Australia's Housing Affordability Crisis

squeeze on 16/04/2023 - 23:02

The average income in Australia is 92K pre-tax. This equates to around 4.7K monthly take-home. To buy an apartment in a desirable suburb in Sydney or Melbourne you are looking at spending AT LEAST $600,000 for something small but liveable (2 bedrooms if you're lucky). The monthly repayments assuming a 500K loan (assuming you have saved 100k deposit) is 3.4K over 30 years (7% interest rate). This leaves 1.3K leftover for body corp fees, car expenses, holidays, food, utilities and life which is not enough to live comfortably.

In other words for a single person to buy their first home without the bank of mum and dad it's really not achievable without making big sacrifices. I wonder where this will leave a generation of low income earners who never make it into the market.

What can be done to address this and get first home buyers / young people into the market?

Personally I think there should be more tax on property investors and restrictions on foreign property investment. In other words - more owner occupied homes. I am interested to see what Labor do with the first home buyer shared equity scheme.

An interesting watch from Friendly Jordies on the housing affordability crisis - https://www.youtube.com/watch?v=lJE3B_ra3lY&ab_channel=frien…

Financial

Comments

      • Assiduous on 17/04/2023 - 13:58
        +1

        This is not actually true it's just what gets broadcast by politicians and vested interests. Surveys show a majority of home owners are in favor of lower house prices. Owner occupiers don't really benefit from rising house prices as you have to live somewhere. sell high buy high, sell low, buy low, they see just higher land tax / rates developer activity next door, kids that can't move out, crime, poverty, homelessness.

        • Bargainitis on 17/04/2023 - 15:36

          there isn't a benefit to it dropping either. Things tend to move in proportions.

          Where is this surve you talk about? I find it hard to believe that home owners don't want property prices to move up - thats how equity is built and thats how they can upgrade.

          • Assiduous on 17/04/2023 - 15:46

            @Bargainitis: https://twitter.com/sitiveni05/status/1508285775926140928

            "We've done survey's on this very topic across our 10,000 client base and 87% of baby boomers & older Gen X with just an O/O property want lower house prices for the young generation not to be burdened by debt, the data is 14% when client's have at least 1 Inv property."

            "When presented with the statement I have benefited from the longer-term increase in house prices around only 40% of homeowners agree."

            https://centreforequitablehousing.org.au/our_work/the-austra…

            Lower prices are always better whether it's food, housing or energy. You have been brainwashed.

            • Bargainitis on 17/04/2023 - 16:14
              -2

              @Assiduous: See this is where I think context is important. Here's why.

              When someone has benefited so significantly from the housing boom, they are also likely at the end of their working life too. It is perversly in their best interest that property prices don't increase too much because if they wanted to upgrade, their ability to fund it may be limited (unless they have built material wealth via other investments). Reading your quotations, it sounds like majority only have one property (O/O) so assume these are more average joes and not your "old money" type.

              Think about it this way. Sure, if I made out like a bandit through the housing boom and about to retire, I wouldn't want the property prices to increase too much either. I know what impacts it'll make to my living if it does - everything will cost more. See how under that lens, that survey is worthless?

              Now if you are millenial or pre-millenial but not quite baby boomer and haven't been able to ride that housing wave you are 100% freight train to property growth because you would want your money to work for you.

              Now if you are the uber wealthy, you DGAF because all your investment properties will be worth more if boom continues but if it stalls, you are balanced out via other alternative assets and likely your earning ability just keeps growing in any event.

              Again, gotta think about this stuff in specific shoes - now, tell me, who's brainwashed?

              • Assiduous on 17/04/2023 - 20:44
                +1

                @Bargainitis: Nope - the number of recently mortgaged people who you claim all have converted to wanting property to go up, are outnumbered by renters and people in public housing.

                • Bargainitis on 18/04/2023 - 07:39

                  @Assiduous: Sure mate. Because people are not inherently greedy and are all for the greater good of society. Let’s not be naive.

                  We are in this mess because people tell you one thing but turn around and always protect their own interest at end of the day.

                  That’s the way the world works sadly.

                  • Assiduous on 18/04/2023 - 10:14

                    @Bargainitis: I'd keep an open mind on that mate. It's not because we are constantly trying to rob one another that humans are the dominant species on the planet, it's quite the opposite in fact. Think about it - how many people do you see form an orderly que, vs push past to the front at the shops every day? Protecting your interests in a society, is cooperating with others, and doing what is right and fair.
                    https://thedecisionlab.com/insights/society/are-we-innately-…

                    • Bargainitis on 18/04/2023 - 10:39

                      @Assiduous: I do mate - I'm try to give everyone the benefit of the doubt.

                      The issue is lining up in a queue / basic courtesy is very different to financial outcomes. When push comes to shove on major items, I can assure you no one likes to compromise.

                      Anyway, I admire your noble principles - don't get me wrong. If there was more like you in this world, it'll be a better place.

    • tonka on 17/04/2023 - 13:28

      What happens to the renters if investment properties disappear. There's much better, less hassle investments available that will allow negative gearing instead.

  • tonka on 17/04/2023 - 13:09
    +5

    My friends were all in the same situation 20 years ago and got second jobs and lived with parents until they could get ahead enough to move in. What we couldn't afford was families as no subsidized childcare.

  • tonka on 17/04/2023 - 13:11

    Here's an alternative question. Should single people on average income expect to afford an exclusive (not shared) residence?

