Friday, April 24, 2009

Bricks and Slaughter for First Home Buyers? My arse...

Maybe I am a little biased as both an investor and a first home buyer, but Jessica Irvine's comments in the Sydney Morning Herald Yesterday really made my blood boil.

"Last time I checked, a mortgage holder with a $300,000 mortgage pays $1400 a month in interest payments straight to the pockets of those same banking chiefs we all say we despise. Hate them, but you're paying their salary."

This, among other things, was part of an attack on Mr Rudd's government for encouraging activity in an otherwise flat/receding economy by helping First Home Buyers to get into the market with the First Home Owners Grant Boost.

Let me tell you something, Ms Irvine: If we had not made the decision to take the plunge and buy, we wouldn't even have a roof over our heads. Not for $1400 per month. Not for any money (that we didn't have at that point anyway).

Rents had skyrocketed so high in the three years since we leased our last property that we simply could not afford to rent a property to house our family and our home businesses. Nor, with me out of work at that point, could we even persuade a landlord to give us a lease. With a five-month-old and my husband just started a new job on a new career-path, we were considered too much of a risk!

I would much prefer to pay $1400 per month for a suitable property in a slightly crappier suburb, than the $2000 per month we would have had to find (and our peers have had to find) by staying in the rental market.

For a start, it now officially costs less to be buying than renting for us. We can also do as we please with the property and tailor it to our needs. The renovations have reaped us several rewards, including an increase in property equity and the ability to leverage it into an investment property. And now that we have lived in it for more than six months, whenever we are ready we can move on and keep this one as an investment property on a rental return that will see it positively geared.

So sure, some prices may have gone up in the Sydney market, but it's certainly reinvigorated the dead and receding market in Western Sydney, and provided some, like us, with the fantastic opportunity to secure their financial futures!

Tuesday, April 21, 2009

So the banks really are ripping us blind!

Here it is, in writing (as if we didn't know it already). The banks are crying poor and refusing to pass on the rate cuts, all the while, raking in the extra profits from the poor suckers who fixed their rates at the height of the interest rate mess.

Yes, their profit margin has gone from 0.8% to 0.95% in the last year alone.

So guys, what's the problem? An extra 0.15% not good enough for you?