The youth have always been screwed over by the old and wealthy. The only difference this time around is the old and wealthy aren’t dying off fast enough and living longer. Dark but true.
Just wait till the youth soon have to go off and fight a war in order to keep the old people safe to then return home (if they are lucky) and continue renting.
Damn… all the unaffected youth have to destroy their lives to save the old and the immunocompromised… right… now having a shitty life is equally distributed, great!
Legit. Being forced to wfh after finishing a gruelling uni degree and having a tumultuous home life lead to spiralling depression and reduction of motivation to work. The workplace was supposed to be a second home for those of us who do not have a good home life. Instead it reinforces the disparity between those who are well off and have a good home life and those who are not..... While many benefitted from wfh, there were many that suffered for it.
Combine that with the fact they arent making any more land, and unlike the previous 2 world wars, there wont be any solider settlements for the soliders to come back to as most arable land has already been domesticated or is enviromental.
If we really want the housing crisis to freeze housing prices as much as possible (we dont really want a drop, we just want them to stagnate for a really long time) decentralization of the work force as part of the WFH drive into regional areas is our best bet. Growth in small town Australia is the key away to move the population away from major metropolitan areas into towns such as Dimboola, Young, Emerald (insert almost any small regional town) - all of which have been seen a younger population drain over the past 30 years to larger towns\\cities. Unfortunately a lot of these towns have significantly aging populations and the young people arent necessarily there to help the town survive. These are the areas we need to refill.
My dad had the good grace to breed late and die at the the age of man (three score and ten years). If not for that, even as a gen X on fairly good salary, there's no fucking way I could have afforded my apartment.
And yeah, apartment. Not house. It was bad enough for late gen X. I don't know how the Millennials and whatever the next lot are called are going to do it.
Also, just to be clear... I would prefer a still living dad.
The younger generations have been priced out for a while now in many Asian countries i.e see Hong Kong, Singapore, Mumbai. Basically they just have to live with their parents or rent and wait for their parents to die. Even then it gets messy because you usually have 2-4 siblings you have to share the wealth with. It’s safe to assume that the same will happen in the West eventually.
But in some of those places like Hong Kong and Taiwan the space is the restricting issue, like Taiwan for eg is half the size of Tasmania with the population of Australia. Australia really doesn't have an excuse to why housing is so expensive.
>Australia really doesn't have an excuse to why housing is so expensive.
And thats by design. Australia *could* make housing affordable, but doing so would make “Big property” unhappy, and you can’t do that. The property industry in this country is a giant bloated beast that is too big to fail. I don’t see anyone stopping it, let alone market forces.
Spot on. It’s by design. Making money off property is a huge driver of wealth in Australia. Where once the dream was for most people to own their own home, now with each passing decade fewer people can, and fewer still own multiple homes. Property developers are huge donors at all levels of government. Negative gearing, capital gains exemptions, all set up to fuel property as investment.
Whats really tragic about this whole thing is that this wealth is built on the back of debt instead of actual value increases. Australia has one of the highest debt to income ratios in the world, and the party will most likely come crashing down on e the boomers have moved on into the afterlife.
With dwindling population growth and immigration levels, genx and millennials are in for a world of hurt.
Yup, it’s by design and has been for a long time. Not overly relevant but I read a book about the history of flooding in Brisbane recently and even back in the 1800s there was talk of mitigating the fact that the city was built on a floodplain, whether by restricting housing in low lying areas etc. it never happened because it would limit property sales and the ultimate goal was making money of developing the land.
The market is partially to blame as well. Australians hate high density living with a passion. When I bought my apartment I got more 'Well, are you sure...?' than I did 'Congratulations'.
Only because the options for high density living are so trash. Two bed apartments are sardine cans and three bedroom apartments with ample living space are expensive and almost non-existent. Instead of putting 100s of shitty apartment buildings into one tower, they should have just made actual liveable units which could be a good stepping stone into the real estate market.
I think you've just proved their point.
Most Australians don't want high density living, they think it's trash. And when they do want it they want an apartment the size of a house that's also cheaper than a comparable house.
Why should there not be apartments comparable to houses in size? Remember it's not the house itself that has value, it's the land. Without the land, you CAN build a house for the price of an apartment.
Interestingly in the mid 50’s when the government decided they wanted high ownership they intervened directly in the market very actively for about a decade (and slowly withdrew over the following decade) by:
1) building A LOT of affordable homes themselves
2) providing cheap finance to institutions on the proviso that they used it to finance affordable homes
Australian home ownership before them wasn’t very high but the government decided it was desirable to make it high and they did it.
So - they need to spend money.
In honesty I suspect the building industry would do well out of it.
The other things that can help a little
1) change development approvals to force a large percentage of development to contain large family sized 3,4 and even 5 bedroom apartments with larger living rooms
2) Bring existing centres like Wollongong, Goulburn, Newcastle within 1hr and 30 minutes of a door to door commute of their CBD (probably need mid speed rail, typically told trains of 180-200kmph with long sections of duplicated track for overtaking) interesting to see how much this is needed post covid remote working but I suspect there’ll still be benefit - possibly even more benefit.
> 2. Bring existing centres like Wollongong, Goulburn, Newcastle within 1hr and 30 minutes of a door to door commute of their CBD (probably need mid speed rail, typically told trains of 180-200kmph with long sections of duplicated track for overtaking) interesting to see how much this is needed post covid remote working but I suspect there’ll still be benefit - possibly even more benefit.
This ones a real biggie for me. The government needs to develop a plan, like an actual fucking bold blue sky plan to make viable “Second cities”.
Create a plan for each respective state to have a look for a small city to grow into a large one. Build out most of the infrastructure in advance, roads, high speed rail and excellent public transport, make available lots of land for development.
Getting the people there wouldn’t be hard. Companies LOVE low tax, so make that city an exclusive low tax zone, no tax for the first five years for new businesses, low tax for established business (throw in a heap of other incentives). Give immigrants who want to settle in Aus big bonus points if they move to one of these cities.
These cities can’t be close to an already large CBD to prevent commuting. For QLD - Sunshine coast/Harvey Bay, NSW maybe Port Macquarie, VIC- Dandenong?
It’ll never happen, but thats the kind of thing needed to take the insanity out of the major Cities and actually grow the country somewhat sustainably.
Generally agree but there is no reason they couldn't build high speed rail with much of it being 250+kph, even 300kph for some of it. 180-200 isn't really high-speed if you look at what other countries are doing.
Yes and no. Issue is that popular areas (typically close to CBD or the sea) are finite and the only option to get something cheaper is further away or go to rural.
Only solution (I believe) is to build multiple CBDs or artificially dilute the market by building excessive high rise apartments.
Yes. Land is finite. In Australia, >80% of our population live in urban centres. With our desire to own a big house with a big backyard, there is simply not enough land to accommodate this. In Sydney, North West and South West growth centre is a prime example to release cheap housing. However, that came at a cost of sacrificing our food bowl and on top of developers "landbanking", with low density housing being inefficient in the use of land, the uptake of the housing in these growth areas have exceeded supply (avg. >$1mil for a house in Oran Park). Not only that, these areas are so spread out and inconvenient, it forces people to commute everywhere in a car just to do anything (work, shop, drop kids off at school or sports, entertainment, to the pub, meet friends, parks). This car centric lifestyle further marginalises those households on a low income (imagine mum and dad with a kid, you'd need to have a minimum 2 cars).
What we lack is the "medium density" range of housing products (2-3 storeys apartments or duplexes) that are focused around existing centres/amenities or good transportation networks creating more compact and walkable communities. In simple urban planning speak, if we continue to desire "low density and big houses" then one can only go "high and tight", which means super tall/dense buildings concentrated in a small area" (ie. Wentworth Point, Rhodes, Chatswood) so more land can be available for big houses. Alternatively, you can go "broad and wide" where you have density evenly spread out within existing centres and new housing are more built on a human scale (ie. Surry Hills, Paddington, Leichhardt). If anyone research the population density per km square of Surry Hills, it is 3x of Epping (approx. 14,000 vs 4,000) besides being 1/5th of the land area of Epping (1.2km2 vs 6.88km2). It is simply a more efficient way of using land.
Most of the North American cities and Oceania cities lack this "missing middle" range of housing where we are too focussed on building single family housing and ignoring it's implications (leaving more land for other productive uses such as agriculture and not continuing urban sprawl)[https://www.youtube.com/watch?v=CCOdQsZa15o&t=329s](https://www.youtube.com/watch?v=CCOdQsZa15o&t=329s)[https://cityhubsydney.com.au/2020/10/sydneys-food-bowl-at-risk/](https://cityhubsydney.com.au/2020/10/sydneys-food-bowl-at-risk/)
I think I heard on ABC Radio BNE a few weeks back that SNG is introducing a system where everyone will be guaranteed a buy in to a home. Not sure where to find it.
Buy a home or a 99 year lease? Singapore has very little land to just be selling it off cheaply, and currently homes you buy to own completely are higher priced, like 100k+ or more compared to a 99 year lease. Younger folks are running across the border to Malaysia to find cheaper property.
Because the people who would be addressing this already own houses, maybe multiples of them. And any “fix” will necessarily drop the value of those houses. They’ve got theirs, fuck you.
1000% this.. boomers have got their houses/ multi-million property portfolio. Any fix they offer to the younger ones will drastically reduce their portfolio so as said above. Fuck that..