    • jellykingdom on 17/04/2023 - 13:39

      Kind of agree with you.

      It isn't the right of every citizen to be able to afford a home, especially one all to themselves, and in the exact area they want to live in, and have enough money leftover to do everything else they WANT to do (versus NEED to do)

    • IPYF on 17/04/2023 - 13:54
      +4

      I mean the question is more 'should we be fine that this isn't expectable anymore?' because it used to be very doable. If you were alone and were fine with paying a bit more, you used to be able to get a rental so you could be comfortable and alone. I used to rent a one bed bonghovel in Caulfield for ~$1200 a month and it sucked, but it existed and suited me.

      Now single apartment rentals of that type have like 20-30 couples and families applying for them, and they're listed out at like $2k pcm for even the wretched ones.

      For young singles, given these circumstances, it absolutely makes sense to buy. There's plenty of 1 bedroom or studio apartments for sale in superb locations for less than $400k with repayments and rates coming in at less than what you'd pay in rent even if you could find a rental. Young people just don't want them because without that second bedroom, they'll never go up in value. But, anyone who wants to get a place like that to live and exist in it can - and honestly it may well be the best option.

    • Jolakot on 17/04/2023 - 14:14
      +2

      I see single pensioners constantly complaining about this more than any other group. If you don't own your own home and you want more space than a studio/1br allows, then you have to share with other people, having an entire house to yourself is a luxury.

  • tonka on 17/04/2023 - 13:37
    +1

    The real problem is government using population growth to balance it's books. Supply and demand and rarity is the main contributor to property price. Bullet trains might just be the best solution.

  • Malik Nasser on 17/04/2023 - 14:22
    +1

    Prices are determined by supply and demand.
    Numerous first order solutions have already been suggested here/above (change tax structure, etc…).
    How about a second order solution like the creation of teleportation. As such people could live anywhere in the world, and just teleport to wherever they want to go.
    You could then build on land that is not very useful for other purposes, like farming, etc… This should help bring down property prices.
    To achieve this we need more people investigating how to achieve teleportation. So encourage more young people to enter the STEM fields.
    Think outside of the box…
    Rely less on politicians solving the problem, and try to solve it yourself (will probably be quicker and more effective).

    • tonka on 17/04/2023 - 16:10

      While a bit tongue in cheek, this is spot on. Your second order solutions should be the first order solutions. More work by the gov't to make regional cities attractive. Sydney is full. Build a new city at Kempsey.

  • PopCounty on 17/04/2023 - 14:41
    +1

    No one’s factoring AirBnB. This has reduced significant houses to be put on rent.

    • jaimex2 on 17/04/2023 - 16:03
      -1

      It plays a role but its not that much. There 300,000 AirBnB/short stays in the country.

      Were adding 1000 people a day at the moment.

      • richrichie on 17/04/2023 - 22:43
        +4

        300,000 is a lot, isn't it? That's 3% of the total properties in Australia (if census was right that we have 10M properties).

        Considering our economy relies heavily on migration, we can house all these new people comfortably this year if the number of these short stays are halved?

  • DrSwag on 17/04/2023 - 15:21
    +8

    For me it was a sacrifice + moving towards opportunities + time + reducing mistakes to purchase a house in early 30s.

    • Sacrifice: in that I've ever only owned an A-to-B car, that when I travalled it was predominately hostels, that I rarely eat out and I definitely rarely drink out (rarely drink anyway) while also finding a lot of activities that don't require money e.g. running group, board game and other meetups.
    • Opportunities: I left New Zealand. Though some time ago when I was a graduate accountant my salary was c.$32,400 while living in Auckland. Here in Australia I see grads earning $60k+ with lower costs of living (all things adjusted). Even when living here, I received about a 20% pay increase by just leaving for another drop though I was driven away because the charity had me clocking in 12-hour no break days.
    • Time: I am a 33 single male. I'm sure I could have bought a house much earlier had I focused and learnt lessons earlier from mistakes
    • Mistakes: Reducing these. In essence not gambling on the stock market
  • Pt001 on 17/04/2023 - 16:09
    +2

    I suspect nothing really will change with of who is in power unless the current model of housing changes

    I find that in AU/NZ people see housing as an investment and a way to make money. I had a friend say people don't do anything here, they just invest into housing. While other countries focus is on businesses for financial growth.

    I would like to see firstly, ban all foreign investments into residential prop, like a few countries already do.
    Secondly, move the sentiment away from using housing as investment vehicles, so that it cheaper and accessible for all. By doing things such as removing negative gearing, restricting lending, increased taxes for residential investments.

    Will this ever change to allow equal access to housing for all? Lets see.

  • Oz em on 17/04/2023 - 16:44

    Renting should be optional not a necessity.
    People move for work or prefer to rent for various reasons.
    Atm it’s forced on the lower class.
    Not many get that amount of income. I would say the average income is $50k and even lower for a single parent who can only work part time.

    There will be many homeless people in the next 10 years +. There will be no rentals they can afford and no other options, they will be too old to buy a house and not have the income. If they don’t have children they can live with then they will be forced to share apartments to stay off the streets. Share houses for elderly should be in the future plan with no expiring leases as they can not move house.

    • tonka on 17/04/2023 - 17:21

      There is a lot of rental housing available for people on a pension. But your not gonna get to smoke, drink or gamble excessively. And it's not gonna be a roomy house with a yard or a view over Sydney Harbour. But clean safe functional and convenient yes.

