Housing Affordability

[lizzie]

Negative gearing should be restricted when buying existing housing where no additional dwellings are created. The savings used to reduce these ridiculous council charges. Same amount can be collected, but additional incentive is given to increasing the total supply of dwellings.

i don't agree as i believe investing needs to be a level playing field ... like telling someone they have to pay more tax on their share dividends because it's a blue chip company when they should be supporting startups.

i think they should get rid of the fhog and give that money to the state/councils, get rid of stamp duty when purchasing and put it on to the selling end (above figures include stamp duty).

 

[Rockstar]

Finally watched the show (online at an airport in korea!)... What I'd like to know is, what does that first lady do with her spare $30 each week? I'm betting she doesn't invest any of it.

Was that the lady who was done up with make up and dyed hair? I wonder what kind of car she gets around in? Society is full of people who just don't have any saving or investing sense. They are addicted to spending their money on non essentials because they are in the trap of trading their money for immediate material gratification. It's just how it is with many people.

The worst off are those who earn little or are on Social Security and spend it all on crap. ( Running from darkness to darkness)

Then there are those who earn heaps and spend it all on non essentials. (running from brightness to darkness)

Then those who are earning little yet managing to save for the future and investing wisely. (running from darkness to brightness)

And the fortunate ones who are earning plenty and investing wisely to create even more wealth. (running from brightness to brightness)

The most fortunate ones are earning plenty and investing wisely to create even more wealth to support their family and community and donating a substantial portion of their wealth to charity.

It's just human nature that society will always be a mix of these characteristics.

 

[joeExpat]

Abolishing negative gearing would go a long way to making house purchases easier for owner occupiers, as well as freeing up a lot of cash (3billion+) currently lost in investor tax breaks. Sure you can deduct costs from your rent, but not off your personal income. Hardly any other countries in the world allow negative gearing (I think only 3)

 

[lizzie]

by supplying negative gearing - the government is basically subsidising lower income earners into rental properties.

if negative gearing were removed, i think you would find that investors would increase their rent substantially to become neutral/positively geared and that the government would be forced to subsidise in other ways - public housing, rental assistance etc.

we did have a government that removed negative gearing for a brief period in the late 80's ... granted prices did drop but, for those that couldn't afford to buy, rents went thru the roof. i don't think they would like to see a repeat.

 

[steveadl]

Removing negative gearing would benefit buyers to the detriment of renters. You put that much pressure on rental prices, see how the electorate react - like it or not, a vast number of the population will always be renters, no matter what tinkering is done by govts to make housing more affordable.

 

[Trogdor]

Thanks for posting the link. This was quite an interesting show.

It was somewhat frustrating to watch at times - as the feeling I got was that the housing minister (especially) and one or two others seemed to understand the issue and were simply discussing things "around the edges" which would have minimal or no effect simply to make people happy that "something was being done".

At the end of the day - no matter what government incentives there are - the issue with housing, as well as employment/wages, and many other things in life - is that there is a finite supply - the "top" people will always get the best, "middle" the middle, and bottom will miss out or have to make do with what they can get. Its always been the way with people sadly. As Ross Gittins stated - demand side solutions will just move prices - and the bottom fraction of society will still miss out. As he also pointed out - not everybody can live in central Sydney. Why do people expect the right to simply for existing?

All I could draw from this is that some people are genuinely in need (disability, mental health, domestic violence, etc..) and extra (basic) low cost housing should be built for them.

Others should drop the entitlement mentality and either make do with something cheaper/share - or - be prepared to do the hard yards to move up the ladder relative to the rest of society and take their place. Everybody else had/has to - and this show seemed to be a forum for (not really so) tall poppy bashing.

 

[northie]

Others should drop the entitlement mentality and either make do with something cheaper/share - or - be prepared to do the hard yards to move up the ladder relative to the rest of society and take their place. Everybody else had/has to - and this show seemed to be a forum for (not really so) tall poppy bashing.

Im not sure what generation the people have been posting but i sense that not enough recognition is given to the fact that the ratio of average house price to to average income has risen subtantially over the last decade.
THere is a affodability crisis.

This means on a like for like basis, forgeting the mcmansions stereotype and think of a decent hardworking person, from a decade ago and now, the person trying to move up ladder now has got a much longer and steeper ladder to climb.

