y ago
The issue here then becomes what do you do at 60 when you've been unable to purchase property and can now not qualify for a standard 30 year mortgage? If you've paid 35% of your before tax income in rent since you were 20 on a standard salary, you've got maybe $150k(AUD) in savings if you were really, really dedicated, which isn't even enough to buy a house 600km out of a major city (Sydney in my example) and now have no income outside of superannuation or a government pension? Quality of retirement (in Australia) evaporates if you have to pay market rate rents...
- pm90 9y agoI might be wrong since I don't know what the economy in Australia is like, but it is VERY unlikely for someone in the US to have $150k in savings and yet not own a home. In fact the opposite does happen a lot: all of a person's equity is in their house, and they have $0 in savings. But then they sell their house, move to a cheaper house and used the difference to make ends meet.
- ericd 9y agoHm, that sounds an awful lot like a Ponzi scheme, if people are actually expecting that. Do you think a large percentage of people are planning on that?
- toomuchtodo 9y agoThat's all most Americans have, besides a small monthly Social Security benefit.
- PebblesHD 9y agoInteresting.. Given the current median price and interest rates in Australia, $150k isn't actually enough for a 20% deposit on the mortgage for the average house here, especially as you get closer to the city. Within about a 20 mile radius and increasing with proximity to public transport, you'd be looking at a median price of over $1.15M, quite nearly insurmountable for most people wishing to enter the market simply due to the capital required before you can even get a home loan.