  • tessel on 17/04/2023 - 18:34
    +5

    Real estate is the economy. There will be no affordable housing again. Everyone sees real estate as a way to make money and hopefully make a lot of money. There is no incentive to make real estate affordable when everyone is looking at it to make money.

    "They" will do everything to prop up housing prices. We'll see more easy access to super annuation so you can get that required deposit. Prices will not drop or come down of any significance.

    Now, grab your fin foil hat because this is where you think I'm really bat shit crazy. The only way real estate comes down is due to a war. That's the great reset we need to undo this matrix we have created.

    Instead, accept our fate. It's like watching a train crash in slow motion. Sit back. Enjoy the ride. You know what's coming. Marvel at the greed and stupidity of humans and repeat after me… "Isn't capitalism great".

    • Ghost47 on 17/04/2023 - 18:57
      +1

      The only way real estate comes down is due to a war.

      I would say revolution, not war.

    • Windows7forever on 20/04/2023 - 07:16
      +2

      100%

  • drprox on 17/04/2023 - 18:41
    +1

    Life just isn't designed for single people.

    • bobolo on 17/04/2023 - 20:51
      +1

      *poor people

  • johnnygolden on 17/04/2023 - 21:05
    +1

    Affordable homes for first time buyers = lower house prices for everyone

    • Reduce immigration
    • Increase interest rates
    • Replace stamp duty with land tax
    • Eliminate negative gearing
    • Cap home loans at 4x income
    • Force banks to diversify their loan portfolio beyond real estate
    • Penalties that disincentivise land banking by developers
    • Regulation that actually protects renters
    • infinite on 17/04/2023 - 23:59
      +5

      This is so many levels of silly, it's unbelievable.

      Increasing interest rates forces average Australians to default on mortgage repayments and lose their homes. Those homes are then bought by commercial property investors.

      Replacing one tax with another is like shooting yourself in the forehead, compared to shooting yourself in the back of the skull.

      Capping homes at 4x your income would eliminate 99% of potential home buyers from ever owning a home.

      Every bank in Australia already has a diverse portfolio of investments.

      The Australian state tenancies act's are already among the tightest and most heavily weighted pieces of consumer legislation on earth, that already heavily favour renters in almost all possible scenarios. If you weren't aware of that, there's not much that can be done or said.

      • johnnygolden on 18/04/2023 - 17:55
        -1

        Um, I think you missed the point I was trying to make. There is no sustainable way to make housing affordable for first time buyers without actually lowering house prices. There are many obvious ways to do this such as increasing the costs of ownership, reducing credit availability, or otherwise making housing a less attractive investment. However these will benefit future home owners at the expense of existing owners (and lenders) and the political costs of this are too high so it will never happen voluntarily. Instead politicians will continue to pretend that somehow housing affordability can be addressed without actually lowering prices and will make only token efforts that are doomed to fail.

      • surg3on on 19/04/2023 - 16:44

        Actually replacing stamp duty with land tax is a proven way to increase mobility of the workforce and increase equity between older generations and newer.

        You are right about every other idea though. Caps and rate hikes wont help at all.

      • Ghost47 on 21/04/2023 - 12:51

        Increasing interest rates forces average Australians to default on mortgage repayments and lose their homes.

        Good thing unemployment is low right now, those people can go get a second job to afford their mortgage.

        Or would you prefer inflation to stay high and hurt all Aussies, including the poor who don’t own their own property?

        We are regressing to the mean; interest rates have been too low for too long on a global scale. It’s been a silly decade of cheap money everywhere, that’s why houses earn more annually than people working in full time jobs actually contributing to society.

    • mrvaluepack on 19/04/2023 - 23:07

      Only one of your idea makes sense which is capping home loans be it through reduced income multiplier or tighter LVR. That will restrict money supply and tame prices.

  • ribze1 on 17/04/2023 - 21:15
    +4

    Labor took really good, and reasonable policies to the 2016 and 2019 to remove some of the market distortion in regards to CGT concessions and Negative Gearing but the LNP and their Media mates weaponised it.

    • infinite on 17/04/2023 - 23:50
      +3

      Lab have the numbers in parliament to do anything they want currently, yet they've chosen to do absolutely nothing. Turns out Lab are the problem, not the Lib's.

      • surg3on on 19/04/2023 - 16:46

        and how did they get those numbers? promising to not touch housing.

        • infinite on 19/04/2023 - 21:20

          They got in by tricking moron voters to vote Teal. Now those Teal voters are getting what they asked for & reeeeeing about it.

          • surg3on on 20/04/2023 - 09:20
            +1

            @infinite: Tricking? Oh i see you are the only voter smart enough to vote and everyone else are idiots.

      • Motek Benzona on 20/04/2023 - 06:53
        -1

        I lost count of the many "Albo will save us" posts either during or right after the election in groups i belong too and online

        In fact he has not saved ANYONE. Traditionally Labor helps the poor but if anything this nasty little useless commie has probably done the opposite and placed increased burden on those who probably need a bit of help.

        If you add to that how he is screwing the average worker who can afford to live AND add his inaction on ANYTHING that is not for some kooky minority group then you can safely say the leftists who vote for this loser have been conned

        I feel for people who actually expected Labor would help them

        and im not a liberal supporter….

