An answer to housing affordability

Discussion in 'Investor Psychology & Mindset' started by Bargain Hunter, 5th Aug, 2015.

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  1. THX

    THX Well-Known Member

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    A definition is not an opinion.
     
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  2. Guest

    Guest Guest

    The definition wasn't the opinion, this was "You are using the wrong definition in your link".

    You are welcome to use a different definition for affordability to the way most use it in property commentary. It just makes you look a bit silly.
     
  3. THX

    THX Well-Known Member

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    That's not an opinion either. You are using the wrong definition. The definition listed in 1. refers to afford in the sense of to be able to undergo without serious consequence, as per the example; the country can't afford another drought. It does not refer to the definition of afford in the monetary sense of whether or not you can afford to pay for something.

    But the only one who looks silly is you. Property is not unaffordable. This is proven every single day a property is listed for sale by person a and purchased by person b. Property can be unaffordable to person c based on person c's personal circumstances. I can't afford an apartment overlooking Central Park in New York. I can however afford my own house.
     
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  4. Guest

    Guest Guest

    Yes, yes it is. But don't take my word for it, simply do a Google search for articles about housing affordability. They typically won't talk about property being affordable vs unaffordable, but rather a lack of affordable housing, an affordability crisis or use a measure of affordability. That is because in the world of property commentary it is seen as a scale, rather than a line in the sand where something crosses from affordable (able to buy) to unaffordable (not able to buy) as you are trying to draw.

    This poor argument taken to it's logical conclusion means that you think property is affordable so long as one house is listed, bought/sold on any given day in Australia?!

    It means that you think property is affordable even if people have to put every penny they have available toward the largest loan they can take to buy a home, despite the risk and disadvantage of doing so.

    It means you think every property bubble in history has affordable housing at the absolute peak, because that is the price at which transactions are taking place.

    It means you think property is affordable even if the lenders are giving out loans to those with no income or job as they did for some time in the United States. After all, they are able to buy a property, so what does any other circumstance matter?

    I don't agree with this and neither do most other rational people.

    I could buy a Lamborghini, but the reality is I can't really afford to.
     
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  5. THX

    THX Well-Known Member

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    I think you are viewing housing through its role in society rather than I am as a commodity. Property from the pov of a commodity is simple, it is a line in the sand. No matter how complex in the end it boils down to the numbers either work or they do not.

    Right now the numbers prove housing is affordable in Australia. Your multitude of discussions about housing being unaffordable all boil down to; if I carefully select a certain group and apply that group to a certain market I can prove housing is unaffordable. It is pardon the expression all a *********** (goes in circles since my word is censored lol) .

    I think also the vast majority of these topics all make the same mistake; Sydney is not Australia (although I do live here and consider every other state rubbish :D).
     
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  6. MichaelW

    MichaelW Well-Known Member

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    If you "could" buy a Lamborghini then by definition you "can" afford to...

    Its just you choose not to as you are prioritising your disposable income. I too can afford to buy a Lamborghini but choose not to. Doesn't change the fact that I can afford to if I wanted to...

    I'm prioritising my surplus disposable income on another wasteful luxury. I'm going to go blow a lot of moola on a 27 foot Catalina yacht when I get my bonus next month. Probably not the wisest investment I'll ever make, but damn it will be fun! :D I've been able to afford one for a while, given the size of my asset portfolio and surplus disposable income, but its taken a lot of internal heartache to make that income allocation decision. Turning from delayed gratification to informed consumption is a big step for a seasoned investor...

    Cheers,
    Michael
     
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  7. MichaelW

    MichaelW Well-Known Member

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    THX speaks true. Fact, this is!!

    Sure, certain market segments in Australia cannot afford to purchase median priced residential property. That, however, in no way makes property unaffordable. It is your definition that is creating the metaphorical line in the sand from affordable to unaffordable. Measured as I've repeatedly called out it should be, property is still eminently affordable. Just not to everyone, and I guess that's the rub...

    Cheers,
    Michael
     
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  8. THX

    THX Well-Known Member

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    Where are the countless articles on the affordability of yachts? Is the yacht market a bubble? what can we do to help first yacht buyers?
     
