Student buys first home for $1.094mill

[i-need-a-martini]

Not sure about other states but Sydney house prices have gone a little crazy in the last year and a bit.

Last weeks paper said that the average house was now $740,000. I am seeing it around me -  a dump of a house down the street sold for $1.1mill last week. The guy only bought it 5 months ago for $949,000. And this isn't exactly a swish neighbourhood.

But how does a student afford the repayments on a house over a mill??

http://smh.domain.com.au/real-estate-news/milliondollar-first-home-20131026-2w8ch.html

[cherry*135]

Can you do that crystalg. .... if the person living in the house is a close relative/has a relationship with the owners of the house?

The parents said if they didn't buy the house, they would be paying her rent, so they might as well buy a house and pay off the mortgage instead of paying dead money on rent.

[cherry*135]

EXAMPLE 7: Renting to a family member
Mr and Mrs Hitchman were charging their previous
Queensland tenants the normal commercial rate of rent
($180 per week).

They allowed their son, Tim, to live in
the property at a nominal rent of $40 per week. Tim lived
in the property for four weeks. When he moved out, the
Hitchmans advertised for tenants.

Although Tim was paying rent to the Hitchmans, the
arrangement was not based on normal commercial
rates. As a result, the Hitchmans cannot claim a
deduction for the total rental property expenses for
the period Tim was living in the property. Generally, a
deduction can be claimed for rental property expenses
up to the amount of rental income received from this
type of non-commercial arrangement.

Assuming that during the four weeks of Tim’s residence
the Hitchmans incurred rental expenses of more than
$160, these deductions would be limited to $160 in total
($40 multiplied by 4 weeks).

If Tim had been living in the house rent free, the
Hitchmans would not have been able to claim any
deductions for the time he was living in the property.

ATO

[i-need-a-martini]

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@cosmosgrove wrote:

I can't fathom how anyone can afford the repayments on a million dollar house, do city wages really pay that well?

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I think it's a Sydney/Melbourne city thing.

When we sold our last house 5 years ago we had some friends here from Adelaide (who live in a decent part of Ad.) and they were stunned at how high the bids were going at. They couldn't fathom how you could repay the mortgage.

BUt I'm not sure what the difference is. Wages are vaguely the same. Sydney people still have money for the same things people from Adelaide enjoy etc. Is it simply that people in other states pay their mortgages off more quickly?