Why not just rent? Isn't it common in other countries for years and it is never a problem?
Edit:
Thank you all for your reply. I think it is now clear that it is not a problem.
Is Housing Affordability Really a Problem?
[Deactivated] on 22/09/2020 - 17:33
Last edited 22/09/2020 - 22:28
Last edited 22/09/2020 - 22:28
closed Comments
$200 a week in Hobart will get you a bedroom. If you're lucky enough to get it.
https://www.domain.com.au/rent/hobart-tas/?excludedeposittak…
The housing affordability issue in Australia lies solely with those who cannot afford it and feel they are entitled to it.
You realise there's now probably millions of people around Australia that aren't sure if they can still afford to pay for a house, either renting or mortgage. Even if they're renting people who have lost their job or been downgraded heavily will struggle to pay for a home that has enough bedrooms for everyone in the family. Nothing to do with entitlement. Majority of Australia has nowhere near the job pay rise or government benefits to sustain living, when everything around them is constantly moving up in value
You've just proven my point. You think everyone in the family should have their own room.
If you cannot afford that then find a smaller place or a place further away from the City or rent or share a house with others.
There are just so many options.
I don't think you understand the premise. If you're stuck paying rapidly increasing rents while your wage has stagnated for years then you have a problem. If those that have already bought a house continue to invest back in houses pushing up prices further then you have a crisis. It's not about entitlement, it's about people literally unable to leave the rental trap as the affluent few snatch up properties left right and centre.
Shelter is a basic necessity, when it becomes the plaything of investors at the expense of regular Australian's is when the system is broken.
@Drakesy: I understand perfectly.
I too have started on a low income and struggled.
But the notion that rents and income are outside of a person's control is misguided.
One can reduce rent by renting a smaller place or in a more economical location. One can share with others significantly reducing the cost.
One can find a better job. One can find a second job.
@tsunamisurfer: I get what you're saying but in perth we're in a very different situation. We're still able to afford a house within 30 minutes of the cbd. Its a different story in victoria/melbourne where houses are still 750k+ 1 hour out.
You can't tell these people to just move further out because they're already spending 2 hours a day commuting just to afford to live 1 hour out of the city.
On top of this 1 bedroom entry level apartments are 500k plus to live within 30 minutes of the city - not a viable outcome when rents are proportionally higher to match the unit cost
Unfortunately its very narrow minded to apply perth's conditions nationally.
@Drakesy: I do not care how many hours out they are. The issue is home affordability, and there are affordable homes full stop.
You have outlined opportunity cost, I am aware of opportunity cost, it applies to Perth, and Melbourne people the same.
@tsunamisurfer: Totally agree we are only discussing affordability in this discussion not standard of living or distance from workplace/city. With regards to affordability I believe park benches and underpasses are free, so of course its affordable.
@Drakesy: Start a business. Do something outside the box…so many options here in Australia. We have too many options, we have won the lottery ticket living in Australia and still people find reasons to complain.
If you don't like your current situation (not directed at you Drakesy) then change it, don't look for reasons or excuses why you can't do this or that. Take responsibility and make a change. Others far less fortunate have done it.
@SelfMade: Oh hey you just solved the poverty problem, start a business. Let's get these low income families to invest what little savings they may have and probably be at risk of bankruptcy to start a business where more than 60% fail within 3 years and if you google the statistic it even says 97% but I'm not sure what that refers to. Honestly, you're the one that sounds entitled here. You got lucky, because there are many others who try and fail and I'll emphasize luck again. Many businesses are crumbling right now because of covid and it's got nothing to do with them. Just because you made it doesn't mean you can just expect people to do the same thing. As I said before, housing should be a right, just because you come from a third world country where you'd be lucky to eat, doesn't mean it should apply here. Just because you're poor, less skilled and disabled doesn't mean you don't deserve a roof over your head. It's people like you making this country worse. Again, we have the same background but you brought YOUR mentality that made the country so poor in the first place here. That everyone who wants a basic human right is entitled and should just work harder
@[Deactivated]: So much negativity. Please use the extra time you have to do something productive and provide value to the world instead of constantly arguing with someone you don't even know. No sympathy for people who have such a mindset. I'm a fool for even engaging in conversation with you.
