Are the good times over ?

[buggerlugs]

Just heard that Austar and Foxtel customers cancelling subscriptions in their droves, due to tight finances, Oil just hit $140.00 a barrel and expected to get to $170.00 very shortly. Business's quitened down dramatically since early May. Are the good times over ?

[Racecraft]

The 'boom' is slowing. Interest rates, fuel and the general cost of living mean the belt has to come in a notch.

The problem I have with it all is lifestyle. While things are a little harder, how many people were living on the razors edge? People were obviously living outside their means. While I am comfortable a few of my friends that have car loans and home loans seem to be hurting the most. Where is the duty of care from financial institutions?? Obviously theses people should not have got approvals for so much money. Banks etc seem to be in the business of making money out of foreclosing on people, a set back that hurts for the next 10 years if they are lucky.

[Ringo]

Yeah the times are a changing.

I work in a business to business sales environment and 2008 has been a big change from 2007 and this year we are about 1/3 behind targets. There has already been some internal restructuring because of it. Basically our experience is mirroring that of the retail sector. Business at the moment is very wary of borrowing money or any type of financial commitment..

I have friends who bought their first house 18 months ago. They are in debt up to the eyeballs now after buying nearly $10k worth of furniture on credit from H-Norman to go into their new house. They justify it by saying that they will not be going out as much as they used to so will save money to pay the loans but they have no margin for error, not plan b or safety net. If something happens to them (retrenchment, illness , pregnant etc) I think they will be stuffed. I worry about them actually, and despite what I have just posted they are actually prety smart people....they just got suck into having their parents lifestyle in their late 20's early 30's....

[InfernoSR]

Why is it so many people want the $500k house and life style instead of living comfortably in a $150k house that they can actually afford?

Buying houses at this time is only going to cost you more... as the economy is already sliding down hill very quickly and an economic slump is already becoming reality... welcome to the 21st century and a Labour Government... (yes, they are already borrowing over sea's money...)

[Bossxr8]

Originally Posted by BLUEPRINT

Buying houses at this time is only going to cost you more... as the economy is already sliding down hill very quickly and an economic slump is already becoming reality... welcome to the 21st century and a Labour Government... (yes, they are already borrowing over sea's money...)

So Labour has caused all this after 6 months in government. Thats just bloody ridiculous. 11 years of the previous government sets up whatever is happening now and Labour have to try to clean it up. :

[Powdered Toast Man]

Originally Posted by BLUEPRINT

Why is it so many people want the $500k house and life style instead of living comfortably in a $150k house that they can actually afford?

Buying houses at this time is only going to cost you more... as the economy is already sliding down hill very quickly and an economic slump is already becoming reality... welcome to the 21st century and a Labour Government... (yes, they are already borrowing over sea's money...)

Where's this 150K house???? I agree about people buying above their means but the days of housing below $200K are pretty much gone unless you want to live in the middle of nowhere unfortunately.

And come on mate, the economic downturn has nothing to do with Labour, it was forcast while the Liberals were still in power. Actually if you want to be petty you can say it's Liberals fault because the economy was so strong internationally while they were in power it caused the inevevitable downturn.
(I'm not necessarily saying that and definitely not turning this thread political, that will end up in it's closure : )

[XR06T]

i think as racecraft has said, the buckle has been tightened a notch. i am still ok while on a modest wage, but i would hate to think what me and the gf would have to live like on one wage. i mean 100k combined, and its not like we can afford luxuries (holidays, home theatre etc). that is getting us by at the moment, we wouldn't be able to live on less than 80k/year i rekon, which is a big sum for an individual!

[InfernoSR]

Ok... i dont want this going off topic to far with political garbage... but i will make a couple of valid points inwhich to consider as part of my debate... but please dont take it as if i am an ignorant liberalite... cause i'm not a fan of then either...

1. Last time Labour was in goverment, my parents were paying interest rates around the 18% mark...

2. last time Labour was in goverment, we all were in National Debt due to overseas lending...

There are some other valid points, but i've had enough atm...

As for $150k houses... yes they exsist... even here in Bathurst... I've seen 3 bedroom houses that are in resonably good nick atm for $120k...