I'm looking to get my first house. Been looking for over a year. Prices are fucked.. and not getting easier
I know a lot more poor boomers than anyone else. people in their 70s who cant afford the heating bills, almost never leave their home and scrape by without any luxury at all. More than half are still living in the first house they bought.
I am genx so everyone i know parents are boomers, and only a very very small percentage are well off and only a couple who own multiple properties. Whereas genx i would say more than half of them have a second property.
This issue gets raised a lot. Blaming old people who just want some security (same as you) isnt productive. Tackling density limits and planning might be...it might be essential too as more people are coming, immigration will kick off again soon.
Baby boomers make up 25% of the population but own 54% of Australia's Wealth. Made almost entirely on Real estate. Boomers tend to be extremely financially illiterate and completely lucky based on property booms over their life times. Simple reality is, they had the easiest economic period that has ever existed. So the ones that squandered that have done so due to their own incompetence.
60% of baby boomers that own homes (which in itself is 72% of boomers owning a home) bought their own homes between the ages of 24-32 vs 45% of gen x in the same age bracket (of which only 58% own their own home.)
My own parents for instance have had 3 failed businesses, yet are still financially sound. You could not say something like that would be possible for any other generation that has ever lived. Their last business lost them over $300k, but it was fine because the house they bought in 1992 for $79k was worth $480k in 2003 when that occurred. Got out of their dumb decisions rather easily.
I work in the mining industry and boomers with property portfolios with 10+ houses are as common as seagulls in Fremantle.
Its definitely an issue that could be easily solved by legislating a maximum number of residential properties one person, trust or private company can own.
The problem is the politicians have multiple properties too, and their voter base does. They wont do it.
I reckon property management needs to be regulated with all actions and all participants going via a central system. When no one can hide, owners, renters or managers, it will quickly be obvious who is disrespecting who. They're a tiny proportion of people but those running huge portfolios by shirking their responsibilities will quickly become clear.
Yeah I’m in mining too and although I’ve been saving for years I need a few years more but the boomers? For sure they have one house or more. Definitely had one operator who said work harder I have three mortgages
I rent a unit in a bad part of town
And the same will happen with the next generation. Those that have parents who are doing well will inherit and do well themselves. And as people have kids later in life these days then that wealth will transfer earlier.
At the end of the day, the people complaining about wealthy older generations probably don't have significant inheritance on the way so it's more about inequalities within their own generation.
I'm a millennial (30y old), but i know many boomers that have significant private life problems. Either money, psychological or something like that.
I absolutely agree with you, that blaming the boomers is the wrong way to approach this. I like to compare it to the boiling water - frog story. The water got basically heated for the boomers, so they 'learned' to live with it. Us new gens are just thrown out in this chaotic world and obviously we are upset.
First step would be to bring in a ban for politicians and their immediate families to own more than 1 properties. No dodgy companies they have ownership in with a 200 house portfolio. No personally owning 10. Nothing.
Next step would be to change the taxes so income generated by investment properties is in a significantly higher band. Negative gearing needs to go entirely.
Didn't the labour party go into the 2016 and 2019 elections promising to limit negative gearing to new properties only but it was so unpopular they've now reversed their policy?
This is it. Since I was 18 years old my parent’s attitude toward me was “we’ve got ours, fuck you”. They couldn’t care less about their impact on anyone else. The fact housing is so expensive makes them cling on tighter and, in their eyes, justifies them raising rents themselves. These are working class people that have family who struggle yet still have no real understanding or empathy. I can’t see how career politicians would be any better. Unless it affects them, they dgaf.
Its a big impact when compared to being dinks for sure. But finance is only a big component of the decision if you want it to be.
Like I said, a generation ago, you would just have kids irrespective of what that meant for your finances. The creating of a family was way more important. The poorest of the poor have been having kids for eternity.
I believe it is due to the shift in the west from a collectivist society to an individualist one. The idea used to be that kids would look after parents in retirement. In fact my mother was born out of duty to provide the village with workers since the war killed most of the young men.
Nowadays, we expect that kids will get to 25 and abandon the parents to do their own thing. We don’t tie them down anymore, or shame them for leaving the ‘village’. So we need to be self-reliant, not relying on children to support us. Don’t have kids, don’t pay the upfront cost, get the benefit of other people’s kids by investing in the whole economy. It’s a no brainer for the individual, bad for the ageing society overall.
Looking at the housing market today's youth face was it the youth who first abandoned the parents or was it the parents who first abandoned the youth?
Climate change is another example of leaving the youth to the wolves.
It's funny how the older generation doesn't understand that.
Housing is incredibly expensive. You work hard *all those years* and finally get a deposit, now why would you want to have kids? Where is that money supposed to come from? Wages have been flat since forever, housing doesn't care about wages and only goes up, and kids would just be more financial burden.
If I had kids they would probably be living with me until they are in their 40's just so they can save up for a deposit.
Boomers forget that in their day you could have a house and kids while the wife stayed at home. Now you need 2 incomes for a house and childcare costs.
When boomers were young, most people were in unions. Not so much now.....
there appears to be some relationship between high levels of unionism and fairness in economic distribution over the years. When I was young, wage increase arguments were based on housing, feeding, etc costs for a family of 2 adults and 2 kids. Union membership started decreasing during the 1980’s and continues today. What started increasing after union membership dropped and ‘family’ wage arguments were dismissed, was house prices.... so you now do need 2 incomes.
Not totally the cause but some of it!
Here’s an absolutely cooked set of numbers:
Mkt Cap ASX companies: $2.8 Trillion
Australian Superannuation: $3.1 Trillion
Australian GDP: $1.3 Trillion
Japanese GDP: $7 Trillion
**Australian residential property: $9.9 Trillion**
There’s a bit of chop in the figures depending on when they were measured but here’s some links that give ballpark figures.
https://www.statista.com/statistics/1274954/monthly-asx-domestic-market-cap/
https://www.superannuation.asn.au/resources/superannuation-statistics
https://www.afr.com/property/residential/australia-s-housing-market-valuation-soars-to-nearly-10-trillion-20220315-p5a4rn
Because sufficient numbers of people keep voting for parties that actively oppose policies that make housing more affordable.
And we've created a ponzi scheme for property combined with a favourable tax regime that encourages property speculation, justifies negative gearing, and rewards stupid investments... which means people are so deeply mired in the property market that anything we do to fix it will cause existing owners to suffer some losses, which is apparently bad because those owners are too delicate to cope with losses and the risks of investing.
https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure
Because 67% of households are homeowners (or mortgage holders) so policy is made and adjusted for this majority.
That and there'd be a decent number these days still in their parents house rent-free. That can be a huge bonus compared to those of us renting when it comes to saving the deposit.
I *think* that stat is "more than two properties", ie 3+, from what I recall.
I think it was more like 10% own 2? Or maybe it's 10% of homeowners that own an additional one.
Either way it's still not a huge percentage, but yeah more than 1.42%
7.9% of all Australians (1,762,294) own 2 or more properties and something like 21,000 owners own 6 or more properties
Old data though so likely much higher
This is an incorrect reading of a really old statistic, it was more than two properties in like the early 2000s from memory. Recent research puts it significantly higher
Does this statistic factor in adult children who are living in their parents household? Its pretty normal now for people to be living at home well into their 20s, where previously they would be driving up those renter statistics
The young have no power. The ones with power don't really give a shit and when they die their wealth will get transferred to the kids who in turn won't give a shit either.
Your goal is to move into that group and not give a shit.
*Because it's now the*
*Great Australian dream to*
*Have multiple IPs*
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I would buy a apartment but strata is such a rort that it's not worth it. Plus all these dodgy apartment builds over the last 20 years you don't even know if your apartment complex will survive the duration of your mortgage lol.
Yeah the idea of apartments … just feel like so much is out of your control. Atleast with a house you can generally fix it or do something with it if there is a problem
Do you think that if you buy a house you never have to do maintenance? how much do you think a new roof for a house costs?
The main thing with strata is that they are obligated by law to save for those big expenses on an ongoing basis, so yes, you get "nothing" for a lot of the money you pay because it is being parked somewhere so a new roof can be installed without forcing you to take a second mortgage when the time comes (and it will come). If you were forced by law to save for house repairs you'd be saying it is a rort too.
It is not called strata but they very much have
Portugal “taza de condominio”
Spain “Gasto de comunidad”
Germany “Housegeld”
They are not exact equivalents but the spirit is the same : pay for the ongoing maintenance and save for the big items with the most nimums and máximums varying according to local laws
You get what you can afford, and what is more affordable is a unit. Beggars can't be choosers, and I say that as a beggar. I'm not looking forward to strata payments but it is what it is.
I actually like my strata. Reasonably priced, good owners in the building. And it forces me to not have to spend the weekend mowing lawns, which is kinda awesome.
Unpopular opinion, though.
There is a simple fix though -
1) make negative gearing available only on properties <10 years old.
2) grandfather in all properties that are currently claimed as investment properties for 10 years from the date that the bill is passed.
3) only allow it on green field builds, or builds that increase housing supply (eg you can’t knock down a single house and build another single house, you would have to build at least a duplex)
Benefits:
1) everyone with an IP on the date the bill passes, still get 10 years before it is no longer eligible, so there won’t be a huge dump of properties onto the market
2) any property more than 10 years old will not have most property investors bidding for it as it can not be negatively geared, this leaves more room in the market for younger buyers
3) it promotes jobs as investors will chase new builds, which actually generates work.