@SelfMade: You don't even see the hypocrisy do you? You're the one who's posted 3-5 comments on this thread arguing with people you don't know and yet I'm the one with extra time? I'm not asking for much mate, people took the time to respond to you and if you think they're wrong, tell them why. I've used facts and statistics to substantiate my point and what do you say except 'have the right mentality'?
You say- start a business
I say- most people cannot afford to start a business and if they can doesn't mean they should
Then you say- oh you're the one with so much time. You're negative. You don't have the mentality etc etc
It's garbage mate. You're spout nothing but utter garbage but for some reason you refuse to believe it and I'll keep calling it out when I see it.
By engaging in discourse, the world can change for the better. You're not interested, you post comments then run away. You don't spread positivity. You spread blame and false meritocracy. And value to the world? You don't even know what I do my friend
No sympathy for people who have such a mindset.
Of course you don't. You're narrow minded and can't see any other mindset than your own.
You sound like one of our politicians. You want everyone to live in absolute poverty. A family sharing a house with another family and all the kids and parents have to share rooms? What drugs are you on
@Whisper Quiet: If the renters cannot afford a place of their own, what would you suggest is a practical solution?
1) Whinge that society doesn't pay them enough.
2) Whinge that the market values their skills at low rates.
3) Take personal responsibility and get what you can afford?
@tsunamisurfer: You have no empathy for people? See people struggling to eat and survive and even get a home to live in. Been said that there's a job available for 1 in 13 people who need it right now. Maybe you've been looking too long for that final wave. There's alot more than those 3 options! All kinds of different industries get many millions of dollars in tax breaks for their products and how they sell them. Prices go up so they can keep the same profit margin for their billion dollar empires. While the normal worker isn't getting an increase. Maximum price locking at least for a certain time can make people know how much products will cost on a consistent basis. Lowering tax rates for people earning smaller amounts per annum, tonnes of options to make sure we don't turn into Detroit or even Brazil if it gets too far.
You realise there's now probably millions of people around Australia that aren't sure if they can still afford to pay for a house, either renting or mortgage.
It is what happens when people borrow all they can afford, rent all they can afford. Really nobody has savings and it is just a country inflated with debt.
I am keeping fingers on the pulse how bad this biff with China blows up. A lot of China money have been inflating everything and if you stop pumping in money the balloon needs to deflate.
I'm the poor guy who is giving 50% off rent to my tenant in one property and pretty much 40% off another for the last 6 months and when I paid a lump sum, bank rang up to check "source of your wealth" and they were surprised it came from my salary.
Yes it's a problem, we need government to control the rent by negative gearing…. oh wait….
Yes purchasing housing is very expensive in Australia, relative to almost all other places in the world, and all other times in Australia's history. By every objective measure I can think of. Also, many if not all organisations taking a look at the Australian housing market call it overvalued. Any more questions?
In b4 (or way way after): No because my personal income is 3x the median and I can service the loan on a 1br apartment in Sydney with only some nights eating 2 minute noodles.
In b4 (or way after): it's all too hard and I wont bother trying to save money on rent, I'd rather convenience now than saving for a deposit tomorrow.
Both groups give me the proverbials.
I think it is now clear that it is not a problem.
Classy.
It is a sector artificially inflated to give the perception of worth and you allowed it to occur by facilitating and participating in this sham.
Now look where you live, 20k from town, no public transport, no infrastructure, no shopping centre… may as live in a graveWhat shanty town are you talking about that doesn't have infrastructure or shopping centres 20km from the cbd? Dramatic much.
Edit: Thank you all for your reply. I think it is now clear that it is not a problem.
Lol, so you ignored just about the comments that explained why it was a problem and concluded it wasn't because…reasons? Pro tip: if you already have a strong opinion and won't change your mind, don't bother 'asking a question' online - you just look stupid when you reject everyone's reasoning and stick with your pre-conceived views.
I can imagine Donald Trump opening a brief discussion on global warming, and after 24 hours the discussion is over as it's clear that global warming is not a thing.
