Preacher Posted February 27, 2008 Report Share Posted February 27, 2008 (edited) For everyone who thinks that housing is so expensive in Australia, I would like to help you run a more accurate comparison between South Africa and Australia. One of the biggest mistakes people make is that they often compare the purchase price of houses, not the total cost of ownership on their home. Most people have to take a bond on their house, and the interest repayments make your home more expensive to own.Lets use the current average house price of R1 Million in South Africa, which is the average according to the latest FNB survey. At the current interest rate, you are looking at a bond repayment of about R12 800 per month. Taken over 20 years, your total payment would amount to just over R3 Million. So that million rand house you bought has cost you three times as much in the long run. Lets use the average Australian house price of $400 000 (Sydney is higher, Brisbane lower)At an interest rate of 9% over a period of 20 years, your total cost of ownership is about $865 000. Bear in mind that his is a conservative rate, as better rates can be negotiated, even as first time buyers. When you look at home ownership as a percentage of income, there is almost no difference in what you are paying to own your home in SA and what you are paying in Australia, simply because of the lower interest rates in Australia. Calculator to work out bond payments in Aus - http://www.mortgagechoice.com.au/calculators.aspx?id=4240Am I saying that property in Australia is dirt cheap? Of course not. Any first world country you go to, property is expensive. Its the same in the USA and UK. Hell, most third world countries, its expensive to own property. The point I am trying to make is that the days of South Africa providing cheap affordable homes to middle class south africans are over. Sky high prices, coupled with high interest rates, makes owning your own home very expensive indeed, and no much cheaper then most countries when you start to earn local currency and pay local interest rates. Edited February 27, 2008 by Preacher Quote Link to comment Share on other sites More sharing options...
Overtaker Posted February 27, 2008 Report Share Posted February 27, 2008 maybe... or maybe not... Having looked around, the house you get for $400k is about half as big as the house you get for R1mil... and costs twice as much... In my research over the last few days, for me to get an equivalent house to the R1.2 one I had in RSA (and sold for R970k), I need to spend about $750 to $1mil. So in my mind, houseing costs about 6 to 7 x more here than back in RSA...Even if you take in RSA a R1mil house actually costs R3mil. Here a $400k house costs $865k, which is R6mil - ie housing is double the cost in RSA for something half the size... (oh, yes, I'd already said that)...It looks like I will pay 10% more of my salary towards a $460k house than I was in RSA towards a 1.2mil house.Unless you live out in the sticks, and admittedly, I am comparing a house in Kimberley to one in Perth, which is not fair, though sadly for me this is my reality, and housing is a LOT more expensive here. Quote Link to comment Share on other sites More sharing options...
Preacher Posted February 27, 2008 Author Report Share Posted February 27, 2008 I can imagine that in Kimberly, a million rand would buy a decent four bedroom home on a decent 1000sqm property. You probably have a garden dont you? All due respect, but Kimberly is in the sticks. Its hardly a metropolis, and property is much cheaper. You get more for your money in Kimberly then say, Pretoria. You need to make the same allowances for any country that you emmigrate to. You want to know what you get for a Million bucks in Gauteng these days? A 3 bedroom townhouse, or a cluster as we prefer to call them. Maybe 180SQM - 200sqm home if you are lucky. Enough space for a small splash pool where the neighbour can watch your wife sun tanning in her bikini. You cant buy an old school house on a quater acre of property for under 2.5 million in a decent area anymore. Those days are over. What about Cape Town? Anyone want to tell us what you get for a million bucks in Cape Town now?Property in SA is not cheap. Its comparable to property the world over. Throw in our interest rates, along with high inflation, and home ownership is no longer cheap. Quote Link to comment Share on other sites More sharing options...
Oryx Posted February 27, 2008 Report Share Posted February 27, 2008 Where in Cape Town would that be? Nothing in the waterfront. And in Stellenbosch a nice two bedroomed flat. And in Pearl Vally golf estate you will have to fork out R3m plus for land only. And in Val de Vie polo estate you might get a plot for R1m if you are lucky. Quote Link to comment Share on other sites More sharing options...
