Australian Housing Affordability Discussion

[cove]

Imagine for a moment that you live in Greece and have a Euro denominated mortgage loan and you are now earning Drachmas that are worth a fraction of a Euro. Looking like a true Greek tragedy at the moment

 

[burmans]

Imagine for a moment that you live in Greece and have a Euro denominated mortgage loan and you are now earning Drachmas that are worth a fraction of a Euro. Looking like a true Greek tragedy at the moment

Sometime very soon would be a great time to buy a property in Athens. You'd need to be brave but the time to buy is definitely when very one else is talking doom and gloom.

 

[rainbowgirl]

Property arrangements are very unusual in some European countries. You might think you are buying a property and have exclusive title over it, only to find that you own the property with a number of other people and can't do anything to the property until you have approval from all of the other parties. I'd be extremely cautious trying to own properties overseas.

 

[RooFlyer]

No, he's wrong for for talking simplistic nonsense that demonstrates he's out of touch. As I've already mentioned a few times his advice was to just get a good job that pays good money as if you don't need to study hard etc etc etc. He is wrong because his advice ignores all the hard work required. Really not sure why this is so hard to understand, well besides political blindness. <snip>.

Ah, I've been away for a while but I see the Treasurer is still being verballed to support a particular argument and other things still being made up. Listen to what No, he's wrong for for talking simplistic nonsense that demonstrates he's out of touch. As I've already mentioned a few times his advice was to just get a good job that pays good money as if you don't need to study hard etc etc etc. He is wrong because his advice ignores all the hard work required. Really not sure why this is so hard to understand, well besides political blindness."]he actually said here.

As has been pointed out a number of times in this thread, he starts his statement with "The starting point for a first home buyer ...".

That's starting point folks ... not the be-all and end-all ... the starting point. Is that so hard to understand?

And he didn't say 'Just ...' to anything. Again, this has been pointed out several times already but that word just keeps coming back . Its hard to understand why.

<snip>
I've outlined precisely what is wrong with the treasurers statement in this thread. Try reading it, and then address my points. Until then go argue with a fence post.

Maybe everyone here should 'try reading' (or listening to) what the Treasurer actually said, then address their points, instead of demanding people respond to arguments based on mis-quoting. And keeping it civil would be an advantage for everyone.

 

[Moody]

The treasurer's comments were in response to the question of housing affordability. The context was that first home buyers are being priced out of the market - particularly in Sydney and Melbourne. His responses that they should "get a good job that pays good money" and "if housing was unaffordable in Sydney then no-one would be buying it" were unhelpful at best, insulting by common agreement, and execrable at worst.

What is it about this topic that people can't acknowledge this and just move on?

 

[burmans]

Property arrangements are very unusual in some European countries. You might think you are buying a property and have exclusive title over it, only to find that you own the property with a number of other people and can't do anything to the property until you have approval from all of the other parties. I'd be extremely cautious trying to own properties overseas.

Sounds a lot like a strata title in Australia! So sure, you need someone who has local expertise to provide legal advice, but Greece has just a long a tradition of buying and selling property as Australia. So be cautious, well yes, but I wouldnt be letting it get in my way with proceeding with the right advice.

 

[amaroo]

Wonder if JH will use SMH money as a deposit for another property :!: :mrgreen:

Treasurer Joe Hockey awarded $200,000 in defamation case against Fairfax Media

Treasurer Joe Hockey awarded $200,000 in defamation case against Fairfax Media

 

[JohnK]

I haven't been through this whole thread and I have to agree that things were easier 30-40 years ago but the attitude of kids today is totally wrong.

Gap year? What in hell is a gap year? Stay in school and finish your degree ASAP, start working and save as much as you can as quickly as you can save.

Forget travel. Forget moving out of home. Forget fancy restaurants, expensive night clubs, eating out all the time.