Maybe the President has become fascinated with the OzB community and has created an anonymous account to ask questions that he already knows the answers to - like housing affordability in Australia :D
Even Trump can't make money as a property developer. Bankrupt multiple times. POTUS is a trade down.
This is my very first post so don't know if I am doing it correctly. I just wanted to say good luck in getting public housing. It is like catching a unicorn. I know from personal experience.
Yeah it's not easy at all. I don't have first hand experience but I've heard the waiting list is years long. It's not a good outcome for people who are unemployed, going through family violence, disabled, already homeless and other public health issues.
Yeah lmao I had a co worker who said she had to give proof about her going to be homeless… Do you just take a picture of yourself sleeping on the streets? How do you prove you are homeless?
Housing is affordable if you a. have parents who can give you a leg up b. if you have been lucky enough to obtain stable and well paying employment.
It's really easy for well paid people who come from backgrounds where it's either normal for you to live at home until you get married so you can save up for a deposit and/or your parents really push you to get a well paid job and/or they then give you a leg up into getting into the housing market. But not everyone hails from that background or culture.
Housing is a necessity, not a commodity. But unfortunately it has been made into a commodity, for people to speculate on and invest into for profit.
Everything is commodity. if it is a necessity, it makes it an even better value.
Food is a necessity. Is it affordable? No if you don't have a job. If your parents don't feed you, then no, you will die stillborn. Government can give u food, yes, is it good? No, but it keeps you alive.
Clothes, is a necessity. Is it affordable? Yes, if you have basic job, yes you can buy from donated clothes. Is it nice? Depends on how much you earn.
Housing, is it affordable? Again, yes, if u have a job, you can afford one. Is it nice? Depends on how much you earn.
I agree parents giving you a leg up is luck but getting paid well is in most cases not luck, there are a lot of sacrifices that have to be made and continue to be made.
Whether it be as an employee or business owner, many, contrary to popular belief on OzBargain, actually make it on their own accord.
It's a cop out to those who've made enormous sacrifices to get to where they are to think that they have all got there with luck or a leg up from someone.
Tall poppy syndrome is alive and well in Australia and especially on OzBargain.
You can play with preapproval on most bank websites, its like 170k loan for 60k a year salary for normal lifestyle without a car loan.
Not sure about other states, but that allows you to buy and pay off a unit in 10 years (say putting 350 a week into loan).
Even more affordable with a housemate or partner. Gives you sub-10 years to have that 200k unit to finish off and put towards a house.
170k loan for 60k a year salary
Is that from current covid times or since last 5 years?
What are you gonna get for 170k? I've played around with figures and based on my current rent I could afford to borrow $400,000k over 30 years, and thats if the 20% deposit is saved up, and you can't really buy much with that; in NSW for a family home theres 4069 choices. Greater Perth 3485, Perth seems to be where its at if you can make it work.
For a family in Melbourne CBD or Sydney CBD? Nothing by Australian standards. Sub 200k houses in the country, can get a 3 bedroom home for $170k in Mildura or Broken Hill any day.
For a single person or couple, there are a ton of sub 200k apartments/studios available in inner Melbourne as well, I'd imagine Sydney too.
Nothing fancy, but it really highlights how affordability is an expectations issue not a supply issue.
Housing affordability is only an issue if your expectations far outweigh wat you are capable of affording.
A box, haha
When you need to talk about affordability it is already a problem.
Problem with housing is people see it as an investment, people are just being fooled because you buy it for $100k and someone told you it will double every 7 years, because salary inflation means people can borrow an extra $4 for every $1 they have as deposit and the bank is willing to lend you more money because interest rates keep on going down. What do they call the scheme where new investors keep on paying higher price to buy in while existing investors cash out?
House prices keep on going up to give people confidence they are richer but if you redraw your equity to invest in more houses you find most of them are just as expensive as yours.
That is totally different to business where you invest in a machine so you can produce more and sell at a profit. Unfortunately no matter how many houses you invest in, it doesn't produce more houses to sell at a profit.
I have property but I don't view it the same way as most people do.
If you look at Japan. Central bank zero interest rates, massive amounts of QE, high property prices, stock market that's crashed. What is missing from US, UK and Australia? Stock market crash.
