generational housing problem

K

keneth

has anyone thought of what is going to happen in generations to come?

How will 2nd and 3rd generations from today be able to afford housing?

if house prices double in the next 10 years?

how will the children born in the mid 90's be able to afford property?

at some point will property peak?

i beleive a change in negative gearing is the only thing that would drop the prices of property, and still make it affordable to own a home.

For the good of housing affordability this is the only way housing will become affordable for everyone.


If Negative gearing for tax purposes was not allowed then what would be wiped off the housing market??

can you see it coming into play?
 
Keneth,

I do not think that negative gearing will be stopped because it has been done before in the past and was quickly reintroduced with more incentives for investors.

If it was scrapped the way I see it investors are only approximately 30% of the market so even if some investors left the market housing prices wouldn't fall to much (maybe 20% max!) and in addition to this landlords would increase their rents as the government is no longer subsidising their losses which would have the end effect of yields increasing. Once yields start to increase guess what happens? investors start to buy again so you will see the prices start to increase again but this time round rents will be higher and those who are saving to buy a PPOR will have even more trouble doing it.

I think that many Australians will either have to give up their dream of buying a house and just simply rent or just settle for something that isn't quite as nice e.g. a unit.

Just my opinion,
Pablo.
 
I think it has always been hard for each generation, but the difference (moreso now, I believe) is that many young ones don't want to buy a little run down house in an area they would not prefer, and use sheets at the windows and sit on $10 Vinnies chairs like we did, and my parents before me, and their parents before them.

I am 47 now and when prices went through the $20K barrier in Brisbane I remember everyone saying "How can anyone afford to buy a house at THESE prices?" I found it hard to buy my first house, as did everyone else, but I bought a 70 square metre little box with two bedrooms (second one big enough for a bed only) and slowly improved my situation.

I hate to think my 18 year old son will be faced with possibly a $400K mortgage to live locally, but he could also choose to buy a small unit further out and do it like we did, and have second hand everything until he gets some equity built. That way he will have a manageable mortgage and that is do-able.

Wylie
 
It's all BS. There are plenty of houses at great prices across sydney. They probably won't be 40 squares have home theatres and 2 minute walk from the beach but they are out there.
 
I also agree that the housing crisis is BS. In Western Sydney there is more supply than demand: that's why prices are falling. In the East we have more demand than supply: hence prices are firm or going up. It's not lack of land: it's an unwillingness to give up the good stuff. Surely the young investors on THIS forum prove that young people can still afford to buy property.
Alex
 
Wylie is spot on. It has never been easy for an ordinary guy/gal to buy their first home.

Went for a ride in my "pet hate" new development on Sunday and inspected a McMansion. Nothing special really (near new, of course) but for a bloody big ensuite with his 'n' hers hand basins and wired for home entertainment. Asking over 600k. It looked as if a young couple without kids owns it . Where's the housing crisis?
 
whenever this question comes up i always think "look at London". houses in the inner metro area are millions of pounds. but young people still live in them. how? cos they rent! over there, actually owning a home isn't such a big deal.

probably will take another couple of generations but we'll lose our sentimental attachment to the "own home" idea too - starting in sydney.
 
There are plenty of societies (Europe, especially) where renting is the norm. In the US big funds own huge apartment buildings and thousands of apartments. Why is it so anathema to Australian society that it might happen here? If it happens, it happens.
Alex
 
Is it a sign that Australia is maturing? Over time the cities grow and so the properties within say 5kms of the city become more and more elite over time as they become a smaller and smaller % of the entire housing in the city. And the next stage being more development as those blocks become more and more "precious"

Is the expectation that first home buyers can buy in inner Melbourne no longer realistic? In more mature cities such as New York, Toykyo, London etc first home buyers would hardly expect to buy within walking distance to the city.

Are we forgetting how young our nation is and therefore we will gradually move towards the norm in the older cities?
 
GoAnna! said:
Is it a sign that Australia is maturing? Over time the cities grow and so the properties within say 5kms of the city become more and more elite over time as they become a smaller and smaller % of the entire housing in the city. And the next stage being more development as those blocks become more and more "precious"
Click to expand...

My thoughts exactly. Although it's been said many, many times, a large part of the problem is that one of Gen Y's generational traits is to be impatient about getting what they want (but hey, who could blame them). I know a number of people in their 20's who complain they can't get a house, but they want a luxury inner city unit. Let them rent, I say! (That way they can help pay my mortgages).

As to the issue of inner city property becoming more expensive, my main strategy is to buy underpriced inner city property that yields well, figuring that the strong yield will initially cover my costs, and the longer term growth will support my expanding equity position.
 
No sympathy from me either....

