Podcast: How to Deal With the Cost of Housing in Australia

Podcast: How to Deal With the Cost of Housing in Australia

Today were talking about the elephant in the room Aussie housing!

Specifically, how do we deal with our biggest lifestyle cost without ruining our plans for Financial Independence?

We get into a bunch of strategies to keep housing costs down while still living in a nice place.

Listen to the show:

(if you prefer, download the mp3 file here)

Topics covered

  • Renting versus buying
  • The huge freedom and flexibility of renting.
  • How damn expensive it is to move house as an owner
  • How we each approach housing and our plans going forward
  • Forced savings versus self-discipline
  • The LONG list of costs that most home owners seem to gloss over
  • Leverage and capital growth
  • Suburb arbitrage
  • How the tax/welfare system is skewed in favour of buying
  • How to optimise whether youre buying or renting
  • Why renting in affluent areas is actually good value
  • The insane amount of spare rooms Aussies have
  • Should you buy property with a small or large deposit?
  • And much more!

Resources and stuff mentioned:

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Do you have anything to add to this discussion? Let me know in the comments below

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17 Replies to “Podcast: How to Deal With the Cost of Housing in Australia”

Hi Pat and Dave, Enjoying hearing you guys go from strength to strength with each podcast, keep it up. We jumped in early with a high LVR loan and quickly got it down below 80%. We then re-mortgaged to a better lender with a lower interest rate, fees etc I also managed to cancel my Lenders Mortgage Insurance policy with the original lender, as we now owned more then 20% of the property. This resulted in a lovely little 4k reimbursement cheque in the mail from the insurer. It was a clunky process and the bank certainly werent promoting the idea, but it did work for us. Hope that helps anyone here in the same position. Cheers Luke

Hey Luke. Fantastic work, thanks for sharing! I wasnt even aware you could get a rebate on the LMI if the policy gets cancelled, thats great!

Thanks for sharing Luke. Its very helpful, especially for someone like me looking to buy with lower LVR.

Dave, keep going with your usual great posts. Thanks.

Hey guys, great stuff. You both just briefly mentioned avoiding LMI, Lenders Mortgage Insurance without expanding the reason why which I think would benefit a lot of listeners. Its easy to blow over stuff once you know it and I like podcasts that refuse to use acronyms (ie Woolworths stock not WOW) as it makes it easier to digest. I suspect most people would think insurance is good, until you explain that on an average house LMI it can be $5,000 to $10000 (plus Stamp duty on the LMI) that you pay TO INSURE THE BANK! You pay to insure someone else and you dont have any insurance protection. I kinda feel you skipped over this very basic fundamental.
Some good info here: https://www.homeloanexperts.com.au/lenders-mortgage-insurance/lmi-premium-rates/

Keep up the good work.

Ah yes well pointed out Travis we kind of assumed people knew what LMI was which probably isnt true at all! Thanks for that my bad!

Im enjoying your podcast lots of good info to consider. Just a suggestion, though could you please include in your topic list the time markers where you start talking about each topic? It would be really helpful if someone wants to go back and listen to a particular topic again.

Hey, thanks for the suggestion. That sounds like a good idea. Noticed some other people do it but I wasnt sure how important it is. Will look to implement that in future eps 🙂

I really enjoyed this one guys, a good in depth look at the pros and cons of renting and buying. Great work.

As with most other things, its really going to come down to your individual circumstances. We own our home for a number of different reasons including stability for ourselves and the kids, having a specific house design etc. But I totally understand that a younger person or couple without kids may be happier not being tied down to a location and a 20 year mortgage. Its about finding what works for you and your situation, and thats going to be different for everyone.

Cheers mate, glad you liked it!

Totally agree. I havent heard of ‘house design being a main reason for people owning before. Thats interesting what do you mean by that?

We wanted a bunch of extra rooms like a playroom, theatre room, and a home office. Which you dont typically get in a rental property. We also wanted a specific layout, so some rooms at one end of the house, other rooms at the other end, which made it even more difficult.

So renting a place was essentially out of the question, even if our desire for stability didnt rule it out anyway. Obviously all of this comes at a cost and we could FIRE earlier if we went for a smaller place, but thats a tradeoff we were willing to make.

Oh I see very nice! Even if you got those features in a rental, youd only have it for maybe 2-3 years lol. Makes perfect sense for you guys since you know youll live there a long while, can comfortably afford it and youll enjoy it much much more!

I have a mate who just built a house for a similar reason, he was very particular about the design. Havent thought about this aspect before, but its interesting because I often look at houses and think of all the wasted space, unnecessary extra rooms/nooks/walls etc. Maybe well build one day!

Do it, Dave building your own home is fun! And quite an education to boot. It was a common saying when I was a child that you have to build three times to get it right.

Haha! That puts me off more than anything too many decisions to make and stress around it not turning out like you hope Im not sold lol.

Soooo many decisions Dave! And a lot of them were along the lines of which of these 100 shades of white do you want for the walls? For the skirting boards? For the roof? For the doors? And on and on and on Oh and if you arent good at visually from a 5cm by 5cm patch what something might look like on an entire wall, then youre just going to have to guess.

Im very thankful that at least my wife and I were in agreement on pretty much everything so at least we didnt have the stress of arguing over any of the choices.

Ohhh jeez! That sounds like a nightmare, haha. The WA govt has offered a further $20k building bonus on top of the feds $25k, so weve actually become curious and started to browse blocks of land for sale. But the status quo of doing nothing will probably win out in the end lol.

Ha ha! I have a list of things that Id do differently if I build again, thats for sure!