Sydney's housing affordability crisis for low income earners is spreading, Anglicare finds Read mor

Just one in 100 homes for rent in the Illawarra and one in 200 in Sydney is affordable and suitable for families receiving income support payments.

Source: 'www.smh.com.au'

 

Since one of our kids was diagnosed with disability, we've had to change tactic, but I'm so glad we're investing in the future. I don't thinking Sydney's housing crisis is going away anytime soon.

 

Agree Eng but don't confuse it with that there will be a price drop.

 

So what's the answer? Everyone should offer a 50% discount on rents and sale price? Higher taxes to landlords? None of that's going to happen.

The problem occurred early in the last century. Urban planning didn't keep up with population growth and social trends. Rather than the massive capital cities with a significant portion of population employed at their centers, smaller 'villages' with employment hubs should have been developed with plans for hundreds of years of sprawl.

As long as economies are based on population growth, there's never going to be a solution to housing affordability.

 

I read a similar article in the ABC about Adelaide this morning, but the figures were slightly better in Adelaide.
SA low-income earners struggle to find affordable rentals

"The report examined 3,942 private rentals advertised in Adelaide on April 1, but found only 157, or 4 per cent, suited households on income support".
"About 43 per cent of the houses were considered affordable to households earning the minimum wage."

As Peter said I don't see this trend going away though. The only solution would be for the Government to drastically increase public housing. Too much money gets wasted by the Government giving it to 'non-for-profit' organisations to build affordable housing.

 

We live a very wealthy country....most can afford to buy..it is question of where they are prepared to live.

The trouble is people are too picky. There are still plenty of under 400k options in terms of units, T/H, etc in the West, Central Coast, etc. Under 500k ....there are plenty of 1 brm units within 20klms of the city.

Sure it will require two wages (minimum of 100K)....but opportunities still exist. If they move to Melbourne or other cities...the options are endless.

What was discretionary spending is now part of essentials...people need to get a reality check.

 

We don't know Matthew Lytham's circumstances that led to him living in backpackers but what about house sharing? He said he's a proud man but not sure what he's referring to, to keep up with appearances or?

"Basically, the backpackers' is about the cheapest place in Wollongong," said Mr Lytham, whose difficulties were compounded when a planned break from work blew out into a struggle to find another job.

So he planned his break from work? I don't know the reasons behind that and it is not explained.

 

Yes it's doable. We got here in '07 with barely $3000 cash and the clothes on our back, a child to support and two others on the way. I took a job working night shifts while my wife was pregnant & looked after the kids. Even with the GFC the Aus government was generous providing a little subsidy to get by. We're by no means well off, both working part time and balancing kids now one with developmentAl delays. Still we're able to buy a home & invest in property for the future.
As always lots of government support, programs, knowledge sharing. If you took the low hanging fruit, do what you can and with a bit of luck you'll be OK. Doesn't happen overnight of course, but you'll have lots of fun and fond fireside stories to tell your grandkids

If you're living in any other part of the world, you're never going to have the same opportunity and support.

 

Let's just turn the article on its head, Sydney's median house price has fallen below $1m. Doesn't that mean that affordability has improved? Linky

 

There is one solution. No CHEAP lending. I still remember how it was in the late 80s. The prices were affordable, because mortgage rates were 17-19%.

 

And this will make it more affordable how?

Equilibrium of affordability will remain the same.

 

Interesting idea. When rates got to 9% in 2008, nobody could afford to borrow money. Nobody was buying property.

 

Yeah this is true. Yhere are options, just that a lot want the same thing - the 3-10 km of the cbd - you know , far enough to not be affected by supply but close enough to be close the action, jobs etc...hence high prices...as if god lives there..!!
wait...i too live there...lol..

 

I have bought my last IP in 2008. High rates never bothered me.

 

Yes it will. Prices will fall at least 50% in this case and become affordable again.

 

20% of $500k is still more than 5% of $1M

Please explain how the 50% price reduction made it more affordable for people that can't afford it now.

 

A lot of the replies have missed the point. If you can't afford to rent how on earth can you afford to buy!

All very well to suggest moving to the middle of nowhere, but where is the work that is going to pay the rent? Have you looked at the unemployment rates in places where housing is cheap?

Easy to blame a low income person - after all it must be their fault they are on a cleaner's wage, didn't do well at school etc. Clearly, they didn't try hard enough...

 

I take it maths isn't something you're particularly good at?

interest rates roughly 4 times current rates on properties half the price will still mean double the current mortgage repayments.

eg 4% on $1m = 40k
18% on $500k = $90k

still think its a good idea?

 

Let's say the median property price is 1 mil now, after we will have high mortgage rates the price will drop to 500k. Is 500k more affordable than 1 mil. Yes.
I have 500k now. Can I buy a house for 1 mil - NO. Can I buy a house for 500k - YES.
Any other questions?

 

Of course. I don't borrow, so I don't care what rates are. I buy ONLY in CASH. That's why I need lower prices.