Monday, July 27, 2009

OK, I Exaggerated a Little...

When I wrote in yesterday's post that I'd need to have enough cash to buy a house to be happy to do so if my income was very uncertain. On a single slightly above average salary it's a bit of a stretch to afford to pay rent and live a nice lifestyle here for two people. At least we found that to be the case until I started my current job. You have to be reasonably frugal. Forget international travel and the like (remember our parents and most other relatives all live in the neighboring large continent). Paying a typical mortgage is out of the question. To get your housing costs down to the same level as paying rent you need to put down a downpayment of 50% approximately. So you do need $A250k for that purpose and after that you're living paycheck to paycheck more or less. So I don't really think this is still a very wise financial decision.

Of course if you have secure employment consisting of either two average salaries at least or one salary at twice the mean (say a full professor) then you can go for homeownership without too much concern. It might not be good economics, but if that's what you want to do you can. I'd still put down the traditional 20% and have cash reserves for repairs etc.

Houses are really expensive in major cities in Australia.

No comments: