Your housing affordability wishlist

Discussion in 'Property Market Economics' started by albanga, 4th Nov, 2019.

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  1. New Town

    New Town Well-Known Member

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    My view is towards supply side and planning design. I would mandate far taller buildings in suburbs, say 20 or 30 stories, but on more narrow bases and hence permitting public space at ground level
     
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  2. TSK

    TSK Well-Known Member

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    At least it’s building up...does need thinking or at risk of becoming a ‘project’ if it’s lump all low socioeconomic into one space. Lots of research about this.
     
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  3. albanga

    albanga Well-Known Member

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    I lived in Bayswater for 6 months. It use to take me over an hour and 15 minutes door to door.
    Fast rail living in Albury could get me either Sydney or Melbourne in the same time.

    If it’s soul destroying then why does a huge portion of the population already do it and are paying premiums for houses considered close to the CBD as per my example?

    Again i look long term not short. People are creatures of habit yes but it’s not always choice. It’s lack of options for change.
    People don’t move to places because they can’t! Not they don’t want.

    I know as soon as the Geelong to Melbourne fast train is complete I’m straight up the beach.
     
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  4. TSK

    TSK Well-Known Member

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    Good question. Put a levy on it as a ratio of persons to m2 for property. If you want to live large, pay up for it. Resources are going to become scarcer and we need to curtail people’s desire for more and more.
     
  5. Trainee

    Trainee Well-Known Member

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    Is this politically realistic? Genuine question.

    imho the more likely outcome is more trains, more units and some attempts to charge for use (congestion charge, city supplementary charge, pension changes?). But it will all be catchup. None will be enough to result in a permanent increase in affordability because it will not be done fast enough to get ahead of pressures.
     
    Last edited: 4th Nov, 2019
  6. euro73

    euro73 Well-Known Member Business Member

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    Hope you meant incentivise :) Otherwise you're being very insensitive ;)
     
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  7. euro73

    euro73 Well-Known Member Business Member

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    Then why do cities such as Chicago, Denver, Houston, Dallas, Atlanta etc , exist in the USA? Why doesnt everyone live on the East Coast , in NY, Washington, Miami and Philly?

    Why do cities such as Moscow, Zurich, Berlin, etc exist in Europe? Why doesnt everyone live on the coast there?

    Same question for Africa, and for Asia, and for South America...?


    The answer is... they have water and when you have that, cities of all shapes and sizes, including genuinely world cities with many millions more than Sydney or Melbourne ( such as Chicago or Moscow) can evolve even far away from oceans - all though I will concede Chicago has a very large Lake :)

    Australia needs many more cities the size of Newcastle or Geelong - or even larger . Get the water issue solved. Build the rail links....provide the tax settings for jobs to go there and 100,000 - 200,000 populations will evolve very quickly in many regionals that currently house only 30-40,000 . It isnt rocket science... but it is a 20 year plan and none of our pollies have it in them... which leads me to the mother of all things holding us back - our political system. Get term limits into parliament. They can stay for either 8 or 12 years max. ie 2 or 3 cycles. then get them out. Break the back of the factions. But thats another thread for another day...

    Gotta think big if you want to solve big issues.
     
    Last edited: 4th Nov, 2019
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  8. TSK

    TSK Well-Known Member

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  9. hammer

    hammer Well-Known Member

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    @euro73 How does affordability work if the fast train costs $50 or $100 one way? Even at $20 one way that's still $200 a week in extra transport costs.

    Sure the housing might be cheaper but......
     
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  10. TSK

    TSK Well-Known Member

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  11. euro73

    euro73 Well-Known Member Business Member

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    Very simple example. Lets imagine you have 250K saved. Go buy a home in Melbourne or Sydney for $1Million, and take out an 800K mortgage ( 80% LVR) That 3% P&I mortgage of 800K will cost you $3373 per month . Or, move to Shepparton and buy a bigger home on more land for 500K. Take out a 300K mortgage instead of an 800K mortgage and spend $1265 per month instead of $3373 per month I'm fairly confident the $2108 less per month is going to assist with a minimum of two things in such a scenario.

    Firstly, even allowing for $1000 per month for ticketing, youd still be over $1100 per month better off
    Secondly, if you took that $1100 and made extra mortgage repayments on your 300K mortgage in Shepparton, you'd pay off the mortgage 17 years and 3 months sooner .

    Screenshot 2019-11-04 19.49.58.png


    This of course leads to compounding opportunities, to purchase other INV properties or invest in shares, or get extra money into super. I would argue the reward delivered by all of these things far outweighs the price of the train ticket

    The thread is about a wishlist to improve affordability. Page 2 and already people cant agree that there are things that can be done. It only serves to demonstrate why our pollies arent motivated to make it happen either.

