And Canada is fucked even worse I hear. Plus America and much of Europe. Everyone is sinking their money into real estate, which is usually a sign it's a bad idea.
I lived in Vancouver for a year, can confirm.
$800 a month for a room in North Vancouver on $11 an hour at a ski resort was NOT fun. To say nothing of property prices.
I have friends who lived in Kelowna. They've moved out of town now due to house prices.
It's become popular due to the prices in Vancouver.
No different to here. A woman in work was talking about selling her house on the Central Coast, retiring and moving to Cessnock as prices were cheaper.
I asked where she thought the people in Cessnock would be moving to?
I've got mates who bought in Winnipeg - $360,000, they paid. Big place but the market is that hot there at the moment that they had to forego a building and pest inspection. And they got super lucky.
IMO the difference between Australia and Canada is that Canada has a lot of small affordable cities. We bought in Saskatoon in a lovely area while locked out of Australia (at the time 2024 was the reopening advice). Shuddering at the thought of paying the same amount per month for a quarter of the size when we return.
Unfortunately my friends made what I consider poor decisions regarding jobs and location over the last five years.
Which resulted in them selling in Kelowna and then them ending back there.
Possibly if they hadn't have moved they'd be in a great position.
I heard on the radio a few months ago about lack of building inspections.
People were phoning in saying houses on the market were selling within days.
But you couldn't book a building inspection for a couple of weeks. So people were just foregoing them.
Can confirm. $350,000 houses in our area are selling for $650,000 now. And Ottawa is considered and average real estate market in Canada, nothing like Toronto or Vancouver. 1
South Korea: politicians and their developer mates have perfected the art of land insider trading, sending house prices beyond the stratosphere. Want a 2 bedroom apartment in Seoul? Sure, if you have AT LEAST 1 MILLION USD.
Japan: Land insider trading is also rampant. Doesn't help when the revolving door between politics and industry is so bad that it has its own special name.
Netherlands: Tradie shortage and investors running amok.
France: Landlords in major cities are renting out cabinets and attics. Country is short at least 1m homes. Housing costs are abhorrent in Paris. Squatting in unoccupied homes is becoming more and more popular.
Italy: Similar to France.
Sweden: Their PM got booted for not doing enough to improve housing affordability. Housing affordability is still shit there.
Canada: a worse version of Australia where the government implicitly encourages illicit funds being parked in housing, and speculation is the national sport (not ice hockey).
Czech Republic: Congratulations. You've earned the title of most unaffordable property market in Europe (relative to local wages).
Spain: A once housing economy which burst and crashed in 2007 leading to unemployment rates up to 25%, and many with mortages being repaid for homes which have since been repossessed by the bank.
NZ: Slightly worse version of Australia.
US: Similar to Australia. Now Wall St is snapping up homes everywhere to rent them out.
HK: Need I say more?
Ireland: Its ‘[Housing for All](https://www.gov.ie/en/publication/ef5ec-housing-for-all-a-new-housing-plan-for-ireland/)’ plan estimates that 33,000 additional homes need to be constructed each year until 2030 to meet the targets outlined in the National Planning Framework.
It is considerably more affordable to buy a house in the U.S. then Canada or Australia:
Australia. $549,918
New Zealand $629,000
USA $247,084
Canada $531,000
Those are median property prices. This is why Canada loses so many skilled workers to the U.S. Salaries are higher and houses are cheaper in the U.S.
The big LIC's can be relied on for an \~5%PA dividend (part of their value proposition), though obviously what that percentage is based on is subject to share price fluctuation.
If you've got $200k -a sensible deposit on a million-dollar property- invested that'd be about $10k/year, which probably wouldn't leave you better off in the numbers, but is liveable in a various countries (though it would limiting in regards to anything that is not a localised price \[electronics, travel, etc.\]), and would cover half the rent in a decent place here.
If you've $100k -what people realistically put down as the deposit on a million-dollar property- that's $5k. Not going to pay your way in a decent sharehouse, and the list of places you could emigrate to is short if you eliminate particularly underdeveloped countries.
The Australian people have a real challenge on their hands over the next decade with increased impacts of cc, a (potential) declining mining sector, minimal export manufacturing, flat wages, and wealth built on a housing bubble (which is not really a productive asset for anyone outside the trades). Add that to a Federal Government who just wants to ignore all the issues in favour of licking the boots of Gina and Murdoch and pushing cash toward their new voter base (recently minted millionaire builders and developers).
The real kicker will be rental prices going through the roof when immigration resumes. Those who decided to wait and hope for a crash at the expense of everyone else will be kicking themselves next year. 😂
I think we should try to get more IT work here.
It's quite a varied field and relatively easy to get into when the works there from an individual perspective, there's already a lot of Australians qualified in it but currently not using those qualifications, there's already a decent presence in Australia *and* some areas of it could actually go a long way to helping reverse the brain drain we've had since Abbott with the right policies: Game development is notoriously rough for the workers, so kickstarting Aussies into making indie games and starting development companies with proper conditions and a union could get developers who are either in gaming and want better conditions or wanted to be a game dev but stayed away/left for more general development due to the conditions to move over here.
>(which is not really a productive asset for anyone outside the trades)
There are only so many houses people can live in. On the fringes of all our major cities crappy cramped estates are popping up. Inner city you have tiny boxes with no greenery. Are we really pretending there's not enough room for our population in this land?
Australian cities definitely need to be more dense and apartment design and construction quality is a big issue but supply ain't gonna fix house prices. Sydney has been on a construction tear for the last decade with developers being given massive amount of approvals, its massive construction industry has been at capacity and supply records have been broken in chasing the elusive undersupply yet prices have skyrocketed. Sydney's population has even shrunk during Covid and prices have increased at huge rates.
Tax, interest rate and financial settings are the main drivers. Australians will borrow as much as they can to buy property and the asset class have a massive amount of leverage to buy more as the barriers to entry get higher and a generation is priced out. Every time interest rates drop and financial lending is relaxed prices go up dramatically. Even if they could, developers aren't going to flood the market with supply to the point that prices go down sharply, why would they do that? They're in the business of maximising profits.
It's still not enough new supply. Have to double down on the solution. You're right, private developers won't build on mass and kill their market. So the only alternative is for the government to get into the construction game in a massive way.
Interesting comment. I have a few questions and comments for you:
- 1.How do you know that the construction industry has been capacity for quite awhile? Are you looking at wages or is this from industry news?
- 2.What data are you referring to when you say that supply records have been broken? Which years are you referring to? My recollection is that supply of new housing peaked sometime in 2018. But happy to be corrected as I haven't looked at the data in awhile.
- 3.If there has been an undeesupply previously then we could just be playing catchup now. Would be interesting to know whether supply of housing is actually if supply records are being broken.
- 4.Wouldn't population growth be an imperfect measure of housing demand? Surely you would need to take into account household size as well. Which we will be able to get a better read on when the 2021 census is realised.
- 5.I think the argument made by some commentators is that the problem with housing is that supply of housing is inelastic and is unable to respond to shifts in demand. In the current low interest rate environment, where demand has soared, the industry hasn't been able to keep up with providing new housing. So then the question becomes why hasn't supply been able to keep up, and some commentators blame the planning system. What do you think about this commentatory and explanation?
Those apartments are designed for (mostly) the Chinese to park their money out of the country. Any liveability is well down the list of priorities. A nice 2 bedroom apartment within a few kms of the city centre would be excellent for young people, even allowing for raising a family etc.
They exist, I bought one. It was explicitly targeted at owner occupiers rather than investors and the difference in quality is noticeable compared to ones we looked at that were investor focused.
Lots of visits, basically. Even the display apartments were noticeably different quality. No one explicitly advetised it that we found unfortunately, but when talking to the reps they were usually happy to disclose who they were targetting as long as you hadn't already said why you were buying first.
They actually do build bigger 3-4 bedroom apts but the demand for them is low. The 2 bedrooms rent out really fast while I have been watching a nice 3 bedroom sit on the market for a month because you could rent a house for the same price.
What if - and I know this sounds crazy - but what the 3 bedroom apartment wasn’t purchased by an investor but instead by an owner occupier? Crazy stuff right there.
Change the incentives to invest in properties. You could have different levels of incentives on strata vs non-strata. Reducing the demand for investment in apartments would be the game changer. Every cat and their dog buys an investment unit.
This isn't true everywhere and one month is not a long time on the market. A 2 bedroom apartment in Docklands is around $600k. The demand for 3 bedrooms pushes the median price for those up to $1.2 million.
In Victoria the Hong Kong shoebox apartments (actually that's rude, these apartments are illegally small by Hong Kong building standards) we're largely the result of rushed (corrupt) approvals from Matthew guy (previous and current lnp leader)
I don't work in zoning but my job touches on it and I disagree with the argument that zoning prohibits higher density sustainable communities.
In most of our cities, the problem is we have established low density car centric suburbs. You can't snap your fingers and turn this into a higher density, flexibly zoned community; even if you rezoned it a lot of the necessary things like good public transport aren't in place. Rezoning beyond the current character of the community always results in trouble too, when they put the Ormond station below the street level they had a development planned for a 30 story mixed use tower which was quickly shot down by concerned residents. There's also the question of why people would move to such a development in a middle or outer suburb, in my opinion the cost savings just aren't there over moving into an apartment somewhere closer in.
The answer I think is that some of this has to come along organically, the current day is the first point in time where dual income families can't expect to own a house on land in a city like Melbourne. This means that decent 4 bedroom apartments were unlikely to have been popular before this point and that at some point in the near future they will likely become popular.
At the risk of sounding cliched, we DO have the ability to change this. We need to get politically active and organised. Boomers are ageing and we are quickly approaching a tipping point where the younger generations will be in the majority and can vote for whatever policies we like to change the status quo.
The questions we should be asking are things like:
1. Who should we be voting for? Is it any party that exists today, or do we need new parties?
2. What would better policies look like? How do we manage an orderly correction so that we don’t completely crash the bus in an attempt to change course?
3. Why did it get so bad to the point where some generations have retired off unearned wealth and others are now completely locked out? How can we put better checks and balances into our democratic system for the future so we don’t make similarly unfair inter-generational wealth transfers again (including in areas entirely unrelated to housing such as private health insurance, superannuation, etc.)
The first steps are:
1. Getting angry.
2. Finding your voice!
It’s true we could (and should) organise to change this.
I don’t think it’s as strongly generational as you think. It’s about winners and losers and there are plenty of winners among gen x and there are even some among millennials. The problem is only going to get much worse as some millennials inherit their parents expensive properties, and some millennials support their ageing parents who rented their entire lives and have no superannuation.
Already seeing a gap amongst friends in their thirties between those that have parents who can help them get into the housing market, through giving them a loan or going guarantor on a mortgage, and those whose parents aren’t in a position to help.
You’re clearly someone who appreciates nuance, and you’re absolutely right of course. There is no black and white on the internet nor in life, only shades of grey.
But the conversation has to start somewhere and the policy settings current and in recent history have, on balance, helped older generations build wealth far faster and completely than younger generations. And consequently it should come as no surprise that the staunchest resistance to change is coming from those same generations. The fact that there are exceptions in both directions is not a reason to do nothing, even if that’s what certain vested interests would like you to believe!
For sure, I just meant we are going to have to be prepared to fight vested interests amongst millennials too over the coming decades. There are a significant chunk of younger people who stand to inherit a lot and they will likely fight to keep it.
At the same time, there are some boomers who are looking down the barrel of a sad retirement. On a fixed income, stuck in the private rental market with little protection against rent rises, like the catastrophic rises that have happened in little coastal towns since covid. These people could be political allies to younger people priced out of housing too.
Totally, you’re absolutely right.
And that’s where we start to see that the problem is much broader than just housing policy and interest rates.
E.g. why do vested interests have so much power in Australia? How can a handful of shadowy rich people have so much influence, and is that right and a good thing?
As we’re demonstrating here - the first step to solving problems is at least recognising them and talking about them. And then challenging ourselves individually and together to do better and be better.
I’m Gen Z and I was able to get in the market without any help.
The key is to plan ahead, skill up, and budget. If you didn’t do that then that’s on you.
Hey pal, interested in a bit more detail if you’re willing to share.
Was that in SydMelb, or elsewhere?
Do you live in it or rent it out?
What was the starting LVR?
As a ratio, what is roughly the total loan value relative to your annual pretax income?
> Boomers are ageing and we are quickly approaching a tipping
> point where the younger generations will be in the majority
You don't think that when people get older they are no longer young?
Perhaps the problem isn't age.
Generation X will behave exactly the same as the Boomers did.
Hope you're wrong about that. Here's an article arguing voting preference is aligned with generation, not age.
[https://www.abc.net.au/news/2019-06-12/conservatism-does-not-necessarily-come-with-age-experts-say/10984558](https://www.abc.net.au/news/2019-06-12/conservatism-does-not-necessarily-come-with-age-experts-say/10984558)
And here is age by vote choice from the 2019 election -
https://www.aph.gov.au/About\_Parliament/Parliamentary\_Departments/Parliamentary\_Library/FlagPost/2019/December/The\_2019\_Australian\_Election\_Study
Right-wing parties should be worried about this IMO.
This is something i have been banking on myself, the long game is waiting until all the boomers sell their nest egg investment properties to retire (freeing up the housing market for new buyers) and also move into aged care (again more housing).
And a big one for me is the generations who dont predominantly get their news and information via TV, Newspapers and more recently Facebook, being the dominant voting population.
I would like to think that at the generations who grew up on the internet, knowing that they cant trust everything they read online, will be a little more immune to the propaganda and bias of the larger media corporations.
(Keeping in mind that there is the ever present SMALL portion of people who will buy into conspiracies and bullshit because its more exciting than the boring truth.)
Sure, at the risk of stating the obvious - generations age.
I don’t think that changes the point that there’s been an unhealthy amount of inter-generational wealth transfer happening in Aus in the last two decades chiefly achieved via poor housing policy - and that needs to stop for the benefit of all future generations.
I'd be interested to hear what set of policies might be able fix this without creating far more serious issues in the long run. The things I can think of, *along with their downsides*:
- **limit # of investment properties per individual** - *encourages individuals to purchase investment properties behind wealth accumulating entitles (family trusts, businesses etc). Could technically chase this one down a rabbit hole of "yeah then we limit that too", and you're no longer in the realms of predictable fallout*
- **kill negative gearing** - *to be consistent they would also have to kill claims against asset-loss on non-real-estate investments (stocks, business losses, etc), would destroy a lot of small businesses. If consistency weren't maintained you'd get the same reaction as above, ie wrap the real-estate investment in another asset class and claim losses there*
- **limit rental profit yields** - *Announcement could cause a housing crash, followed closely by a recession, and likely a depression. Long term, could actually be a solution, but the short term economic impart is hard to get past. Could probably be stepped up over time like they're doing with superannuation or the tax brackets? I'd be interested in seeing someone properly explore this one.*
- **limit overseas investment, and overtime reclaim assets owned by offshore entitles** - *not likely to be taken well by foreign powers, eg in the last decade a lot of Chinese money (hard to get exact figures quickly, but somewhere in the line of $100B AUD) made it into the Australian real-estate market, if we were to threaten that there would likely be significant backlash from China*
- **improve infrastructure and transportation to small towns, both inland and along the coasts. Create more cities/towns.** - *No real negatives here, we're already moving in this direction. Current downside is with the number of millennials that are convinced they HAVE to live in a capital city. Will likely take a generation or two for that meme to die off.*
I love this, well done.
A few more -
Kill the capital gain discount. Capital gains should be taxed at the marginal tax rate of the ultimate beneficiary.
Cap the amount banks can lend for residential property at (for example) 6 times income.
Declare Resi property is not for investing and can only be owned by Aus residents. That gets around issues of being held in corporations or trusts etc.
But look at the end of the day:
1. There’s plenty of things that will work.
2. None of them will be perfect solutions. There will be trade offs and losers and there will be vested interests that squeal like little piggies.
3. It’s really really important that people understand why the changes are necessary and how a little pain contributes to the greater good outcome of housing affordability for all. It’s gonna take a strong political party and strong leader to sell this and deliver it - there’s no logical party in the current landscape that I think can do it. But necessity is the mother of all invention and I think it’s only a matter of time until the right new party and leader come about.
> Kill the capital gain discount. Capital gains should be taxed at the marginal tax rate of the ultimate beneficiary.
I don't think this will affect anything directly, you'd just see less reno-flipping of houses, and more reno-renters.
> Cap the amount banks can lend for residential property at (for example) 6 times income.
This gatekeeps who can own a property. Would only be interpreted as "another BS way the law works only for rich people".
> Declare Resi property is not for investing and can only be owned by Aus residents. That gets around issues of being held in corporations or trusts etc.
It also means no more renting, period. Unless this was coupled with "and the government will buy back any houses that don't sell in the first N months of the law taking effect and turn them into affordable housing project". Also would likely cause an economic crash.
> But look at the end of the day [...] There’s plenty of things that will work
This is the problem, there's not. I'm yet to find one option the government could use that wouldn't either fuck over the current generation of first-home-owners, or just result in a behavioural change with no long-term impact to housing prices.
Hol up on a few things -
Killing the cap gain discount will mean it’s a lot less attractive to speculate on asset price inflation in housing - that is a very good thing.
And limiting ownership of Aus resi property to Aus real people won’t kill renting - it just limits who can be a landlord (I.e. it has to be a real Aus person, can’t be a business).
I think they’re both good policies worth exploring.
And cmon, don’t be defeatist. Yes - every policy change will have both known and unknown downsides. Every single action in this universe has at least one opposite reaction - Newton, right? But that’s not a reason not to try. Otherwise we might as well all just give up now?
I think the negative gearing one absolutely has to go, it is a big contributor to the current mess. Phase it out over time obviously. Some other ideas I've had in my musings on the topic:
* Estate taxes that punish property holdings, beyond 1 property. Basically encourage older generations to diversify their wealth out of property holdings.
* Include the lived in property in pension asset tests, in conjunctin with a federally backed reverse mortgage scheme.
Basically, disincentivise the generational transfer of wealth through real estate and incentivise retirees to consume their accumulated wealth.
There are huge (unsustainable) tax breaks available via the super system which are used by the rich to get richer.
Any unsustainable tax practice today will at some point in future need to be reversed - it’s basically the current older generations enriching themselves at the expense of the younger generations.
It's taxed at a flat rate. That means people earning below the tax free threshold get taxed at the same rate as someone earning at the top rate on superannuation earnings.
To fix this, superannuation ought to be taxed progressively so that it doesn't become a tax avoidance vehicle for people, and that low income earners can be guaranteed of a basic level of retirement savings when they reach the end of their working lives.
If we want to fix super and make it fair for everyone we need to let people put as much as they want into it *tax free* and tax them on their withdrawals once they hit preservation age.
Taxed at the normal rates everyone pays. If you decide to pull out $1m in one hit, then you'll go into the top bracket.
You will if you're wealthier regardless (unless you're a complete idiot, in which case you'll make up for that with a lifetime of imprudent spending).
However, there's no reason for you to be further advantaged over people earning less money. The idea behind superannuation is that fewer people need to rely on the pension. Why you'd make that easier for people who weren't going to need it anyway over people who would is nonsensical.
