Never-ending capital growth

In my recent post, "Rent money is dead money", I highlighted that fact that there is lot more dead money when owning a house in comparison to renting. In the ‘Comments’ section, some people acknowledged this extra cost, but argued that house-price growth would more than offset this.

Anonymous, for example, said:

“Either way, a gap of $17,000 or $7,200 is a far cry from the appreciating gains a $500,000 property on average will give you. You do the maths!”

There's no bubble after all

Sorry everyone, I was mistaken. There's actually no house-price bubble:

"Buyers have been told that Melbourne is not suffering from a house-price bubble.  Property valuer Greville Pabst, of WBP Residential Advice, said that although property prices were higher than 10 years ago, these prices had become the new norm."
http://www.heraldsun.com.au/news/victoria/telling-weekend-for-property-market/story-e6frf7kx-1226008425010

Confident property investors rush the exits

In his weekly property spruik summary, Enzo Raimondo from the REIV said:

“The next three weekends will see significantly more auctions with 695 next weekend followed by 980 and 910 in the following two weekends. The high number of listings shows that sellers have a reasonable degree of confidence in their prospects, reflecting the overall health of the national and state economy.”
http://reiv.com.au/home/inside.asp?ID=162&nav1=1226&nav2=162

"Rent money is dead money"

It’s been drummed into us by the real-estate industry, by the media and by family and friends. It’s the catchphrase ‘Rent money is dead money’, meaning that if you’re renting, you’re wasting your money.

Interestingly, you rarely get advised that you’re wasting your money buying food from the supermarket, or by going to the movies for a night out. But when it comes to providing shelter for yourself or your family, you’re apparently throwing your money down the drain.

It’s different here

If I had a dollar for every time someone said to me: “It’s different here; we didn’t have the dodgy lending practices that they had in America”, I reckon I would have a good $12 by now.

So what do you consider to be a conservative requirement for a deposit for a potential home owner?  10 per cent? 20 per cent?