I for one am unsettled with the near future and our economical struggle... It worries me with what a future family of mine will need to go through... and i can only hope its not what my parents went through 12+ years ago...

[XYGTHO]

Yes it worries me alot to. I bought my first house about 9months ago. Cheapest i could find that had what i required and nothing much to be spent on it. I had worked 7days a week for afair few years saving a deposit (although most miers would make the amount in a coupla months). I am quite comfortable, but in saying that i ride my bike to work. Buy no brand food and the minimum to get by, don't hardly go out and unfortunately don't have much to spend on cars. But i'm happy. I have interest rates fixed for 3years, but i'm worried when that period is over what my repayments will be as i don't think my wage is going to go up much due to what is happening with the economy. I am in a vital role in my employment i feel but can't help but worry being put off in the future if it gets bad.

[SB076]

Originally Posted by XYGTHO

Yes it worries me alot to. I bought my first house about 9months ago. Cheapest i could find that had what i required and nothing much to be spent on it. I had worked 7days a week for afair few years saving a deposit (although most miers would make the amount in a coupla months). I am quite comfortable, but in saying that i ride my bike to work. Buy no brand food and the minimum to get by, don't hardly go out and unfortunately don't have much to spend on cars. But i'm happy. I have interest rates fixed for 3years, but i'm worried when that period is over what my repayments will be as i don't think my wage is going to go up much due to what is happening with the economy. I am in a vital role in my employment i feel but can't help but worry being put off in the future if it gets bad.

I wouldnt be too worried about interest rates going up, if anything and if the boom time is over, we will see rates drop (like in the US) as the government attempts to stop/stall a recession. Unfortunately just like in the US it doesnt always work. This is alll IMHO, nobody really knows what will happen in three years

[Powdered Toast Man]

Originally Posted by BLUEPRINT

As for $150k houses... yes they exsist... even here in Bathurst... I've seen 3 bedroom houses that are in resonably good nick atm for $120k...

Like I said, the middle of nowhere :

But seriously, it's frustrating the hell out of me as I want to buy but it's just not an option for a single person on a medium income unless I have no other expenses apart from food and bills. And I live almost out in the sticks myself, about an hour south east of Melbourne.

Business at my work has definitely quitened down. But since we make earthmoving attachments we were also enjoying the housing and construction booms which have now dramatically slowed. Knew it was coming though and I'm not overly worried, I'm not gonna starve or anything (yet).

[ebxr8240]

I would rather pay 18 % on $80k house than $350,000+ ..Which people have been borrowing for if not more.. In Sydney area to Penrith you would be hard pressed to buy any nice brick veneer under $ 280,000 and that would be a very basic house..
MOST people who have fallen into financial trouble have car loans and credit card issues... You cannot blame the gov for that!! They are in denial if they are...

[XYGTHO]

well i hope interest rates come down abit.

[FlipXW]

Originally Posted by ebxr8240

MOST people who have fallen into financial trouble have car loans and credit card issues... You cannot blame the gov for that!! They are in denial if they are...

Thats why no one in my family has one. They give you the temptation to spend. The way I see it, If you dont have the money you go without. Or save untill you have enough. Iv'e seen far to many people get into trouble with credit cards. Although it is a pain not having one for stuff like airplane tickets, sporting events and concert tickets.

[XYGTHO]

Originally Posted by PhilXR8

Thats why no one in my family has one. They give you the temptation to spend. The way I see it, If you dont have the money you go without. Or save untill you have enough. Iv'e seen far to many people get into trouble with credit cards. Although it is a pain not having one for stuff like airplane tickets, sporting events and concert tickets.

Yes somepeople are better off without them. I only use mine to pay bills over the internet or as you said flights etc. But usually just to pay electricity, rego etc. If you use them right there great. I only give myself bugger all really on my eftpos card also so i only have a very limited amount i can spend and i just haven't even thought about using the credit card. If i don't need it i don't get it, if i want it and can't afford it i either still don't get it or save untill i have the money.

