Complain or Conquer, is housing affordability really the issue?

Discussion in 'Property Market Economics' started by albanga, 10th May, 2016.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Perthguy

    Perthguy Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    11,767
    Location:
    Perth
    Won't be possible. I could make sure I sell to a nice investor though :p

    Yep.
     
  2. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    TylerJamesson, Francesco and Angel like this.
  3. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    The bloke has never taken a holiday - according to that article....o_O

    I think I prefer to take reg hols, and die at 75 :p
     
    Perthguy likes this.
  4. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,091
    Location:
    Brisbane
    Yeah, doesn't sound like happiness to me.
    But each to their own.
     
  5. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,380
    Location:
    Qld
    But that is the whole point of the article. He says he is doing what makes him happy.

    Thankfully, so am I.
    Marg
     
  6. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,414
    Location:
    Gold Coast
    Work is a holiday.

    Retirement - now that is hard work!!!
     
    Marg4000 likes this.
  7. House

    House Well-Known Member

    Joined:
    13th Sep, 2015
    Posts:
    929
    Location:
    Sydney
    Here's another FHO sob story... from Canberra!

    First home buyers struggling to pay the mortgage

    Sounds like it's a new thing!

    Really? Pretty sure any broker could have got them the mortgage for half that. So, what, $35-$40k each for deposit, Stamps and closings? Unaffordable!

    Should have thought of that before you bought after having a child :rolleyes: And by "so much more", she means a whole extra $3k each per year over what they were paying in rent! $57 extra per week to own their own 3br house :eek:

    :( #thestruggleisreal

    But there's good news, she's very good at money management so they can work something out! Oh wait...
     
    Last edited: 3rd Jul, 2016
    Francesco, zed_kid, HUGH72 and 2 others like this.
  8. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,091
    Location:
    Brisbane
    If he's never taken a holiday, he wouldn't know what happiness feels like.
     
  9. Dave3214

    Dave3214 Well-Known Member

    Joined:
    11th Oct, 2015
    Posts:
    277
    Location:
    Norlane
    Haven't read the thread in it's entirety, but i think Australians are an odd lot nowadays. Just speaking from my own perspective, even in Geelong, the consensus is that yes, it's a disgrace, housing's unaffordable blah blah blah, but if i make a comment in the local paper or on Facebook emphasising that Norlane properties can be got for under $200K, the commentariat changes to 'Oh, who'd want to live there'.

    It's like how Australians started to eschew the traditional Aussie sixes, citing them being thirsty on fuel and 'too big' thus hastening the ending of local vehicle manufacturing, but lo and behold, four of the top 10 selling vehicles are fuel-guzzling Tonka truck 4WD's!!

    Years ago people would buy where they could afford, although to be frank 40 years ago when mu parents bought in Newcomb (Geelong suburb), the house was $20,500, and most housing was in a rather narrow band of prices. A clipping from an old Saturday Herald from 1975 showed auction results....Broadmeadows houses were low 20K's, and Toorak had a couple where the price was about $46K. But nowadays, those suburbs have exponentially risen to almost disbelieving figures, far beyond the growth of the lower socio-economic areas. But it seems people just will use any excuse to whinge and not be satisfied with buying in an affordable area first and working up. It's lunacy that people expect to buy a first home where 7 figures are the price tag.

    But it seems that's what Australians have become now. Odd, really. Even in Geelong, people will try and scrounge the 400K or so to get a 1st property in Armstrong's Creek, with it's 'future schools, future shops etc' instead of places half that price which has actual schools and shops.
    I simply don't get it. But maybe i am a bit strange.
     
  10. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    It's an expectation thing; and is made even harder when all the FHB's see are ads for really cool Jennings style home on offer with 3 or 4 beds, 2 baths, DLUG etc...that's what they want for the first home, or a really cool apartment in a high-demand area like say; Elwood, or Richmond, etc.
     
    Dave3214 likes this.
  11. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    In the USA; maternity leave for nurses is 3 months...paid by the Gubb - not the Employer...

    Shock horror; these two won't have Foxtel or O/S trips....o_O

    Seriously?

    Looks like they have been in a good paddock and haven't had it too tough in the nosebag dept either. pffft. Might be a few dollars to be trimmed in the shopping trolley bill as well.
     