Don't let Japan stop you. You just need to keep dancing until the music stops.
A crash is what the doctor ordered. It's the best time to grab bargains.
You know in Japan things have never really recovered right?
I didn't know that.
The first rule of investing is "your capital is at risk". The second rule is " only invest what you can afford to lose". The third rule is "don't invest if you can't handle the first two rules".
There is also the rule not to get emotional when investing.
So true
Australia definitely has declining affordability in the housing market which has seen a reduction in the number of home owners. Judith Yates an honorary associate professor in economics at the University of Sydney wrote a great article on this subject in 2015 called; "Trends in home ownership: causes, consequences and solutions", which outlines a lot of interesting information regarding this topic. If you are open to a bit of reading it is quite an enlightening article.
Why would I look bother reading well considered research backed by facts and data when I can read ozbargain comments?
It would be kind of nice to live in a house that I own, but I actually prefer to rent.
- My rent is much less than the interest component on a mortgage would be if I was to buy this place.
- House prices haven't increased in my area in the last ten years so not missing out on any capital gain. (the last 5 years has actually been a decrease)
- I can move to a new area when my situation changes and not get stung with crazy stamp duty each time.
- Don't have to pay council tax, water tax, or any plumber, electrician, etc bills.
I treat this house like it's my own, have changed all kinds of stuff around, put in new gardens, planted trees, put hooks etc up wherever I want, changed curtains, etc
All done to a good standard of course, and the landlord has never said a word. The place is looking much better than when I moved in, so nothing to complain about I guess.
Except to say that in 30 years you'll have rented and will own nothing at the end of it.
I didn't necessarily want to buy a house because I needed it for some type of self validation or because I wanted to be able to hang hooks or any of that. I wanted to buy so that when I paid the bill for the place, it was money I could recover by selling the place later.
You are paying off some other persons mortgage and when you retire and have to spend your retirement on rent because you never locked anything in, you'll probably regret it.
- I say this knowing nothing of your personal circumstances but I am directing this to all readers not just you.
Common issue I see. People sell house while younger and working. They rent and all good. Then money from selling home is gone after several years. Then person retires and stops working. Suddenly their income drops back to pension rate. The rent on their house keeps going up outstripping any CPI increase of their pension. They suddenly realize they made a huge mistake selling their home all those years ago. It's a recurring theme I see.
My parents house is worth almost 100x what they paid for it. So yeah that was a great investment, but that house price boom is not going to happen again. Unless you seriously think normal residential houses are going to be $100million in 30 years lol
Also houses aren't the only investment, my parents would be billionaires now if they had put their money in to Apple, or Google instead.
As I see it, their mistake in this scenario is that they don't have a retirement plan. If they sold their home and invested the money for retirement they probably would be fine.
It's possible to have a retirement plan that doesn't revolve around home ownership, but it would necessarily require extra funds to cover rent during retirement.
You are paying off some other persons mortgage
But that's not true though is it. I am paying much less than the mortgage interest would be.
So it's actually the landlord who is subsidising my rent. :D
It's nice that you have been able to change the place and feel at home, but I wonder if you have asked for permission to do those things, and if you did, what would be your reaction if the owner had told you not to change anything. You might be lucky, but most tenants can't do anything, not even improvements, and it is not like there is usually a big number of nice properties available (maybe there is now, but not before COVID-19).
Moreover, you might find a nice place that you wanted to improve, and you get permission for that, spend some money, and after 12 months the owner decides to sell the property and you have to leave. Long-term contracts solve part of the problem and might benefit both owners and tenants, but, again, that's usually not available.
I never ask first - they might say no! haha
Exactly. :)
Our market is artificially manipulated by government subsidies for property investment. This makes buying 2nd and 3rd properties attractive for those that have the means thereby pushing the price for property, within reasonable distance of employment centres, out of reach for many.
This makes buying 2nd and 3rd properties attractive for those that have the means thereby pushing the price for property
This is why a crash or two may help redistribute the wealth. Landlords with debts up to their eyeballs will be forced to sell.
this is a real problem in a post COVID world what people dont realise it will hurt the poorest people the most
Can you explain how?