  • FHBs can't expect the perfect first home
  • They should be less influenced by marketers & spend less $$ on DVDs & plasma & cars
  • They shouldn't expect life to be easy - they should expect to have to put in the hard yards - the same as every previous generation has had to do
  • They shouldn't take any notice of the 'concerned' media who want their $$
  • They shouldn't take any notice of the 'concerned' politicians who want their vote
 
Sunfish said:
Went for a ride in my "pet hate" new development on Sunday and inspected a McMansion. Nothing special really (near new, of course) but for a bloody big ensuite with his 'n' hers hand basins and wired for home entertainment. Asking over 600k. It looked as if a young couple without kids owns it . Where's the housing crisis?
Click to expand...

This sounds like my new house!!!
 
Most of my mates I cant understand (I'm 28). So desparate to buy expensive or build expensive homes that has to be perfect with a huge mortgage as their first home and will have a sook about the whole situation if they cant get what they want immediately :confused: . You tell them to start small, live further out, invest and then move up to the perfect home then and they interpret that as talking down on them. Just dont get it. The fact that one whole wage would be devoted to paying a morgage is just plain outrageous!!

I'm with Keithj. No sympathy from me either.
 
Never had sympathy for all the whingers you see around the place. Get over it and do something about it! It's not going to make the situation easier by complaining about it and procrastinating for another couple years before you finally wake up and realise that that's they way it is, whether you like it or not!

What makes these people think it's going to be any easier in a few years time? Complain all you like, politicans can only bandage the problem for so long before it'll be beyond their control totally as well.

Also agree with others thought above - what makes people think that at some point the house price rises have to stop??!! Did realestate stop rising in NY & London 20yrs ago once it became unaffordable for the newlyweds??!!
 
very common for DINK's to have joint inc of 100k
plenty of property around for 400K
10% deposit 40K - not hard if you let your ego rule your life
loan for 360K at 8% 29K
35% of inc 35K

Wheres the problem???

Wayne
 
I've been calling it a "Housing want crisis". It has nothing to do with affordability. Every other day I see younger people (and some older) bitching about not being able to afford a great place in a nice suburb... Tough.

To me it has nothing to do with the cost. Just the expectations of the people involved.

Either rent closer in our buy further out. Jumping up and down and hoping a government can change the situation, or playing the blame game (being a victim), will produce the sum total of zero results.

I'm teaching my kids how to invest. My 6 year old already knows the difference between appreciating assets and liabilities. Understands Capital growth, debt and the difference between good and bad debt.. Don't think his prep teacher appreciates it much but hey.. Will her kids be able to afford a nice house in a nice suburb 20 years from now?

It's not like what we learn and discuss on these forums is not available to anyone, irrespective of income. The more my mindset shifts towards abundance the less I can tolerate the poor me attitudes.

Cheers,

Arkay.
 
Hi everyone,

Those people who keep complaining that younger people should just move further out should carefully think of what they are saying. Most of our citys lack infrastructure and thus a heavy burden is place on those infrastructures that already exist. It is very time consuming to go from the outer suburbs to the inner suburbs when there is a lack of infrastucture.

I did this very suggestion, purchased my PPOR on the outskirts of brisbane. Before buying my PPOR it took me 5-10 mins to get to work. Now, it takes me an 1 hour. I am single and have no kids which makes it easy for me to handle. However, I can perfectly understand how a young couple with kids would feel a little reluctant in making the same choice as I did.

I not saying that there aren't any whingers out there who expect too much. What I am saying however is that the stituation when you guys started out is not necessarily the same as the one facing those who are starting today. By all means, pass on those suggestions but do not look down upon those who do not necessarily follow it. Things are not genenally as black and white as you might precieve.

That's my 2 cents worth.
 
Dean,

I'm only 37 and I live in an outter suburb of Melbourne. I have two kids and it used to take me 1.5 hours to drive to work and home again. 3hrs in the car each and every day. I now work 15 mins from my home but I did the trek for many years.

It's true that infrastructure may be lacking but that doesn't justify the thought that new starters should be able to afford to live within a reasonable distance to city based work.

I don't believe it's a realistic expectation. It is really a want or a preference that simply cannot be served for many. Better to realise that and make a start further out if needs be.

Cheers,

Arkay.
 
Dean, my own view is that a long commute is the price you pay for living in a big city. I agree that a long commute has negative effects on family, etc. but maybe that's just the price we pay for living in a big city as opposed to, say, a country town.

Ultimately, it is what it is. I doubt houses are going to become cheaper over the long term. Not as long as we still have economic and population growth. So, looking at, say, LA, New York and London, we have to live with it.
Alex
 

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