Summer days

It is hot in Perth, but in my parents’ house it is cool due to insulation in the roof. I haven’t been doing much since I’ve been back.

Much of my time has been spent discussing with my folks my plans to buy some sort of housing. They would very much like to help me out with some money towards a deposit as a result of the sale of my grandmother’s house. They can’t sell it at the moment, however. They can’t sell for the main reason I should buy due to the housing slump. There are currently two or three parts of this unit/studio buying business that occupy my mind.

The first immediate problem is to raise capital for a deposit. I have some limted savings. The bulk of my money will come from the sale of one of my cars (or parts of it at least), which has been in storage over here since I’ve been in Sydney. I also have a few matters with the Tax Man that I need to resolve, about 5 years worth of matters. Not that I owe money to anyone, rather, they owe me money.

The second problem is a complex mixture of two problems. Do I buy a tiny studio in my beloved inner-west of Sydney? I really do love Glebe. Quite simply, it is where I have been the happiest in my life. Or do I move out closer to work in Silverwater (anywhere between Burwood and Auburn)? Do I want a tiny studio or at most a modest one bedroom place or similar? I have little qualms about moving out to say Auburn to be within walking distance of work. Staying in the inner-west would require a greater finiancial strain and definitely a studio-style apartment that would be less modest abd more humble.

In all the advertisements I mull over they are described as ‘perfect investment opportunity/first home buyers’. Hopefully, the investment property buyers will have a dimished capacity to take part in the property game due to the financial crisis (I am not sure that, with all the hand wringing going on, if people in ‘power’ do not realise how happy this crisis makes some people!?! Pure glee!). I am certainly of the view that I am in fact both investing and first home buying. I don’t really regard any place I have lived so far as a home. A home is more complex that simply buying or inhabiting a place. I feel more at home in suburbs than I do in my actual place. The loose networks of casual connections between familiar faces and shop keepers makes me feel more at home than any brick and motar has so far in my life.

The investing and first home buying scenario complicates my options. If I was buying my home I would wait and save up enough of a deposit to afford a place in Glebe, which with my current finances would take about 5 or 6 years. I am not buying a home. My chief priority is to avoid paying rent as much as possible. I have a stable job now and have the means to buy a very very small place. I find the idea of building on that stability an attractive one, even if that means assuming the shackles of debt. My enthusiasm for properties on the humble end of the modest sprectrum is in part born of a desire to retain some mobility. I am hopefully earning the least amount of money I shall ever earn as an adult. I should be able to pay off the home debt quite comfortably.

2 replies on “Summer days”

  1. I’ve been thinking about property too. I don’t think you should consider buying a home (with a mortgage) to be an investment, at least not in the financial sense. If it produces an income (rent) that’s different, but the great Australian myth (of the last decade) of endless capital appreciation through real estate looks like it is about to be well and truly busted. At the moment, renting in the inner west is still much better value than buying. If prices come down another 20% or so in real terms, I’ll start looking again at buying.

    The GFC probably has at least another year to run (perhaps much longer). Cash (ie high interest savings account or term deposit) is currently the best place for one’s money. With interest rates falling, select blue chip shares & ETFs may become a better investment (I recently took a position in STW). But real estate, especially in Sydney’s inner west, is currently overpriced, and therefore a poor investment imho.

    Then again, if in your opinion the positive affective aspects of ownership outweigh the financial risks, then go for it!

    This forum is a great antidote to the pro-RE spin that infests Australian culture:

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