australia2 I will attempt to answer your question with the problems I am encountering while looking to buy.
1) Cost of initial deposit and expenses approx 20% of purch price
2) On new homes some deals about with reduced initial expense but price is jacked up to compensate increasing the loan term
3) What you need to live in happily (family etc) and what you can afford can be quite different
4) Max 40 years for age of house + term of mortgage so if you buy a 25 yr old house on a 15 yr mortgage you will need a cash buyer when you come to sell it as most banks won't currently mortgage against it (is this sustainable?)
5) huge fluctuations in prices over the past 6 years (60%) difference brings with it the risk of negative equity
6) Horrendous build quality (hence the 40 yr rule). Worst instance is cancer causing carcogens (sp) in the plumbing due to dodgy materials so you are looking at a possible replumb and rewire on anything over 10 years old
7) Apparent changes to tax in that allowance will be fully taxable if used for rental (Approx 6K month increase in tax) that should make buying more attractive
8) If you can live with all this, i.e. accept the risks and be happy in what you are in then buying (especially with new tax on rental) looks good. Bear in mind that the mortgage payments will most likely way outstrip any rental returns so you can't rent it out instead and move into something bigger if you grow out of it early.
9) Family has to be happy
10) Family has to be happy
11) Family....
IMHO