 

[james_w]

Im not sure what generation the people have been posting but i sense that not enough recognition is given to the fact that the ratio of average house price to to average income has risen subtantially over the last decade.
THere is a affodability crisis.

This means on a like for like basis, forgeting the mcmansions stereotype and think of a decent hardworking person, from a decade ago and now, the person trying to move up ladder now has got a much longer and steeper ladder to climb.

well I am under 30 and I don't' believe there is such a affordability crisis

it depends where your willing to start the hard working person can afford an I.P with 8% yeilds isn't the average income 50k ?

but not in there chosen area I learnt a long time ago stuff friends family etc and buy where you can afford something small theres still plenty around

and now you can check in every state in australia in a few mouse clicks.

I agree with the others it's what your willing to take ppor is a diffrent kettle of fish and if my town was overpriced I would look at ways outside that area to increase our cash outside the square to buy the ppor if I had to which is what we have done.

 

[northie]

im talking about ppor, NSW.
yes, buy where you can afford. makes sense. but there has to be some reasonableness in what is meant by this statement.
For someone working in the city, it is clearly unaffordable to live reasonably close to the city these days. Sure one can afford a place 2 hours commute to the city, but this time sacrifice can be a massive detriment to one's advancement in the corporate world. NSW's infrastructure blackhole is partly to blame, but expensive property doesnt help either.

 

[james_w]

im talking about ppor, NSW.
yes, buy where you can afford. makes sense. but there has to be some reasonableness in what is meant by this statement.
For someone working in the city, it is clearly unaffordable to live reasonably close to the city these days. Sure one can afford a place 2 hours commute to the city, but this time sacrifice can be a massive detriment to one's advancement in the corporate world. NSW's infrastructure blackhole is partly to blame, but expensive property doesnt help either.

why not start with a cheap ip elsewhere? or do a h&l elsewhere

or reno and resell we took the h&l path and are still doing this today

but we have an ppor with 450k value and it took us 4yrs did I want to take the risk of being stuck in a regional town with no beach if it came to that no but we did it anyway as the reward put us in our area

and if prices bottom yes I'd be annoyed but I can hold through it easily and we started on little income with 15k dirt in woop woop

I Imagine we are not the only ones.

 

[Novar]

forgeting the mcmansions stereotype and think of a decent hardworking person, from a decade ago and now, the person trying to move up ladder now has got a much longer and steeper ladder to climb.

Even if we do forget the McMansion .....

What about the McDonalds
McVideos
McMobiles
Nights out with McFriends
2 McMotorVehiles in the drive
mps player, nice furniture etc etc etc ..... get my drift?

People used to be able to afford a first house because it WAS modest, 1 bath if you were lucky. I lived without a hotwater system and a kitchen for months ...and MANAGED.
1 car ...no outings if things were $hort....watch tv instead
vegemite if cupboard was bare ...a block of cheese HAD to last a week.
pizza occassionally if things were good
home phone IF you could afford it.
Hand down furniture
any extra's that weren't neccessary weren't even on the radar of reality.

How many of this generation would be prepared to live like that?
None that I can think of. If you want a house, you live within your means and that MEANS ... you do without!

The standard of living in Australia and the world may be falling but from where ........ Excess and Expectation to Reality.

 

[james_w]

Even if we do forget the McMansion .....

What about the McDonalds
McVideos
McMobiles
Nights out with McFriends
2 McMotorVehiles in the drive
mps player, nice furniture etc etc etc ..... get my drift?

People used to be able to afford a first house because it WAS modest, 1 bath if you were lucky. I lived without a hotwater system and a kitchen for months ...and MANAGED.
1 car ...no outings if things were $hort....watch tv instead
vegemite if cupboard was bare ...a block of cheese HAD to last a week.
pizza occassionally if things were good
home phone IF you could afford it.
Hand down furniture
any extra's that weren't neccessary weren't even on the radar of reality.

How many of this generation would be prepared to live like that?
None that I can think of. If you want a house, you live within your means and that MEANS ... you do without!

The standard of living in Australia and the world may be falling but from where ........ Excess and Expectation to Reality.

_________________________________________________________

I would and have Lived on the streets and in youth centres/friends places when was 14/15/16/17 yeah I have a big nice home being built now in the place I want to live But we also sacraficed alot and didn't buy what we wanted/ first place was a run down bore water and broken tank water

when our bore died we had no water but we managed this was with myself/wife/4yr old at the time my wife is now 27 I am 29

so no there is some of us around still and atm I am living in a tiny 2 bedder with a shower toilet laundry combined no bath but it is beachfront

while we build our ppor.