[InfernoSR]

Originally Posted by Powdered Toast Man

Like I said, the middle of nowhere :

But seriously, it's frustrating the hell out of me as I want to buy but it's just not an option for a single person on a medium income unless I have no other expenses apart from food and bills. And I live almost out in the sticks myself, about an hour south east of Melbourne.

Business at my work has definitely quitened down. But since we make earthmoving attachments we were also enjoying the housing and construction booms which have now dramatically slowed. Knew it was coming though and I'm not overly worried, I'm not gonna starve or anything (yet).

Would it have been easier if i mentioned that I live not far from THE Mount Panorama?

Everything else you have mentioned is the same as me... except change earth moving to equipment handling and location from Melbourne to Mount Panorama (Bathurst)... So i understand all to well what you mean... :

[Rodp]

Originally Posted by PhilXR8

Thats why no one in my family has one. They give you the temptation to spend. The way I see it, If you dont have the money you go without. Or save untill you have enough. Iv'e seen far to many people get into trouble with credit cards. Although it is a pain not having one for stuff like airplane tickets, sporting events and concert tickets.

My credit card doesn't give me the temptation to spend, it'll save me years of interest off my home loan as well.

(...and not necessarily directed at your post...)

Too many people went in too deep with large homes. I took out a $200k loan 5 years ago and made sure that under my current income, if interest rates went up 6% it still wouldn't impact my standard of living. I'm currently $50k ahead.

Interest free loans with no repayments until 2010 also made too many people googly eyed and buying up large on widescreen TV's and furniture which they won't pay a cent on till 2010 and all of a sudden be stuck paying 22% on close to the full amount.

Lenders aren't to blame, there's no duty of care provided there's enough collateral to cover the loan. Borrowers need to look at the root cause of why they're in financial strife, their own poor planning.

[mik]

i dont think the good times are over, maybe on hold for a while, it seems to go in cycles, its more about the population not being educated enough to put away for a rainy day, and being lulled into a false sense of security by politicians that tell us we`ve never had it so good, ........and banks who give out money like there is no tommorow, the oldeys creedo if you can`t pay cash for it you don`t want it is sadly lost, australia`s credit debt has for the last 10 years NEVER been higher.
written and spoken by an old fart

[ebxr8240]

Its o/k to borrow. Borrow on things that appreciate like real estate..
Example I bought an investent property 15 years ago for $130k
Its worth over $350k now...
If you borrow on interest free!! Then PAY IT OFF during interest free period !!
These loans are often NOT reducable so you PAY interest on FULL amount you borrowed.. Even if you have $200 to pay off in total..

[flappist]

Here is a thought for you. No one has ever won an election in Australia. We always vote out the old one.

In the last decade or so things have been great and there was lots money about. Credit went bezerk and you could have as much stuff as you like on the never never.

Just look how many twenty something year olds on here have a GT/F6/XR with a squillion dollars of mods on a 7 year payment plan, a giant plasma, bluray, doof doof and gollywog phone on 4000 months interest free from hardly normal, and drink crownies and wear "name brand".

There is a limit to how much anyone can hock up before they drown and as this happens retail sales slow, interest rates go up and it all goes splat.

We blame everyone but ourselves, vote out the ones who made the economy bubble leaving the mess for the ones that can't fix it.

Eventually it will fix itself and the cycle will start again.

Of course there will be lots of very cheap second hand HSVs, FPVs, Euro rockets etc and lots of people with crap credit ratings driving lasers abd telling everyone about "the car they had before other people/banks/the government/labor/liberal/santa claus wrecked their lives".

This is the third one of these I have been in since I started my own business. It will be no different to the other two......

[buggerlugs]

Forget the credit card. Get a debit card. You can still pay all your bills or book flights etc. Its exactly the same as a credit card except you use YOUR money and there are no fees. I remember during the election campaign , I think it was Laurie Oaks who said, " It doesnt matter who wins the election, whoever does will be handed a poison chalice" re the economy........so I think whether the Libs won or Labour won , I think we were always going to be in a downturn due to the Global enviroment.........