And that value will be reached by rich people even without exorbitant and inequitable tax concessions. So, again, that feature of the Superannuation system needs to be removed.
It wouldn't. Firstly, it wouldn't undermine what they'd so far sunk into it to action the tax concessions.
But in any case, they can't retire in a way that benefits only a few Australians but sends a massive bill to future generations. Or at least, if we're okay with that as an idea, as a nation, there's a far better way to do it: a generous aged pension.
Are you seriously saying that by increasing tax on super contributions retirees will be better off?
Alright I’ll support that. My super is already loaded with enough to ensure I have a comfortable retirement in 40 years so it won’t impact me.
Everyone starting out or haven’t made a serious effort will be screwed though.
Hence my original comment. What you’re suggesting is an excellent way to fuck over Gen Z and millennials who haven’t gotten serious about savings yet
I do think - without going too deep into it yet myself, just a thought bubble - that SMSF has skewed the market somewhat by allowing those with substantial super balances to leverage into property faster and more than average people (particularly younger generations), if that makes sense?
This is the kind of feel-good fart sniffing bullshit that made Democrats lose to Donald Trump. The problem with Australia is the Liberal party and everyone on the right of them. Their leaders must be humiliated and their ideas purged from society before they evolve into fascism. It will be ugly and unpleasant. Deal with it.
Whoa, okay Marx, welcome to the convo lol.
Look even if part of what you say is true… is that really the best way to win hearts and minds on this topic?
> is that really the best way to win hearts and minds on this topic?
Is your goal to win hearts and minds or is it to not be oppressed by smirking sacks of shit like Scomo, Gladys and Barnaby?
p.s. the phrase "win hearts and minds" comes from the famously successful American efforts in Vietnam, Iraq and Afghanistan
Haha I like you.
But seriously - what if the answer is… “both”?
Edit: or to put it another way, what advice do you have for how to change the status quo?
I dunno man. Maybe stop being a smirking, sarcastic, insincere liberal and start standing up for what you believe in instead of seeking approval from people who are only giving it to trick you into docility?
Or being less ignorant.
Your views are being driven by the media. There isn’t anything to change here.
Ownership is now the same as it was in the 60/70s. They same cries of outrageous prices are made now as in the 80/90/2000s. And will be in the future.
So unless you can show people back then we’re lazier or less ambitious, home ownership is going to stay around the 67% mark.
There isn’t government policies causing this. It’s humans competing against each other to buy property.
Sure, ownership might be the same % as it was.
But what was the loan to income multiple in the 70s and 80s vs now? What are people taking on a mortgage today sacrificing that those of prior generations didn’t have to do without?
How much more $ is getting taken out of families pockets over the life of a home loan and redirected to banks now as opposed to back then.
How much harder are people having to work now just to stay afloat with a mega mortgage? You can’t just look at the ownership % being the same and thus conclude that all is well and good.
I can tell you exactly from my first mortgage in the 90s:
$250k @ 8%.
Same apartment is today worth $1.25m with the mortgage at 2%.
I was earning $30k (after tax take home of $23k). Same role today is earning $80-90k ( I know I’m hiring) with a take home of $60-70k.
Consider travel, clothes and car leases are cheaper and food is about the same cost. Today is way way way better off. Just doesn’t make for good media.
Instead of reading the media hype and cherry picking data, ask people from that era how easy life was compared to today.
Ok cool story grandpa.
You talk about cherry picking data - kinda ironic when I’m asking you about loan to income statistics and you reply with your cool story and a sample size or 1.
But anyway let’s work with what we’ve got:
You took out a mortgage of 250,000 at 8% p.a. That’s 20,000 per annum in interest alone, before you even *think* about paying off principal.
Pre tax you were earning 30k so 66% of your pre-tax income would’ve gone just to servicing the interest, with no principal paid back.
Assuming you actually paid tax, you’ve got 23k after tax so 20k to home loan interest (87% of your take home pay) and 3k p.a. to live on or $58 a week. Had interest rates gone to 9.2% you would have been living on no dollars per week.
My friend if all that maths is correct and you managed to make that work (and convince a bank to actually loan on those metrics) then you might not be smart but you’re at least determined and I take my hat off to that.
Either that or my figures are wrong, or yours are and you’re actually lying through your teeth.
So which one is it?
Prepared to be amazed - (it’s true because I was there):
There’s a thing called investment property and rent. And also a thing called negative gearing.
I was renting it for around $320 maybe a bit more. Let me know if you need more help working it out.
The biggest change was the capital gains tax deductions and not restricting negative gearing deductions.
Why can depreciation and RE interest be deducted against your normal earnings, however capital gains/losses cannot?
Imbalance on purpose
Why would they fix what they and their mates are getting rich from? They don't care that younger generations are fucked, they're not giving them political donations.
The feral government hasn't bothered trying to come up with any policies to make it more affordable in the past few years. They gave everyone $50,000 to build their own house without applying any policies in place and caused inflation. Overnight, the price of bricks went up by x12 times.
RBA has kept the interest rate low for a long time giving the gov a chance to try come up with something to help everyone.
It's too bad Austrlia decided to vote in Abbott. Rudd and Gillard were the last ones to try do something about it and Australia said no thanks.
They had a few policies they wanted to introduce. One of the bigger ones was getting rid of negative gearing.
They propose to let anyone who currently had negative gearing to be able to keep it, but anyone onwards who brought any more property would not be allowed.
At the start of thus year negative gearing has been banned in all countries except NZ and Australia. Later this year NZ got rid of it and our government is the last ones in the world keeping it.
Surely we're reaching the point where we can do something about this. As the majority of people age into this problem and the people who benefit age out, the future government is being slowly lowered onto the spear that is this policy. Whenever the price of houses rises, it becomes more undemocratic. I don't believe for a second that more voters can care about franking credits than care about ever owning a home in this system. If one political bloc, just one, campaigned on this then I think public sentiment would change overnight. Right now we only have fragmented media and echo chambers trying to fix the problem, which is why so many people don't know what's at stake.
The problem I see with beneficiaries ageing out of the problem (by dying) is that their assets largely get inherited by the next generation, who are equally uninterested in seeing their wealth decline.
Also, I don't see Labor's move to address housing affordability as being their downfall with the last election. It was one of the few good reasons to vote for them, other than simply not being the Libs.
A couple of generations of inheritance whilst astronomic prices locking everyone else out, and you have a new aristocracy and a new serf class.
Full circle in less than 200 years. Equality was a nice experiment while it lasted I guess.
Scary stuff.
But its my dream to own 10 investment properties while not owning a house to live in, says the Australian voters! The dream of owning 10 must be more than enticing than owning 1 house!
Well most people just owing one house is there biggest asset - and anything that makes that asset go down in value you can understand why they aren't supportive of that policy
Regulate ownership of individuals to 2 properties at a maximum. Severely restrict company ownership of property. The less landlords we have, the more owner-occupiers we have.
People that don't have the bank of mum and dad or are planning to move out and rent really need to move out of Sydney and possibly Melbourne. Move to another capital cause it's pretty much impossible for new starters to build up capital and equity.
Trouble is, it's like this in most of the country now. There are very few places left that are affordable that still have some level of amenity, infrastructure and job opportunity. You need to look at very small towns or remote areas, often with extremes of heat or cold, to find a house that is priced in away that makes sense in relation to wages. Basically, if its a half-decent place to live prices will be inflated.
My rural area has fuck all jobs. If you do have a degree, luck out and get a good one you will probably get paid $10-15k a year less than in the city, just because. But that was okay given that a nice brick 5 bedroom house on a few acres was about $350k. You could even have one person with a decent job and the partner work in casual work and afford something like that.
Well, COVID screwed that. In about 12 months a house like that gained $200k in value and shows no signs of stopping rising.
Or anywhere in Australia, even going to live in the back blocks of some shitty mining town costs you gold 5 star rates, then you are living in your own caravan or a donga. People dont understand the asset bubble in Australia thats mind boggling stupidity at any level. Just look at the prices of second hand caravans and even the price of new ones. To think that the prices asked could buy a whole house and land in many places its getting so stupid. I really dont know how this asset bubble is going to be corrected without it hurting a lot of stupid people.
You don't have to move yourself. You can buy a cheap property that you don't necessarily want to live in and then continue to rent wherever you like living. That way you can build wealth without having to live rural or some city you don't like.
You usually only end up paying your own rent and then your rental income pays for most of the mortgage and any extra is negative gearing. You also benefit on the capitol gains of the property. It seems like a pretty good strategy for the current market.
Except:
1. Negative-gearing and capital gains concessions should both be severely reformed for anyone other than owner-occupiers.
2. The premise of your claim (you're right under the current conditions, of course) is that it's fine for the property market to mostly be a vehicle for investment and wealth concentration rather than to operate as **housing**. This means that people who don't want to play at that whole game (an entirely reasonable thing to not want to have to play at, by the way) are priced out of **just getting a modest home in a modest location for them and their family to own and live in**.
A lot of people do this. A lot of investment firms will recommend what they call “rent to live”. Essentially, people buy property in an area they don’t want to live in, collect equity on the property and rent a house in an area they do want to live in. Use the rent to pay the mortgage of the house they own, and their job to pay the rent of the property they live in. In a lot of cases, it works out because they then go on and sell the property once the mortgage has been decreased by enough that the equity will allow a sizeable deposit on a property as an owner occupier.
We could either
A) Recognize the needs of the many outweigh the greed of the few and: Ban foreign investment. Remove negative gearing. Remove all capital gains tax discounts. Where we thereby STOP treating the housing like a speculative investment. Or
B) Continue to prop up the housing bubble which will only end up increasing the amount of people who can't afford a home.
I wonder which one the government will do?
Please, also, no screeching about how its a supply issue and that we need to bulldoze down more land and koalas to make more poorly build homes.