 

[Novar]

Good for you
You deserve all the good things your sacrifices enable you to have.

It's a fact of life many need to learn ... you want something, you do what it takes to get it.

 

[ianvestor]

Good for you
You deserve all the good things your sacrifices enable you to have.

It's a fact of life many need to learn ... you want something, you do what it takes to get it.

Problem is Novar, there are people that think 'doing what it takes to get it' means appearing on Insight and having a whinge.

 

[Trogdor]

Im not sure what generation the people have been posting but i sense that not enough recognition is given to the fact that the ratio of average house price to to average income has risen subtantially over the last decade.
THere is a affodability crisis.

This means on a like for like basis, forgeting the mcmansions stereotype and think of a decent hardworking person, from a decade ago and now, the person trying to move up ladder now has got a much longer and steeper ladder to climb.

Im on the border of Gen Y/X (27). Speaking to older people - they all seem to have thought property was very expensive and a big purchase in the 1970's, 1980's, and 1990's. In fact I look at parents/friends parents and the homes they have now, compared to in my early teens, all have upgraded significantly over time - nobody had a "nice" house or "big" portfolio straight away.

Pehaps there are more people in the big cities - and more liquidity for borrowing (hence bigger loans) these days - but I still think if you work hard there isnt an affordability crisis now.

The catch is with more people in the cities/competition the people who want to bludge their way through school and neglect getting a career or a trade or business now have to live outside the cities or in rural areas. But this is their choice / trade off.

 

[Novar]

Problem is Novar, there are people that think 'doing what it takes to get it' means appearing on Insight and having a whinge.

Or robbing a bank!!

 

[steveadl]

Im not sure what generation the people have been posting but i sense that not enough recognition is given to the fact that the ratio of average house price to to average income has risen subtantially over the last decade.
THere is a affodability crisis.

Who says first home buyers have to buy the average/median house price for a city?

im talking about ppor, NSW.
yes, buy where you can afford. makes sense. but there has to be some reasonableness in what is meant by this statement.
For someone working in the city, it is clearly unaffordable to live reasonably close to the city these days. Sure one can afford a place 2 hours commute to the city, but this time sacrifice can be a massive detriment to one's advancement in the corporate world. NSW's infrastructure blackhole is partly to blame, but expensive property doesnt help either.

That's the result of continually expanding populations and urban sprawl outwards from CBD's. 40yrs ago, living 10km from the CBD would have been considered 'the sticks'. Who's to say that buying 30km out now won't be considered close when in another 40yrs time, people will be commuting from 60km out?

 

[VYBerlinaV8]

im talking about ppor, NSW.
yes, buy where you can afford. makes sense. but there has to be some reasonableness in what is meant by this statement.
For someone working in the city, it is clearly unaffordable to live reasonably close to the city these days. Sure one can afford a place 2 hours commute to the city, but this time sacrifice can be a massive detriment to one's advancement in the corporate world. NSW's infrastructure blackhole is partly to blame, but expensive property doesnt help either.

If you work in the city, you have some decisions to make:
1) Does my job, it's income and future career potential justify the effort needed (and time lost) to get to the city and back each day? Unless it's a job that can only be done in the city, brings high income, or is leading to major career improvement, I'd be seriously considering looking for a job outside the city area.
2) Assuming your job does offer high career development potential, how long are you prepared to wait for your income to grow to a level where you can live closer to the city (or infrastructure to take you there)? 3 years? 5 years?

The reality is that if you are climbing the corporate ladder, you need to consider that you are going to be making significant sacrifices anyway. Why try to do it all when we all know no-one does? Make decisions - is the lifestyle more important than career? Do I need to get up at 5am every day to beat rush hour?

OR, can I pursue my career in another, smaller, city?

There ARE options - what you need to do is identify them, and make them work for you.

 

[feihong]

Who says first home buyers have to buy the average/median house price for a city?



That's the result of continually expanding populations and urban sprawl outwards from CBD's. 40yrs ago, living 10km from the CBD would have been considered 'the sticks'. Who's to say that buying 30km out now won't be considered close when in another 40yrs time, people will be commuting from 60km out?

