Am I missing something?
Yes. The entire supply side of the problem.
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Am I missing something?
Here's an article in the SMH, that effectively questions the notion of property as an investment.
http://www.smh.com.au/opinion/editorial/housing-market-needs-a-slow-leak-20110603-1fkts.html
"And policies encouraging home ownership have been popular precisely because they assume ownership is a first big step on the ladder to amassing lifetime wealth. But the fees associated with buying a home, the cost of upkeep and other risks of home ownership in fact make it a poor investment -
Read more: http://www.smh.com.au/opinion/editorial/housing-market-needs-a-slow-leak-20110603-1fkts.html#ixzz1ONiMCdp3"
Its a slightly confusing and schizophrenic piece, but appears to want to say a few home truths, but hardly dares to
If the median house price has increased at a more rapid rate than the median household income then obviously median income households have two options:
1) Live in lower end housing
2) Take on more debt
But if the median income earners are living in the low cost housing then where are the low income earners living? And if home buyers are taking on more debt and we have become much more leveraged in property what is the impact on our economy during periods of rising unemployment and interest rates?
Am I missing something?
According to this forum young people think that their 4 bedroom, 2 bathroom house in the mortgage belt is an investment and doesn't concern themselves with questions such as "What happens if I lose my job?" or "What happens if interest rates rise?" Instead they buy iPods, iPads, Plasma TVs, brand new cars and yearly trips to Europe on high interest credit.
If these are the people who are buying houses why aren't you as worried as I am that something is going to go wrong?
The people who are worried about housing affordability like myself..are probably the sensible ones. We do the math and think should I take out a 30 year loan, which consumes 50% of my income and is worth 6x my annual income (assuming a $300,000 loan and a $50,000 yearly salary). Ummm..probably not!
I'm not planning on sitting around and complaining and I have a bunch of strategies to overcome my affordability issues like;
-Live at home/in a share house and buy an investment property
-Purchase a 2 or 3 br house and rent out the spare rooms
-Wait until my income increases
-Save up a massive deposit
-Buy a property with 1 or 2 friends
-Move overseas
But I just can't ignore this issue!
And those who are bringing back the late 19th & early 20th century Eurocentric view that thought of property should be for shelter only and not for exploitation to be used by 'wealthy' individuals. It is not considered socially acceptable that property is an investment tool. Many social groups have this fundamental premise underpinning their views on property, property prices and taxation of property eg Get Up
I'd be looking to social change as one of the indicators, specifically that 30 years ago most homes were bought with one income, now they're bought with two.
But affordable housing is an issue for all people whether they are single without children, single with children, a couple without children or a couple with children. To say that housing is affordable because a couple with dual incomes can afford it when a single person or a single parent can't doesn't make a lot of sense to me.
Part of the social change over the past few years is that we have more single parents and more people living alone (widows/widowers due to the ageing population and young singles), isn't housing affordability for them an important issue?
Don't forget, many of those desirable but 'unaffordable' properties were yesterday's bad neighbourhoods. I don't think this is as much of a societal problem as we think - it's a symptom of a market that moves up and down with supply and demand.
Want to solve the housing affordability problem? Start campaigning for more and easier development. Lobby governments to release more land, and building more transport infrastructure. Hassle councils to reduce development fees and taxes.
Property in highly desirable locations will, in the longer term, become even more expensive. This is a symptom of more money chasing fewer properties, thus driving up the price. Average and below income earners should not be expecting to be able to purchase these properties without significant planning and sacrifice, as they will be competing with people with much fatter wallets.
To say that housing is affordable because a couple with dual incomes can afford it when a single person or a single parent can't doesn't make a lot of sense to me.
Cupcakes,
Despite quite literally hundreds of replies by extremely-well informed and extraordinarily-experienced property investors here, it appears that nothing you have heard makes a lot of sense to you.
I don't think I'm alone in suspecting that there's one reason for this: You believe that the presence of investors in the property market is the underlying cause of the unaffordability problem.
Despite all your dozens of questions and comments, you have yet however to find a single property investor here who will wholeheartedly agree with you in this, so frustrated, and with genuine altruistic concern for our wretched souls, you persist in your effort to tease out a proper public confession from at least one of us.
So, let me ask you this straight up: Do you believe that the presence of investors in the property market is the underlying cause of the unaffordability problem?
An open and honest answer would be appreciated, as would an explanation of your reasoning if so.
Cupcakes,
Despite quite literally hundreds of replies by extremely-well informed and extraordinarily-experienced property investors here, it appears that nothing you have heard makes a lot of sense to you.
I don't think I'm alone in suspecting that there's one reason for this: You believe that the presence of investors in the property market is the underlying cause of the unaffordability problem.
Despite all your dozens of questions and comments, you have yet however to find a single property investor here who will wholeheartedly agree with you in this, so frustrated, and with genuine altruistic concern for our wretched souls, you persist in your effort to tease out a proper public confession from at least one of us.
So, let me ask you this straight up: Do you believe that the presence of investors in the property market is the underlying cause of the unaffordability problem?
An open and honest answer would be appreciated, as would an explanation of your reasoning if so.
. The people on this forum feel that if affordability is addressed their investments might not perform so well and that is why they refuse to acknowledge the problem.
.
Cupcakes,
So, let me ask you this straight up: Do you believe that the presence of investors in the property market is the underlying cause of the unaffordability problem?
An open and honest answer would be appreciated, as would an explanation of your reasoning if so.
............. Do you believe that the presence of investors in the property market is the underlying cause of the unaffordability problem?
An open and honest answer would be appreciated, as would an explanation of your reasoning if so.
Yes I agree it is because of those investors who speculates and hogging the affordable property for their own gain makes this housing price bubbled up.
It sounds like you are speaking for yourself but projecting that onto the greater majority of investors. Around 1 in 7 tax payers are "property investors", what percentage of those would you think are sophisticated/experienced enough to buy well?Property investors pay less for property than owner occupiers, because most investors don't buy a property unless it is well priced. This being the case, why don't FHBers simply outbid the investors? I've walked away from far more deals than I've gone through with, and have only bought where I thought the price was a bargain.
As you've evaded the question, I then repeat -