    I am a realist. I understand that what I have suggested won't happen. But that doesn't mean it shouldn't happen or wouldn't be effective.


    PS - you'd save a truckload annually on car insurance, servicing , tyres, petrol etc as well, by not sitting in grid locked traffic 90 minutes each way, 5 days a week.
     
    Last edited: 5th Nov, 2019
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  12. Guest

    Guest Guest

    • Hard immigration cap at 100,000pa or lower.
    • Change stamp duty to land tax.
    • Remove all FHB incentives.
    • Enforce tighter lending standards, in particular with IO loans and for portfolio investors.
    • Include the PPOR in the pension asset test (encouraging retirees to downsize into appropriate housing).
    • Reduce capital gains tax discount for properties bought as established / return to indexation method.
    You did say wish list... not a realistic list :D
     
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  13. Scott No Mates

    Scott No Mates Well-Known Member

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    Has anyone forgotten that with infrastructure, prices of well located land increases, rent increases etc. There won't be a free ride for anyone relocating to the bush.
     
  14. euro73

    euro73 Well-Known Member Business Member

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    Agreed, but it will still be far cheaper than metro SYD or MEL locations. Just ask Perth, Brisbane, Adelaide etc...
     
  15. Angel

    Angel Well-Known Member

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    Following Euro's concept, the people relocating to the regions for lifestyle and new employment opportunities wont have to commute to Syd and Melb every day. They will have jobs locally and only travel into the big cities occasionally for entertainment (and hospitals).
     
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  16. TSK

    TSK Well-Known Member

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    It's not just about the initial purchase price, there are risks going into smaller labor markets and to be honest, you could get a house/unit in that price range within 20KM of CBD of Melbourne.
    Maybe, but probably not. You would want to make sure you had employment before making the move, even then, it's not the same labour market as a city and their may be less opportunities to pick up work should your employment come to an end.
     
  17. Angel

    Angel Well-Known Member

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    My gripe is with the number of new dwellings, both houses and units, being unsuitable and unaffordable for single people and LSE households to live in. In way outer Brisbane, a one bedroom or two bedroom unit costs almost as much to rent as a three or four bedder. I'm not discussing buying, to me affordable accommodation starts as renting. As an example a 4 bedroom house or apartment costs just over $400 a week and a two bedroom unit in the same complex/suburb is $380 a week.

    How can pensioners and low-income earners afford a smaller home? Where are these people expected to live when their income is only $400 to $600 per week?

    Edited to add this from the Urban Developer. The article suggests its demographic can often afford to buy higher-end property, yet the main argument is that there aren't enough smaller properties being built for residents who want small homes.
    Smaller Homes Driving Unmet Downsizer Demand
     
    Last edited: 5th Nov, 2019
  18. TSK

    TSK Well-Known Member

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    How does that happen? I was reading somewhere about older woman share housing to make it work - might have been Sydney. At first it seems terrible but there is some value in having a social network rather than being by yourself stressing out how to pay the rent - these women had come out of relationships and like many, the kids had grown up and left and so did the husband.
     
  19. hammer

    hammer Well-Known Member

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    You're absolutely right...but this situation outlined above is hardly what you'd call affordable.

    At least not for the average Aussie.

    The generally accepted metric for properly affordable accommodation is round 30 percent of your take home pay.

    According the the ABS the average weekly wage is $1633.80 which becomes about $1233 after tax.

    so 30 percent of 1233 is 369.30. Approximately $370 per week to safely spend on a mortgage.

    This translates to (roughly) a 340k property (Assuming a safe 4 percent interest rate). At a pinch you could obviously make that 400k with a bit of wheeling and dealing with the banks.

    With another income you might be able to take it up to 500k (even 600k) quite safely but things start getting real stressful once kids or some sort of unforseen family emergency arises.

    If you're an "average" Aussie on an 80k income this is the reality.

    If you're one of the millions of Australians on 40-65k then things get much tougher again.

    I've got no doubt that high-speed rail will be a great thing if it ever happens but I suspect that it won't help as much as we would like with big-picture affordability.
     
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  20. hieund85

    hieund85 Well-Known Member

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    The idea of fast rail is to create and develop more 2nd, 3rd tier cities in Australia with proper employment market. Coupling with remote working trend, one does not need to travel to Mel/Syd CBD every weekday for good paying jobs. The key word here is "decentralisation". But like @euro73 said, it is a long term plan like 20-30 years and unfortunately it does not fit in our current political system.
     
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