  • kgree92 on 17/04/2023 - 22:06
    +2

    All comes down to supply and demand. You can’t make anymore land and so many people only want to live in specific areas (e.g. family friendly suburbs, close to cbd, nice schools). Hence these people will be competing for those desirable areas, and given in this low house stock environment - this will push the prices up.

    Solution? I feel that people should explore lowering their expectations and requirements. Not everyone can have 500 sqm+ block, <50 min travel to CBD, A+ school catchment, 3/4 bedroom + 2 car space with a backyard yada yada…. Heck, I was prepared to raise a family in a small apartment

    • infinite on 18/04/2023 - 00:05
      +1

      Yep, Australians need to get out of their basements and go travel & work overseas for a few years. People living in equivalent cities all around the world have regular daily travel times to work of an hour or more every day. They'll do this for a decade to save enough for a shitty 20yr old third-hand car of their own, so they aren't trapped on horrifyingly bad public transport systems and can spend less than an hour each way traveling for work. Many will work all of their lives for the opportunity to secure a multi-generational loan their grand-kids will pay off for a small dingy 2-BR apartment in a 5th tier regional city somewhere, or a suburb an hour+ from major employment hubs and locations.

      A stupid amount of Australians live in a delusional fantasy about how owning property should be easy, or ever has been.

      • FrugalDealHunter on 19/04/2023 - 14:56
        -1

        You’re comparing apples to oranges.

        You should be looking at how it was in aus a few decades ago vs today.

      • Jazzyau1973 on 20/04/2023 - 00:11
        -1

        Delusional? Haha

  • Ononono on 17/04/2023 - 22:48

    The path to success in Australia is by buying a property, then buy another, and another. All of our policies and institutions are geared towards this. The situation will only get worse, even if they build a surplus of homes there will always be a line of migrants waiting to get in. Demand will remain high and supply will remain low, the system is working exactly how the powers that be want it to. No government proposing a change to the system will get voted in, and even if they are they won't last more than a term. If you're young, single, and can find a career abroad, you should seriously consider leaving. I did it and couldn't be happier, secure housing is something that changes your quality of living significantly.

    • infinite on 17/04/2023 - 23:48

      "If you're young, single, and can find a career abroad, you should seriously consider leaving. I did it and couldn't be happier, secure housing is something that changes your quality of living significantly."

      I find this a very interesting comment for a number of reasons, being someone who has worked across Asia, the US and Scandinavia.

      First off, many countries won't allow you to buy a residential property at all, unless you are a full citizen of that country. So, good luck with that being a temporary foreign worker on a work visa. In many countries through Asia, that restriction is even tighter, requiring you to be at minimum a second or third generation child from grandparents/great-grandparents who were citizens. The on top of that, many countries will only allow you to purchase "minimum-value properties" as a non-citizen, as a form of protecting the market from foreign purchasers driving up housing prices for average citizens - so you are locked in to buying properties worth over $650K-$750K (AU).

      Going overseas to work will rarely if ever result in saving any significant amount of money more than working hard here in Australia over the same period of time, as living costs, living expenses and renting prices are way higher than what they are here in Australia through most of Europe and most large Asian cities. Most Australians refuse to acknowledge it, but we have it unbelievably good here compared to most countries in terms of our standard of living and it's associated cost. Consumer protections for those renting are often non-existent overseas compared to Australia & as a foreigner you are extremely vulnerable to getting ripped off and then kicked out of a tenancy without reason or notice. So while you will be entering markets with better opportunities for higher earning potential, that higher earning is eaten up by higher living costs.

      Working overseas to get ahead in your career and make it further to the top in a shorter period of time is a good idea in general, but the financial payoff for that only really happens if you can come back to Australia and secure an executive position or role once you get back here. That then allows you to earn a higher income at a relatively younger age than normal, while having a higher standard of living and lower comparative cost of living compared to overseas.

  • leiiv on 17/04/2023 - 22:51

    The big question is what would happen in the short term and long term if the situation is being left as it is (no government intervention, more or less). How would the market (and society) correct itself?

  • infinite on 17/04/2023 - 23:25
    +6

    OP is making some absurd comments, to say the least.

    No one as a first home buyer should ever expect to live in a desirable inner-city suburb for a start, be it in an apartment or a house. Also, no one in their right mind should expect to be able to save enough money for a home without making big sacrifices - that's literally what financial discipline is. Sacrificing for a good number of years is literally the absolute base minimum requirement for the financial discipline required to save for a house. It was the same for our parents and grandparents, too.

    "What can be done to address this and get first home buyers / young people into the market?"

    Young people shouldn't expect to be in the house buying market unless they've been saving every penny from part time jobs since they were a kid, all through their teen years and then from working as a casual while studying at TAFE/Uni - as well as receiving some sort of financial benefit or inheritance from a third party/family. Young people literally haven't been in the work place long enough to have saved for a deposit needed for a house. Only a fool would think that was something they'd be able to do simply out of thin air.

    "Personally I think there should be more tax on property investors"

    Why? That would do nothing other than raise the cost of rent for renters, which would take money out of the pockets of people most likely to be trying to save for a mortgage deposit in the first place.

  • cauilfield on 17/04/2023 - 23:41
    +6

    I came to this country when I was in my early twenties, worked my ass off overtiming without having those smash avos and almond flat whites every morning. Managed to secure 4+ properties current LTV is circa 50%; Guess what, I still drive a relatively cheap car and eat my avos at home. And yeah, Breville Barista Express still does a pretty good flat white.

