Real Estate Institute of Australia President Says Renters Should ‘Get Two Jobs’ to Buy a House

tsunamisurfer on 07/09/2018 - 15:58
Last edited 07/09/2018 - 16:07 by 1 other user

The REIA President has come out and said on radio that people should "Do the hard yards. Maybe even, God forbid, get two jobs," .

The message as you can all imagine was not received well at all and is causing a storm.

The articles are below.

https://www.realestate.com.au/news/real-estate-institute-of-…

http://www.abc.net.au/news/2018-09-06/tenants-unable-to-pay-…

My take on it is what Mr Gunning has suggested has merit from a pragmatic sense.

If your income is below what is required to service home ownership increase your income, and one of the most common ways is to get a second job.

However, his delivery, his tone and who he is (someone that is rich and profits from the very issue preventing his target audience from affording a home) works in concert to make him sound like an insensitive, out of touch, Knob.

Its akin to telling the people to eat cake.

But if we were to put aside the outrage for a brief moment, is there anything fundamentally wrong with Mr Gunning's assertions that people who want but cannot afford home ownership should :

  • Increase income as another way of saying get a second job.
  • Move to a more affordable area
  • Review one's expenses / budget as another way of Mr Gunning quoted as saying "first-home buyers should move away from Melbourne, Sydney and Brisbane, cut spending or negotiate their rent."

If I were on the cusp of being able to buy my own home, I would happily take Option 1, because just sitting there and bitching about how everyone else is bidding more than me will not get me into a home any time faster.

If your goal was the Great Australian Dream, and it is 'ohh so close' would you be prepared to make additional sacrifices to achieve that goal?

Home & Garden Affordability Property REIA

Comments

  • [Deactivated] on 07/09/2018 - 16:04
    +80

    Yeah you know because people don't have kids to look after or anything like that.

    Lets just essentially give up our lives why don't we. Who needs free time and rest anyway? Chumps, thats who!!

      • [Deactivated] on 07/09/2018 - 16:28
        +69

        If you're struggling to afford a house, I doubt that one extra day a week of work is going to magically solve all your financial hardships.

        There are far greater costs to owning a home than just paying the mortgage and council rates.
        If you don't have an emergency fund to cover expenses such as plumbing leaks, broken water heater, etc. this can really get you into trouble as an owner but not a renter.

        • 2ndeffort on 09/09/2018 - 15:29
          +3

          He doesnt care about any of that because after the house has sold and the agent (member of the REIV) is off to the Porsche dealership with their commission cheque his interest is over.

      • Quantumcat on 07/09/2018 - 16:47
        +23

        It isn't really useful to get a second job when you have children if the extra child care expenses (nights) would cost a lot more than any salary you could get

        • kahn on 07/09/2018 - 17:32
          +57

          If you want a house and kids then you'll be needing three jobs.

        • whooah1979 on 07/09/2018 - 17:37
          -4

          @kahn:
          We live in Sydney where our friends have two or more children. None of them work two jobs.

        • chriise on 07/09/2018 - 18:24

          @kahn: God forbid!

        • pao2x on 07/09/2018 - 21:02
          +12

          Only until you get your refund, and the largest income tax rate is 45% not 50.

          So unless you are doing a 2nd job to earn over 180K I highly doubt you will be taxed 45%

        • bobbified on 07/09/2018 - 21:26
          +8

          If your second job is being taxed at the highest marginal rate, you're already doing pretty well compared to everyone else!

        • donga100 on 08/09/2018 - 10:33
          +9

          2nd job being taxed at 50% is just a myth. It is taxed at the same rate as your first job unless it puts you over the next threshold. Source: https://community.ato.gov.au/t5/General-tax/How-much-tax-sho…

        • No ONE on 08/09/2018 - 12:56
          +4

          Do u even know how tax works?

        • josho9 on 09/09/2018 - 19:23
          +1

          I think Spackbace's simplification for emphasis masks the very real issue - all of your additional income is taxed at your marginal tax rate, which for top income earners is not just the 45% but also the 2% medicare levy and any flood levy/deficit levy/etc that the pollies have decided to tack on.