[XYGTHO]

Originally Posted by buggerlugs

I remember during the election campaign , I think it was Laurie Oaks who said, " It doesnt matter who wins the election, whoever does will be handed a poison chalice" re the economy........so I think whether the Libs won or Labour won , I think we were always going to be in a downturn due to the Global enviroment.........

Well said.

[rodderz]

Get used to changes. Next week from July 1, everything will go up. Groceries, materials, the lot.

Today I learned that steel prices are going up 20-30% (thats a heap!), with the fuel costs added on, everything you can imagine goes up in price. The steel prices are due to India and China hogging supplies for development, but still, it adds to the pain over here

[DJM83]

I have just moved from rural NSW (Albury) to Brisbane, home ownership was in my league down there but up here i havnt got a hope. opefully when i pay off my car i might be able to buy a townhouse. But yes the good times are over IMO have to tighten the belt but i dont live outside my wage anyway

[prydey]

Originally Posted by BLUEPRINT

1. Last time Labour was in goverment, my parents were paying interest rates around the 18% mark...

.

this is the same propoganda the liberals wanted everyone to see. it paints a false picture though as its not the whole story.

have a look at the repayments then compared to now as a percentage of your income and you will find that even though interest rates were 18% when labour were last in, the repayments were a lot smaller percentage of your income as the housing was reasonably affordable. 18% on 50K is a lot better than 9.5%on 400k.

just for the record, i'm neither liberal or labor fan.

[Green X]

The gravy boat has been hit by a torpedo and sunk LOL

[Rodp]

Originally Posted by buggerlugs

Forget the credit card. Get a debit card. You can still pay all your bills or book flights etc. Its exactly the same as a credit card except you use YOUR money and there are no fees.

I'd prefer to use the banks money and have my own offsetting interest in my home loan. The few dollars in fees doesn't make up for the tens of thousands I'm saving in interest.

[ZA-289]

Originally Posted by Rodp

I'd prefer to use the banks money and have my own offsetting interest in my home loan. The few dollars in fees doesn't make up for the tens of thousands I'm saving in interest.

Tis a good point, if you have $5000 savings, putting it on the loan means you are earning/saving 8.whatever percent on $5000.

the good times may be over for a few years maybe longer, we are doing ok atm, 2 incomes/ 1 morgage / no car loans but when when we have kids its gonna be real hard on just my income.

Were not looking forward to it. 40k is not even a half decent income anymore.

[Powdered Toast Man]

Originally Posted by BLUEPRINT

Would it have been easier if i mentioned that I live not far from THE Mount Panorama?

Everything else you have mentioned is the same as me... except change earth moving to equipment handling and location from Melbourne to Mount Panorama (Bathurst)... So i understand all to well what you mean... :

I know where Bathurst is, that was my point lol.

I imagine you would be at the "Mountain" every year living there. I will make the pilgrimage myself one day.

Rodderz, I had heard rumors of up to 50% increases in the price of steel so 20-30% is good compared to that.

[Yellow_Festiva]

The good times are almost over I think. Will finalise my decision towards the end of the year.

I actually agree with Flappist on this one. People generally want the best of everything far to quickly these days.

I work with people who make very good money, still live at home with the parents yet come time to buy a $15 grand car they are off to the bank to borrow 90% of it...

I really think you should run your life like a business, I do, and have no regrets. See what money you have coming in, see what would generally go out over the course of a month, plan for a rainy day or week, plan for a family emergency, plan for rate rises etc.

How many people live payslip by payslip? Although I'm only young, I like some of the valuable lessons those older than me told me about.

Like starting small, roughing it for a while when times are good, and then being able to survive the bad times should they pop up out of the blue.

Buy what you can afford, not what you want here and now... credit can be good, and a tax deductable expense, but borrowing for things that won't make you live longer etc is just stupid.

Ask your parents what they did when they were teenagers and young adults. Sure, those times are long gone, but the lessons behind them are valid to this day, perhaps more so.

Take control of your own life, be proactive rather than reactive. Sacrifice every now and again, rough it once in a while, be willing to work harder than the person next to you and you will be in a far better position to weather the downturn.

For those who are starting to hurt, act now. Over act even. It may just save you in the long run...