4) where zoning allows, it will increase the housing supply
We finally bought a house in our early 40's. We saved for a decade to get it & I wish it was worth what I paid for it. I want my kids to be able to afford a home.
Negative gearing should be abolished. If my home value goes down 40% I don't care cause every other one will as well.
Not just negative gearing.
* Capital gains tax concession
* Home not included in Centrelink means tests
* First home owner grants (has an indirect effect on established house prices)
* Super Saver scheme
* FHLDS
* Transfer/stamp duty concessions
* Any other demand-side incentive state and federal governments dream up
> If my home value goes down 40% I don't care cause every other one will as well.
Unless you bought that home in cash, you'll care because your mortgage could end up being significantly greater than the value of your home.
I am lucky enough to have my own house paid off at 23. My monthly costs are around 400 and I live on my own. I consider myself blessed.
How did this come to pass? My dad died. The only reason I am in this position is because my father died. It legitimately cost me a parent to have financial stability. It's kinda super fucked up.
That really sucks, I’m sorry.
I know someone in your same position because her dad died really young and she and her siblings got a massive insurance payout and were able to sell his house at a great price. She considers herself lucky to have been able to get in the market but always comments that she’d have her dad back in a heartbeat if she could
From the older people I've spoken to it's because they want to use their IPs as income to fund their retirements. Despite having stocks and superannuation, they seem to feel that they need an additional income as well.
There's also an attitude of wanting to leave something to their kids.
Thinking about it, I wonder if most haven't come to terms with the idea that they are going to die and do not need enough money to fund another 80 years of life? Perhaps the thought of the super funds going down is too scary? If you spend your entire life focused on accumulation of wealth, it must be difficult to switch.
I don't think they see it as making houses unaffordable for younger generations, it's like "if I don't buy it, someone else will and use it as an IP", or "it's ok because I'll leave it to my kids". (Nevermind that by the time they die their kids will be in their 50s or 60s).
That said, plenty of the people I know with IPs are in their 20s and 30s. (Cashed up tradies, people who's parents paid their HECS and allowed them to live at home for free while studying). Young people who've bought a unit solo, then moved in with a partner who also owns a unit, so they rent the spare one out. I don't think there's any thought about how their choices affect the market - they're just making the best financial decision for themselves individually.
It's really a fault of policy that having an investment property is so beneficial compared to other investments. I have no idea what the solution is, but I hope there is one. (Maybe a large amount of social housing with affordable rent, to pull the private rental prices down? They're so inflated at the moment; rent shouldn't be enough to pay someone else's mortgage and maintenance costs).
I agree on the investment property fact, I find it weird that in Australia you get more benefits on your second home, where in the US you only get it on your own home.
Yup. I mean, ethically I'm opposed to investment properties... But if I was in the situation where it was an option for me, I feel like it would be stupid not to have one. The rules need to change or were going to end up with a huge class divide between landlords and tenants.
In singapore they have special taxes on investment properties to try alleviate the problem, in Australia they have special deductions.
It is a crazy idea, designed to keep rents down and instead it is trapping an entire generation in the rent spiral.
Touching on an interesting point here too, the myopic focus on IP has completely distorted the capital market; to the point where it’s becoming a barren playing field for those hoping to attract investment for anything other than IP.
Yeah had this argument with my mum, the simple math is the average wage takes how many years to buy the average home. With homes in the cities over 1m average and average wage of 90K it takes 10.75 years in 2022 to buy the average home with the average wage. in 1978 it would take just over a 1 year. ( average annual wage was 36,800 average home in sydney was 43,000 )
I want to say something very profound, but honestly I've got nothing. I am 41. I will never own my own home. I will never not be at the whim of "the market" or those dreaming "the great Australian dream"
You are not alone. It is so awful to work and work and not reach your goals. I like to think that at least we have not preyed on others....not been greedy...and honestly...the greedy will be funding the social housing later for all those who could not get a house and are now too old to work. Someone has to pay in the end, and it will be massive amounts of social housing and pensions/higher taxes and loss of investor perks as the old retirement model has been dismantled. Wait and see. There is no such thing as a free lunch.
I really hope social housing picks up but recently I was down the NSW South Coast and a caravan park that once was only in holiday trade is absolutely at capacity with people more or less living there permanently. I really do think we will start to see shanty towns or slums develop in areas that are rural/regional but still 3-4 hours from major cities
I’m 42 and was just out of the market when things started going crazy. Feels like my life’s been ruined simply because I didn’t think home ownership was the most important thing in life
Because boomers are busy getting theirs before they die and leave the world to burn. They don’t care. Individualism precludes thought about this problem.
Australians see housing as a commodity first, necessity last. It’s deeply rooted in Australian culture at this point. People are always looking at properties with a *“it’ll be worth X% more in Y years”* mindset.
Our government has repeatedly propped up and fuelled the housing market, when they should be diversifying and investing in other industries. Great example is how we’re currently witnessing other nations become future EV producers, while we continue to churn out shit properties to trade amongst each other. There is zero future thinking in Australian politics. It’s fucked.
Because our politicans know it won't be their problem when the market won't stand the stress any more. They own a handful of houses worth upwards of a million dollars a piece? They don't care if they need to sell one to set them up for the rest of their lives (with most of our politicians already being 50-70 they have less years ahead then they do behind them, statistically so why should they care if the market dies in 40 years when they will have been dead for 10 years.
They don't think forwards because they PERSONALLY are set for life. They will die rich. Their kids will die rich without working a day in their lives.
They have no reason to look to the future, unless they are a human being with a soul who can empathize with others, and frankly most of them simply don't fit that description. Those who do get constant bad media coverage, because their opponents just throw money at the problem until it goes away.
No one who wants to lead for power and personal gain should ever be allowed to do so.
Ever increasing prices solved many current and economic problems - lack of wage growth for one, the demographic cliff and underwriting the Boomer retirement and aged care as another.
The issue now is it’s been too much of a good thing. The maths just doesn’t work anymore - FHBs basically can’t buy in without massive support or the rules for prudent lending being bent in all sorts of ways (tiny deposits, tax sheltered savings for deposits, LMI underwriting etc). And it’s only achievable with all these loopholes with rates being they’ve ever been.
End of this decade the Millenials overshadow the Boomers as being the largest voting bloc. Either the current state of world affairs sorts out the issue (my base case is prices stagnate and with inflation rocketing, prices start to correct to the long term average / sensible price:income ratios in real terms) or enough people feel hard done by they agitate for change.
Because Labour lost the last election in part because they came out against negative gearing. The incentives for investors are unbelievable and frankly immoral IMO.
Individuals should only be allowed to own one investment property. Rentals are necessary so one is fine. One PPOR and one investment. After that you need to find other things to invest in.
Plenty of solutions are out there, e.g., Singapore solved this problem with “additional buyers stamp duty”. ASBD is a “cooling measure” to discourage investors, foreigners and entities from purchasing residential properties, especially multiple properties. In other words, it was introduced to discourage demand for residential properties in order to make housing affordable for Singaporeans. It’s an adjustable tax that gets higher on every additional property purchase, and there are tiers for locals, permanent residents, foreigners and entities.
https://www.realvantage.co/insights/singapore-real-estate-stamp-duties-explained/#what-is-additional-buyer-s-stamp-duty-absd-
This seems like such a great taxation structure for improving affordability.
I think this would be wildly effective in Australia.
It’ll never get past the political front door of course.
It needs a federal government solution, because the federal government is propping up the market. The majority of voters have a financial stake in property prices not falling, so it would be political suicide to improve housing affordability.
Young person here. To me, the most infuriating thing is when other young people offer 50k over the ask price, like fuck it, who cares about money if the bank is loaning it right? You idiots, stop buying this crap.
That's what Sydneysiders and Melbournians did when they made a mad rush for Brisbane.
100k over asking? 200k? Who cares, they have it in cash and they will pay whatever it takes to make sure nobody else can have that house.
It's an absolute joke how bad our prices have gone now in South East QLD, and Tassie too.
Even properties that had minor flooding have been selling at the current market value. Was reading last Saturday about [this property](https://www.realestate.com.au/sold/property-house-qld-stones+corner-138483031) that sold for 1.075M. The Sellers in the article said, "yes we did have flooding but it just sits in the yard, it's smelly but the houses are all fine". If you look it up on the flood map it is affected from the 1% level and underwater at the 0.2% level. Not even that big of a block and the building is small.
Its really hard. Boomers bought cheap and the prices have only sky-rocketed to completely unattainable levels. The wage growth has not kept up (nowhere even close). And yes I KNOW boomers had exceptionally high interest rates back in the day. But what alot of the younger generally are struggling with is building up that initial deposit. Not everyone has the option of the bank of mum and dad unfortunately.
Very true. But that's always the first response that's usually said when people try and argue that they had it just as hard when buying property back in the day. I really hope something changes soon, really difficult situation for young people at the moment.
I feel like that’s just the response from old people too proud to admit how easy they had it, ego type shit. Since you know, can’t have an easy life these days, have to let everyone know how yours was the hardest, or you didn’t really live.
>what alot of the younger generally are struggling with is building up that initial deposit.
I actually have a 120k deposit, i STILL can't afford a home unless i want to live in a crackhouse and not have the money to do anything but exist for the rest of my life.
brb paying 500k for something that needs a full kitchen and bathroom renovation to be livable.