Alibaba Posted February 27, 2008 Report Share Posted February 27, 2008 We are from Bloemfontein and a 3 bedroom, 2 bathroom townhouse in our suburb will go for >R850 000 to R1 mil. We have looked at buying a 4 bedroom house about 1-1.5 years ago (we have a 3-bedroom, 2 bathroom house with a study, but the rooms are very small), and we looked in the same suburb where we live now and everything was R1.4 mil and up. Should we have bought that our bond payment would have been at least double of what we pay now as we bought 6 years ago. We live in a middle class suburb, not the more expensive ones. Housing has become extremely expensive in SA and salaries are not keeping up. What I do think is that one should stop comparing countries, you cannot make a direct comparison by means of conversion of Aus dollars to Rands (or any currency for that matter). In a European city an average house is the size of a townhouse over here. One of my colleagues in Paris, France lives in a 74 square meter apartment with her partner and baby, no garden, no garage. Are they poorer or worse off than we are? I don't think so, it is just a different way of living and what they are used to.Rememer, all of us on this forum go to Aus for a "better" life. None of us are doing it for the money, so if you have to give a little in terms of smaller housing, so be it. It is after all only a house! No use having a big house you are being locked up in, being robbed every now and again, being highjacked, your wife perhaps raped, one of the events costing someone in your family their lives.The costs of things will surely take a long time to get used to, but if one keeps on comparing everything to SA you will get mad. There are cheaper things in Aus than in SA too....think saving on security, etc. So, even if your house is more expensive, you save on other things, so it equals out. Also take into account if you were to sell your house in SA, which you owned for say 5 years or more to move to another city and you want to buy the same house you will pay more for that same house than you currently do.Be realistic when comparing things and remember what things are like here in SA at the moment. You use a lot of money getting to Aus too. Remember Rome wasn't built in one day and you should gradually built it up again and make wise choices when spending your money. Everything is about choices at the end of the day. The new expensive car vs the more affordable second hand car, private vs public schooling, shopping for clothes at upmarket boutiques or going for the cheaper type stores. You make the choice on how you spend your money and only you are accountable for it.We are choosing for me to stay home for a while when we move to Aus, so this is probably the last month that I'll be earning an income, so if finances are going to be tight, we can either cut on expenses, if at all possible, if not I can choose to work again and pay (expensive) daycare, perhaps bringing a bit home each month. So, if I can't spend money like I am used to, I cannot blame Aus and the cost of living, it was the choice we made for me not to work to spend more time with my child. Quote Link to comment Share on other sites More sharing options...
dixie Posted February 28, 2008 Report Share Posted February 28, 2008 I agree with alibaba,A town house that we bought 6 years ago for R255000, we sold last year for R900 000. and that is after they neg. a lower price before the credit act came into play.Sad thing is that this 134 square mete house is about the average for a young family nowdays.We were fortunate enough to build a house in a very good area, at that stage it was cheaper to build than buy.A year after completion we can have a asking price R400 000 more than we paid for it.House prices are going through the roof. I have no idea how young people just starting out will be able to buy their first home without some help from family.I know once we get to Oz we will have to settle on a smaller house, but if I can be safe and at home with the kids, that will be a tiny thing to give up.I may have a large house now, but It is a jail. Electric fence Beams in the garden, alarm, big dogs Trellis gates inside the house, armed responseMakes you think, is the fancy house worth it. Yes we worked very hard to have what we do, none of it came as gifts. But is it worth being a target.?Rather live with less and be free. Quote Link to comment Share on other sites More sharing options...
Guest natalie3 Posted March 1, 2008 Report Share Posted March 1, 2008 I also konw it will be many years before i live in the same standard of house i have here in SA..My house is brand new (it was rebuilt after a very severe fire 2 years ago)..and we built it just the way we wanted...all the fancy finishing touches you could wish for...330 sqm....pool ..jacuzzi......but im giving it up for a new life in oz...i cant wait to sit on my stoep and not be scared that im going to end up with a gun in my face while im having as glass of wine.....................even if it is a smaller stoep Quote Link to comment Share on other sites More sharing options...
Nilo Posted March 1, 2008 Report Share Posted March 1, 2008 Nats you can still have a portable Jacuzzi been doing research $5500 for a rather good one!! And..... this is the best, without the water you just put it on a dolly (a trolly with wheels) and take it to your next home, no worries!! It's got everything, heater pump motor etc etc and it looks great too!!!So you can sit on your stoep in your Spa sipping a wine having a chat AND feel safe!!! Wooohooo!!! Quote Link to comment Share on other sites More sharing options...
Guest natalie3 Posted March 2, 2008 Report Share Posted March 2, 2008 Nats you can still have a portable Jacuzzi been doing research $5500 for a rather good one!! And..... this is the best, without the water you just put it on a dolly (a trolly with wheels) and take it to your next home, no worries!! It's got everything, heater pump motor etc etc and it looks great too!!!So you can sit on your stoep in your Spa sipping a wine having a chat AND feel safe!!! Wooohooo!!!Nilo...sorry.."u edel agbare" (u being the first citizen u deserve the title dol!!)Thats lekker expensive..but ill definitely look into it when i eventually land in oz...ive been making a list of what ill miss from life in SA and a list for reasons to go and reasons to stay..and the jacuzzi is on the "i will miss list"My reasons to go list has around 22 reasons on it....reasons to stay list :2 Quote Link to comment Share on other sites More sharing options...
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