    • OzHan on 18/04/2023 - 11:07
      +3

      Good on ya. NO pain no gain. most young people do not seem to understand this old saying any more.

      • Protractor on 19/04/2023 - 10:03

        ….shoebox in middle't road…..

    • DingoBilly on 19/04/2023 - 11:27
      +5

      Not sure how old you are now - but if you came early enough then this would not be a difficult achievement.

      My parents came in their 30's, got a $20k home loan (to cover a full 4-bedroom house) with no actual income to their name and paid it off within 4 years.

      Without more context it's unclear whether what you did is impressive or full of shit.

      But also worth noting that working your ass off/doing overtime would not be anywhere near enough to afford 4 properties in this day and age unless you're buying absolute garbage and are on top of the range income. I think you're completely missing the point otherwise that for the average person it's just not reasonable.

      • surg3on on 20/04/2023 - 09:23
        +2

        hes full of it and you know it. Oh congrats he bought housing in the 90s. So smart for being born at the right time.

        • cauilfield on 20/04/2023 - 10:51

          My first property was bought in 2012, last one was bought last year. Don’t blame the time.

          The cheapest is valued at 750k.

  • Wasabi Ninja on 17/04/2023 - 23:54
    +3

    This is the new normal. The home ownership of past generations is gone and not coming back.
    Do what you have to do to enjoy life and have some security.
    I had to work two jobs 6 days a week to get my first home. Worth the sacrifice of putting my life on hold for me. But everyone is different.

    • infinite on 18/04/2023 - 09:25
      +2

      Home ownership now is no different to prior generations, other than we are now lucky enough to likely be able to repay our mortgages well before retirement and shop around for a second more suitable property later in life.

      Far too many individuals in the current generation simply aren't willing to make the financial and lifestyle sacrifices necessary to save for a mortgage in an affordable outer-suburban area, nor are they willing to accept the reality of what standard of house/apartment their finances will afford them for a first home.

      • Wasabi Ninja on 18/04/2023 - 10:15
        +4

        It’s definitely more years wages now.
        My father bought house and land for $16k when his wage was $8k. Now his house is worth over a million.
        I bought my first house for $220k when my wage was $75k (22 years ago) now that’s worth over a million.
        Pretty obvious it’s not the same.

  • Bystander on 18/04/2023 - 00:02
    +3

    Surely the most obvious solution is to set the immigration numbers based on housing and other services availability.

    We currently have the highest immigration rate in history and at the same time a chronic housing shortage.

    Immigration is great when we can comfortably accommodate more people.

    • GG57 on 18/04/2023 - 09:12
      -1

      Should we limit the birth rate as well?

      • Protractor on 19/04/2023 - 10:41

        Yes.
        We don't have a right to to spread beyond the means and capacity of a closed ecological system, just because we can .
        And just to justify an economic model.
        Children have become commodified, anyway.
        The next pandemic will probably sort it all out for us.Especially if it is a morphed bird flu (or other ag animal ) type variant that can cross to humans

        • GG57 on 19/04/2023 - 11:23
          -1

          Don't forget climate change; some people are already choosing not to bring new humans into existence, so that the offspring won't have to cope with that.

          • Protractor on 19/04/2023 - 12:12

            @GG57: I can see why people would do that.
            The spike just from 'electrifying' everything, switching to renewables and probable global conflict will hit hard on the carbon column, but just the background population growth as is, is enough to keep climate change exponentially growing.It's already outrunning the piss poor actions(cough cough) No-one from the jobs and growth camp can or will explain how infinite growth works with finite resources in a perfect world, let alone this one. So how parents today articulate, the positive, when they look in their kids (and grandkids) eyes, when they say 'it's all good' is head up arse stuff or straight out misleading them.
            We are(were) a finely balanced machine, that could be moved (or worse) by natural events like meteors, volcanoes etc, but when you throw the other stuff of 'us' in, we are well into the mire. We could almost plant (mass reafforestation) ourselves back into the black if we had the brains to slow down our rate of population growth. Passive choices (choosing no or less kids) is still framed as evil by the warlords and greedmeisters.And all trees are bad.( You know the ones that are the planets lungs and carbon sinks.) If the tropical belts and the Amazon keep disappearing at the rate at the moment, we could jump another degree or more in a decade.And the icing on the cake is the latest info on the ozone problem returning and expanding along with methane from the melting of ancient areas around the arctic.

    • infinite on 18/04/2023 - 09:29
      +4

      Many countries have "non-citizen" property purchasing laws that dictate foreigners can only purchase residential properties valued at a minimum in the top 3% or top 1% value of the housing market, to protect every day citizens from having the bottom and middle sections of the housing market jacked up by foreign investors and workers. Australia should definitely consider that.

  • wimphrel on 18/04/2023 - 01:04
    +3

    "Everyone deserves to own their own Bitcoin" Just joking….

    Look - it's all doom and gloom, but if any of you know anyone who lives in Singapore, Hong Kong, New York, San Francisco bay area -> They're pretty much future predictions of what Syd & Melb are like. How about $2M+ AUD for a 2 bedroom apartment in a desirable location?

    I'm one of those pesky landlords & I rent out to lower income tenants who can't afford to buy in the area. If I put up my properties for sale right now, they would just go to middle-to-upper class people. There are suburbs in sydney where owner occupiers make up > 90% of the occupancy which is crazy!