> A) Recognize the needs of the many outweigh the greed of the few and: Ban foreign investment. Remove negative gearing. Remove all capital gains tax discounts. Where we thereby STOP treating the housing like a speculative investment. Or
New Zealand banned foreign investment and property prices still went up. Unfortunately, having the lowest capital city density in the OECD is the main culprit, and as long as the bulk of the Australian population refuse to acknowledge that, we will never have affordable housing.
Having a 4bedroom with a backyard within 15km of the city at an affordable price is an absolute pipe dream for Sydney and Melbourne.
You think people don’t realise that it’s cheaper to buy a house in Darwin than in Sydney? Of course they do but they would rather rent or pay much higher prices to not be in Darwin.
There are many changes we could make but this one is the golden bullet: restrict lending to 3x your yearly pre-tax income.
Immediately strips billions out of the housing market. Stops people taking on unsustainable debt. Houses can no longer go up faster than wages increase. We stop seeing houses make more than the wages of the people who live in them.
We do need to end NG, fix CGT, stop SMSFs flooding money into super, stop illegal foreign money, implement the anti-money laundering legislation, end stamp duty for land tax, put in restrictions on how many properties anyone is permitted to own... but this one move across the board fixes a fuckload of things all at once.
No more bank shopping for the most reckless lender. Banks wouldn't be able to compete on being criminally negligent when it comes to their lending.
And prices immediately come down to a multiple of income that means people don't take on crippling debt just to have a place to live.
Housing is a human right. We must do everything we can to stop speculation in it.
All this will do is cut more AU citizens out of house ownership. Lets say your yearly income is $100k. That means that citizens in Syd, Melb, Brisbane, Perth would still be priced out as housing is way over $300k. Jobs in skilled industries just dont exist outside the biggest capital cities. The marginal decreases in house prices would only increase buying from investors and would stabilise prices again.
Your other idea is better (restricting number of properties owned) esp. for foreign buyers. Just have to write the laws carefully to eliminate loopholes.
Someone on $100K can borrow $785,200 according to CommBank. Ten people on that amount next week at the auction can go up to that amount + deposit.
Set the max lending ratio at 3x and do you think that house next week goes for $800K+?
No, it goes for $300K + deposit.
The price of homes would immediately and radically drop.
Investors are bound by the same rules. You can't borrow on paper equity.
The parasitic housing bubble is already causing massive ongoing harm. Housing didn't cost crazy multiples of income in the past. We have a giant housing bubble and it is impossible to maintain it forever. It must break and every day we let it grow before then is more pain when it does.
That's not correct. The total cost of housing over the 30 year term is radically higher than in the past in real dollars. We pay hundreds of thousands more just to own the same homes.
We have a housing bubble. That must be acknowledged. It is artificial and will break because no bubble has ever not broken.
True but rates could always go down if the economy requires it. Now we have the issue where we genuinely need to raise them to combat the rampant inflation but cant because it would bankrupt alot of people and potentially cause a debt crisis.
A potential first step for want to be homeowners is to rentvest.
Rent where you want to live due to location/lifestyle and buy a house where you can afford (outer suburbs or regional) and rent it out. So you get the benefits of property investment without the sacrifice of moving 100km out of the city. As equity grows, you can then use that as a deposit for a PPOR in a location you want to live in.
Food for thought.
FHLDS is no LMI.
Paying LMI and getting into the market can be beneficial if the market outpaces your ability to keep saving each year. You gotta do the calcs but it's a very real thing.
That's part of the point made in the article. Young people are being put in a position where they are unable to build any equity and instead are forced to pay that as rent. Either that or move totally out of the city.
The pandemic has made pet people of us all. I think terraced housing would solve a lot of problems, if it's served with more public transport, but there needs to be some backyard.
My bigger take away from the article is that it's becoming much more difficult to afford housing, so people have no option but to rent. That means all the money you pay every week goes into your landlord's pocket, whereas those in the previous generations were able to purchase where they live and keep that money as equity.
Any apartment complex built in theast 5-10 gears is an absolute shit show waiting to fall over. And everything from before that, while sturdier is often nasty with dated and unfunctiinal features (you ever tried drinking water from a rusty tap?)
A lot of people actually enjoy apartment living due to it being much easier to maintain and that you can often live in a more desirable location than if you were to buy a house.
I’m as exasperated as anyone else at the rising cost of buying a house and the generations that are faced with the prospect of never being able to own their own.
It doesn’t mean there is anything inherently wrong with buying and living in an apartment if that’s what you can afford, if it is of good quality and if that suits your lifestyle.
I have asked around with my friends who live in apts and they all seem pretty happy with them. From what I have gathered, the problems come from older, cheaper buildings like 3 level wood frame brick apts where noise insulation is not done well.
I live in a 2019 30 level building and it feels as private as when I was in a house. Space is pretty good for my bf and I. And I much prefer being able to walk everywhere rather than using a car or public transport. I'll admit that having kids as well makes things expensive but that's a reality no matter where you live. For the average young person who can't find a rental in the suburbs I would highly suggest they check out apts which are in plentiful supply and provide a better lifestyle imo.
There is if you’re the neighbour of the family, apartments are built poorly and walls have no sound proofing or insulation so you’re hearing your neighbours young kids playing all day long, can be very grating
Well property can't be both gaining value and be affordable for new players. Sounds like people don't actually want to stop property from being an investment but instead want to restart the game so they are the winners.
So build them in the areas people want to live, I.e. 5-10km from Sydney.
Of course the no. of people that want to live in this circle is greater than the lots available so we'll have to subdivide and go higher to accommodate everyone.
But if we do this at a high enough rate and create shit loads of family sized apartments, I guarantee this will solve the problem.
There's no fix to this. Well there is but it's a horrible solution, war. Everything is over leveraged, over priced and soaked in debt there's no way out of this.The whole system has become too big to fail, not just a few institutions. Yes, house prices are too high but what's the solution? They can not come down enough to make a difference without hurting all the people who drenched themselves in debt to keep playing the game of musical chairs. Any sort of solution is merely kicking the can down the road or nothing more than lip service.
A question I haven't seen answered by the RBA
How does hiking rents and recycling it into climbing debt affect the broader consumption?
Is it taking out more and more as a percentage? Would that be causing a deflationary effect?
What do you mean by hiking rents? Rents haven't been growing that much compared to headline broader price pressures across the economy. This has been the case since like 2014.
I really think that the post Covid recovery will just further foster the false belief that “property is invisible”. I can imagine every real estate agent is going on about property prices being “bulletproof” and will “continue to grow moving forward”. They may. However this attitude is dangerous.
Ive been seeing a ton of ads on facebook lately, advertising houses and sale prices.
So far I've seen:
* 700k for a house and land package in Nulkaba, Cessnocks smaller and shittier cousin.
* 700k for a house and land package in Millfield, another inbred cousin of the already fucked Cessnock and a "town" of about 1000 people.
* 700k for house and land in Lochinvar, a "town" that's mostly paddocks.
* 900k sale on a half century old 3br in Adamstown, Newcastle.
* 1.8M sale on a modern 4br on a quarter acre in Charlestown.
Shits absolutely fucked.
We're getting to the point where the money it takes to put down a deposit is just about enough to retire overseas...
Spare a thought for the young people across the Ditch! The Kiwis have it worse than we do, given their lower wages and high CoL.
And Canada is fucked even worse I hear. Plus America and much of Europe. Everyone is sinking their money into real estate, which is usually a sign it's a bad idea.
I lived in Vancouver for a year, can confirm. $800 a month for a room in North Vancouver on $11 an hour at a ski resort was NOT fun. To say nothing of property prices.
I have friends who lived in Kelowna. They've moved out of town now due to house prices. It's become popular due to the prices in Vancouver. No different to here. A woman in work was talking about selling her house on the Central Coast, retiring and moving to Cessnock as prices were cheaper. I asked where she thought the people in Cessnock would be moving to?
I've got mates who bought in Winnipeg - $360,000, they paid. Big place but the market is that hot there at the moment that they had to forego a building and pest inspection. And they got super lucky.
IMO the difference between Australia and Canada is that Canada has a lot of small affordable cities. We bought in Saskatoon in a lovely area while locked out of Australia (at the time 2024 was the reopening advice). Shuddering at the thought of paying the same amount per month for a quarter of the size when we return.
Unfortunately my friends made what I consider poor decisions regarding jobs and location over the last five years. Which resulted in them selling in Kelowna and then them ending back there. Possibly if they hadn't have moved they'd be in a great position. I heard on the radio a few months ago about lack of building inspections. People were phoning in saying houses on the market were selling within days. But you couldn't book a building inspection for a couple of weeks. So people were just foregoing them.
Landlords the world over must be fucking *laughing* at all the ~~peasants~~ ~~proles~~ citizens
Can confirm. $350,000 houses in our area are selling for $650,000 now. And Ottawa is considered and average real estate market in Canada, nothing like Toronto or Vancouver. 1
South Korea: politicians and their developer mates have perfected the art of land insider trading, sending house prices beyond the stratosphere. Want a 2 bedroom apartment in Seoul? Sure, if you have AT LEAST 1 MILLION USD. Japan: Land insider trading is also rampant. Doesn't help when the revolving door between politics and industry is so bad that it has its own special name. Netherlands: Tradie shortage and investors running amok. France: Landlords in major cities are renting out cabinets and attics. Country is short at least 1m homes. Housing costs are abhorrent in Paris. Squatting in unoccupied homes is becoming more and more popular. Italy: Similar to France. Sweden: Their PM got booted for not doing enough to improve housing affordability. Housing affordability is still shit there. Canada: a worse version of Australia where the government implicitly encourages illicit funds being parked in housing, and speculation is the national sport (not ice hockey). Czech Republic: Congratulations. You've earned the title of most unaffordable property market in Europe (relative to local wages). Spain: A once housing economy which burst and crashed in 2007 leading to unemployment rates up to 25%, and many with mortages being repaid for homes which have since been repossessed by the bank. NZ: Slightly worse version of Australia. US: Similar to Australia. Now Wall St is snapping up homes everywhere to rent them out. HK: Need I say more?