Stay at home with mum and dad, make your own dinner, make your own breakfast and lunch for work. I see people paying $8 for a gourmet tuna sandwich. What is a gourmet tuna sandwich? Is it any different to the $1 loaf of bread and $1 tin of tuna you can buy? How many tuna sandwiches can you make for $8? Save enough for a deposit on a small place somewhere and negative gear. When you are close to paying that one off then you can think about owning a house.

It is not going to be easy but if you keep throwing money away it is going to be impossible.

 

[SeatBackForward]

30-40 years ago, a degree was free. Industry was happy to train people rather than expecting everyone to already have experience. Businesses offered careers not just sort term "incentives".

It also isn't them that set the current rules, they just inherit them from people who didn't have to face similar at that age.


It's not all about kids decisions alone.

 

[Moody]

...It is not going to be easy but if you keep throwing money away it is going to be impossible.

I bought my first house in my mid 20's. I used to go out most Friday nights, take regular overseas holidays, and basically piss a lot of money up against whatever wall was handy. But I still could raise a deposit and get a bank to loan me the rest.

My kids will have buckley's of doing the same now without our help, in fact if they retain an accountant I suspect they would be advised to have a gap year and spend their money on expensive tuna sandwiches .... and basically wait for us to die and leave them the house!

 

[JohnK]

Cease negative gearing. I have an investment property myself and looking at another, but I still say get rid of it if there is genuine commitment to help people into their own house.

Or, at least cease it on any property bought after say July 2015.

Cease negative gearing but continue to pay tax on rental income? Cannot have it both ways.

If you want tax on rental income then you must be able to negative gear.

By the way negative gearing helped me out for a few years. The government has been making a fortune out of me for much longer even though I still have 2 mortgages. And the government didn't take a single risk.

 

[whatmeworry]

Wonder if JH will use SMH money as a deposit for another property :!: :mrgreen:

Treasurer Joe Hockey awarded $200,000 in defamation case against Fairfax Media

Treasurer Joe Hockey awarded $200,000 in defamation case against Fairfax Media

Looks like Treasurer Dum Dum, might have to pay 2 million in costs. So which investment property does he sell or does he host 200 dinners?

The truth is that this case has been a disaster for Hockey and it may yet prove to be a significant victory for Fairfax.

One would expect Hockey's legal expenses to be in the order of $1 million. Fairfax's expenses will be of a similar order, if not more.

If a differential costs order is made denying Hockey a costs order in respect of the articles portion of the case, then he will have to pay his own legal costs for that portion of the case. These costs would far exceed his $200,000 damages award.

Joe Hockey's defamation victory may yet turn to disaster

Meanwhile another report shows Aussie housing market overvalued.

For yields to return even to where they were even three years ago would require sizeable rises in rents or hefty falls in prices.
For example, the average rental yield on a house in Sydney fell to 3.3 per cent in June from 4.4 per cent in June 2012.
To return that yield to where it was three years ago would require a price fall of 25 per cent, from the current median price of $900,000 back to $675,000, or for rents to rise by a third.

http://news.domain.com.au/domain/re...ing-market-is-overvalued-20150701-gi2kte.html

 

[eastwest101]

Joe Hockey's defamation victory may yet turn to disaster

OT I know but always best to check the source of the information provided - in this case an article published by a Fairfax about a defamation case between Fairfax and the Treasurer, containing the advice of a lawyer that Fairfax have retained for legal work (but this is not disclosed by Fairfax), so may not really the most relaible source of information on this topic.

The ABC and The Australian have published various interpretations on this - probably not really resolved yet from my reading of the case and the awarding of costs (while inconvenient for whomever 'loses') does not change the legal decision that was made.

 

[seanpodge]

I bought my first house in my mid 20's. I used to go out most Friday nights, take regular overseas holidays, and basically piss a lot of money up against whatever wall was handy. But I still could raise a deposit and get a bank to loan me the rest.

My kids will have buckley's of doing the same now without our help, in fact if they retain an accountant I suspect they would be advised to have a gap year and spend their money on expensive tuna sandwiches .... and basically wait for us to die and leave them the house!