    I voted for Labour to get rid of negative gearing & CGT discount, but was surprised that they lost the election. I don't need the perks as I always aim to be positively geared, and don't plan to sell any property anytime soon. I honestly felt it was a bit of a farce as a good proportion of investors don't invest for these two reasons anyway (but yes they are a weird perk that should be gotten rid off). IMO if you want equal access to properties, the government needs to regulate rents. I liked the idea of defence housing - guaranteed & fair rental income for & long leases: If rents are fair & contracts are long, then there's less motivation to own property & more ppl would consider taking other risks like starting a small business & improving the economy in non-construction-based ways (look at Switzerland -> middle aged ppl are happy to rent apartments as they have 10 year leases & can renovate them without owners consent).

    Either way, if you want to live in above-average areas (desirable), you gotta think outside the box and get an above average/median wage. That's just how capitalism works -> My 1st property - I co-owned with 3 close friends. We lived in it like a shared house & 2 of us sold our share to the couple when they were going to get married. Us 2 then separately bought our own 2 bd apartments with the money we saved up: Thinking outside the box!
    FYI - we had a legal contract in place to cover any risk of falling out: we used podproperty at the time.

  • pogichinoy on 18/04/2023 - 01:06
    +2

    There are number of observations I have about the 'housing crisis' in Sydney:

    • Limited quantity of properties in the desirable areas.
    • Govt costs and time are too high to zone, build electricity, water, gas, and internet infrastructure to the property, requests to make changes to property, etc. Small govt please!
    • FHBs aren't prepared to start small where they can afford and level up.
    • Much like the rest of Aus, double income is the norm. Too bad so sad, this is the status quo.
    • I'd have less sympathy if FHBs actually started saving from a home since they started working between 16-21 years of age. It seems most FHBs wake up at 25 or 30 and suddenly want to buy a home when they cannot save much from their current lifestyle and don't have much savings to start with.
    • FHBs tend to have champagne tastes but have beer money.

    From a Gen Y.

    • infinite on 18/04/2023 - 09:56
      +2

      All of that, plus there's not even a housing crisis at all.

      It's not a housing crisis when a bunch of 25-35yr old's who have never saved a cent in their lives, or studied/applied themselves to achieve anything other than part time minimum wage jobs, suddenly wake up to themselves and realize they too would like to own a nice property in a good area…… but have no financial capacity to achieve it. That's just people being slapped awake by reality. It's also not a housing crisis when those people need to simply save & work hard to purchase realistically affordable older low-mid standard quality housing in outer suburban areas as a first home.

  • nightqueen on 18/04/2023 - 03:51
    +1

    I had a good chat to a German Australian, he said housing is far more affordable to purchase in Germany even though they have 80 mil population in the land size of greater than Victoria. They have much less land size than NSW.

    He made the observation that a large majority of population of Australia is packed into coastal cities of Sydney, Melbourne, Brisbane etc…

    Where as Germany has greater spread of population and also higher density of housing
    Germany has far superior infrastructure and cities are much closer together

    Berlin 3 mil
    Hamburg 2mil
    Munich 1 mil
    Cologne 1 mil
    Frankfurt less than 1 mil

    Australia has much lower density and much more competition for land for the 'desirable' suburbs. Australian has far greater distances between cities and worse infrastructure.

    Sydney 5 mil
    Melbourne 4 mil
    Brisbane 2 mil
    Perth 2 mil

    Australias city locations on the coast means there is always a physical boundary of land by the sea and the competition is very high living close to the beach where as the German inland cities can have far greater spread

    • cauilfield on 18/04/2023 - 08:35
      +2

      what are we comparing again? Tier1 Aussie towns such as Sydney, Melbourne with Tier1 German cities like Munich and Berlin?

      1br apartment sets you back at $500 per week in Melbourne and 350 EUR in Munich, how is that more affordable?

      • nightqueen on 21/04/2023 - 13:36

        I'm comparing house prices to purchase, also tenant laws are far stronger for renters in Germany too. People often sign up leases for many years for security

    • infinite on 18/04/2023 - 10:32
      +2

      You'd have to be Blind Freddy to also fail to notice that they can do that in Germany because their country isn't mostly an uninhabitable desert, like ours is. We are also a massive island, they are a mostly land-locked country with cities in forest areas well above sea-level, divided into persistent small pockets of dense development as their topography dictates. They've also slowly built up their infrastructure and city areas for over a thousand years.

      Cost of living and housing in Germany is also completely wild compared to Australia. The average cost per square meter of land in Melbourne is $1,800 - the average cost of land per square meter in Munich is €11,000 Euro's !!!! Their cost of land is literally 10x what it is in Australia. The cost of housing and building is approx 3x what it is in Australia. The cost of renting is almost 2x what it is in Australia. The differences in cost of living are also substantial, with electricity/petrol being just shy of twice as expensive as here & gas being more than three times as expensive, if you are even lucky enough to get access to it. They've also been facing persistent blackouts and power supply shortages due to their disastrous "green policies" which have all but ruined their power infrastructure and crippled consumers financially, leading to insane situations like only being able to wash with hot water once every three days. Australia in no shape or form ever want's to go down the path of Germany in regard to any of this.

      • OzHan on 18/04/2023 - 11:10
        +1

        For some people grass is always greener on the other side.

      • Hansi on 19/04/2023 - 06:53

        That's a good summary by infinite and I can back the information up.

        "I had a good chat to a German Australian, he said housing is far more affordable to purchase in Germany even though they have 80 mil population in the land size of greater than Victoria. They have much less land size than NSW."

