mousepad wrote:Crazy. I didn't think people are that dumb. But then again, am I really surprised?
I know exactly how you feel, some things you just think, "no that couldn't happen" and then it's revealed that it did. I was in construction (cottage) for a lot of years and in the 00's when people were renovating houses like crazy all over the nation I didn't think much of it, that's normal, I mean I'd been doing it for people since the 70's. But what was happening now was on a whole other scale.
Driven by half a dozen TV shows like "location Location Location" and "Fix this house", enabled by new "products" like home equity loans, and cheerleaded by the whole RE industry, people began spending hundreds of grand "Adding value" to old homes. It sort of make sense to me but I was seeing it from an industry insider's point of view. What it was doing though was enslaving people to years of extra debt, people who otherwise would be out of their mortgages free and clear, and all just so they could live in a nicer house like the rich and famous. It pushed up the price of RE across the nation too, I mean a $400k home + $250k reno is $650k. And at 7% interest compounded that's a lot more for a young couple to pay back.
So what the housing bubble debt prison did was take something (renos) which were formerly the purview of those on high incomes that could afford it, and turned it into a natural must have for anyone buying an old house. I see it all the time still, it's entrenched in the psyche of the nation now. My nephew is atypical, bought a rundown old house in a decent area and proceeded to gut it! New everything from walls to plumbing to fixtures. Then of course all new furniture. Well there's another 10 years out of his life whether he ultimately sells it to upgrade or not. Madness!
The consequences were obvious but are only now being spoken of in the mainstream.
More Australians set to retire in debt: AMPThe dream of debt-free homeownership at retirement is slipping away for more people despite increasing super balances, leaving older Australians increasingly exposed to interest rate changes.
Australians aged over 50 are expecting to retire with more debt than ever before, according to research to be released on Tuesday by AMP, with the Australian Bureau of Statistics showing a fourfold increase in household debt levels for those aged over 55 in the past 20 years.
An AMP survey of 1000 Australians aged 50 years and older indicated only one in seven people believed they would be mortgage-free when they retired, and one in nine expected to have more than $250,000 in unpaid debt. Data from the ABS shows average household debt ballooned from $62,000 in the 2003-04 financial years, to $242,000 in the 2021-22 financial years.
Not exactly a recipe for stress free retirement is it.