How To Buy A House In Australia [Infographic]

17 responses to “How To Buy A House In Australia [Infographic]”

1. 

   frente69

   September 14, 2015

   Mortgage interest can be deducted from your tax obligations? I don’t see how unless you’re buying an investment property.

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   1. 

      jetsom

      September 14, 2015

      I read the exact same point and thought…. “What am I missing out on???”

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   2. 

      djadams

      September 15, 2015

      The tax break for owner occupiers does not exist in Australia as far as I am aware

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   3. 

      borganstein

      July 12, 2018

      Haha that makes me want to call that firm.

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2. 

   pupp3tmast3r

   September 14, 2015

   tldr: Joe Hockey said to get a better paying job.

   Edit: Worth noting if you do the math that buying home isn’t always cheaper than renting; it depends entirely on the location of your property and the difference between your rent and your interest payments. E.g. Buying a property in sydney is actually inadvisable at current rates because the interest payments in a low interest rate environment are almost equal to the rent you would expect to pay on the property.

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   1. 

      dman

      September 14, 2015

      Sure, weekly expenses (mortgage repayments vs rent) may be more expensive if you buy a place. But note the infographic says it’s cheaper in the long term. If you buy a property and sell it later, chances are you would’ve built up some equity and will be able to sell the place for more than what you paid for it. Whereas rent money is just money you’ll never see again.

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      1. 

         pupp3tmast3r

         September 14, 2015

         Any investment out there should grow equity over time; the degree by which it grows varies from asset classes. Presently a lot of property investors are actually gambling as opposed to investing; they’re picking properties where interest payments are covered by rent and they’re willing to cover the holding costs in the hopes that when they sell the capital growth makes up for the holding costs.

         Obviously this varies from property to property which is why it’s worth doing the math before picking up those terms as facts which are usually thrown around by property spruikers. As a general rule of thumb if you get a good property with decent rent and the interest payments you are likely to pay on a mortgage (depending on how long you have the mortgage) are considerably greater you probably want to do a bit more digging before purchasing the property.

         FYI every asset class generates equity in the long term; averaged over 50 years the returns from the stock market and the property market are actually more/less equal (bear in mind all this only applies for investment properties; owner occupiers come with emotional wellbeing/security and trying to justify your own home as an investment is like trying to saying you got married because you expected dividends). But from a purely mathematical point of view it makes 0 sense to pay down any property that is leveraged if you expect it to grow in capital.

         For what it’s worth I’ve spent a lot of time looking at properties vs the stock market and doing the figures; it really does come down to the asset you choose (e.g. if you invested in say Bank of Queensland over CBA don’t be surprised you don’t get the same steady return; same applies to property). The rest of the stuff is just fluff people like to quote as fact.

         Edit: For those interested here’s a really good article I looked at when I first started looking into the two markets; platinum is a managed fund so they do have a vested interest in the market however they do raise some good points to bear in mind if you decide to to start breaking down/researching the fundamentals that make up property investing! https://www.platinum.com.au/Journal/Fundamentals-of-Investing/Property-Investing/

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      2. 

         spadge

         September 14, 2015

         Note that puppermaster was comparing rent to interest, not to mortgage repayments – interest is dead money as well. If you can rent for less that the interest on a mortgage, you’re free to invest what would be the principal repayment in whatever you want which, depending on your preference, may be more or less risky with a worse or better rate of return.

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         1. 

            pupp3tmast3r

            September 14, 2015

            This =] It comes down to a question of opportunity cost; are you locking away capital that could be better utilized elsewhere and still obtain the same level of return on investment you currently do from your property?

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            1. 

               adamor

               September 15, 2015

               tHANKS HEAPS GUYS!

               My uncle has been saying something along these lines but you two gents just cleared it up.

               He rents the house he lives in and invests smaller amounts of money into projects, vineyards etc. ALthough he is an accountant and I imagine he would have the inside scoop on whats good to invest in :S

3. 

   askvictor

   September 14, 2015

   Seems to me that infographics have become another advertising mechanism (like surveys in the past few years) for parties with something to gain.

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4. 

   juice

   September 14, 2015

   “Mortgage interest can be deducted from your tax obligations?”

   Gee, who said you can’t trust lawyers? This is pretty basic stuff.

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5. 

   rethilgore

   September 15, 2015

   Step 1) Don’t be an Australian on an average income in Australia
   Step 2) ???
   Step 3) Profit

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6. 

   rickinoz

   September 15, 2015

   Most important … get a property inspection during the cooling off period. This can be no more than 48hrs so it’s worth having your preferred inspector ready to go when going into purchase negotiations.

   And make it clear that final sign-off will be dependent on that inspection. This is fairly standard so the real estate agent shouldn’t grumble.

   This is crucial to ensure you won’t wind up with a lemon that has major structural issues. Optional when buying a new build, but essential for anything beyond a couple of decades old or in an area prone to subsidence/damp/termites/etc.

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   1. 

      husky

      September 16, 2015

      Or just buy the house pending Pest and building inspection and finance. tThen you can have 2 weeks (We pushed to 3) to organize an inspection and back out if there are any major structural defects. That’s what I did last year.

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7. 

   husky

   September 16, 2015

   Don’t wait until you have 20%, some places will let you buy with as little as 5%. yes you’ll have to pay mortgage insurance, but you save long term as you aren’t paying rent, which is dead money.

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8. 

   nathandavidson

   October 2, 2015

   Buying a house can be more than finding your own space for storage and living. And it boils down to your finances I think! Make sure you do your calculations before you even think about looking for a house on the market!

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