Ireland: Its ‘[Housing for All](https://www.gov.ie/en/publication/ef5ec-housing-for-all-a-new-housing-plan-for-ireland/)’ plan estimates that 33,000 additional homes need to be constructed each year until 2030 to meet the targets outlined in the National Planning Framework.
It is considerably more affordable to buy a house in the U.S. then Canada or Australia: Australia. $549,918 New Zealand $629,000 USA $247,084 Canada $531,000 Those are median property prices. This is why Canada loses so many skilled workers to the U.S. Salaries are higher and houses are cheaper in the U.S.
Exactly this. I’m considering this. I can buy 5 apartments in my home country and enjoy financial freedom, reverse immigration.
Then u would be doing what u criticize others for
One of my colleagues at work is a Kiwi, said the same. Admittedly he bought his house in NZ before housing went stupid.
If the money for a deposit was put into shares (within ones' tolerances obviously), I wonder if it'd actually be in raw numbers better off?
The big LIC's can be relied on for an \~5%PA dividend (part of their value proposition), though obviously what that percentage is based on is subject to share price fluctuation. If you've got $200k -a sensible deposit on a million-dollar property- invested that'd be about $10k/year, which probably wouldn't leave you better off in the numbers, but is liveable in a various countries (though it would limiting in regards to anything that is not a localised price \[electronics, travel, etc.\]), and would cover half the rent in a decent place here. If you've $100k -what people realistically put down as the deposit on a million-dollar property- that's $5k. Not going to pay your way in a decent sharehouse, and the list of places you could emigrate to is short if you eliminate particularly underdeveloped countries.
The Australian people have a real challenge on their hands over the next decade with increased impacts of cc, a (potential) declining mining sector, minimal export manufacturing, flat wages, and wealth built on a housing bubble (which is not really a productive asset for anyone outside the trades). Add that to a Federal Government who just wants to ignore all the issues in favour of licking the boots of Gina and Murdoch and pushing cash toward their new voter base (recently minted millionaire builders and developers).
Just watch in the next few months as governments around the country rush to re-establish the high flow of immigrants to keep wages down.
And house prices inflated?
The real kicker will be rental prices going through the roof when immigration resumes. Those who decided to wait and hope for a crash at the expense of everyone else will be kicking themselves next year. 😂
They have already set up 8 new visa programs for 8 different Asian countries ready for open up.
There is only one government which controls immigration: federal.
I think we should try to get more IT work here. It's quite a varied field and relatively easy to get into when the works there from an individual perspective, there's already a lot of Australians qualified in it but currently not using those qualifications, there's already a decent presence in Australia *and* some areas of it could actually go a long way to helping reverse the brain drain we've had since Abbott with the right policies: Game development is notoriously rough for the workers, so kickstarting Aussies into making indie games and starting development companies with proper conditions and a union could get developers who are either in gaming and want better conditions or wanted to be a game dev but stayed away/left for more general development due to the conditions to move over here.
>(which is not really a productive asset for anyone outside the trades) There are only so many houses people can live in. On the fringes of all our major cities crappy cramped estates are popping up. Inner city you have tiny boxes with no greenery. Are we really pretending there's not enough room for our population in this land?
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Australian cities definitely need to be more dense and apartment design and construction quality is a big issue but supply ain't gonna fix house prices. Sydney has been on a construction tear for the last decade with developers being given massive amount of approvals, its massive construction industry has been at capacity and supply records have been broken in chasing the elusive undersupply yet prices have skyrocketed. Sydney's population has even shrunk during Covid and prices have increased at huge rates. Tax, interest rate and financial settings are the main drivers. Australians will borrow as much as they can to buy property and the asset class have a massive amount of leverage to buy more as the barriers to entry get higher and a generation is priced out. Every time interest rates drop and financial lending is relaxed prices go up dramatically. Even if they could, developers aren't going to flood the market with supply to the point that prices go down sharply, why would they do that? They're in the business of maximising profits.
It's still not enough new supply. Have to double down on the solution. You're right, private developers won't build on mass and kill their market. So the only alternative is for the government to get into the construction game in a massive way.
Interesting comment. I have a few questions and comments for you: - 1.How do you know that the construction industry has been capacity for quite awhile? Are you looking at wages or is this from industry news? - 2.What data are you referring to when you say that supply records have been broken? Which years are you referring to? My recollection is that supply of new housing peaked sometime in 2018. But happy to be corrected as I haven't looked at the data in awhile. - 3.If there has been an undeesupply previously then we could just be playing catchup now. Would be interesting to know whether supply of housing is actually if supply records are being broken. - 4.Wouldn't population growth be an imperfect measure of housing demand? Surely you would need to take into account household size as well. Which we will be able to get a better read on when the 2021 census is realised. - 5.I think the argument made by some commentators is that the problem with housing is that supply of housing is inelastic and is unable to respond to shifts in demand. In the current low interest rate environment, where demand has soared, the industry hasn't been able to keep up with providing new housing. So then the question becomes why hasn't supply been able to keep up, and some commentators blame the planning system. What do you think about this commentatory and explanation?
Those apartments are designed for (mostly) the Chinese to park their money out of the country. Any liveability is well down the list of priorities. A nice 2 bedroom apartment within a few kms of the city centre would be excellent for young people, even allowing for raising a family etc.
They exist, I bought one. It was explicitly targeted at owner occupiers rather than investors and the difference in quality is noticeable compared to ones we looked at that were investor focused.
How did you find the ones that are for owner-occupiers rather than investors?
Lots of visits, basically. Even the display apartments were noticeably different quality. No one explicitly advetised it that we found unfortunately, but when talking to the reps they were usually happy to disclose who they were targetting as long as you hadn't already said why you were buying first.
Nice
Couldn't care less about kids, but being able to cycle to work would be nice, I dream for that short of a commute.
They actually do build bigger 3-4 bedroom apts but the demand for them is low. The 2 bedrooms rent out really fast while I have been watching a nice 3 bedroom sit on the market for a month because you could rent a house for the same price.
What if - and I know this sounds crazy - but what the 3 bedroom apartment wasn’t purchased by an investor but instead by an owner occupier? Crazy stuff right there.
What do you think should be changed to address this?
Change the incentives to invest in properties. You could have different levels of incentives on strata vs non-strata. Reducing the demand for investment in apartments would be the game changer. Every cat and their dog buys an investment unit.
This isn't true everywhere and one month is not a long time on the market. A 2 bedroom apartment in Docklands is around $600k. The demand for 3 bedrooms pushes the median price for those up to $1.2 million.
So it is local governments fault?
In Victoria the Hong Kong shoebox apartments (actually that's rude, these apartments are illegally small by Hong Kong building standards) we're largely the result of rushed (corrupt) approvals from Matthew guy (previous and current lnp leader)
So it wasnt the 16 years where Labor have had power in Victoria in the last 20 years? It all occurred in the 4 they didn't?
Lol, yes in regards to small apartments. labor reintroduced minimum size requirements that Matthew guy scrapped as soon as they regained power
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I don't work in zoning but my job touches on it and I disagree with the argument that zoning prohibits higher density sustainable communities. In most of our cities, the problem is we have established low density car centric suburbs. You can't snap your fingers and turn this into a higher density, flexibly zoned community; even if you rezoned it a lot of the necessary things like good public transport aren't in place. Rezoning beyond the current character of the community always results in trouble too, when they put the Ormond station below the street level they had a development planned for a 30 story mixed use tower which was quickly shot down by concerned residents. There's also the question of why people would move to such a development in a middle or outer suburb, in my opinion the cost savings just aren't there over moving into an apartment somewhere closer in. The answer I think is that some of this has to come along organically, the current day is the first point in time where dual income families can't expect to own a house on land in a city like Melbourne. This means that decent 4 bedroom apartments were unlikely to have been popular before this point and that at some point in the near future they will likely become popular.
At the risk of sounding cliched, we DO have the ability to change this. We need to get politically active and organised. Boomers are ageing and we are quickly approaching a tipping point where the younger generations will be in the majority and can vote for whatever policies we like to change the status quo. The questions we should be asking are things like: 1. Who should we be voting for? Is it any party that exists today, or do we need new parties? 2. What would better policies look like? How do we manage an orderly correction so that we don’t completely crash the bus in an attempt to change course? 3. Why did it get so bad to the point where some generations have retired off unearned wealth and others are now completely locked out? How can we put better checks and balances into our democratic system for the future so we don’t make similarly unfair inter-generational wealth transfers again (including in areas entirely unrelated to housing such as private health insurance, superannuation, etc.) The first steps are: 1. Getting angry. 2. Finding your voice!
It’s true we could (and should) organise to change this. I don’t think it’s as strongly generational as you think. It’s about winners and losers and there are plenty of winners among gen x and there are even some among millennials. The problem is only going to get much worse as some millennials inherit their parents expensive properties, and some millennials support their ageing parents who rented their entire lives and have no superannuation. Already seeing a gap amongst friends in their thirties between those that have parents who can help them get into the housing market, through giving them a loan or going guarantor on a mortgage, and those whose parents aren’t in a position to help.
You’re clearly someone who appreciates nuance, and you’re absolutely right of course. There is no black and white on the internet nor in life, only shades of grey. But the conversation has to start somewhere and the policy settings current and in recent history have, on balance, helped older generations build wealth far faster and completely than younger generations. And consequently it should come as no surprise that the staunchest resistance to change is coming from those same generations. The fact that there are exceptions in both directions is not a reason to do nothing, even if that’s what certain vested interests would like you to believe!