        • Randolph Duke on 12/09/2018 - 11:42
          +1

          If you're working 2 jobs the second job can not be claimed on the tax free threshold. Whilst you may be taxed extra during the year on the second job, it will be returned at the end of the financial year. It's unbelievable the amount of people who claim a second job is straight up taxed at the marginal rate (and humorously, don't want pay rises because it'll bump them to the next tax bracket and they'll lose money*).

          *Which is only true when you clock the Medicare levy amount.

        • RocketSwitch on 13/09/2018 - 10:14

          @Randolph Duke: What's so unbelievable about it? If there's so many people who think like that, what do you think the problem is?

        • Randolph Duke on 13/09/2018 - 10:29
          +2

          @RocketSwitch:

          I’d argue the problem is people spouting off uninformed opinions. Progressive tax rates aren’t that difficult to understand.

      • Plug on 08/09/2018 - 09:26
        +4

        If your finances are that tight then relying on a second job would be extremely foolish. Doubles your chances of it all going horribly wrong.

      • SydBoy on 09/09/2018 - 07:33
        +11

        You probably have no idea what it takes to get 20% deposit for your first home in Sydney and Melbourne.

        Also your liberal mates just got rid off penalty rates so weekend or weeknight work won't help.

        • whooah1979 on 09/09/2018 - 07:43
          +1

          Less spending and more saving. Improve oneself by upskilling and get more tickets. Change jobs when the work conditions or pay rate of the current job isn’t working out.

        • SydBoy on 09/09/2018 - 08:45
          +5

          @whooah1979: when salary are stagnant not much is gained by changing job. Upskilling which can make significant change in pay required time to study and off work for some time plus experience in that field before you can see change in wages so housing problem can not be solved by upskilling and multiple jobs ! You need government who thinks about common working class people and change in policy to supporting housing affordability !

        • whooah1979 on 09/09/2018 - 09:06
          +3

          @SydBoy:

          I’ve been changing jobs/industries on average about every 2 to 3 years with an increase in income every time. Upskilling and getting new tickets were either after hours, weekends or personal days with no pay.

          The best way to increase one’s income is to be proactive and not rely to much on government handouts.

        • RocketSwitch on 13/09/2018 - 10:16
          +1

          @whooah1979: Yep, this is on point. 90% of the time (stats by my own observations), you get the increase you want by changing jobs.

    • whooah1979 on 07/09/2018 - 16:34
      -4

      Many Australian families may have both. Servicing a mortgage and quality family time is possible with hard and smart work.

      • spackbace on 07/09/2018 - 17:00
        +8

        Yep, daycares are flourishing!

        Would be a very tough ask to have a 50s traditional nuclear family these days (2 kids, 1 provider, mum stays home) and pay a current day mortgage.

        And said family saving a 20% deposit while renting

        • spackbace on 08/09/2018 - 10:28
          +6

          @decr:

          Nuclear family is mum, dad, 2 kids. Mum staying home to look after the kids. No daycare

          No worries you say? Only if you're earning over $100k, $150k in some states to have the same housing affordability my parents had in the 80s

        • decr on 08/09/2018 - 13:59
          -2

          @Spackbace: I earn less than $100k and easily support my kids with daycare and private school fees, I guess it's a matter of spending habits unlike what seems the norm.

        • ely on 08/09/2018 - 20:01
          +1

          I'm doing the traditional 50s family thing and it sucks. Saved up most of the deposit before kids though, and with interest rates what they are and buying cheap (an apartment) the total cost (mortgage, strata, water, rates, etc) is about the same as renting in the same place.

          Looking forward to my wife getting back in to the workforce at some point though, can't really save much which is stressful. Salary way over the AU average; no way we'd be able to do it on $80k with what my wife considers to be "necessities".

        • decr on 08/09/2018 - 21:32
          +1

          @ely: Hmm yes, that's a valid argument but it really depends on location I suppose. Then again I have mates asking me how come you own your house as they have been renting for 10+ years and have nothing left if/when they leave.

          With a mortgage you're at least paying some of it off and it does bring up a happy face when selling when you end up with x thousands in your bank account.

        • scheps on 09/09/2018 - 21:12

          @decr: you must be doing well with financial management or making a lot more sacrifices than the people who negged you. plus from me.