        Housing is more desirable in less favourable / sought-after areas, but that's the same in Australia! People don't want to live far away from metropolitan regions, suburbia or places that offer jobs.

        "Where as Germany has greater spread of population and also higher density of housing
        Germany has far superior infrastructure and cities are much closer together"

        True, Germany has a lot of cities in the 100,000 - 500,000 tier compared to Australia (Our 30th biggest city is Shepparton–Mooroopna with just over 50,000 people) (Ger 30th biggest city has a population of almost 250,000).]

        The salaries in Germany also tend do be lower than in Australia, but the housing price has skyrocketed over the last few years, meaning housing affordability has gotten worse than it was previously.

        The rent situation is also quite different. Many people are happy to rent throughout their whole life (a family member is currently going into her 40th year in the same apartment). I pressume that is because property was (not is) not seen as an investment and rights as a tenant are much better than in Australia. Often heard people saying how they would hate to be a landlord in Germany. Around 2/3 of the population in Germany rent, as opposed to 2/3 of the Australian population owning their home.

  • RefusdClassification on 18/04/2023 - 06:34
    +2

    Firstly, you should use median income instead of average (there is a large difference between $65,000 median and $92,000 average). You mention how hard it is for a single person on an average income; it is impossible for a single on a median income).

    Secondly, government charges (federal, state and local) add 40 to 50% to the cost of developing greenfield housing. Eliminate those charges and the price and new and already build homes will fall substantially.

    Lastly, some people (like the Greens) mention more public housing as a solution to housing unaffordability. The problem is that you are locked out of home ownership and can never build up equity for your retirement years when all you'll have is a government pension to live off. Forcing poor people to live in close proximity in high rises is a disaster (skyrocketing crime, drug addicting, vandalism). People who don't own housing don't care about their apartment, don't maintain it, and don't care about their neighbourhood, hence the inevitable urban blight. Read about "Pruitt-Igoe", a housing project in St Louis.

  • redpenguin on 18/04/2023 - 08:20

    You might find this interesting. Cost of suburbs (i.e stand alone single dwellings) to a city.

    https://www.youtube.com/watch?v=7Nw6qyyrTeI

    One part of the solution would be to allow high density mixed use construction within 1km of existing main roads, tramways, railways and commercial areas. Build high quality and make our cities more liveable.

  • kokita on 18/04/2023 - 08:35
    +1

    The price for new 2-bed apartment within 25km from Sydney CBD in 2014 was already 600k. The only option is to find somewhere outside Sydney or other cities/towns in Australia.
    Sadly true, this can't be reversed as the demand will be high indefinitely.

  • GourmetFoodie on 18/04/2023 - 08:56

    Vacancy tax.
    Death taxes on Boomers to build affordable low income housing.
    Turn off migration except for highly skilled only and all must do English tests.

    • GG57 on 18/04/2023 - 09:16

      I'm ok with a vacancy tax, but I'm also reasonably sure that there will be ways and means to avoid it.
      Death taxes will result in smaller inheritances to offspring, so they won't have as much to spend on rent or property purchase.
      Migration (and birth control) have multiple effects on our economy, not just re property availability.

      • Protractor on 18/04/2023 - 13:06
        +1

        "here will be ways and means to avoid it."
        Something like.
        Tick here if you intend /need to access the property as a non resident.
        or Is the property currently fit for habitation YES/NO

        Rules are great everywhere, except where the rorts are greater and where no umpire exists.
        Howard turned on the floodgates to greed and 'stuff you mate', and we (as a country) embraced and perfected it.
        Look at the situation right now.

        So I think we can officially stop claiming any moral high ground on "fair go" and "mateship". Long since dead/buried/cremated. The obsequious sycophancy I hear every ANZAC Day, from suits and slime bags is like being force fed ipecac syrup.

    • OzHan on 18/04/2023 - 11:11

      Have you checked the recent vacancy rate in the major cities? How does it even help.

      • GG57 on 18/04/2023 - 13:52

        I'm not sure of the basis for the 'vacancy rate'. Is that a property that is currently available for rent/lease?
        Probably less in some areas of major cities, but there are plenty of vacant properties all over the country. The problem is that a majority of those are not currently made available for rent/lease.

    • richrichie on 18/04/2023 - 21:52

      Agree with vacancy tax, but not too sure about death taxes.

      Migration english tests are already very difficult as it is (for skilled migration at least). The IELTS requirements to get decent points are ridiculous. I suspect many locals / native english speaker would probably struggle to pass that too. Have many international coworkers / ex-classmates that I think have excellent working English skills that failed multiple attempts to get the proficient/ superior english points.

  • MindGrenadius on 18/04/2023 - 09:00
    +1

    Housing market in Aus has been a heavily rigged market for decades. People lament that there's always a call for a crash - realistically there should have been 20 years ago but it's been propped up for far longer than it ever should have and certainly longer than any sane person thought this would go on for. Rigged markets always fail and it's finally starting to now. How much more life support it gets in things like flooding in migrants is yet to be seen but it is in the final days where either it breaks or society does - my guess is on society based on the Govt's latest actions.

    It's truly sad to see people honestly try to justify the absurd ratios between income and housing prices like some weird brand of Stockholm Syndrome. They'd rather see Aus drift into a weird type of quasi-second-world country where unless you are a relatively very high income earner, you're basically in mortgage/rent stress & very poor and their answer is for everyone to "simply get a better paying job!" or be permanently relegated to the serf class. An economy where everyone has a high paying job doesn't exist.