I'll second to that. I think countless people may have already mentioned it, and I'll repeat it again, that people have to travel 2 hours each way to Tokyo to work. Even a tiny place like HK, people travel more than 1 hour each way to HK or Kowloon island from New Territory. 60km out will be a norm.

 

[tcocaro]

housing affordability is not the issue

I will start by disclosing I am a developer.

This topic is discussed dissected and analyzed to death unfortunately its not the problem just a symptom if the real issue lack of infrastructure and poor planning and the negatives of democracy.

If "house affordability" is treated as a standalone issue as its seems to constantly be then its a myth. There are houses out there that can be afforded by everyone. In each article I read its stated that first home buyer can only afford 1 in 4 houses on the market in NSW, then whats the problem they can afford 25% of all the houses out there?

Now people in housing stress, or looking for a home and cant afford the ones they want are probably reading that paragraph standing up, eyes bulging and steam coming from their ears and say BUT.....!

Yes i agree "BUT..." the obvious point being missed is that out of those 25% of houses their location is probably 1-2 hours from the city or place of work, unsatisfactory in terms of their location and proximity to work\entertainment nodes, away from family and in summary located in bloody no-where and where no-one wants to live or at least not where first home buyers (25-39) want to be located.

Therefore the problem is NOT housing affordability its not as most of my peers (developers) claim is due to government taxes (although they are a joke and for a separate discussion) its lack of infrastructure and the pace of planning.

Releasing land, reducing taxes does NOTHING to fix the problem because releasing land means (in NSW) releasing land 1 hour+ DRIVE from Sydney where there are NO trains and no entertainment and where young people DONT want to live. There is a shift in demand for housing, young people or at least a large chunk of them (including myself) do NOT want "play cricket in the backyard" I want to walk out my door and have a coffee, stroll down the street and watch a movie and do the shopping on the way back without getting in my car.

To do that I need to buy a property in the city far from the "affordability" of most people especially first home buyers.

So government have to create new (life-style centers) similar to rouse hill development but TOGETHER with infrastructure to support i.e. a train station today not in 2017 which everyone knows will turn to be 2030 with delays and the bleeding hearts that dont want to tracks running anywhere near their "pretty and quite" property.

The other problem is planning and this issue is a due to, too many interest groups (a symptom of democracy)

No I am not promoting communism. What I mean from this is that in a democratic system unfortunately the masses are in charge of making decisions beyond their understanding and their views\positions are governed by self interest rather than whats the right position overall.

For instance we need more trains however if your property will back a train station you will be out there exercising your democratic right as a NIMBY.

If you have your block next to another which just got rezoned as medium/high density you will again be out there exercising your right as a NIMBY arguing such frivolous excuses as "increased traffic" from a single townhouse development when really you just don't want perceived "rif-raff" living near your pretty 600sqm masterton home.

Try building a large office\commercial or retail near homes, you will get bleeding hearts saying "its ugly" "its huge" "its terrible" but then curse each time they drive 1 hour to work?!!? i.e. NIMBY

Then you have developers who want the cheap and nasty solution (in order to avoid the above mentioned headaches) and get given more and more tracts of land further and further away from city centers because except for a few tree huggers wanting to save a rare frog that no one has even seen there are much fewer complaints about a new development in a greenfield site out in no-where. Therefore more "politically" easy to get over the line.

So therefore in order to solve this "crisis" and mind you solve the whole green issue in the process (another discussion) governments must do we have all been blindly and unwaveringly opposed and that is be a bit more undemocratic, STOP listening to us developers\NIMBY's\greenies\bleeding hearts\ and any other segmented group and start enforcing some clear, forward thinking and integrated planning principals which allows for new developments to be closer to city centers and have the infrastructure projects to support them.

And for those that cant read between the lines means, higher density developments, more commercial\retail\office centers integrated into our housing developments and more transit lanes rather than the energy intensive highly segmented and car-centric solution we have today. This will increase supply push down prices and solve the green issue to boot.

In summary the affordability crises is due to the lack of infrastructure\planning and i blame governments but unfortunately i ultimately blame all of us, myself included because if someone called me tommorow and said great news theres finally a train station coming to your suburb (ill say GREAT) but its behind your house (ill say oh... BUT...) and you know how that story goes.

So unfortunately we need to all take a hard look at ourselves and realize we need to change like it or not.