🤔🏠 ONE-MINUTE READING: What Type of #property Would Your Children Buy? Let’s face it, property price keeps going up way more than our salary would be. I mean, if you can get a 10%/year increase in salary, that’s already super incredible. I’m yet to think of a company that can increase your salary by 10% year after year. And yet, when market rises, property price can go up by 20%+/year. So…. when my now-5 year old becomes a 20-year old some time in the near future, I wonder how much property price would be and how much income he would bring. I hope he can go on an entrepreneurship journey and able to earn himself the big buck. Otherwise, if he has to rely on becoming an employee like the majority of us, I wonder what kind of property he would buy.
It seems, the dream of owning a “good size #house, ready-to-move-in, has backyard big enough to invite friends and families along” move further and further away. I mean, a 450sqm land in an outer suburb is already selling at $400k-$500k easily in 2025. To build a standard 4×2 at 50% size-land capacity (225sqm) will cost us shell-only $2200-$2500/sqm. So, the shell alone will cost $500,000. Add site works, holding cost, stamp duty, etc…. before you know it, a standard 4×2 + theater in an outer suburb will hit $1m.
Say, my boy is able to save $200k deposit. With $800k loan at 6%, that’s $48,000/year (or $4000/month) just on interest alone! If you add the principal payment in it, that would be around $4800/month.
An income of $150,000 will bring in about $109,000 net income (post tax). That’s about $9083/month net. The repayments alone is 52.8% of his salary…that’s madness! On top of it he’ll have his day-to-day expenses (groceries, utilities, council rate, water rate, etc etc etc).
If his spouse/partner is also earning another $150,000, then it will not be as bad. But remember, we’re talking about a $1m house in an outer suburb! The closer-to-CBD he wants to go, the more expensive it would be.
Now, coming back to the original question. Will our children (unless helped by us parents) settle with smaller but cheaper properties? I went to Singapore and this was the case with majority of people can only afford an apartment.
He has no choice but to have skills that can earn him the big bucks. And with the coming of #AI, I wonder what jobs can earn him the big bucks when most things will already be automated and replaced by. Thoughts? #buyersagent