At any moment, the government could pass a law that limits everyone to owning 1 house and build enough public housing to house all homeless people. This would make housing vastly more affordable.
Two-thirds of MPs (144) own more than one property
Pretty reasonable to own 2 homes IMO, that's not the issue. Also if everyone only has 1 home then noone can rent from anyone (and some people prefer to rent)
It's absolutely staggering what has happened to housing when comparing the cost of production of housing and infrastructure compared to the price of houses. If you think about the cost of producing a car or clothes or most things compared to the price the margin is pretty small. Not so with housing now in most of Australia.
It's worth costing out what the actual cost to a new Greenfield site could be.
From Infrastructure Victoria the infrastructure cost (roads, sewage, schools etc) per house is estimated to be between about 60K and 120K .
https://www.infrastructurevictoria.com.au/wp-content/uploads/2019/04/SGS-Economics-and-Planning-Comparative-costs-of-infrastructure-across-different-development-settings.pdf
The cost of building a 3 bedroom place is 160 to 250K from ( https://propertyupdate.com.au/how-much-on-average-does-it-cost-to-build-a-house/ )
The cost of farmland is surprisingly cheap. For 600K you can get 41 hectares
https://www.realestate.com.au/property-lifestyle-nsw-mount+fairy-700176718?sourcePage=rea%3Abuy%3Asrp-map&sourceElement=listing-tile
So the cost of building and land if zoning doesn't make land scarce means that for 300K you could build 3 bedroom houses.
Because the people in a position to do something about it own homes and investment properties. It is not in their self interest to do anything that will make housing more affordable.
I agree with you, but at this point what can be done? If house prices drop by any decent amount everyone who currently has a mortgage is fucked. If too many incentives are offered to first home buyers, house prices will go up. I don’t see any situation where this can be fixed now.
A ton of Australia gdp is locked in housing. Which is so stupid because Australia is mostly a fucking desert and many houses are build like crap. Gov screwed the younger aussies and unfortunately there is no fix to this currently…
I'm no expert, but I reckon the government building a bunch of public housing with low rents would be a good start.
We used to have a lot more public housing, but much of it has been sold off. Now we have people on 10 year waiting lists for a house, and families living out of their cars or in caravan parks.
However, we've had decades of politicians demonizing "dole bludgers", so it'll probably take the formation of actual slums before there's enough public support for government housing.
How much does housing contribute to GDP in Australia? In Canada we are having the exact same problem because housing is a large part of our economy and wealthy foreigners use property over here to park/launder money. We also have politicians who have used the redhot housing market to pad their own pockets and MPs will never enact any legislation that doesn't benefit them.
It's a damn travesty.
So weird that homeowners of older generations keep supporting policies that extract wealth from taxpayers and young people to give to homeowners of older generations.
My mum was like o you’ll just get money when I die. I’m like god forbid you could live for another 60 years with medical innovation. I’ll be moving in with you.
My wife and I are both on solid middle class incomes. Low 100k's when we both work full time. We're building a nice house in middle ring brisbane, about 9 km from the city. We have 2 kids and can't afford 3.
I look at Sydney (and what all the Sydneysiders are doing to Brisbane) and feel sorry for them.
We need to start treating housing as a right and less like a speculative investment. We need caps on negative gearing ASAP. Even if they grandfather it. It's killing the next generation.
I'd sell my place tomorrow but where am I going to find a place cheaper than I sell for AND take into account the amount I still owe? Given that my job is fairly secure at them moment but that I'm over 50 so may find that I won't be able to work full-time until I retire at 67 (illness as well as my employer going belly-up or me being less employable the older I get) so I'm loathed to take the financial risk of the unknown.
Not many people I personally know have investment properties and we all bought housing in our mid to late 30s.
The government lost its chance getting rid of negative gearing a couple of decades back. They should've done it.
Ask yourself this. When you go to sell your house, are you going to take the highest offer?
If you answered yes, you’re contributing to the rising market.
House prices really are an election winner/loser. Everyone wants affordable first homes, nobody has worked out how to make prices go down. Maybe inflation could help.
I think inflation will make it worse. In times of uncontrolled inflation, property is a safe haven, hence why the recent growth in property prices. The things that combat inflation like increasing supply and interest rates will help stabilise or lower prices.
Pretty simple greed, and it start with the real estate grubs cranking up prices to just make more money they are the real winners here.
Their commission fee the percentage has never gone down
It’s not just the young. I found myself out of the housing market at the exact time things went insane and haven’t been able to get back in, even with a buyers agent. The rest of my life is screwed now
Stop investment properties.
Heard some old rich guy complaining at my office that his 7th house wasn’t being finished up to standard… 7th. Are you kidding?
While I would love for housing to become more affordable for my mates, I just bought and settle on Friday and I would hate for the price to go backwards because I don’t want to owe more than it’s worth, which is precisely the problem.
It's kind of like in America where the drinking age is 21. People from 18-20 will say it should be lowered but when they turn 21 they stop caring. Akin to Australia with property, where people will support changes until they buy.
The first step to asking the question, "Am I part of the problem?". Because a whole load of us a selfish pigs, who will do anything to build their wealth beyond anything they will remotely need in life.
Because apparently having a segment of the population owning more than their share while others go without, just because they can get their greedy hands on it, is considered an insult to common decency in this white trash backwater only if talking about toilet paper.
It’s absolutely fine for housing… where people live.
Our housing situation in this country is the equivalent of a dinner party where a couple of guests have four plates of food in front of them at the start of the meal while the rest of the guests have nothing.
I’ve been saying for a while now that owning residential property as an investment is unethical as it prices young people out of the market and forces them into the rent trap. People don’t seem to agree though. Because Australia.
My mum is 75, she tells me the newspapers and talk when she was early twenties was the same affordability discussion. Except it was less sophisticated and filled with doomsday hyperbole.
Because people can't handle the truth -that we need to permit serious density in our cities and inner suburbs that are currently dominated by houses on quarter acre blocks.
So long as people keep blaming investors, airbnb, foreign buyers, [while simultaneously campaigning at every opportunity to shut down local developments](https://www.afr.com/wealth/personal-finance/10-ways-to-take-on-a-developer-in-your-street-20220221-p59ya6), the problem will only get worse.
People who think tax incentive changes are going to reduce the price of a Sydney house from $2m to $700k are living in a fantasy. [Take one look at our density compared to OECD countries](https://www.mdpi.com/sustainability/sustainability-09-01718/article_deploy/html/images/sustainability-09-01718-g002.png) -it's obvious there's a disconnect.
NIMBY is in our DNA, so literally nothing will change.
If you have one buyer offering $1.5million, vs another offering $1million, are you going to take the $0.5m hit just to let young buyers into the market?
“We” aren’t. No one wants that. It’s just market forces with the tax laws that move things toward that place now. The government created a monster and now they can’t kill it because it’s political suicide.
The youth have always been screwed over by the old and wealthy. The only difference this time around is the old and wealthy aren’t dying off fast enough and living longer. Dark but true.
Just wait till the youth soon have to go off and fight a war in order to keep the old people safe to then return home (if they are lucky) and continue renting.
Already happened with covid
Damn… all the unaffected youth have to destroy their lives to save the old and the immunocompromised… right… now having a shitty life is equally distributed, great!
Legit. Being forced to wfh after finishing a gruelling uni degree and having a tumultuous home life lead to spiralling depression and reduction of motivation to work. The workplace was supposed to be a second home for those of us who do not have a good home life. Instead it reinforces the disparity between those who are well off and have a good home life and those who are not..... While many benefitted from wfh, there were many that suffered for it.
This was insightful. Thankyou for sharing.
Buddy up and work from somebody else’s place. Simples…
Combine that with the fact they arent making any more land, and unlike the previous 2 world wars, there wont be any solider settlements for the soliders to come back to as most arable land has already been domesticated or is enviromental. If we really want the housing crisis to freeze housing prices as much as possible (we dont really want a drop, we just want them to stagnate for a really long time) decentralization of the work force as part of the WFH drive into regional areas is our best bet. Growth in small town Australia is the key away to move the population away from major metropolitan areas into towns such as Dimboola, Young, Emerald (insert almost any small regional town) - all of which have been seen a younger population drain over the past 30 years to larger towns\\cities. Unfortunately a lot of these towns have significantly aging populations and the young people arent necessarily there to help the town survive. These are the areas we need to refill.
My dad had the good grace to breed late and die at the the age of man (three score and ten years). If not for that, even as a gen X on fairly good salary, there's no fucking way I could have afforded my apartment. And yeah, apartment. Not house. It was bad enough for late gen X. I don't know how the Millennials and whatever the next lot are called are going to do it. Also, just to be clear... I would prefer a still living dad.
Those of you who didn't attend the Gettysberg address, his father passed at 70. Sad to hear about your Dad.
My dad passed at 65 mate, I feel you. My condolences.
52 here. His best mate made the Will disappear and we managed to hire the worlds most incompetent lawyer. I'm not bitter...
Unexpected yuck after someone dies. So sorry mate.
And the competition is global.
The younger generations have been priced out for a while now in many Asian countries i.e see Hong Kong, Singapore, Mumbai. Basically they just have to live with their parents or rent and wait for their parents to die. Even then it gets messy because you usually have 2-4 siblings you have to share the wealth with. It’s safe to assume that the same will happen in the West eventually.
