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Much like ECMAs reply in this thread, I've also resigned myself to pretty much never owning a home. Although I earn enough to get by on, I'm out 80-90% of my we

Much like ECMAs reply in this thread, I've also resigned myself to pretty much never owning a home. Although I earn enough to get by on, I'm out 80-90% of my weekly income in rent, power, internet, and food leaving practically nothing to save. I hardly ever eat out, thought I had a decent job and try to put as much as possible in high interest, but every time I look in my savings and think yeah that's looking good, I check house prices and a deposit has gone up another $1500 on what I've saved. It's debilitating, a feeling that I'm literally putting in all this work for nothing. Sadly, it's not just living close to the city anymore, anywhere within a few hours of Sydney is ridiculously expensive. Much like you, I'm not too concerned about carrying on renting, and I have time to wait out the market, but if this trend continues I feel like my whole generation will be permanently locked out of the market, and hence out of one of the most effective retirement savings vehicles the system has.

ux-app 9y ago
Sydney prices are absurd. Keep saving and wait for interest rates to rise. If they ever go to the 17%+ territory which we had back in the 90s then there'll be a country wide firesale, and you'll be sitting pretty with your cash savings.
- adambyrtek 9y ago
  Interest rates would rise so high only after a significant increase in inflation, which means that your cash savings would fall in real value as well.
- spangry 9y ago
  It won't need to be 17% this time around, that's for sure. Just to give people a sense of the magnitude of the debt Australians are in: - When mortgage rates 'peaked' in 1989 at around 17%, aggregate interest payments ate up about 6% of aggregate household disposable income. - When mortgage rates 'peaked' in 2007 at around 9%, aggregate interest payments ate up about 11% of aggregate household disposable income. We're more indebted now than we were in 2007. An external shock that causes mortgage rates to rise by as little as 1% (relative to incomes) will probably be enough to trigger our long overdue 'Minksky moment'. [0] [0] https://en.wikipedia.org/wiki/Minsky_moment https://en.wikipedia.org/wiki/Minsky_moment

ux-app 9y ago

Sydney prices are absurd. Keep saving and wait for interest rates to rise. If they ever go to the 17%+ territory which we had back in the 90s then there'll be a country wide firesale, and you'll be sitting pretty with your cash savings.

adambyrtek 9y ago
Interest rates would rise so high only after a significant increase in inflation, which means that your cash savings would fall in real value as well.
spangry 9y ago
It won't need to be 17% this time around, that's for sure. Just to give people a sense of the magnitude of the debt Australians are in: - When mortgage rates 'peaked' in 1989 at around 17%, aggregate interest payments ate up about 6% of aggregate household disposable income. - When mortgage rates 'peaked' in 2007 at around 9%, aggregate interest payments ate up about 11% of aggregate household disposable income. We're more indebted now than we were in 2007. An external shock that causes mortgage rates to rise by as little as 1% (relative to incomes) will probably be enough to trigger our long overdue 'Minksky moment'. [0] [0] https://en.wikipedia.org/wiki/Minsky_moment https://en.wikipedia.org/wiki/Minsky_moment