@pinchies: Lack of a buffer? Sure your Sydney yuppie whos seen their property price go up 2000% since they bought it might lose more on paper when they downsize, but the renting single parent is the one who has to work 2 jobs, never see their kids, risk their health and go without food to try and survive.
@tarb: Thanks, but won't a housing crash reduce the single parent's rent? As long as they have a job (yes, that's a serious concern) they should be better off?
I reckon it will probably be the middle income person who has overextended themselves to buy an off the plan 60km from CBD is going to be worst hit.
@pinchies: Right now, in VIC at least, rent is sliding, anything real estate is at a pause because of covid restrictions. People think it's a good thing for renters, because less rent. Yaay!
Landlords at this time, may think of unloading some investment properties, the government rule about no evictions during this period doesn't help with the decision making either.
Once demand and supply balanced out,, rent is stabilised, there is less rental supply. After covid situation eases, government opens its doors, more demand, thus difficult to obtain rental for the bottom of food chain.
Of course, with macroeconomics, so many factors at play here. Lots of things can happen.
Property prices could be down 30% like the media titled, but who do you think could better take advantage of this opportunity? People with means ,,, or people without means? Can the poor afford to buy even with the huge price dip ?
Joe Hockey said just get a higher paying job. Problem is people not wanting to be paid more.
Then you can join the government sponsored ponzi scheme that is housing.
We dont make anything in this country but we have million dollar fibro shacks with asbestos.
My landlord is the bank that owns my mortgage.
Less a problem of housing affordability and more a problem of lack of foresight and terribly poor investment decisions. With a population of 25 million and 7.69 million square kilometres there’s enough land for every person to have 307680 square meters each.
What makes your 80sqm dog box in the centre of Melbourne worth a million dollars? It ain’t supply and demand - there’s enough for us to have 4000x that amount each! It’s a lack of infrastructure and diversification. We build cities in some of the best farming land, and force farms out to some of the best places to build.
Covid has shown the majority of jobs can work from home. Those that can’t are generally tied to/supporting those jobs that can work from home (your local restaurant, your local Sparkie, etc are only there because he population is there) or FIFO (mines, etc.) anyway.
What would happen if you built high speed rail from say Albury to Melbourne? Your commute time from Albury is now around 30 minutes. Are the units there still worth $130k? Are the ones in Sunbury with the same 30 minute commute still worth $500k?
Lock people in to something they spend their life paying off and they’ll vote for people who promise them it’ll make them rich, while the people they vote for do nothing :)
well my parents bought a small house by the beach in adelaide in 2002 for $250,000 around $350,000 in todays money. Just recently a identical house sold for $800,000 just recently. So it's gone up an extra $500,000 above inflation which is ridiculous. If they moved to this country now we wouldn't be living anywhere near here.
I bought a house 4 minutes from the beach in Adelaide in 2018 for $240,000 so that logic isn't really valid.
brighton is why
live somewhere else? a house is only worth what someone is willing to pay and can afford - if your parents moved here now they simple would of moved to a difference area that suited there budget
yeah so affordability has gotten worse in certain areas. I could build a house in the outback for $50,000 so affordable yes but not so good for opportunities
Thus as i said in another comment it is not a housing affordability crisis it is a lack of jobs and employment opportunities crisis
Government didn't stand up to the banks soon enough, let them print money and decide what properties are worth. And now everyone is paying the price for their fat profits, grubby tactics and stupid bonuses over the years.
Government and the reserve back and two sperate entities they are independent of each other
Reserve bank doesn't regulate lending practices. Nor does it influence what responsible debt levels are for households.
If you don't think housing affordability in this country is a problem you've got a problem in your head.
When you have negative gearing and capital gains tax discounts to make it a hugely beneficial tax loophole for the wealthy, of course it's a problem.
Interestingly if we didnt have those 'loop holes' the 'crisis' would be significantly worse….
Please, explain that statement.
if there is no investment properties where do ppl live if they can only afford to rent ?
@Trying2SaveABuck: Who said anything about there being no investment properties?