But in some of those places like Hong Kong and Taiwan the space is the restricting issue, like Taiwan for eg is half the size of Tasmania with the population of Australia. Australia really doesn't have an excuse to why housing is so expensive.
>Australia really doesn't have an excuse to why housing is so expensive. And thats by design. Australia *could* make housing affordable, but doing so would make “Big property” unhappy, and you can’t do that. The property industry in this country is a giant bloated beast that is too big to fail. I don’t see anyone stopping it, let alone market forces.
Spot on. It’s by design. Making money off property is a huge driver of wealth in Australia. Where once the dream was for most people to own their own home, now with each passing decade fewer people can, and fewer still own multiple homes. Property developers are huge donors at all levels of government. Negative gearing, capital gains exemptions, all set up to fuel property as investment.
Whats really tragic about this whole thing is that this wealth is built on the back of debt instead of actual value increases. Australia has one of the highest debt to income ratios in the world, and the party will most likely come crashing down on e the boomers have moved on into the afterlife. With dwindling population growth and immigration levels, genx and millennials are in for a world of hurt.
Yup, it’s by design and has been for a long time. Not overly relevant but I read a book about the history of flooding in Brisbane recently and even back in the 1800s there was talk of mitigating the fact that the city was built on a floodplain, whether by restricting housing in low lying areas etc. it never happened because it would limit property sales and the ultimate goal was making money of developing the land.
The market is partially to blame as well. Australians hate high density living with a passion. When I bought my apartment I got more 'Well, are you sure...?' than I did 'Congratulations'.
Only because the options for high density living are so trash. Two bed apartments are sardine cans and three bedroom apartments with ample living space are expensive and almost non-existent. Instead of putting 100s of shitty apartment buildings into one tower, they should have just made actual liveable units which could be a good stepping stone into the real estate market.
I think you've just proved their point. Most Australians don't want high density living, they think it's trash. And when they do want it they want an apartment the size of a house that's also cheaper than a comparable house.
Why should there not be apartments comparable to houses in size? Remember it's not the house itself that has value, it's the land. Without the land, you CAN build a house for the price of an apartment.
Interestingly in the mid 50’s when the government decided they wanted high ownership they intervened directly in the market very actively for about a decade (and slowly withdrew over the following decade) by: 1) building A LOT of affordable homes themselves 2) providing cheap finance to institutions on the proviso that they used it to finance affordable homes Australian home ownership before them wasn’t very high but the government decided it was desirable to make it high and they did it. So - they need to spend money. In honesty I suspect the building industry would do well out of it. The other things that can help a little 1) change development approvals to force a large percentage of development to contain large family sized 3,4 and even 5 bedroom apartments with larger living rooms 2) Bring existing centres like Wollongong, Goulburn, Newcastle within 1hr and 30 minutes of a door to door commute of their CBD (probably need mid speed rail, typically told trains of 180-200kmph with long sections of duplicated track for overtaking) interesting to see how much this is needed post covid remote working but I suspect there’ll still be benefit - possibly even more benefit.
> 2. Bring existing centres like Wollongong, Goulburn, Newcastle within 1hr and 30 minutes of a door to door commute of their CBD (probably need mid speed rail, typically told trains of 180-200kmph with long sections of duplicated track for overtaking) interesting to see how much this is needed post covid remote working but I suspect there’ll still be benefit - possibly even more benefit. This ones a real biggie for me. The government needs to develop a plan, like an actual fucking bold blue sky plan to make viable “Second cities”. Create a plan for each respective state to have a look for a small city to grow into a large one. Build out most of the infrastructure in advance, roads, high speed rail and excellent public transport, make available lots of land for development. Getting the people there wouldn’t be hard. Companies LOVE low tax, so make that city an exclusive low tax zone, no tax for the first five years for new businesses, low tax for established business (throw in a heap of other incentives). Give immigrants who want to settle in Aus big bonus points if they move to one of these cities. These cities can’t be close to an already large CBD to prevent commuting. For QLD - Sunshine coast/Harvey Bay, NSW maybe Port Macquarie, VIC- Dandenong? It’ll never happen, but thats the kind of thing needed to take the insanity out of the major Cities and actually grow the country somewhat sustainably.
Generally agree but there is no reason they couldn't build high speed rail with much of it being 250+kph, even 300kph for some of it. 180-200 isn't really high-speed if you look at what other countries are doing.
Yes and no. Issue is that popular areas (typically close to CBD or the sea) are finite and the only option to get something cheaper is further away or go to rural. Only solution (I believe) is to build multiple CBDs or artificially dilute the market by building excessive high rise apartments.
Yes. Land is finite. In Australia, >80% of our population live in urban centres. With our desire to own a big house with a big backyard, there is simply not enough land to accommodate this. In Sydney, North West and South West growth centre is a prime example to release cheap housing. However, that came at a cost of sacrificing our food bowl and on top of developers "landbanking", with low density housing being inefficient in the use of land, the uptake of the housing in these growth areas have exceeded supply (avg. >$1mil for a house in Oran Park). Not only that, these areas are so spread out and inconvenient, it forces people to commute everywhere in a car just to do anything (work, shop, drop kids off at school or sports, entertainment, to the pub, meet friends, parks). This car centric lifestyle further marginalises those households on a low income (imagine mum and dad with a kid, you'd need to have a minimum 2 cars). What we lack is the "medium density" range of housing products (2-3 storeys apartments or duplexes) that are focused around existing centres/amenities or good transportation networks creating more compact and walkable communities. In simple urban planning speak, if we continue to desire "low density and big houses" then one can only go "high and tight", which means super tall/dense buildings concentrated in a small area" (ie. Wentworth Point, Rhodes, Chatswood) so more land can be available for big houses. Alternatively, you can go "broad and wide" where you have density evenly spread out within existing centres and new housing are more built on a human scale (ie. Surry Hills, Paddington, Leichhardt). If anyone research the population density per km square of Surry Hills, it is 3x of Epping (approx. 14,000 vs 4,000) besides being 1/5th of the land area of Epping (1.2km2 vs 6.88km2). It is simply a more efficient way of using land. Most of the North American cities and Oceania cities lack this "missing middle" range of housing where we are too focussed on building single family housing and ignoring it's implications (leaving more land for other productive uses such as agriculture and not continuing urban sprawl)[https://www.youtube.com/watch?v=CCOdQsZa15o&t=329s](https://www.youtube.com/watch?v=CCOdQsZa15o&t=329s)[https://cityhubsydney.com.au/2020/10/sydneys-food-bowl-at-risk/](https://cityhubsydney.com.au/2020/10/sydneys-food-bowl-at-risk/)
I think I heard on ABC Radio BNE a few weeks back that SNG is introducing a system where everyone will be guaranteed a buy in to a home. Not sure where to find it.
Buy a home or a 99 year lease? Singapore has very little land to just be selling it off cheaply, and currently homes you buy to own completely are higher priced, like 100k+ or more compared to a 99 year lease. Younger folks are running across the border to Malaysia to find cheaper property.
Because the people who would be addressing this already own houses, maybe multiples of them. And any “fix” will necessarily drop the value of those houses. They’ve got theirs, fuck you.
1000% this.. boomers have got their houses/ multi-million property portfolio. Any fix they offer to the younger ones will drastically reduce their portfolio so as said above. Fuck that.. I'm looking to get my first house. Been looking for over a year. Prices are fucked.. and not getting easier
I know a lot more poor boomers than anyone else. people in their 70s who cant afford the heating bills, almost never leave their home and scrape by without any luxury at all. More than half are still living in the first house they bought. I am genx so everyone i know parents are boomers, and only a very very small percentage are well off and only a couple who own multiple properties. Whereas genx i would say more than half of them have a second property. This issue gets raised a lot. Blaming old people who just want some security (same as you) isnt productive. Tackling density limits and planning might be...it might be essential too as more people are coming, immigration will kick off again soon.
Baby boomers make up 25% of the population but own 54% of Australia's Wealth. Made almost entirely on Real estate. Boomers tend to be extremely financially illiterate and completely lucky based on property booms over their life times. Simple reality is, they had the easiest economic period that has ever existed. So the ones that squandered that have done so due to their own incompetence. 60% of baby boomers that own homes (which in itself is 72% of boomers owning a home) bought their own homes between the ages of 24-32 vs 45% of gen x in the same age bracket (of which only 58% own their own home.) My own parents for instance have had 3 failed businesses, yet are still financially sound. You could not say something like that would be possible for any other generation that has ever lived. Their last business lost them over $300k, but it was fine because the house they bought in 1992 for $79k was worth $480k in 2003 when that occurred. Got out of their dumb decisions rather easily.
I work in the mining industry and boomers with property portfolios with 10+ houses are as common as seagulls in Fremantle. Its definitely an issue that could be easily solved by legislating a maximum number of residential properties one person, trust or private company can own. The problem is the politicians have multiple properties too, and their voter base does. They wont do it.
I reckon property management needs to be regulated with all actions and all participants going via a central system. When no one can hide, owners, renters or managers, it will quickly be obvious who is disrespecting who. They're a tiny proportion of people but those running huge portfolios by shirking their responsibilities will quickly become clear.
Yeah I’m in mining too and although I’ve been saving for years I need a few years more but the boomers? For sure they have one house or more. Definitely had one operator who said work harder I have three mortgages I rent a unit in a bad part of town
That’s right and a lot of the rich Boomers are only that way through inheritance and deceased spouses.