        • cillianbc on 10/09/2018 - 10:39

          @Spackbace:
          Day to day costs were also radically different for the 50's family. Mum didn't go out and spend money every day, a weekly shop was done and that was it. Dad didn't buy 2-3 coffees per day and get lunch or breakfast out. His commute was likely a fraction of what it is now and petrol was a hell of a lot cheaper. As was electricity. There was no 2-5k holidays every year.

          Our cost of living has exploded in the last 20 years. A lot of it is on non-essential items that seem essential from a societal POV. If you really tried living like 50's family you might pull it off but wave goodbye to your latte and avo on toast :)

        • spackbace on 10/09/2018 - 11:45

          @cillianbc:

          Well the comment you replied to was actually based off 80s affordability, income vs house cost (sorry didn't specify). Wasn't referring to outgoings.

          My folks built in mid-80s, 3x1 in the 'burbs for ~4x dads full-time income. That same house now is $450k+.
          Even if you lived tight, you'd still need to be earning over $100k to meet that same affordability (not taking into account the high interest rates they had at the time).

        • decr on 10/09/2018 - 18:26

          @scheps: Thanks, I was wondering about the negs but it is what it is I suppose. And a yes for sacrifices that I'll not comment on a public forum.

        • Shiny Mew on 10/09/2018 - 21:15
          +4

          @cillianbc:

          Pretty sure a very small percentage of the population buys more than one coffee a week and one avo and toast more than every month. You must be thinking of baby boomers in latte land. I've only ever been on one holiday - three days on the edge of Victoria - and work 50-60 hours a week. I don't spend very much on non-essentials and am still no where near being able to put down a deposit before my 30th birthday. Granted, I'm on a low hourly salary (<3 years' PAE solicitor). Maybe in 10 years I'll be able to buy a nice tent within an hour of work.

        • Talonparty on 11/09/2018 - 00:57
          +2

          @cillianbc:

          Mum didn't go out and spend money every day, a weekly shop was done and that was it. Dad didn't buy 2-3 coffees per day and get lunch or breakfast out.

          Imagine genuinely thinking that this is what's holding people back. Having enough money for a coffee EACH day, let alone 2-3…as well as lunch! Cost of living? What a laugh.

          The only thing at I ever see in my local cafe is a sea of grey hair and the only people I see buying coffee and lunch at work are the executives who drive sports cars and young single kids who are living at home with mum and dad anyway. I'd love to experience your reality.

        • HighAndDry on 11/09/2018 - 10:35

          @Shiny Mew:

          I don't spend very much on non-essentials and am still no where near being able to put down a deposit before my 30th birthday. Granted, I'm on a low hourly salary (<3 years' PAE solicitor).

          I mean with your logic skills it might be possible, but you seem to be calculating this based on staying at the same pay grade for the next 5+ years and as a basically newly graduated solicitor that shouldn't happen.

        • Cyphar on 11/09/2018 - 11:03
          +2

          And said family saving a 20% deposit while renting

          IMO this is the important part that many people seem to forget. Rents are also skyrocketting so among all other rising living costs, people also need to save a deposit that, come the time they have the original 20% deposit, may not even be 20% of the going prices of housing at that time.

          Where I live, if you began to save for a 20% deposit of an average house price where I live in 2010, you were looking at saving $45k. 3-4 years later, by the time you got that much, house prices had jumped so quickly that the $45k was now just under a 10% deposit and you now also have to factor in LMI that increases costs even further. You're being punished by doing the right thing and saving.

        • cillianbc on 11/09/2018 - 13:22

          @Talonparty: I didn't say that is what is holding people back. You clearly missed my overall point.

        • Talonparty on 11/09/2018 - 20:54
          +2

          @cillianbc: Fair enough, I am quick to outrage, but you implied that this is a day to day cost. It's not and probably never will be for me and many like me because it's absolutely unaffordable. I think you're wrong and I stand by it.

        • robredo on 12/09/2018 - 06:54

          @cillianbc: In the 50s currency was still backed by the gold standard. It was in 1971 that Nixon took the USD off the gold standard and subsequently all the other currencies linked to it. Central banks and banking cartels have essentially had the license to create money and we keep on being told that inflation is a ‘good’ thing for the economy!