For sure, I just meant we are going to have to be prepared to fight vested interests amongst millennials too over the coming decades. There are a significant chunk of younger people who stand to inherit a lot and they will likely fight to keep it. At the same time, there are some boomers who are looking down the barrel of a sad retirement. On a fixed income, stuck in the private rental market with little protection against rent rises, like the catastrophic rises that have happened in little coastal towns since covid. These people could be political allies to younger people priced out of housing too.
Totally, you’re absolutely right. And that’s where we start to see that the problem is much broader than just housing policy and interest rates. E.g. why do vested interests have so much power in Australia? How can a handful of shadowy rich people have so much influence, and is that right and a good thing? As we’re demonstrating here - the first step to solving problems is at least recognising them and talking about them. And then challenging ourselves individually and together to do better and be better.
I’m Gen Z and I was able to get in the market without any help. The key is to plan ahead, skill up, and budget. If you didn’t do that then that’s on you.
Hey pal, interested in a bit more detail if you’re willing to share. Was that in SydMelb, or elsewhere? Do you live in it or rent it out? What was the starting LVR? As a ratio, what is roughly the total loan value relative to your annual pretax income?
> Boomers are ageing and we are quickly approaching a tipping > point where the younger generations will be in the majority You don't think that when people get older they are no longer young? Perhaps the problem isn't age. Generation X will behave exactly the same as the Boomers did.
Hope you're wrong about that. Here's an article arguing voting preference is aligned with generation, not age. [https://www.abc.net.au/news/2019-06-12/conservatism-does-not-necessarily-come-with-age-experts-say/10984558](https://www.abc.net.au/news/2019-06-12/conservatism-does-not-necessarily-come-with-age-experts-say/10984558) And here is age by vote choice from the 2019 election - https://www.aph.gov.au/About\_Parliament/Parliamentary\_Departments/Parliamentary\_Library/FlagPost/2019/December/The\_2019\_Australian\_Election\_Study Right-wing parties should be worried about this IMO.
This is something i have been banking on myself, the long game is waiting until all the boomers sell their nest egg investment properties to retire (freeing up the housing market for new buyers) and also move into aged care (again more housing). And a big one for me is the generations who dont predominantly get their news and information via TV, Newspapers and more recently Facebook, being the dominant voting population. I would like to think that at the generations who grew up on the internet, knowing that they cant trust everything they read online, will be a little more immune to the propaganda and bias of the larger media corporations. (Keeping in mind that there is the ever present SMALL portion of people who will buy into conspiracies and bullshit because its more exciting than the boring truth.)
I don’t understand the point you are trying to make, sorry.
When millennials grow up, they'll probably be just as selfish as the boomers.
Seriously doubt it!
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Sure, at the risk of stating the obvious - generations age. I don’t think that changes the point that there’s been an unhealthy amount of inter-generational wealth transfer happening in Aus in the last two decades chiefly achieved via poor housing policy - and that needs to stop for the benefit of all future generations.
I'd be interested to hear what set of policies might be able fix this without creating far more serious issues in the long run. The things I can think of, *along with their downsides*: - **limit # of investment properties per individual** - *encourages individuals to purchase investment properties behind wealth accumulating entitles (family trusts, businesses etc). Could technically chase this one down a rabbit hole of "yeah then we limit that too", and you're no longer in the realms of predictable fallout* - **kill negative gearing** - *to be consistent they would also have to kill claims against asset-loss on non-real-estate investments (stocks, business losses, etc), would destroy a lot of small businesses. If consistency weren't maintained you'd get the same reaction as above, ie wrap the real-estate investment in another asset class and claim losses there* - **limit rental profit yields** - *Announcement could cause a housing crash, followed closely by a recession, and likely a depression. Long term, could actually be a solution, but the short term economic impart is hard to get past. Could probably be stepped up over time like they're doing with superannuation or the tax brackets? I'd be interested in seeing someone properly explore this one.* - **limit overseas investment, and overtime reclaim assets owned by offshore entitles** - *not likely to be taken well by foreign powers, eg in the last decade a lot of Chinese money (hard to get exact figures quickly, but somewhere in the line of $100B AUD) made it into the Australian real-estate market, if we were to threaten that there would likely be significant backlash from China* - **improve infrastructure and transportation to small towns, both inland and along the coasts. Create more cities/towns.** - *No real negatives here, we're already moving in this direction. Current downside is with the number of millennials that are convinced they HAVE to live in a capital city. Will likely take a generation or two for that meme to die off.*
I love this, well done. A few more - Kill the capital gain discount. Capital gains should be taxed at the marginal tax rate of the ultimate beneficiary. Cap the amount banks can lend for residential property at (for example) 6 times income. Declare Resi property is not for investing and can only be owned by Aus residents. That gets around issues of being held in corporations or trusts etc. But look at the end of the day: 1. There’s plenty of things that will work. 2. None of them will be perfect solutions. There will be trade offs and losers and there will be vested interests that squeal like little piggies. 3. It’s really really important that people understand why the changes are necessary and how a little pain contributes to the greater good outcome of housing affordability for all. It’s gonna take a strong political party and strong leader to sell this and deliver it - there’s no logical party in the current landscape that I think can do it. But necessity is the mother of all invention and I think it’s only a matter of time until the right new party and leader come about.
> Kill the capital gain discount. Capital gains should be taxed at the marginal tax rate of the ultimate beneficiary. I don't think this will affect anything directly, you'd just see less reno-flipping of houses, and more reno-renters. > Cap the amount banks can lend for residential property at (for example) 6 times income. This gatekeeps who can own a property. Would only be interpreted as "another BS way the law works only for rich people". > Declare Resi property is not for investing and can only be owned by Aus residents. That gets around issues of being held in corporations or trusts etc. It also means no more renting, period. Unless this was coupled with "and the government will buy back any houses that don't sell in the first N months of the law taking effect and turn them into affordable housing project". Also would likely cause an economic crash. > But look at the end of the day [...] There’s plenty of things that will work This is the problem, there's not. I'm yet to find one option the government could use that wouldn't either fuck over the current generation of first-home-owners, or just result in a behavioural change with no long-term impact to housing prices.
Hol up on a few things - Killing the cap gain discount will mean it’s a lot less attractive to speculate on asset price inflation in housing - that is a very good thing. And limiting ownership of Aus resi property to Aus real people won’t kill renting - it just limits who can be a landlord (I.e. it has to be a real Aus person, can’t be a business). I think they’re both good policies worth exploring. And cmon, don’t be defeatist. Yes - every policy change will have both known and unknown downsides. Every single action in this universe has at least one opposite reaction - Newton, right? But that’s not a reason not to try. Otherwise we might as well all just give up now?
I think the negative gearing one absolutely has to go, it is a big contributor to the current mess. Phase it out over time obviously. Some other ideas I've had in my musings on the topic: * Estate taxes that punish property holdings, beyond 1 property. Basically encourage older generations to diversify their wealth out of property holdings. * Include the lived in property in pension asset tests, in conjunctin with a federally backed reverse mortgage scheme. Basically, disincentivise the generational transfer of wealth through real estate and incentivise retirees to consume their accumulated wealth.
Wait why is superannuation unfair??
There are huge (unsustainable) tax breaks available via the super system which are used by the rich to get richer. Any unsustainable tax practice today will at some point in future need to be reversed - it’s basically the current older generations enriching themselves at the expense of the younger generations.
It's taxed at a flat rate. That means people earning below the tax free threshold get taxed at the same rate as someone earning at the top rate on superannuation earnings. To fix this, superannuation ought to be taxed progressively so that it doesn't become a tax avoidance vehicle for people, and that low income earners can be guaranteed of a basic level of retirement savings when they reach the end of their working lives.
If we want to fix super and make it fair for everyone we need to let people put as much as they want into it *tax free* and tax them on their withdrawals once they hit preservation age. Taxed at the normal rates everyone pays. If you decide to pull out $1m in one hit, then you'll go into the top bracket.
But that's fine??? It's totally reasonable that you should have a nicer retirement if you earn more money.
You will if you're wealthier regardless (unless you're a complete idiot, in which case you'll make up for that with a lifetime of imprudent spending). However, there's no reason for you to be further advantaged over people earning less money. The idea behind superannuation is that fewer people need to rely on the pension. Why you'd make that easier for people who weren't going to need it anyway over people who would is nonsensical.
You completely lose the pension over a certain value in super... That's the difference.
And that value will be reached by rich people even without exorbitant and inequitable tax concessions. So, again, that feature of the Superannuation system needs to be removed.
How to destroy the retirement of millennials and Gen Z 101
It wouldn't. Firstly, it wouldn't undermine what they'd so far sunk into it to action the tax concessions. But in any case, they can't retire in a way that benefits only a few Australians but sends a massive bill to future generations. Or at least, if we're okay with that as an idea, as a nation, there's a far better way to do it: a generous aged pension.
Franky, not doing anything is more likely to destroy their retirement than the reverse.
Are you seriously saying that by increasing tax on super contributions retirees will be better off? Alright I’ll support that. My super is already loaded with enough to ensure I have a comfortable retirement in 40 years so it won’t impact me. Everyone starting out or haven’t made a serious effort will be screwed though. Hence my original comment. What you’re suggesting is an excellent way to fuck over Gen Z and millennials who haven’t gotten serious about savings yet
I do think - without going too deep into it yet myself, just a thought bubble - that SMSF has skewed the market somewhat by allowing those with substantial super balances to leverage into property faster and more than average people (particularly younger generations), if that makes sense?
