Post to SinFongChanRE.wix on 3/1/2018 at 12:38 AM
Commenting on “For most predicted downturn will be little more than a blip”
http://www.theage.com.au/business/the-economy/for-most-predicted-downturn-will-be-little-more-than-a-blip-20180102-p4yy6s.html
If you can afford $895,342, you are definitely better than most first-home buyers, either you have a highly paid job / combined income with your spouse, substantial parents' handout, or dumb enough to overstretch your budget.
The cutoff point for the first home to get full stamp duty exemption is $600,000, and there are still many properties in the market below that price.
Statistics can be manipulated or misinterpreted unless you are given the full story or specifically the full set of data. Median price is a statistical term. What it means is that 50% of the properties are less than $895,342, and 50% are above $895,342. I cannot tell whether those properties below $895,342 are all around $890,000 or worth much less, or those above $895,342 are just around that figure or in the millions.
Assuming a property owner occupier is to borrow 80% of $895,342, or $716,274 for 25 years at 4% pa, the repayment on principal plus interest is $3,781/month or $45,369/year. This is a lot of money by many people standard, and I sincerely hope that they have a stable job, because it is not easy to raise $3,781 or $873 a week to repay.
What if the loan amount is 80% of $800,000, or 640,000 for 25 years at 4% pa? The repayment on principal plus interest is $3,379/month or $40,538/year or $780/week.
For owner occupiers who have no intention to sell, the downturn in price does not concern them, whether it is a blip or not. The unfortunately thing is that the Council may not revalue the property to reflect the down turn, and since Council rate and water rate are based on the property value directly on indirectly, the rates remain as high, if not higher.
If I have a property that its value has gone down by $90,000, I definitely will NOT call it a blip, because that is equivalent to about 600 days of cruising based on $150/day, or a Mercedes-Benz E200.
Thank you for reading.
Commenting on “For most predicted downturn will be little more than a blip”
http://www.theage.com.au/business/the-economy/for-most-predicted-downturn-will-be-little-more-than-a-blip-20180102-p4yy6s.html
If you can afford $895,342, you are definitely better than most first-home buyers, either you have a highly paid job / combined income with your spouse, substantial parents' handout, or dumb enough to overstretch your budget.
The cutoff point for the first home to get full stamp duty exemption is $600,000, and there are still many properties in the market below that price.
Statistics can be manipulated or misinterpreted unless you are given the full story or specifically the full set of data. Median price is a statistical term. What it means is that 50% of the properties are less than $895,342, and 50% are above $895,342. I cannot tell whether those properties below $895,342 are all around $890,000 or worth much less, or those above $895,342 are just around that figure or in the millions.
Assuming a property owner occupier is to borrow 80% of $895,342, or $716,274 for 25 years at 4% pa, the repayment on principal plus interest is $3,781/month or $45,369/year. This is a lot of money by many people standard, and I sincerely hope that they have a stable job, because it is not easy to raise $3,781 or $873 a week to repay.
What if the loan amount is 80% of $800,000, or 640,000 for 25 years at 4% pa? The repayment on principal plus interest is $3,379/month or $40,538/year or $780/week.
For owner occupiers who have no intention to sell, the downturn in price does not concern them, whether it is a blip or not. The unfortunately thing is that the Council may not revalue the property to reflect the down turn, and since Council rate and water rate are based on the property value directly on indirectly, the rates remain as high, if not higher.
If I have a property that its value has gone down by $90,000, I definitely will NOT call it a blip, because that is equivalent to about 600 days of cruising based on $150/day, or a Mercedes-Benz E200.
Thank you for reading.
