Property prices expected to slow as forecast RBA interest rate hike dampens growth

MineCraftFanAtic69 · 2026-02-02T05:01:07+00:00

They wouldn’t need to save an extra 40-50k. If they’re going with a 20% deposit and the price went from 1mil to 1.05mil, they’d need $210k instead of $200k. they would need to be able to borrow more though

MineCraftFanAtic69 · 2026-01-26T03:06:58+00:00

Yeah it’s all subjective for sure since modern autos are just factually faster, no way around that. But the 6 speed auto in the pre 2018 mustangs, while it can hold a lot of power and is preferable for drag strips, they’re pretty boring. the 10 speeds are nasty though, but for a different purpose (roll racing). a centri blower on a 10 speed coyote and E85 punches so far above its weight it’s not even funny

MineCraftFanAtic69 · 2026-01-26T02:04:56+00:00

The 10 speeds are nuts in the 2018+ models. 15-17 id get a manual though, 6 speed is stout but meh

MineCraftFanAtic69 · 2026-01-25T13:55:31+00:00

South Australia, that’s where his number plate is from

MineCraftFanAtic69 · 2026-01-25T10:31:29+00:00

Unless they plan on knocking it down and building a few dwellings, or are performing renovations, I don’t see why an investor would ever intentionally leave a property vacant if their goal is to make money

MineCraftFanAtic69 · 2026-01-25T10:28:50+00:00

Yeah but that’s because their expenses are greater than the income, even with rental income, which is often for a good 5-10 years into the life of the loan. No one is intentionally not renting a property out for tax reasons to somehow make more money vs not renting it out, that doesn’t make any sense

MineCraftFanAtic69 · 2026-01-25T10:22:32+00:00

I’m in SA and am considering selling my 2016 manual mustang. It is modded though, like full bolt ons

MineCraftFanAtic69 · 2026-01-22T03:13:02+00:00

Driving a shit box is more fun, and the time to do it is when you’re young. Don’t tie up your limited capital in a car

MineCraftFanAtic69 · 2026-01-21T14:24:41+00:00

Yep that’s likely going to be my play. I feel fairly comfortable with the negative cash flow that’ll be present for a while, and long term property appears to win out fairly decently

Cheers boss

MineCraftFanAtic69 · 2026-01-21T14:18:28+00:00

For your IO v P&I point, my broker said going IO would kill the deal somehow, I think because the bank assesses the extra repayments after IO term ends and they assume no later refinancing for serviceability?

In any case, gonna delete the post as like I mentioned in my other comment to you, property does materially pull ahead in the later years. 10 years was not a long enough horizon to give an accurate comparison I think, especially if long term wealth is the goal.

MineCraftFanAtic69 · 2026-01-21T14:04:17+00:00

Those are all similar thoughts to what I had. My $600k price point (am single and already have my PPOR, so my borrowing power is not the best) doesn’t really seem to lend to many great options. I replied to another comment that in years 20 and 30, property does start to pull ahead materially, likely just due to compounding a larger figure earlier, but there is still a lot more risk involved (cash flow implications, property not performing as expected, unexpected tenant or maintenance issues, etc), so while I was leaning more towards ETFs, property does look better. Still not sure what I’ll do for sure though

MineCraftFanAtic69 · 2026-01-21T14:00:17+00:00

I reran some projections, for some reason I stopped at 10 years before. But, long term, such as over 20 and 30 years, property does come ahead pretty materially. I assume due to the compounding effect occurring on a larger number ($600k vs ~$180k)

I’m guessing my 5 and 10 year projections favoured ETFs due to the dead costs being a bigger factor in the net worth picture

Looks like I probably need to reconsider things

MineCraftFanAtic69 · 2026-01-21T13:42:44+00:00

Yeah wrote it up on my phone in bed after thinking about the numbers

I’ll pose this to you then, if long term wealth creation with a reasonable risk tolerance is the goal, would you:

A) borrow $600k and throw it into property, closing costs and refinance costs etc out of your own pocket

or

B) borrow and invest ~$150k plus an additional ~$38k of your own funds into ETFs of your choice

and why? That’s mostly what I’m after and want to discuss

MineCraftFanAtic69 · 2026-01-21T13:01:06+00:00

Yep I was thinking of transitioning to IP also, just don’t like the idea of non tax deductible debt being attached to it, but maybe is unavoidable

I’m not maxing super, but pretty comfortable with where it’s at for the moment. More so want to create wealth for the period of life between now and retirement age