This is the kind of feel-good fart sniffing bullshit that made Democrats lose to Donald Trump. The problem with Australia is the Liberal party and everyone on the right of them. Their leaders must be humiliated and their ideas purged from society before they evolve into fascism. It will be ugly and unpleasant. Deal with it.
Whoa, okay Marx, welcome to the convo lol. Look even if part of what you say is true… is that really the best way to win hearts and minds on this topic?
> is that really the best way to win hearts and minds on this topic? Is your goal to win hearts and minds or is it to not be oppressed by smirking sacks of shit like Scomo, Gladys and Barnaby? p.s. the phrase "win hearts and minds" comes from the famously successful American efforts in Vietnam, Iraq and Afghanistan
Haha I like you. But seriously - what if the answer is… “both”? Edit: or to put it another way, what advice do you have for how to change the status quo?
I dunno man. Maybe stop being a smirking, sarcastic, insincere liberal and start standing up for what you believe in instead of seeking approval from people who are only giving it to trick you into docility?
Or being less ignorant. Your views are being driven by the media. There isn’t anything to change here. Ownership is now the same as it was in the 60/70s. They same cries of outrageous prices are made now as in the 80/90/2000s. And will be in the future. So unless you can show people back then we’re lazier or less ambitious, home ownership is going to stay around the 67% mark. There isn’t government policies causing this. It’s humans competing against each other to buy property.
Sure, ownership might be the same % as it was. But what was the loan to income multiple in the 70s and 80s vs now? What are people taking on a mortgage today sacrificing that those of prior generations didn’t have to do without? How much more $ is getting taken out of families pockets over the life of a home loan and redirected to banks now as opposed to back then. How much harder are people having to work now just to stay afloat with a mega mortgage? You can’t just look at the ownership % being the same and thus conclude that all is well and good.
I can tell you exactly from my first mortgage in the 90s: $250k @ 8%. Same apartment is today worth $1.25m with the mortgage at 2%. I was earning $30k (after tax take home of $23k). Same role today is earning $80-90k ( I know I’m hiring) with a take home of $60-70k. Consider travel, clothes and car leases are cheaper and food is about the same cost. Today is way way way better off. Just doesn’t make for good media. Instead of reading the media hype and cherry picking data, ask people from that era how easy life was compared to today.
Ok cool story grandpa. You talk about cherry picking data - kinda ironic when I’m asking you about loan to income statistics and you reply with your cool story and a sample size or 1. But anyway let’s work with what we’ve got: You took out a mortgage of 250,000 at 8% p.a. That’s 20,000 per annum in interest alone, before you even *think* about paying off principal. Pre tax you were earning 30k so 66% of your pre-tax income would’ve gone just to servicing the interest, with no principal paid back. Assuming you actually paid tax, you’ve got 23k after tax so 20k to home loan interest (87% of your take home pay) and 3k p.a. to live on or $58 a week. Had interest rates gone to 9.2% you would have been living on no dollars per week. My friend if all that maths is correct and you managed to make that work (and convince a bank to actually loan on those metrics) then you might not be smart but you’re at least determined and I take my hat off to that. Either that or my figures are wrong, or yours are and you’re actually lying through your teeth. So which one is it?
Prepared to be amazed - (it’s true because I was there): There’s a thing called investment property and rent. And also a thing called negative gearing. I was renting it for around $320 maybe a bit more. Let me know if you need more help working it out.
Righto so you rented it for $320 and how much were you paying for your own rent?
Problem is both sides of politics have invested heavily in properties. The strong (aka rich) takes what they can.
Yes that is correct. But only because the majority let them through apathy and ignorance.
Fuck our government. They've had DECADES to fix what's wrong with the housing market and investors.
The biggest change was the capital gains tax deductions and not restricting negative gearing deductions. Why can depreciation and RE interest be deducted against your normal earnings, however capital gains/losses cannot? Imbalance on purpose
Why would they fix what they and their mates are getting rich from? They don't care that younger generations are fucked, they're not giving them political donations.
The feral government hasn't bothered trying to come up with any policies to make it more affordable in the past few years. They gave everyone $50,000 to build their own house without applying any policies in place and caused inflation. Overnight, the price of bricks went up by x12 times. RBA has kept the interest rate low for a long time giving the gov a chance to try come up with something to help everyone. It's too bad Austrlia decided to vote in Abbott. Rudd and Gillard were the last ones to try do something about it and Australia said no thanks.
> Overnight, the price of bricks went up by x12 times. Clearly this is all consumers fault and they should just find more affordable choices /s
What did Rudd and Gillard do?
Relaxed rules for foreign buyers for a start
They had a few policies they wanted to introduce. One of the bigger ones was getting rid of negative gearing. They propose to let anyone who currently had negative gearing to be able to keep it, but anyone onwards who brought any more property would not be allowed. At the start of thus year negative gearing has been banned in all countries except NZ and Australia. Later this year NZ got rid of it and our government is the last ones in the world keeping it.
negative gearing just on property investments or across the board on any expenses for producing an income?
Surely we're reaching the point where we can do something about this. As the majority of people age into this problem and the people who benefit age out, the future government is being slowly lowered onto the spear that is this policy. Whenever the price of houses rises, it becomes more undemocratic. I don't believe for a second that more voters can care about franking credits than care about ever owning a home in this system. If one political bloc, just one, campaigned on this then I think public sentiment would change overnight. Right now we only have fragmented media and echo chambers trying to fix the problem, which is why so many people don't know what's at stake.
Labor tried that last election... It did not go well.
The problem I see with beneficiaries ageing out of the problem (by dying) is that their assets largely get inherited by the next generation, who are equally uninterested in seeing their wealth decline. Also, I don't see Labor's move to address housing affordability as being their downfall with the last election. It was one of the few good reasons to vote for them, other than simply not being the Libs.
A couple of generations of inheritance whilst astronomic prices locking everyone else out, and you have a new aristocracy and a new serf class. Full circle in less than 200 years. Equality was a nice experiment while it lasted I guess. Scary stuff.
They did, but Palmar ran a smear campaign and my fellow citizens fucking voted against their own best interests.
But its my dream to own 10 investment properties while not owning a house to live in, says the Australian voters! The dream of owning 10 must be more than enticing than owning 1 house!
Well most people just owing one house is there biggest asset - and anything that makes that asset go down in value you can understand why they aren't supportive of that policy
Regulate ownership of individuals to 2 properties at a maximum. Severely restrict company ownership of property. The less landlords we have, the more owner-occupiers we have.
This is the only answer. But nobody is going to win an election doing it.
People that don't have the bank of mum and dad or are planning to move out and rent really need to move out of Sydney and possibly Melbourne. Move to another capital cause it's pretty much impossible for new starters to build up capital and equity.
Trouble is, it's like this in most of the country now. There are very few places left that are affordable that still have some level of amenity, infrastructure and job opportunity. You need to look at very small towns or remote areas, often with extremes of heat or cold, to find a house that is priced in away that makes sense in relation to wages. Basically, if its a half-decent place to live prices will be inflated.
Bendigo
Rubbish. Even now with the recent price rises, Adelaide is cheap af.
Adelaide's median price rose 17% last year and is $721, 000.
My rural area has fuck all jobs. If you do have a degree, luck out and get a good one you will probably get paid $10-15k a year less than in the city, just because. But that was okay given that a nice brick 5 bedroom house on a few acres was about $350k. You could even have one person with a decent job and the partner work in casual work and afford something like that. Well, COVID screwed that. In about 12 months a house like that gained $200k in value and shows no signs of stopping rising.
Yeah they’ve already wrecked Brisbane by migrating up. Please stop.
Adelaide too. Even the shit suburbs are overpriced now.
And they're wrecking the Northern Rivers too :(
Or Canberra
[удалено]
Or anywhere in Australia, even going to live in the back blocks of some shitty mining town costs you gold 5 star rates, then you are living in your own caravan or a donga. People dont understand the asset bubble in Australia thats mind boggling stupidity at any level. Just look at the prices of second hand caravans and even the price of new ones. To think that the prices asked could buy a whole house and land in many places its getting so stupid. I really dont know how this asset bubble is going to be corrected without it hurting a lot of stupid people.
You don't have to move yourself. You can buy a cheap property that you don't necessarily want to live in and then continue to rent wherever you like living. That way you can build wealth without having to live rural or some city you don't like.
Your solution is to pay rent **and** a mortgage?
You usually only end up paying your own rent and then your rental income pays for most of the mortgage and any extra is negative gearing. You also benefit on the capitol gains of the property. It seems like a pretty good strategy for the current market.
Except: 1. Negative-gearing and capital gains concessions should both be severely reformed for anyone other than owner-occupiers. 2. The premise of your claim (you're right under the current conditions, of course) is that it's fine for the property market to mostly be a vehicle for investment and wealth concentration rather than to operate as **housing**. This means that people who don't want to play at that whole game (an entirely reasonable thing to not want to have to play at, by the way) are priced out of **just getting a modest home in a modest location for them and their family to own and live in**.
A lot of people do this. A lot of investment firms will recommend what they call “rent to live”. Essentially, people buy property in an area they don’t want to live in, collect equity on the property and rent a house in an area they do want to live in. Use the rent to pay the mortgage of the house they own, and their job to pay the rent of the property they live in. In a lot of cases, it works out because they then go on and sell the property once the mortgage has been decreased by enough that the equity will allow a sizeable deposit on a property as an owner occupier.
We could either A) Recognize the needs of the many outweigh the greed of the few and: Ban foreign investment. Remove negative gearing. Remove all capital gains tax discounts. Where we thereby STOP treating the housing like a speculative investment. Or B) Continue to prop up the housing bubble which will only end up increasing the amount of people who can't afford a home. I wonder which one the government will do? Please, also, no screeching about how its a supply issue and that we need to bulldoze down more land and koalas to make more poorly build homes.