Precisely the problem. For most people who'd want to buy a first home, they've no hope unless they can get their parents or other family to help out or they win the lotto. Even if you do skimp on little things to save up a deposit, it seems every six months your target deposit gets kicked another $10,000 down the road because speculators and tax dodgers are bidding up the prices. Travel and restaurants might not be the best way to spend one's money, but at least saving up for a gap year or iPhone is an achievable goal.

Also, mortgage payments for houses at current prices are high. The current RBA rate is 2%. What's going to happen when it inevitably goes back up?

 

[cove]

I bought 2 investment cottages in Bayswater (Perth) for $6300 and $6000 and they are still standing (around 1971/72 when two years after I started working).
Should have kept them!

 

[amaroo]

There is always someone worse off..

Chinese buy 40pc of homes in Auckland

Chinese buyers snapped up nearly 40 per cent of houses sold in Auckland in three months this year, and locals say they are forcing property prices beyond ordinary residents.

“It’s staggering evidence that strongly suggests there’s a *significant offshore Chinese presence in the Auckland real *estate market. It could not possibly be all Chinese New Zealanders buying; that’s implausible,” said Phil Twyford, housing spokesman for the Labour Party, which released the figures

Some 39.5 per cent of house sales between February and April were to people with *Chinese surnames, even though Chinese people made up 9 per cent of the population. In May, according to one source, the *figure was almost 90 per cent.

Official statistics show the *average Auckland house value rose by NZ$74,000 ($66,647) in the past three months.

Bank of New Zealand’s chief economist Tony Alexander called for the government to follow Australia and ban foreigners from buying existing houses.

He said overseas buyers were leaving them empty in a city that already had 22,000 vacant properties. “Chinese simply want an asset away from any control by the Chinese Communist party,” he said.

Race Relations Commissioner Susan Devoy said *Chinese New Zealanders *deserved better than to be blamed for high Auckland house prices. She *accused Labour of dumbing down complex economic problems by singling out Chinese buyers as a cause of the overheated housing market.
The Times

 

[burmans]

Also, mortgage payments for houses at current prices are high. The current RBA rate is 2%. What's going to happen when it inevitably goes back up?

House prices will go down, clearly. Much of the recent demand is driven by low interest but the reverse also aplies.

I read recently that the number of young people (under 35 from memory) buying houses was at an all time low with suggestions it would reduce to almost nill. Once those baby boomers all retire and are looking for the next fool to sell their house to they may not find as many people in the queue and hence house prices would eventually go down, that's basic economics.

 

[UP4014]

Cease negative gearing but continue to pay tax on rental income? Cannot have it both ways.

If you want tax on rental income then you must be able to negative gear.

By the way negative gearing helped me out for a few years. The government has been making a fortune out of me for much longer even though I still have 2 mortgages. And the government didn't take a single risk.

I'm happy to pay tax and cease negative gearing, I choose to buy something and make money on it, I need to factor in paying tax without a hand out. Otherwise just put in the bank.

I feel fortunate to be able to be in a position to say it, anyone who can only afford to buy a second or other investment property because of negative gearing has possibly gone a bridge to far with out backup.

Matt
PS, I have had at least one investment property since 2005, never claimed the negative gearing handout. We all look at things differently.

 

[Deleted member]

I think that (in Australia) negative gearing is a good thing. However "IF" it were to go, the SD needs to go too. The problem is we were all Duped into believing the pollies when GST was introduced and were told a sad would go. SD is a tax on growth. I would prefer to see Death duties over SD. ( you can at least insure for death duties, or at least you could when WOL insurance was around)

 

[JohnK]

PS, I have had at least one investment property since 2005, never claimed the negative gearing handout. We all look at things differently.

True. And the richer we are and the better job positions we hold the more we able to legally swindle.

And the way I see it is I have worked hard to get where I am and I do not need to share it with anyone.