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.

2 comments:

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.