        • cillianbc on 12/09/2018 - 09:22
          +1

          @robredo: There is some great research articles out there that track and talk about this very moment and the impact it has had since.

        • robredo on 12/09/2018 - 21:41
          +1

          @cillianbc: There sure is! One has to be quite determined though to uncover the truth. Definitely not something people are going to find in the mainstream media

        • RocketSwitch on 13/09/2018 - 13:54

          @cillianbc: Imagine how much money they would save if they made their own coffee and food. Probably around $8K.

      • try2bhelpful on 08/09/2018 - 00:08

        I think if you asked each family member they may demur.

    • Ace Ventura on 09/09/2018 - 17:00
      +4

      Don't have children if you can't afford to raise them with the standard of living you desire.

      • [Deactivated] on 09/09/2018 - 19:40
        +2

        The fertility rate in Australia is already low enough.

        People have to bang more.

        • Ace Ventura on 09/09/2018 - 19:52
          +1

          I'm all for banging more. Just the resulting kids I think we should limit a bit more.

        • Shiny Mew on 10/09/2018 - 21:18
          -1

          Doesn't matter; there unfortunately have been and will continue to be massive immigration numbers to pick up any slack.

      • Ozbm on 13/09/2018 - 13:16
        +1

        No worries, just remember that when you are old and cant find a doctor to fix your ailments, plumber to fix your burst pipe or any other service as you become dependable on other people because you know who those 'other people' are? Somebody elses kids.

        We should be encouraging and supporting families not holding them back because they are the people we will depend upon in the future. This is how a successful and functional society works.

      • RocketSwitch on 13/09/2018 - 13:55
        +1

        With your logic, there will be no one left.

  • dcep on 07/09/2018 - 16:05
    +18

    Don't worry, you'll see bloodbath in housing market soon.

    But make sure you're cash rich and able to service 7% rates.

    • Shiny Mew on 10/09/2018 - 21:25

      People forget how much the housing markets are fuelled by the merciless, upward trend in population (predominantly net migration). Any increase in interest rates is not going to inspire the 'crash' many are hoping for, and certainly not a reversal to the more sane property values of 5+ years ago (which would be a real 'correction').

      • [Deactivated] on 11/09/2018 - 06:41
        +1

        Agreed - also what people don't seem to realise is that increases in interest rates in a high household debt environment will simply give negative feedback to further interest rate rises. The perfect storm would only occur if global cost of funding increased substantially. On another note wouldn't it be great if media and politicians focused on median real income growth as a key economic statistic, real GDP growth of say 2.5% is not all it's cracked up to be if immigration is at 3%.

        • HighAndDry on 11/09/2018 - 10:36

          You'd hope you're doing financially better than new immigrants. If you're not….. maybe time for some self-reflection.

        • Cyphar on 11/09/2018 - 13:33

          @HighAndDry: Are you confusing immigrants with refugees? The majority of immigrants come over with quite a bit of wealth behind them.

        • HighAndDry on 11/09/2018 - 13:34

          @Cyphar:

          The majority of immigrants come over with quite a bit of wealth behind them.

          This might be more true than it was in the past, but it's certainly not the "majority" of immigrants. The rich ones are going to England, the US, staying in their home country where all their money is, etc.

    • Cyphar on 11/09/2018 - 11:09

      There is not going to be any crash that you, or many others, are hoping for, I'm sorry. Australia's high immigration numbers ensure that there is always a buffer to that. If you are banking on a bubble to burst and all of a sudden housing is now half price like what happened in America? That's just never going to happen. It may drop 20% over a number of years, a tricking percentage, but it'll bounce back and even be more expensive than before.

      • dcep on 11/09/2018 - 11:14
        +1

        so you're saying immigrants will takeover the house ownerships in Australia ?

        • Cyphar on 11/09/2018 - 13:30
          +2

          No, I'm saying that the influx of immigrants will continue to create a need for more housing. They need somewhere to live and most come over with quite a bit of money so they will continue to drive that greater demand.

        • dcep on 11/09/2018 - 13:54
          +1

          @Cyphar:

          what about the australians middle class that suffering mortgage stress & behind on their repayments who eventually resorting to sell or foreclosure ?

          can the immigrants take on the subsales + all the new stocks ?