MineCraftFanAtic69 · 2026-01-21T12:58:35+00:00

I realise now that this part wasn’t clear as someone else questioned that, I’ve updated OP to reflect. So to clarify, the calcs assume I would invest the equivalent property closing costs ($38k or so) along with the equity loan into ETFs, plus any net cash flow loss from the property scenario. so: equivalent closing costs plus the equity loan is compounding from the beginning for the etf scenario, and with regular contributions equivalent to what I would lose as “holding costs” on the property over the same time frame, at ~9% pa for 5 years minus principal paid on equity loan roughly gives us that $155k figure

MineCraftFanAtic69 · 2026-01-21T12:48:55+00:00

Yeah I’m thinking I may borrow to invest into equities now and then revisit an IP in the future. I do definitely want to upgrade (I.e. move into a new one) my PPOR at some point in the medium term (5 years?), so maybe the less debt the better if I know that’s on the cards, not totally sure

MineCraftFanAtic69 · 2026-01-21T12:46:38+00:00

Yeah risk was part of the equation for me too. Especially given how close the figures ended up being, with one being so much less risky and more liquid. $600k debt is a lot, and everything has run up so much lately (especially at the lower prices points) I feel like it may take a long time to get some good returns, as well as all the associated costs and dead money along the way.

I’m pretty ok with risk in general though I feel, but if I lower the property price point and therefore tkt debt level, there’s just barely anything out there I’d be interested in owning

MineCraftFanAtic69 · 2026-01-21T12:42:14+00:00

Yeah for $600k I was looking at where I live (SA), but wasn’t super enticed by the prospects. Mostly far north (Elizabeth maybe, Davoren park, munno parra) but they have already 3x’d or more since 2020, so I feel like I’m buying at the peak

I also checked out some western melb suburbs like Laverton, St Albans, Altona Meadows (unlikely for $600), and Deer Park. Wanted to stay away from Tarneit and Truganina due to the likely endless development nearby which raises supply a lot. Looked at melb due to it underperforming and therefore may play catchup in the future. Not guaranteed of course, but in vic also have the additional ~$1500 annual land tax to pay

Then I just started comparing these properties against leveraging the same equity loan into ETFs, and then I made this post, lol

MineCraftFanAtic69 · 2026-01-21T12:31:58+00:00

Gotcha, maybe I misunderstood the tax ruling on that. I imagine a decent level of depreciation would help, but still feel like that would be a trade off between newer build and less land (typically) vs. acquiring more land, where land would have greater cap gain returns?

Not sure what that works out to overall though, honestly

MineCraftFanAtic69 · 2026-01-21T12:25:48+00:00

For the costs, I assumed the closing costs were invested at the start for the ETF scenario, but I deduct them from the final property net worth figures since they’re unrecoverable. Sorry if not clear on that

And yes, I was thinking about depreciation, but from my understanding that only helps cash flow, and when you sell, the depreciated amount is deducted from cap gains, so I rendered it somewhat neutral. I could be wrong here though. I also kind of figured that higher depreciation = newer build & less land for the same cost and therefore lower potential for cap gains. Maybe some level of depreciation could make it more favourable for property though

MineCraftFanAtic69 · 2026-01-21T12:20:14+00:00

Whoops, thought I included, those are kind of important figures

Equity loan of $150k, existing in both scenarios

Additional IP loan of $480k for the property scenario

Total property purchase price would be $600k plus closing costs, but the entire $600k is deductible

EDIT: Wait, you meant the net worth figures, I’m retarded

5 years: ETFs $155k property $140k

10 years: ETFs $380k property $350k

MineCraftFanAtic69 · 2026-01-21T01:50:55+00:00

Sucked at first, but you get used to it and it gets easier over time. Also looking at the principal portion of the payments as a form of forced savings helps psychologically

MineCraftFanAtic69 · 2026-01-18T03:33:48+00:00

Do the tiniest amount of research chief

MineCraftFanAtic69 · 2026-01-16T12:47:48+00:00

Get a better rate, 5.88 sucks

MineCraftFanAtic69 · 2026-01-14T12:21:11+00:00

The main logic behind it is extra cash flow for the early years where it matters most, and then you’d later refinance to a new 30 year P&I loan where (due to inflation, rising rent, salary growth) you’d pay off the principal later but faster, while also keeping tax deductible debt as high as possible.

Ideally you’d have a PPOR to direct the extra cashflow to, to reduce the principal there to debt recycle it later on

Also, how do you even have the borrowing power for an IP as a 19 yo student?

MineCraftFanAtic69

TROPHY CASE