Wednesday, February 13, 2013

Things are Getting Serious

We went to see this house for the second time today. We took along a couple of friends/colleagues. One has some architecture background. They liked the house too. So, I just ordered an independent valuation. The standard way I value in houses here is to use the taxable value of the land and for a house in excellent condition $A2,000 per square metre. Using that this how comes in at $A775k. But houses seem to sell for more than that in this area. So, going into an auction I need a better sense of the fair price. Oh, yes, it's going to be auctioned in a few weeks time. I contacted the bank and they said I don't need to do anything else at the moment. The bank might accept the auction price or get their own valuation, it depends.


Financial Independence said...

It would be very chicky of a bank to put a different price tag.

I am curious about rationale buying a house? Are you betting on the property price rise?

Paying even interest even on $ 800 K at 4% is 32 K year. It is regardless whether it is your all banks money. Can you rent a smaller house at 2 K a month?

I do not understand the logic, apart from sentimental.

mOOm said...

Our current rent on our apartment is more than $2000 per month. My wife wants a garden. For a house in any kind of good condition that isn't a very long commute (I don't have a driving licence) the rent will be $700-800 per week. There isn't a bubble here in terms of house prices relative to rents. Both are high. You just have to accept what the cost of living is here. $800k is only slightly above 3 times our pre-tax income which is the usual rule of thumb for buying a house to live in. The median price for the metro area for a house is $550k. But a lot of those are either far out or run down and need a lot of investment to bring up to a decent quality.