  12. timetoact

    timetoact Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    422
    Location:
    Sydney
    I must admit I have only got through a few of the first pages of this thread, I will continue to read but feel urged to out my 2 cents in now.

    The main reason for my urge to comment comes from Emza's comment on Page 4 that Albanga correctly refuted. To re-cap - that property prices used to be 2-3 x median wage and now they are 8-10x. As Albanga correctly points out, there a literally thousands of suburbs in Australia were you can purchase in the 4-5x range.

    But further than that, the houses that you refer to in the past that were 2-3x had 1 bathroom, no double garage, a tin roof car port, kitchens with laminate bench tops and basic appliances, they were basic houses. Added to that they were built by tradies that were earning average/below average wages. So, take your 2-3x wages, add all the mod cons that are now standard in most homes (especially the ones in the higher price band), add a drastic increase in labour cost to build said house and it is not hard to see why it costs 8-10x wages to own an inner city, modern house with 2-3 bathrooms, double garage, stone bench tops, that is in demand by the entire population and why only those that have MEDIAN WEALTH - NOT MEDIAN SALARIES can afford them.

    This is important. Median priced homes are bought by people with median wealth, not median salaries. If you are on a median salary but only have a 5%-20% deposit, and are up against someone who is on a median salary and has median wealth (could be 30-60% deposit) and you both want the home as much as each other. Who do you think is going to win?

    The majority of affordability issues and whinging are in Sydney and rightly so.
    Melbourne still has lost of affordable housing in outer areas.
    BUT, in Sydney we have a major land issue.
    Have a look on Google maps, zoom back so you can see Sydney and Melbourne in the same frame. We are completely land locked between national parks, Melbourne on the other hand has room to grow. Add to that, the popularity of Sydney due to strong economy, world famous beaches, harbour and land marks and it is not hard to understand why property prices are expensive.
    Now, if you think removing NGing is going to magically create more room to build houses in Sydney and fix an affordability issue you need to pay more attention.

    Not to mention NGing is simply the equal treatment of investment losses and gains. But that is for another post.
     
    Zoolander, Angel, S1mon and 6 others like this.
  13. Purple Patch

    Purple Patch Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    158
    Location:
    Darwin
    When we purchased way back then it was a very basic house and the main difference was that, we were a one income family and interest rates were 15-17%.
    The percentage of disposable income used to pay the mortgage was very high. Thankfully we didn't have mobile phones, Foxtel, Lattes, breakfast meetings and a social life. If we had all those things we probably would not have been able to buy a house on one income with three children!!
    Cheers
    PP
     
    House, Marg4000 and wylie like this.
  14. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    When I bought my first PPoR, the % of your income for total loans could not exceed 35% of Gross income, and there was a 20% cash deposit plus purchase costs required for a house...80% P&I Loan for the rest.

    I dare say these days it is more than 35% of Gross?
     
    Marg4000 likes this.
  15. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,934
    Location:
    Brisbane
    I don't think it has changed. Brokers...?
     
  16. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    4,144
    Location:
    Inside your device
    I have heard along the way - some time ago; it was circa 50%?
     
  17. timetoact

    timetoact Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    422
    Location:
    Sydney
    Yeah that would be about right, banks will lend us an amount that would take 50% of net income to repay.
     
  18. House

    House Well-Known Member

    Joined:
    13th Sep, 2015
    Posts:
    929
    Location:
    Sydney
    I've been told 30% of gross but 50% net works out to be about the same, just about $2k more (for me anyway.).

    Here's a timely reminder for the young 'unsband their expectations
    image.png
     
    Last edited: 13th Jul, 2016
  19. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,934
    Location:
    Brisbane
    That is not the same as 35% of gross though. Could any brokers shed light on this?
     
  20. House

    House Well-Known Member

    Joined:
    13th Sep, 2015
    Posts:
    929
    Location:
    Sydney
    Dastayari is back with more tripe. Cherry picking $1m development blocks in Toongabbie and using 5.2% as in interest rate :rolleyes:

    Even at that IR, $26k a year each for a couple to own their own freestanding home... I'd say that's pretty affordable.