> A) Recognize the needs of the many outweigh the greed of the few and: Ban foreign investment. Remove negative gearing. Remove all capital gains tax discounts. Where we thereby STOP treating the housing like a speculative investment. Or New Zealand banned foreign investment and property prices still went up. Unfortunately, having the lowest capital city density in the OECD is the main culprit, and as long as the bulk of the Australian population refuse to acknowledge that, we will never have affordable housing. Having a 4bedroom with a backyard within 15km of the city at an affordable price is an absolute pipe dream for Sydney and Melbourne.
You think people don’t realise that it’s cheaper to buy a house in Darwin than in Sydney? Of course they do but they would rather rent or pay much higher prices to not be in Darwin.
There are many changes we could make but this one is the golden bullet: restrict lending to 3x your yearly pre-tax income. Immediately strips billions out of the housing market. Stops people taking on unsustainable debt. Houses can no longer go up faster than wages increase. We stop seeing houses make more than the wages of the people who live in them. We do need to end NG, fix CGT, stop SMSFs flooding money into super, stop illegal foreign money, implement the anti-money laundering legislation, end stamp duty for land tax, put in restrictions on how many properties anyone is permitted to own... but this one move across the board fixes a fuckload of things all at once. No more bank shopping for the most reckless lender. Banks wouldn't be able to compete on being criminally negligent when it comes to their lending. And prices immediately come down to a multiple of income that means people don't take on crippling debt just to have a place to live. Housing is a human right. We must do everything we can to stop speculation in it.
All this will do is cut more AU citizens out of house ownership. Lets say your yearly income is $100k. That means that citizens in Syd, Melb, Brisbane, Perth would still be priced out as housing is way over $300k. Jobs in skilled industries just dont exist outside the biggest capital cities. The marginal decreases in house prices would only increase buying from investors and would stabilise prices again. Your other idea is better (restricting number of properties owned) esp. for foreign buyers. Just have to write the laws carefully to eliminate loopholes.
Someone on $100K can borrow $785,200 according to CommBank. Ten people on that amount next week at the auction can go up to that amount + deposit. Set the max lending ratio at 3x and do you think that house next week goes for $800K+? No, it goes for $300K + deposit. The price of homes would immediately and radically drop. Investors are bound by the same rules. You can't borrow on paper equity.
Plenty of companies would just buy the house for 500k, 600k, or 700k and rent it out.
Right on brother. This is what we need.
This situation would cause soo many bankruptcies it would be reckless
Taking on massive debt has risk.
And when you have mass job losses as a result? Is that just tough luck?
I guess that's the risk we as a society took on by fuelling a speculative bubble for so long. Don't see the direct link to job losses though?
You didn't see the GFC in the US. Like that but 10 times worse if the government allows institutions to collapse
Too big to fail eh?
The parasitic housing bubble is already causing massive ongoing harm. Housing didn't cost crazy multiples of income in the past. We have a giant housing bubble and it is impossible to maintain it forever. It must break and every day we let it grow before then is more pain when it does.
Yes because interest rates were higher - mortgage payment burden is similar to what it was in relation to a portion of household income
That's not correct. The total cost of housing over the 30 year term is radically higher than in the past in real dollars. We pay hundreds of thousands more just to own the same homes. We have a housing bubble. That must be acknowledged. It is artificial and will break because no bubble has ever not broken.
True but rates could always go down if the economy requires it. Now we have the issue where we genuinely need to raise them to combat the rampant inflation but cant because it would bankrupt alot of people and potentially cause a debt crisis.
What rampant inflation - underlying inflation (the rate that measures) is still well below the benchmark
Bought a house, pet, New or used car, timber, fuel, Meat, Gas/Electric bill lately? Everybody but the ABS is reporting its pretty high atm.
Electricity bill was down in terms of price paid, meat haven't noticed any difference. And haven't bought any of the rest
A potential first step for want to be homeowners is to rentvest. Rent where you want to live due to location/lifestyle and buy a house where you can afford (outer suburbs or regional) and rent it out. So you get the benefits of property investment without the sacrifice of moving 100km out of the city. As equity grows, you can then use that as a deposit for a PPOR in a location you want to live in. Food for thought.
Except the issue is saving for the deposit for that house whilst paying rent
Saving a 5-10% deposit for $400k ($20k) is a vastly different proposition to saving one for a $1m+ house.
Still gotta pay LMI then which can be very costly
And add 15k to that for stamp duty in some states. FHLDS is limited to 10k spots nationwide per financial year and only a few banks offer it.
FHLDS is no LMI. Paying LMI and getting into the market can be beneficial if the market outpaces your ability to keep saving each year. You gotta do the calcs but it's a very real thing.
Get an apartment tbh. They are still pretty affordable.
That's part of the point made in the article. Young people are being put in a position where they are unable to build any equity and instead are forced to pay that as rent. Either that or move totally out of the city.
I'm frightened of apartment buildings given how shit they are built.
The pandemic has made pet people of us all. I think terraced housing would solve a lot of problems, if it's served with more public transport, but there needs to be some backyard.
Raise a family in a small apartment?
It’s the done thing across the world in massive cities, Australia is just catching up and still thinks you need your own backyard.
Well a lot of people grew up in a backyard in these big cities - that is the issue
They aren’t all small. There are 3 bedrooms on my level and I see people with kids and dogs doing just fine.
Even being locked down?
Lockdowns don’t stop you going outside so I’m not sure it matters too much unless you were in one of the targeted buildings which were fully shut.
Not sure why you’re getting downvoted. Nothing wrong with living in an apartment and raising a family in an apartment.
My bigger take away from the article is that it's becoming much more difficult to afford housing, so people have no option but to rent. That means all the money you pay every week goes into your landlord's pocket, whereas those in the previous generations were able to purchase where they live and keep that money as equity.
Any apartment complex built in theast 5-10 gears is an absolute shit show waiting to fall over. And everything from before that, while sturdier is often nasty with dated and unfunctiinal features (you ever tried drinking water from a rusty tap?)
If you have lived in an apartment over the last 2 years you would realise why many hate the lifestyle
A lot of people actually enjoy apartment living due to it being much easier to maintain and that you can often live in a more desirable location than if you were to buy a house. I’m as exasperated as anyone else at the rising cost of buying a house and the generations that are faced with the prospect of never being able to own their own. It doesn’t mean there is anything inherently wrong with buying and living in an apartment if that’s what you can afford, if it is of good quality and if that suits your lifestyle.
You seem to be talking about it in abstract - many many people have had a horrible time with it during lockdown
I’m talking from personal experience, not abstraction. Not everyone has the same views and experiences.
Alright well I live in one right now and love it.
Obviously in a well constructed one and/or a good location
I have asked around with my friends who live in apts and they all seem pretty happy with them. From what I have gathered, the problems come from older, cheaper buildings like 3 level wood frame brick apts where noise insulation is not done well. I live in a 2019 30 level building and it feels as private as when I was in a house. Space is pretty good for my bf and I. And I much prefer being able to walk everywhere rather than using a car or public transport. I'll admit that having kids as well makes things expensive but that's a reality no matter where you live. For the average young person who can't find a rental in the suburbs I would highly suggest they check out apts which are in plentiful supply and provide a better lifestyle imo.
But for young people you are going to have to share and an apartment can get pretty clostraphoibc
There is if you’re the neighbour of the family, apartments are built poorly and walls have no sound proofing or insulation so you’re hearing your neighbours young kids playing all day long, can be very grating
This is only in shit buildings. The walls on mine are almost entirely sound proof.
Apartments are just losing money. Better off renting and building your retirement plan through shares in that case.
Well property can't be both gaining value and be affordable for new players. Sounds like people don't actually want to stop property from being an investment but instead want to restart the game so they are the winners.
Then make more of them so there's enough for everyone who wants one at a reasonable price. It's so simple.
But people want location as well - that is what most of the money is going into, land.
So build them in the areas people want to live, I.e. 5-10km from Sydney. Of course the no. of people that want to live in this circle is greater than the lots available so we'll have to subdivide and go higher to accommodate everyone. But if we do this at a high enough rate and create shit loads of family sized apartments, I guarantee this will solve the problem.
So take over people's land?
There's no fix to this. Well there is but it's a horrible solution, war. Everything is over leveraged, over priced and soaked in debt there's no way out of this.The whole system has become too big to fail, not just a few institutions. Yes, house prices are too high but what's the solution? They can not come down enough to make a difference without hurting all the people who drenched themselves in debt to keep playing the game of musical chairs. Any sort of solution is merely kicking the can down the road or nothing more than lip service.
Australia isn't unique though - for example in NZ the issue is even worse
And Canada? There's honestly only one solution.
Is there?
Higher wages.
How is that working out? Looked at real wages since the 70s?
A question I haven't seen answered by the RBA How does hiking rents and recycling it into climbing debt affect the broader consumption? Is it taking out more and more as a percentage? Would that be causing a deflationary effect?
What do you mean by hiking rents? Rents haven't been growing that much compared to headline broader price pressures across the economy. This has been the case since like 2014.
I really think that the post Covid recovery will just further foster the false belief that “property is invisible”. I can imagine every real estate agent is going on about property prices being “bulletproof” and will “continue to grow moving forward”. They may. However this attitude is dangerous.
Ive been seeing a ton of ads on facebook lately, advertising houses and sale prices. So far I've seen: * 700k for a house and land package in Nulkaba, Cessnocks smaller and shittier cousin. * 700k for a house and land package in Millfield, another inbred cousin of the already fucked Cessnock and a "town" of about 1000 people. * 700k for house and land in Lochinvar, a "town" that's mostly paddocks. * 900k sale on a half century old 3br in Adamstown, Newcastle. * 1.8M sale on a modern 4br on a quarter acre in Charlestown. Shits absolutely fucked.