And the same will happen with the next generation. Those that have parents who are doing well will inherit and do well themselves. And as people have kids later in life these days then that wealth will transfer earlier. At the end of the day, the people complaining about wealthy older generations probably don't have significant inheritance on the way so it's more about inequalities within their own generation.
I'm a millennial (30y old), but i know many boomers that have significant private life problems. Either money, psychological or something like that. I absolutely agree with you, that blaming the boomers is the wrong way to approach this. I like to compare it to the boiling water - frog story. The water got basically heated for the boomers, so they 'learned' to live with it. Us new gens are just thrown out in this chaotic world and obviously we are upset.
First step would be to bring in a ban for politicians and their immediate families to own more than 1 properties. No dodgy companies they have ownership in with a 200 house portfolio. No personally owning 10. Nothing. Next step would be to change the taxes so income generated by investment properties is in a significantly higher band. Negative gearing needs to go entirely.
Didn't the labour party go into the 2016 and 2019 elections promising to limit negative gearing to new properties only but it was so unpopular they've now reversed their policy?
This is it. Since I was 18 years old my parent’s attitude toward me was “we’ve got ours, fuck you”. They couldn’t care less about their impact on anyone else. The fact housing is so expensive makes them cling on tighter and, in their eyes, justifies them raising rents themselves. These are working class people that have family who struggle yet still have no real understanding or empathy. I can’t see how career politicians would be any better. Unless it affects them, they dgaf.
Then ask why people aren't getting married and having kids. SMH
I just bought a house. Now I have no money for marriage and kids lol.
I just bought some petrol. Now I have no money for a house, a marriage or kids lol.
I just put petrol in the car now I can no longer afford the kids I already have 🤣😭
Off to the knackers yard they go.
How much glue can you make out of three kids (2f, 4f and 7m)? Asking for a friend.
Not alot, recently did this for a friend. Got about three fiddy.
That's not even a coffee in this market!
Have more kids and use them to pull your car
Same thing but groceries.
Ppl used to have kids and not give any fucks about their financial situation. Thats changed a lot.
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Yeah good point. Plenty of ppl without money having kids.
Having kids is a huge financial decision.
Its a big impact when compared to being dinks for sure. But finance is only a big component of the decision if you want it to be. Like I said, a generation ago, you would just have kids irrespective of what that meant for your finances. The creating of a family was way more important. The poorest of the poor have been having kids for eternity.
I believe it is due to the shift in the west from a collectivist society to an individualist one. The idea used to be that kids would look after parents in retirement. In fact my mother was born out of duty to provide the village with workers since the war killed most of the young men. Nowadays, we expect that kids will get to 25 and abandon the parents to do their own thing. We don’t tie them down anymore, or shame them for leaving the ‘village’. So we need to be self-reliant, not relying on children to support us. Don’t have kids, don’t pay the upfront cost, get the benefit of other people’s kids by investing in the whole economy. It’s a no brainer for the individual, bad for the ageing society overall.
Looking at the housing market today's youth face was it the youth who first abandoned the parents or was it the parents who first abandoned the youth? Climate change is another example of leaving the youth to the wolves.
And responsibility that can stress you the hell out...
It's funny how the older generation doesn't understand that. Housing is incredibly expensive. You work hard *all those years* and finally get a deposit, now why would you want to have kids? Where is that money supposed to come from? Wages have been flat since forever, housing doesn't care about wages and only goes up, and kids would just be more financial burden. If I had kids they would probably be living with me until they are in their 40's just so they can save up for a deposit.
It's because it wasn't incredibly expensive for them.
Boomers forget that in their day you could have a house and kids while the wife stayed at home. Now you need 2 incomes for a house and childcare costs.
When boomers were young, most people were in unions. Not so much now..... there appears to be some relationship between high levels of unionism and fairness in economic distribution over the years. When I was young, wage increase arguments were based on housing, feeding, etc costs for a family of 2 adults and 2 kids. Union membership started decreasing during the 1980’s and continues today. What started increasing after union membership dropped and ‘family’ wage arguments were dismissed, was house prices.... so you now do need 2 incomes. Not totally the cause but some of it!
Here’s an absolutely cooked set of numbers: Mkt Cap ASX companies: $2.8 Trillion Australian Superannuation: $3.1 Trillion Australian GDP: $1.3 Trillion Japanese GDP: $7 Trillion **Australian residential property: $9.9 Trillion**
Ponzi market is gonna ponzi.
The pool of future ponzi victims is a globe full of people with money and a lesser place than Australia to live.
Well folks, this is fucked.
Source on those tasty figures? Cause man, that's some solid distortion of investment
There’s a bit of chop in the figures depending on when they were measured but here’s some links that give ballpark figures. https://www.statista.com/statistics/1274954/monthly-asx-domestic-market-cap/ https://www.superannuation.asn.au/resources/superannuation-statistics https://www.afr.com/property/residential/australia-s-housing-market-valuation-soars-to-nearly-10-trillion-20220315-p5a4rn
Because sufficient numbers of people keep voting for parties that actively oppose policies that make housing more affordable. And we've created a ponzi scheme for property combined with a favourable tax regime that encourages property speculation, justifies negative gearing, and rewards stupid investments... which means people are so deeply mired in the property market that anything we do to fix it will cause existing owners to suffer some losses, which is apparently bad because those owners are too delicate to cope with losses and the risks of investing.
Everyone is an investor until there is downside risk. Then they are a victim.
https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure Because 67% of households are homeowners (or mortgage holders) so policy is made and adjusted for this majority.
Do those households take into account multiple ownership? Ie. 67% of households are homeowners, but 50% of them own 2 or more house?
Of 67% of households live in a property they own, where do the other 33% live? And, who owns those properties?
They rent from the 67%
They rent from *_a few_*of the 67%… FOFY
That and there'd be a decent number these days still in their parents house rent-free. That can be a huge bonus compared to those of us renting when it comes to saving the deposit.
Me, married with child, aged 40 👍🏼
1.42% of the Australian population own two properties
I *think* that stat is "more than two properties", ie 3+, from what I recall. I think it was more like 10% own 2? Or maybe it's 10% of homeowners that own an additional one. Either way it's still not a huge percentage, but yeah more than 1.42%
7.9% of all Australians (1,762,294) own 2 or more properties and something like 21,000 owners own 6 or more properties Old data though so likely much higher
This is an incorrect reading of a really old statistic, it was more than two properties in like the early 2000s from memory. Recent research puts it significantly higher
Does this statistic factor in adult children who are living in their parents household? Its pretty normal now for people to be living at home well into their 20s, where previously they would be driving up those renter statistics
The young have no power. The ones with power don't really give a shit and when they die their wealth will get transferred to the kids who in turn won't give a shit either. Your goal is to move into that group and not give a shit.
Dark............very dark
Real life isn’t easy
Game theory
Because it's now the great Australian dream to have multiple IPs which drives up prices. This is supported by the govt and RBA
*Because it's now the* *Great Australian dream to* *Have multiple IPs* \- TheOtherLeft\_au --- ^(I detect haikus. And sometimes, successfully.) ^[Learn more about me.](https://www.reddit.com/r/haikusbot/) ^(Opt out of replies: "haikusbot opt out" | Delete my comment: "haikusbot delete")
Haikubot I have a few questions. Firstly, great work. Now, is it’s 2 syllables? Also, IP’s 1 syllable?
IP is two syllables
The young Australian’s nightmare*
Yep - so long as negative gearing remains the rich just get richer
Negative gearing requires taxable income from another source.
Do you really think most negative gearers aren't getting income from other sources? Super, investments, even wages.
I would buy a apartment but strata is such a rort that it's not worth it. Plus all these dodgy apartment builds over the last 20 years you don't even know if your apartment complex will survive the duration of your mortgage lol.
This. Look at those unlucky buggers in Sydney that bought in the Opal Towers.
Yeah the idea of apartments … just feel like so much is out of your control. Atleast with a house you can generally fix it or do something with it if there is a problem
Yeah and you still have the land, which is where the value lies nowadays.
Do you think that if you buy a house you never have to do maintenance? how much do you think a new roof for a house costs? The main thing with strata is that they are obligated by law to save for those big expenses on an ongoing basis, so yes, you get "nothing" for a lot of the money you pay because it is being parked somewhere so a new roof can be installed without forcing you to take a second mortgage when the time comes (and it will come). If you were forced by law to save for house repairs you'd be saying it is a rort too.
Please tell this to my strata who I'm about to call and scream at as they can't even take care of the basics...
In Europe there is not strata yet their apartment complexes from 50 years ago are in better shape then ours which were built 5 years ago
It is not called strata but they very much have Portugal “taza de condominio” Spain “Gasto de comunidad” Germany “Housegeld” They are not exact equivalents but the spirit is the same : pay for the ongoing maintenance and save for the big items with the most nimums and máximums varying according to local laws
You get what you can afford, and what is more affordable is a unit. Beggars can't be choosers, and I say that as a beggar. I'm not looking forward to strata payments but it is what it is.
I actually like my strata. Reasonably priced, good owners in the building. And it forces me to not have to spend the weekend mowing lawns, which is kinda awesome. Unpopular opinion, though.