    • Wasabi Ninja on 19/04/2023 - 00:18

      It’s really not that hard to make decent money and live well.

      • MindGrenadius on 19/04/2023 - 12:42
        +1

        "Decent enough money to live well" is getting higher and higher. You basically need to make $100K minimum (which would have been relatively affluent just 10 yrs ago to not be in mortgage/rent stress) in pretty much any town/city that 90% of the population lives in.

        I'm guessing you're in a decent job as am I, but it's just not possible for everyone to do so. There is a giant chunk of essential work & things society desperately needs to function that just doesn't pay well & probably never will. If they "just got a better job" it means a bunch of those jobs wouldn't get done and society would fall apart. With things as they are, those people are just relegated to increasing hardship and serfdom

        • Wasabi Ninja on 19/04/2023 - 12:58
          +2

          Most countries those jobs are taken by immigrants with no real skill sets. If you’ve been here a few generations and still can’t get your act together, that’s pretty bad.
          My parents were immigrants and they died when I was 13. In group homes until 17, lived at a caravan park after that. Got an apprenticeship in a trade. Finished that and did uni part time. So much opportunity in Australia if you want it.

  • payless69 on 18/04/2023 - 09:17

    Get a BSA bike!

  • filmer on 18/04/2023 - 09:41
    +2

    This scenario was always going to happen once having two full-time incomes per household became the norm like it is today.

  • pnt on 18/04/2023 - 09:53

    The invisible hand of economics will kick in one day. But it has been a study in market failure for 25 years and counting!

    • OzHan on 18/04/2023 - 11:12
      +1

      yes one day, until then keep on dreamin'.

  • dumvamp on 18/04/2023 - 10:51
    +5

    I dunno, im in central qld, i have a whole 4 bedroom, 2 bath, 2 car garage house, on 700+sqm, thats only 10 years old, in great condition, and we paid 295k (130k owing) for it 2 years ago. We are 10 minutes out of town, birds, trees and barely a car noise throughout the day, even better as im at the end of a cul-de-sac.

    Ive also got a block of land 3 doors up thats an empty 650sqm, that cost me 99k (Paid in full) last year. Thats gonna have a shed and storage for my project car and a caravan, And if we can swing it a little cottage house for extra room for the kids or to rent out.

    But I'm apparently a minority who dont feel that living in a cube like rats, with 500 other people in the same building, and 10,000 other people in arms reach is a "desirable" location.

    Maybe its a different perspective on life, but I'll take space, affordability, and general life style and room to breathe over a stupidly expensive, claustrophobia inducing box, and the associated amount of people that come with that, any day of the week. Oh… and its affordable too.

    • Hansi on 19/04/2023 - 06:57

      Did you find that jobs are hard to come by in your region? Aside from essential services, smaller towns can be quite limited in the jobs they offer / or even streamlined (mining towns).

      • dumvamp on 19/04/2023 - 07:45

        Thats the thing, im not exactly in a small town, its a major town in CQ with plenty of jobs in all sectors. Everything from essential worker to mining, lawyers to teachers, Ambos to Doctors, council to dog washer.

        Problem is people think they need a massively high paying job because they want or need to live on 200k+ a year EACH… you dont, unless you choose to live somewhere that needs you to earn that much just to actually live there.

        My water bill is $50 a quarter, my power bill (after solar) is $160 a quarter. Gas is about $300 a year. My Mortgage is less than $850 a month. Outside of food, all our bills covered is about $1500 a month. And income is more than double that, closer to triple.

        To show up and put fruit and veg on the shelf I can get about 52k a year. I can get about the same as a dog washer only doing it 4 days a week.
        Selling printers and business level supplies and services is about 100k a year.

        So 2 people working very basic jobs, is 100k a year easily, 150k with a little effort, why isnt that enough for people to live on, maintain a home on, be happy on? We still buy stuff we want and need, we still have trips and holidays, we still head out for dinner and lunch on the regular.

        Getting a higher powered or paying job isnt an issue, but is it needed at all? We dont think so.

        • MindGrenadius on 19/04/2023 - 12:49
          +3

          The problem with this is that it works for you, on the small scale you've done it. You're the exception, and while it's a beautiful way to live and more people should aspire to have that mentality, if everyone (or just more people) had that mentality, those small towns would be overloaded. It only works if you don't have many people going to those small towns

          I'm in a smaller regional town in NSW that since lockdowns/remote work etc, being close enough to Sydney, metro markets have fully discovered it and things have gone nuts. The infrastructure can't cope and house prices have gone insane (median wage here is ~$48K and house price is ~$880K. The same would happen in your town if enough people decided to migrate out of the metro areas. It can't solve the problem because it's just recreating it elsewhere if enough people did it to solve the initial problem

  • FallaM on 18/04/2023 - 11:00
    +1

    I'm starting to really think that it's too complex of an issue to solve. There are important factors that are impossible to fix. A good example is that we probably live in overall the greatest country on earth, which means that we generally do have very high living standards applied to everyone throughout our society, but as our society continues to improve we are losing the middle class. The wealth gap will expand as more jobs become less important over time. The government should act now to at least temper the beast of property profit. Even if that would effect me, it just makes sense. I don't want to see what will happen when a generation of people are locked into renting forever.

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