        • Cyphar on 11/09/2018 - 15:13

          @phunkydude: Don't throw a red herring in to the mix here. House prices are not going to drop as much as people here are hoping they will, regardless of any hypothetical situation you can come up with.

        • dcep on 11/09/2018 - 15:22

          it's not hypothetical

          it's already happening

          mortgage stress is real

        • cwongtech on 11/09/2018 - 15:37
          +1

          @Cyphar:
          House prices won't keep skyrocketing. There's only so much an entire group can circlejerk and try to lift up the wave, before the reality of low income growth, inability to service debt will cause demand to drastically slow down. Supply has increased to stupid levels with people lusting over "investment property". Unless the influx of immigrants and ability of people to move out (hard with low income growth) is definitely higher than additional housing capacity created by constructed buildings + older generation passing away, there will be a point when people realise their empty investment properties aren't great investments.

        • Cyphar on 11/09/2018 - 18:37

          I mean, this discussion has just become cylindrical.

          Historical house pricing shows that after a correction occurs, which occurs over years and not months or days, the prices do go back up so people expecting the $1m 3BR townhouse to suddenly be bought for $300k are going to be sadly disappointed. Most current predictions are a 20% drop which for Sydney's house pricing, isn't really all that beneficial for people in this day of shrinking salaries and once the dust has cleared, will go back up again.

        • bthaddad on 12/09/2018 - 12:11

          @Cyphar: The really frustrating thing about your comments is not that I disagree with you - which I don't necessarily. It's more that you are so self-righteously claiming to know what will and won't happen in the market when the truth is you are as clueless as everyone else (including me).

        • Cyphar on 12/09/2018 - 13:09

          @bthaddad: I mean, I'm only pointing out the obvious here based on the research of others, so excuse me if I take their word over some guy who heard from another guy that prices are going to drop 70% any minute now. Hell, KPMG successfully predicted what is currently happening.

          Fact of the matter is so many people have to come to grips with the fact that housing affordability just isn't going to ease off for our generation. Previous corrections have shown that after a few years, the prices begin to go back up again. It's happened 6 times in the last 50 years. Why would this time be any different? The only problem we have now is that wage stagnation is more pronounced than it's ever been leaving the future of home ownership in the next few decades is muddled.

        • RocketSwitch on 13/09/2018 - 13:57

          @phunkydude: Has been real for a LONG time.

  • Baysew on 07/09/2018 - 16:07

    I wonder what Digi1 will say?

    • onetwothreefour on 07/09/2018 - 16:32
      +25

      It's our own fault for voting for the same two parties blah blah blah.

      • cwongtech on 09/09/2018 - 12:05
        +1

        Damn liblab voters!

  • dust on 07/09/2018 - 16:13
    +1

    Well the alternative is to "get a good job that pays good money"?

  • GG57 on 07/09/2018 - 16:25
    +1

    The REIA President said that.
    Lot's of people have said that the comments are insensitive and out-of-touch.

    I don't think it is newsworthy to be honest.

    • [Deactivated] on 09/09/2018 - 11:53
      +3

      Au contraire, we never worked as much as we do now. We are becoming working machines to earn things to enjoy life just before we pass away. Great life :)

      • whoopdeedoo on 09/09/2018 - 19:58

        well one just had to look at all the crap we own, pretty things we eat and fancy places we visit to realise we cant save 20% to save our lives.

        • Cyphar on 11/09/2018 - 19:24

          Many people are doing none of that, have to pay one of the highest energy rates in the world, while living in a country with the one of the highest costs of living in the world, and still struggling to get that 20% for housing that is also among the most expensive in the world with the price of housing growing faster than people can get a deposit. That 20% deposit may only be worth 10% in 5 years

        • josho9 on 13/09/2018 - 11:31

          @Cyphar: Don't forget that we also have some of the highest salaries/minimum wages in the world.

    • smartazz104 on 09/09/2018 - 15:08
      +6

      Gerry Harvey is a little bitch and anyone who tries to hold him up as an example of a hard worker is an idiot.