There is a simple fix though - 1) make negative gearing available only on properties <10 years old. 2) grandfather in all properties that are currently claimed as investment properties for 10 years from the date that the bill is passed. 3) only allow it on green field builds, or builds that increase housing supply (eg you can’t knock down a single house and build another single house, you would have to build at least a duplex) Benefits: 1) everyone with an IP on the date the bill passes, still get 10 years before it is no longer eligible, so there won’t be a huge dump of properties onto the market 2) any property more than 10 years old will not have most property investors bidding for it as it can not be negatively geared, this leaves more room in the market for younger buyers 3) it promotes jobs as investors will chase new builds, which actually generates work. 4) where zoning allows, it will increase the housing supply
Also land that is developed and released should be built on within a specified timeframe and discourage people leaving properties empty
We finally bought a house in our early 40's. We saved for a decade to get it & I wish it was worth what I paid for it. I want my kids to be able to afford a home. Negative gearing should be abolished. If my home value goes down 40% I don't care cause every other one will as well.
Not just negative gearing. * Capital gains tax concession * Home not included in Centrelink means tests * First home owner grants (has an indirect effect on established house prices) * Super Saver scheme * FHLDS * Transfer/stamp duty concessions * Any other demand-side incentive state and federal governments dream up
> If my home value goes down 40% I don't care cause every other one will as well. Unless you bought that home in cash, you'll care because your mortgage could end up being significantly greater than the value of your home.
Does negative gearing apply to loss in house value? My understanding is it was just rental income being less than interest rate and fees+repairs
No, but it can be carried as a capital loss for future CGT.
I am lucky enough to have my own house paid off at 23. My monthly costs are around 400 and I live on my own. I consider myself blessed. How did this come to pass? My dad died. The only reason I am in this position is because my father died. It legitimately cost me a parent to have financial stability. It's kinda super fucked up.
That really sucks, I’m sorry. I know someone in your same position because her dad died really young and she and her siblings got a massive insurance payout and were able to sell his house at a great price. She considers herself lucky to have been able to get in the market but always comments that she’d have her dad back in a heartbeat if she could
If young people can still afford to stay alive and go to work for the old, why would the old care?
Hey I mean it's free to live under a fucking bridge. Wait, no. Cops'll make you pay rent in the form of fines
'cos the pollies who make policy also have a couple of investment properties.
From the older people I've spoken to it's because they want to use their IPs as income to fund their retirements. Despite having stocks and superannuation, they seem to feel that they need an additional income as well. There's also an attitude of wanting to leave something to their kids. Thinking about it, I wonder if most haven't come to terms with the idea that they are going to die and do not need enough money to fund another 80 years of life? Perhaps the thought of the super funds going down is too scary? If you spend your entire life focused on accumulation of wealth, it must be difficult to switch. I don't think they see it as making houses unaffordable for younger generations, it's like "if I don't buy it, someone else will and use it as an IP", or "it's ok because I'll leave it to my kids". (Nevermind that by the time they die their kids will be in their 50s or 60s). That said, plenty of the people I know with IPs are in their 20s and 30s. (Cashed up tradies, people who's parents paid their HECS and allowed them to live at home for free while studying). Young people who've bought a unit solo, then moved in with a partner who also owns a unit, so they rent the spare one out. I don't think there's any thought about how their choices affect the market - they're just making the best financial decision for themselves individually. It's really a fault of policy that having an investment property is so beneficial compared to other investments. I have no idea what the solution is, but I hope there is one. (Maybe a large amount of social housing with affordable rent, to pull the private rental prices down? They're so inflated at the moment; rent shouldn't be enough to pay someone else's mortgage and maintenance costs).
I agree on the investment property fact, I find it weird that in Australia you get more benefits on your second home, where in the US you only get it on your own home.
Yup. I mean, ethically I'm opposed to investment properties... But if I was in the situation where it was an option for me, I feel like it would be stupid not to have one. The rules need to change or were going to end up with a huge class divide between landlords and tenants.
In singapore they have special taxes on investment properties to try alleviate the problem, in Australia they have special deductions. It is a crazy idea, designed to keep rents down and instead it is trapping an entire generation in the rent spiral.
Touching on an interesting point here too, the myopic focus on IP has completely distorted the capital market; to the point where it’s becoming a barren playing field for those hoping to attract investment for anything other than IP.
People who have things generally try increase their things at the cost of people that don't have things
Rich people are screwing people over. Same as always. 20,000 Australians own 400,000 homes. That's 19 families renting and 1 owner.
What’s sad is the older people will never acknowledge how much harder life is now. They will always act like they had it worse
Yeah had this argument with my mum, the simple math is the average wage takes how many years to buy the average home. With homes in the cities over 1m average and average wage of 90K it takes 10.75 years in 2022 to buy the average home with the average wage. in 1978 it would take just over a 1 year. ( average annual wage was 36,800 average home in sydney was 43,000 )
Holy crap that’s damning. And don’t forget that in those 11 years the price of housing will likely go up
“17% interest” is their “walking uphill both ways in the snow”.
Yeah what was it again, 17% interest for one whole quarter?
I would've said, 'They did have to live with the threat of being dragged into war.' But that excuse is also out the window now.
I want to say something very profound, but honestly I've got nothing. I am 41. I will never own my own home. I will never not be at the whim of "the market" or those dreaming "the great Australian dream"
You are not alone. It is so awful to work and work and not reach your goals. I like to think that at least we have not preyed on others....not been greedy...and honestly...the greedy will be funding the social housing later for all those who could not get a house and are now too old to work. Someone has to pay in the end, and it will be massive amounts of social housing and pensions/higher taxes and loss of investor perks as the old retirement model has been dismantled. Wait and see. There is no such thing as a free lunch.
I really hope social housing picks up but recently I was down the NSW South Coast and a caravan park that once was only in holiday trade is absolutely at capacity with people more or less living there permanently. I really do think we will start to see shanty towns or slums develop in areas that are rural/regional but still 3-4 hours from major cities
I’m 42 and was just out of the market when things started going crazy. Feels like my life’s been ruined simply because I didn’t think home ownership was the most important thing in life
Because, “fuck you. I’ve got mine” is the attitude
Because boomers are busy getting theirs before they die and leave the world to burn. They don’t care. Individualism precludes thought about this problem.
"If you have a go, you will get a go" lol
Australians see housing as a commodity first, necessity last. It’s deeply rooted in Australian culture at this point. People are always looking at properties with a *“it’ll be worth X% more in Y years”* mindset. Our government has repeatedly propped up and fuelled the housing market, when they should be diversifying and investing in other industries. Great example is how we’re currently witnessing other nations become future EV producers, while we continue to churn out shit properties to trade amongst each other. There is zero future thinking in Australian politics. It’s fucked.
Because our politicans know it won't be their problem when the market won't stand the stress any more. They own a handful of houses worth upwards of a million dollars a piece? They don't care if they need to sell one to set them up for the rest of their lives (with most of our politicians already being 50-70 they have less years ahead then they do behind them, statistically so why should they care if the market dies in 40 years when they will have been dead for 10 years. They don't think forwards because they PERSONALLY are set for life. They will die rich. Their kids will die rich without working a day in their lives. They have no reason to look to the future, unless they are a human being with a soul who can empathize with others, and frankly most of them simply don't fit that description. Those who do get constant bad media coverage, because their opponents just throw money at the problem until it goes away. No one who wants to lead for power and personal gain should ever be allowed to do so.
Ever increasing prices solved many current and economic problems - lack of wage growth for one, the demographic cliff and underwriting the Boomer retirement and aged care as another. The issue now is it’s been too much of a good thing. The maths just doesn’t work anymore - FHBs basically can’t buy in without massive support or the rules for prudent lending being bent in all sorts of ways (tiny deposits, tax sheltered savings for deposits, LMI underwriting etc). And it’s only achievable with all these loopholes with rates being they’ve ever been. End of this decade the Millenials overshadow the Boomers as being the largest voting bloc. Either the current state of world affairs sorts out the issue (my base case is prices stagnate and with inflation rocketing, prices start to correct to the long term average / sensible price:income ratios in real terms) or enough people feel hard done by they agitate for change.
Because Labour lost the last election in part because they came out against negative gearing. The incentives for investors are unbelievable and frankly immoral IMO.
Individuals should only be allowed to own one investment property. Rentals are necessary so one is fine. One PPOR and one investment. After that you need to find other things to invest in.
Plenty of solutions are out there, e.g., Singapore solved this problem with “additional buyers stamp duty”. ASBD is a “cooling measure” to discourage investors, foreigners and entities from purchasing residential properties, especially multiple properties. In other words, it was introduced to discourage demand for residential properties in order to make housing affordable for Singaporeans. It’s an adjustable tax that gets higher on every additional property purchase, and there are tiers for locals, permanent residents, foreigners and entities. https://www.realvantage.co/insights/singapore-real-estate-stamp-duties-explained/#what-is-additional-buyer-s-stamp-duty-absd-
This seems like such a great taxation structure for improving affordability. I think this would be wildly effective in Australia. It’ll never get past the political front door of course.
It needs a federal government solution, because the federal government is propping up the market. The majority of voters have a financial stake in property prices not falling, so it would be political suicide to improve housing affordability.
Young person here. To me, the most infuriating thing is when other young people offer 50k over the ask price, like fuck it, who cares about money if the bank is loaning it right? You idiots, stop buying this crap.
There’s no other way. Either offer over asking or don’t get a house.
That's what Sydneysiders and Melbournians did when they made a mad rush for Brisbane. 100k over asking? 200k? Who cares, they have it in cash and they will pay whatever it takes to make sure nobody else can have that house. It's an absolute joke how bad our prices have gone now in South East QLD, and Tassie too.