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  9. Guest

    Guest Guest

    Not by the definition I posted earlier in the thread and advised is the context I and most other property commentators use the term.

    Afford: to be able to do, manage, or bear without serious consequence or adverse effect.
    http://dictionary.reference.com/browse/afford
     
  10. MichaelW

    MichaelW Well-Known Member

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    In the case of the Lamborghini, would that be Mrs BB?

    Bight the bullet, buy the Lamby, you're no hobo any more Mr Baron!! :D

    Edit: As an aside, are you suggesting that "because that's the definition other commentators use in the media, that makes it fact"? I personally never used the popular media as my yardstick for truth, quite the opposite...
     
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  11. THX

    THX Well-Known Member

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    As I have said before you are using the wrong definition. The definition that applies is right there at your link under 2. Afford in a market sense has nothing to do with your definition.
     
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  12. MichaelW

    MichaelW Well-Known Member

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    :)

    Just tell them that its the right thing to do, and not to worry about post purchase cognitive dissonance (or buyers remorse). That will help us wannabe yacht buyers bridge the "affordability" gap by BB's definition.

    Cheers,
    Michael
     
  13. Guest

    Guest Guest

    I've not said it's fact, it's just the way I use it in discussing housing 'affordability' as do most others.

    Says who? You and what army? :D
     
  14. HUGH72

    HUGH72 Well-Known Member

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    I was with you until your last sentence.:rolleyes:
     
  15. Francesco

    Francesco Well-Known Member

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    I bought my first house in Melbourne without any FHB grant or any welfare. While doing postgraduate studies in 1981, my wife was the sole earner in the family with a very ordinary office worker income. The two of us live in that dilapidated house for about two years and maintained it with my DIY labour and her earnings.

    Financially we got by, because the deposit came from my savings and represented about 50% LVR. However, being typically tight a**** help heaps.:) There were no overseas holidays, no fancy cars, eating outs or doodahs.

    Was it affordable? Financially, we managed, but there were serious consequences and adverse effects. The house had asbestos. Some days, we slept with barricades to the front door as it had no locks. The house needed constant maintenance from de-mossing of roof tiles to re-leveling of floor.

    So, by BB's preferred definition of housing affordability, it was unaffordable for me in the early 1980s, but I did not know any better! Affordability like poverty, becomes a relative concept. If you think that it involves adverse consequences, ie sacrifices, then it is not affordable. :rolleyes:
     
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  16. Guest

    Guest Guest

    Nope. You are putting words in my mouth (I've not used the word unaffordable). Read this post again:

    https://propertychat.com.au/communi...-housing-affordability.2492/page-3#post-37994

    If you don't understand it, then you don't understand my position.
     
  17. Natedog

    Natedog Well-Known Member

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    If that's the "reality" in 30 years time then yes, it is still affordable IF that is the "new norm" in 30 years time.

    The reality now is that while prices for homes are higher than they have ever been, people can still afford them based on the current rules and regs and finance availability.

    Like many have said on here, there ate many affordable areas of capital cities all over oz....IF people are willing to do the hard yards to save the required deposit to get it done
     
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  18. WinDyz.

    WinDyz. Well-Known Member

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    I'm with u. If I were to choose. I'll choose to live in a nice new apartment in very well located.
    I used to live in a big house with my parent, and use to hate doing the garden every week and cleaning the house.
     
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  19. Dan Donoghue

    Dan Donoghue Well-Known Member

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    For this very reason we bought a townhouse with a 7 X 9 metre back yard............ it was still too much for me so I concreted it ;).

    As bad as that sounds it looks good all stencilled and everything, the neighbors took my idea also but paved, it looks good too but I don't get weeds coming up through my concrete ;), we have a gate in the back fence straight through to a reserve / bush type area, never to be built on and interestingly enough on the map for birdwatchers due to a number of rare bird species calling it home :).
     
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  20. THX

    THX Well-Known Member

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    I forgive you, we can't all live in Sydney, we can't all be perfect :p