      • The Wololo Wombat on 10/09/2018 - 18:14
        +3

        He broke the second most sacred law of Ozbargain… "never portray Gerry Harvey in a positive light"!

  • ausdday on 07/09/2018 - 16:51
    +4

    Note to self, not to name my children Malcolm.

    • payton on 07/09/2018 - 19:11
      +19

      Not the middle child, at least

  • HighAndDry on 07/09/2018 - 16:53
    -7

    But if we were to put aside the outrage for a brief moment, is there anything fundamentally wrong with Mr Gunning's assertions that people who want but cannot afford home ownership should

    I think this is the real problem. We're so eager to jump to outrage, that putting outrage aside is apparently uncommon or a special case. No! Think about something first, then get outraged if outrage is warranted.

    However, his delivery, his tone and who he is (someone that is rich and profits from the very issue preventing his target audience from affording a home) works in concert to make him sound like an insensitive, out of touch, Knob.

    This is just feelings over reality. Bah.

    • ely on 08/09/2018 - 20:04
      +20

      Outrage is warranted; these pricks lobby against any meaningful reform that would make housing more offensive, then have the gall to suggest people work more to handle the housing crisis that they've helped to create.

      • ely on 09/09/2018 - 07:22

        replace "offensive" with "affordable", damn autocorrect :D

        • Quantumcat on 09/09/2018 - 09:46
          +1

          You could have edited your post if you didn't reply to it :-p

        • ely on 09/09/2018 - 21:30
          +1

          @Quantumcat: Nah, it was hours later when I was scanning past and noticed it :D

  • HighAndDry on 07/09/2018 - 16:54
    -3

    As to the actual question - don't have enough money, find ways to increase income.

    It's sad that that even needs to be said.

    • Diji1 on 07/09/2018 - 18:49
      +30

      Average wage has been dropping in real terms for about four decades.

      Corporate profits are at record levels while the largest pay no tax.

      • bejahi on 09/09/2018 - 06:53
        -7

        Not sure why you're being upvoted, but like nearly everything you comment this is simply untrue.

        http://www.abs.gov.au/ausstats/[email protected]/0/29A46D903FD3F33ECA…

        People like you are what damages the cause. When the loudest people advocating for change are so wrong on nearly every basic fact, it taints the whole lot of us with your crazy.

        Please stop, and think/research before you post. It's time.

        • whooah1979 on 09/09/2018 - 07:17
          -2

          It’s a popular vote. Blaming others is the easiest excuse for not being able to do better.

        • ely on 09/09/2018 - 07:24
          +13

          Your link doesn't appear to contain anything relevant to Digi's comment; not only is it 10 years out of date, it's not discussing wages or corporate profits.

        • HighAndDry on 11/09/2018 - 10:38

          @whooah1979: Exactly. For the masses, it's easy: Why work harder when you can blame the minority who do work hard, and get the government to just take their money and give it to you?

        • ely on 11/09/2018 - 19:00
          +1

          @HighAndDry: Popular for sure, but not always wrong. This seems to be the opposite of argumentum ad populum and just as fallacious.

    • ely on 08/09/2018 - 20:41
      +2

      Don't have enough money (because bad policies have pushed up an essential for life - shelter - to insane levels), find ways to increase income (but also seek to address the poor policies to resolve the underlying problem).

      It's sad that that even needs to be said.

      • HighAndDry on 10/09/2018 - 09:56

        The reasons are irrelevant. House prices are up, rentals can still be had cheaply. Shelter doesn't necessitate owning a property.

        • ely on 10/09/2018 - 14:16
          +2

          Shelter doesn't necessitate owning a property.

          Strawman, nobody is claiming it does. Where you and I seem to disagree is on how closely we think the cost to buy and the cost to rent are related.

          The reasons are irrelevant

          They're largely irrelevant to how you deal with the problem right now, and we agree here - at the present point in time you just have to deal with it, find more money or buy/rent somewhere cheaper.

          They're not irrelevant to addressing the underlying problem, which is that shelter (especially to buy, but also to rent) costs too much relative to income.

        • HighAndDry on 10/09/2018 - 15:15
          +1

          @ely: Oh I didn't see it was you. Yeah that disagreement is still there.

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