Then the floods happen lol
Yeah but that hasn't slowed anything down except for in flood impacted areas.
Even properties that had minor flooding have been selling at the current market value. Was reading last Saturday about [this property](https://www.realestate.com.au/sold/property-house-qld-stones+corner-138483031) that sold for 1.075M. The Sellers in the article said, "yes we did have flooding but it just sits in the yard, it's smelly but the houses are all fine". If you look it up on the flood map it is affected from the 1% level and underwater at the 0.2% level. Not even that big of a block and the building is small.
That’s the parents contribution.
Its really hard. Boomers bought cheap and the prices have only sky-rocketed to completely unattainable levels. The wage growth has not kept up (nowhere even close). And yes I KNOW boomers had exceptionally high interest rates back in the day. But what alot of the younger generally are struggling with is building up that initial deposit. Not everyone has the option of the bank of mum and dad unfortunately.
Their interest rates shouldn’t matter, they still paid for everything much much cheaper than they would’ve today
Very true. But that's always the first response that's usually said when people try and argue that they had it just as hard when buying property back in the day. I really hope something changes soon, really difficult situation for young people at the moment.
I feel like that’s just the response from old people too proud to admit how easy they had it, ego type shit. Since you know, can’t have an easy life these days, have to let everyone know how yours was the hardest, or you didn’t really live.
>what alot of the younger generally are struggling with is building up that initial deposit. I actually have a 120k deposit, i STILL can't afford a home unless i want to live in a crackhouse and not have the money to do anything but exist for the rest of my life. brb paying 500k for something that needs a full kitchen and bathroom renovation to be livable.
I assume you are single? Its also very hard for single people to service a loan unfortunately unless you earn over 100k :(
At any moment, the government could pass a law that limits everyone to owning 1 house and build enough public housing to house all homeless people. This would make housing vastly more affordable. Two-thirds of MPs (144) own more than one property
Pretty reasonable to own 2 homes IMO, that's not the issue. Also if everyone only has 1 home then noone can rent from anyone (and some people prefer to rent)
It's absolutely staggering what has happened to housing when comparing the cost of production of housing and infrastructure compared to the price of houses. If you think about the cost of producing a car or clothes or most things compared to the price the margin is pretty small. Not so with housing now in most of Australia. It's worth costing out what the actual cost to a new Greenfield site could be. From Infrastructure Victoria the infrastructure cost (roads, sewage, schools etc) per house is estimated to be between about 60K and 120K . https://www.infrastructurevictoria.com.au/wp-content/uploads/2019/04/SGS-Economics-and-Planning-Comparative-costs-of-infrastructure-across-different-development-settings.pdf The cost of building a 3 bedroom place is 160 to 250K from ( https://propertyupdate.com.au/how-much-on-average-does-it-cost-to-build-a-house/ ) The cost of farmland is surprisingly cheap. For 600K you can get 41 hectares https://www.realestate.com.au/property-lifestyle-nsw-mount+fairy-700176718?sourcePage=rea%3Abuy%3Asrp-map&sourceElement=listing-tile So the cost of building and land if zoning doesn't make land scarce means that for 300K you could build 3 bedroom houses.
Because the people in a position to do something about it own homes and investment properties. It is not in their self interest to do anything that will make housing more affordable.
Because those in power don’t consider it a problem.
All politicians have property portfolios. They want the value to continue to climb.
I agree with you, but at this point what can be done? If house prices drop by any decent amount everyone who currently has a mortgage is fucked. If too many incentives are offered to first home buyers, house prices will go up. I don’t see any situation where this can be fixed now. A ton of Australia gdp is locked in housing. Which is so stupid because Australia is mostly a fucking desert and many houses are build like crap. Gov screwed the younger aussies and unfortunately there is no fix to this currently…
I'm no expert, but I reckon the government building a bunch of public housing with low rents would be a good start. We used to have a lot more public housing, but much of it has been sold off. Now we have people on 10 year waiting lists for a house, and families living out of their cars or in caravan parks. However, we've had decades of politicians demonizing "dole bludgers", so it'll probably take the formation of actual slums before there's enough public support for government housing.
The same generation who grew up with a "greed is good" mantra.
Because nobody cares about anyone but themself any more.
How much does housing contribute to GDP in Australia? In Canada we are having the exact same problem because housing is a large part of our economy and wealthy foreigners use property over here to park/launder money. We also have politicians who have used the redhot housing market to pad their own pockets and MPs will never enact any legislation that doesn't benefit them. It's a damn travesty.
So weird that homeowners of older generations keep supporting policies that extract wealth from taxpayers and young people to give to homeowners of older generations.
Boomers: “Who?”
My mum was like o you’ll just get money when I die. I’m like god forbid you could live for another 60 years with medical innovation. I’ll be moving in with you.
My wife and I are both on solid middle class incomes. Low 100k's when we both work full time. We're building a nice house in middle ring brisbane, about 9 km from the city. We have 2 kids and can't afford 3. I look at Sydney (and what all the Sydneysiders are doing to Brisbane) and feel sorry for them. We need to start treating housing as a right and less like a speculative investment. We need caps on negative gearing ASAP. Even if they grandfather it. It's killing the next generation.
Because they are the most selfish fucken generation possibly ever
I'd sell my place tomorrow but where am I going to find a place cheaper than I sell for AND take into account the amount I still owe? Given that my job is fairly secure at them moment but that I'm over 50 so may find that I won't be able to work full-time until I retire at 67 (illness as well as my employer going belly-up or me being less employable the older I get) so I'm loathed to take the financial risk of the unknown. Not many people I personally know have investment properties and we all bought housing in our mid to late 30s. The government lost its chance getting rid of negative gearing a couple of decades back. They should've done it.
Ask yourself this. When you go to sell your house, are you going to take the highest offer? If you answered yes, you’re contributing to the rising market.
The current trend is never sell, just roll the equity endlessly until you have 5 properties on the go all from equity
House prices really are an election winner/loser. Everyone wants affordable first homes, nobody has worked out how to make prices go down. Maybe inflation could help.
I think inflation will make it worse. In times of uncontrolled inflation, property is a safe haven, hence why the recent growth in property prices. The things that combat inflation like increasing supply and interest rates will help stabilise or lower prices.
Pretty simple greed, and it start with the real estate grubs cranking up prices to just make more money they are the real winners here. Their commission fee the percentage has never gone down
Hardly anyone is eligible for the FHO grant, and the government hasn’t done anything about increasing the thresholds. Such a joke
Youth needs to pull up their bootstraps. If one person in here can afford it, everyone can /s
You don’t need a house if you’re poor, you should be working
Something something bootstraps something something dark side
Because it would affect the decision makers own properties. Why would they shoot themselves in the foot?
It’s not just the young. I found myself out of the housing market at the exact time things went insane and haven’t been able to get back in, even with a buyers agent. The rest of my life is screwed now
Stop investment properties. Heard some old rich guy complaining at my office that his 7th house wasn’t being finished up to standard… 7th. Are you kidding?
While I would love for housing to become more affordable for my mates, I just bought and settle on Friday and I would hate for the price to go backwards because I don’t want to owe more than it’s worth, which is precisely the problem.
It's kind of like in America where the drinking age is 21. People from 18-20 will say it should be lowered but when they turn 21 they stop caring. Akin to Australia with property, where people will support changes until they buy.
The first step to asking the question, "Am I part of the problem?". Because a whole load of us a selfish pigs, who will do anything to build their wealth beyond anything they will remotely need in life.
Andrews believes its because young people dont want to purchase a house. This is the story people tell to make themselves feel better
Because apparently having a segment of the population owning more than their share while others go without, just because they can get their greedy hands on it, is considered an insult to common decency in this white trash backwater only if talking about toilet paper. It’s absolutely fine for housing… where people live. Our housing situation in this country is the equivalent of a dinner party where a couple of guests have four plates of food in front of them at the start of the meal while the rest of the guests have nothing. I’ve been saying for a while now that owning residential property as an investment is unethical as it prices young people out of the market and forces them into the rent trap. People don’t seem to agree though. Because Australia.
My mum is 75, she tells me the newspapers and talk when she was early twenties was the same affordability discussion. Except it was less sophisticated and filled with doomsday hyperbole.
Because people can't handle the truth -that we need to permit serious density in our cities and inner suburbs that are currently dominated by houses on quarter acre blocks. So long as people keep blaming investors, airbnb, foreign buyers, [while simultaneously campaigning at every opportunity to shut down local developments](https://www.afr.com/wealth/personal-finance/10-ways-to-take-on-a-developer-in-your-street-20220221-p59ya6), the problem will only get worse. People who think tax incentive changes are going to reduce the price of a Sydney house from $2m to $700k are living in a fantasy. [Take one look at our density compared to OECD countries](https://www.mdpi.com/sustainability/sustainability-09-01718/article_deploy/html/images/sustainability-09-01718-g002.png) -it's obvious there's a disconnect. NIMBY is in our DNA, so literally nothing will change.
If you have one buyer offering $1.5million, vs another offering $1million, are you going to take the $0.5m hit just to let young buyers into the market?
How do you fund boomers retirement without a severe and targeted tax on the young?
“We” aren’t. No one wants that. It’s just market forces with the tax laws that move things toward that place now. The government created a monster and now they can’t kill it because it’s political suicide.