If negative gearing wasn't a thing (for example, if deductions were quarantined against the rental income so the net rental income could only be $0, but income from other sources were assessed on their own) or if the capital gains tax discount wasn't a thing (you pay the full marginal rate of tax on the capital gains made from property, again isolated) then the housing market would not have exploded like it did. People were buying houses for 150k and selling them 5 years later for 350k and up. That kind of growth is unsustainable.
Also they need to make property much more expensive for overseas investors.
If the loop holes used to reap massive income tax benefits and discounts weren't there, people would still invest. It just wouldn't be anywhere near as aggressive.
Yes and No we have more of a jobs/employment crisis in which it is difficult to find suitable work outside of the major cities
We have so much land that we wont run out of space like Singapore, China etc but we dont have a lot of work so people are forced to live within a reasonable commuting distance to the major cities.
Well, ill say in Melbourne/Victoria this is the case i havent lived anywhere else
Maybe in a post COVID world this will change for a large number of people working from home will become a permeant part of there job
It is important to note not everyone wants to 'own' a home. Some people like to rent and in the current market it is probably a better option. The reason why buying a property has been an attractive proposition is becuz of the historic capital gains. However for the 1st time in 30 years the economy is shrinking and the government has essentially bankrupted us to try top the stem the destruction of a recession if not full blown recession. We will not see the doubling of property every 7-10 years for a long time matter of fact the values of homes are shrinking.
Renting has always been looked down upon becuz 'rent money is dead money' but so is paying the interest on a mortgage - and if your asset is losing value then it is better to rent then buy in some cases
IMO there isnt anything wrong with renting many years ago i rented and i enjoyed it i was young and up for adventure opposed to now im settled with a family. But to anyone out there that is renting there is NOTHING wrong with it
Being honest, do you own any investment properties?
yep 1
my wife and i both owned a property then we met
Right, so hopefully you understand that you have no right to dictate to people about how they should feel about being forced into a life of perpetual renting. Your self-interest in this whole discussion is so obvious it's borderline obnoxious.
Totally agree even in opposite circumstances. Bought a place before having family and fully paid. Now with family decided to rent instead. Great adventure with the kids. Most of the time renting is a superior financial decision (as long as you are financially discipline to invest what could have been paid as mortgage) but owning more so emotional decision.
to anyone out there that is renting there is NOTHING wrong with it
Other people disagree with you. Quite a few limitations about renting that restrict what you can do to the place, and what you can do in the place. Far fewer restrictions when you own.
There is freedom in renting you dont need to worry about paying rates, building and repairs, depiction, insurance (other then contents), if you get over the area or circumstances change ie kids it is much easier to move and you can invest your money that would be in the equity of your home in other places ie VAS.
Of course there are major negatives the biggest one being you cant do what you want with your property without approval and paying the rent itself is endless unlike paying a P+I loan eventually you own the property
There is a lot of land on Mars but nothing there. Fact is Australia can’t support many more people. The govt will introduce rent seeker for ‘mum and dad investors’
Australia cant support people people there isnt anymore work,
funny enough both major parties will floor migration to combat this recession they have been doing it for you years despite the majority of the population being strongly against large migration
YES! you can’t convince me rent and house prices aren’t linked.
Housing is all about the endgame. A retiree with a 1.5 million dollar home gets the same pension as a retiree who has rented their entire life. You are in a world of pain if you have to pay rent on a $450/week pension.
Add in the fact that interest rates are almost 0 whereas housing are appreciating in value by 10% per year on average. Renting is for losers.
I would rather rent $450/week for a house worth $1.5m.
Care to explain how it is clear it's not a problem? I had a quick read and most comments are saying it is a problem. Looks like you posted a thread that basically said "I'm right, aren't I" and then ignored everything you disagreed with.
"I replied and win the argument."
It could be Donald Trump or any other narcissist, but it is OzBargein…
LMAO
Appreciate your compliments.
I did and I saw the sheer amount of negative down votes you received. Nuff said.
"Houses are totally affordable, you can buy a decent house for a low price very easily, you just have to give up your job, your lifestyle, your location, your proximity to friends and family, and move out to a more remote location where employment is harder to find, for lower money."
Yeah well done you worthless troll
This is just like high school, teh moments I won argument, people start calling me names.
You should live in Sydney, average income $200k per year. :)