Australian Housing Affordability Discussion

[cove]

You need a licence in most places to run a boarding house as the authorities need to check that safety issues are handled. The Childers backpacker disaster in Qld comes to my mind where there were doors that could not be opened when a fire started.

 

[Pushka]

You need a licence in most places to run a boarding house as the authorities need to check that safety issues are handled. The Childers backpacker disaster in Qld comes to my mind where there were doors that could not be opened when a fire started.

That makes sense of course. It would be run as a business. But in private homes and private rentals, is there Council legislation to limit occupancy in other states?

 

[cove]

All of ours must have a licence to run as boarding houses in WA. The risk of running a place with no licence would probably be unlimited liability if something bad happens.

 

[medhead]

Because clearly this:


Seems to be illegal according to cove. So harmless situations get caught up in the mire.

I have never heard of any of this type of legislation in South Australia. Happy to be proven wrong with evidence.

I'd suggest you've misread. I see no suggestion of illegality in 3 people staying in a 3 bedroom place. Only in EIGHT people in a 2 bedroom place. I can't imagine why anyone would suggest that is a harmless situation.

If you want to snip out irrelevance to housing prices perhaps you could've snipped out your entire post about interference. :idea:

 

[alieninperth]

I think that Cove was saying, and please tell me if I'm wrong on this Cove, that there are properties that are operated as bording houses where things are very heavily regualted, where people would be very heavily overcrowded, as opposed to a private rental/house share arrangement that his son is in.

Moving slightly backto the issue of median prices. This is a totally meaningless measure in isolation. For arguements sake, lets assume that median prices in Syd are $1m (incl all stamp duty etc). Now lets assume that median income for the same area is $100k. This would mean that median prices are 10x median income, certainly expensive but consistent with previous years and ratios (over the past decade or so), or indeed in other global cities.

If a first home buyer can secure a mortgage of $450k, there are currently over 1,500 properties for sale in SYD, although granted I have absolutley no idea how nice or far out some of these burbs are.

 

[medhead]

I'm still trying to understand how regulating boarding houses is unnecessary government interference.

In terms of measure to use, i do wonder about the underlying distribution of wages for the population. They tend to talk about averages for wages, is that the correct measure? I'm not convinced that the ratios have remained consistent. Some quoted numbers says median house price was 3-4 times annual average wage. This matches my knowledge of my parents situation in the 1970s - land $1000 house $20000, average wage about $8000. My first house was about 2x my annual salary before tax, my second house was about 4x annual salary. Sure, none of which were in Sydney.

In sydney, certainly there are plenty of studio places within 10 minutes walk of work for about 2.5x my current salary. But I can't have my family in those places. To get my family in ID have to start at 7.75x salary but 10x is more realistic.

 

[OATEK]

<snip> This matches my knowledge of my parents situation in the 1970s - land $1000 house $20000, average wage about $8000. My first house was about 2x my annual salary before tax, my second house was about 4x annual salary. Sure, none of which were in Sydney.

I bought land in outer Sydney in 1973 for $15.5K after making some money on a block I bought 3 years earlier aged 20 which was closer to Wollongong. Put a house on the second for $26K in 1977. The 4 years in between was needed to pay the land down to the point where I could get the building loan. Earning between $4.6 & $5.5K over those years.

So I was far enough out (45 mins on train) to get the equation down to about 8x.

 

[Pushka]

If you want to snip out irrelevance to housing prices perhaps you could've snipped out your entire post about interference. :idea:

Feel free to quote my post and snip to your hearts content.

PS - I have already agreed that boarding houses need regulation but that wasn't what cove was referring to.

 

[cove]

Yes medhead the old 3 times your good gross family income is well and truly gone for inner city Sydney homes.
And yes 10 times is more likely. This is a stopper for many who would like a house in Sydney.

Having 8 ,10 or 12 different unrelated folks in a 2 bedroom home is what the authorities do not want. Whether that is legal or not I would not know but I just consider that it is quite risky.
Our boarding houses are for singles or doubles depending on the size and many have ensuites. We are held back by NIMBYs who don't want a new boarding house near them. (Not In My Back Yard folks)

I think you can get a unit in a reasonable location with 3 bedrooms in the $700,000 to $850,000 range. It may be a bit ordinary compared with Adelaide.

 

[medhead]

I'm really in trouble as I've been house sitting for someone for the last few months while they're overseas. 5 minutes walk to work, studio apartment in an Art Deco building. Now I'm really having trouble with the idea of going back to a hotel when they return. So buying a place is looking attractive. The problem is they mostly have strata/council fees around $5000/annum.

Anyway, the $700000 houses are possibly in the 1.5 to 2 hour distance for the daily commute. So I'd be looking at 6 to 10 hours per week commuting. (When I lived here I was renting in the 2-3 hour zone.) currently with flying I'm spending, about, 6 hours flying. About the same. But SWMBO has already put the demand for schools in the northern beaches area, which should mean buses and longer travel time.

Anyway long story but I'm kinda looking for something inner city. Shame I can't figure out how to effectively do a Joe Hockey. Problem is SWMBO has no real income to offset via negative gearing. I figure renting from myself might be an issue for the ATO.

On the old timers theme. My parents were mightily annoyed that the bank wouldn't loan them $2000 to buy adjacent blocks way back in the early 1970s. Sure they were probably only earning $4000 a year back then, but hardly an unserviceable debt.

 

[wooley]

Speaking of off topic...

http://mobile.news.com.au/finance/r...SF&utm_source=News.com.au&utm_medium=Facebook

 

[whatmeworry]

So if someone can't buy a house, do they buy a high-rise death-trap?

Future high-rise infernos may be so dangerous that firefighters could be ordered not to enter burning apartments to rescue residents, the Metropolitan Fire Brigade has warned.
The MFB say it was lucky no one died in the Lacrosse Docklands building last year when a fire, fuelled by non-compliant aluminium cladding, burnt rapidly up and down the apartment tower.
Now Acting Chief Officer Paul Stacchino said the MFB foresees situations where it may need to withdraw its officers from areas of buildings similar to Lacrosse because their lives would be in

Mr Keller said that if the Lacrosse apartment building had been more than 40-storeys, rather than 21-storeys, the sprinkler system would have failed.
The coroner previously held an inquest into the 2006 deaths of Leigh Sinclair and Christopher Giorgi, who died when their run-down Sydney Road rooming house caught fire.
The MFB are concerned that reforms made after that tragedy have not addressed "fundamental issues" such as overcrowding, education of rooming house operators, search and entry powers and fire safety provisions in the Building Code.

http://www.theage.com.au/victoria/f...-apartments-mfb-warns-20150616-ghp4d4?stb=red

 

[medhead]

As long as they use asbestos it should be fine.

 

[cove]

In California all developments over 20 units have to set aside 15% as affordable housing. Sydney could do well to have a rule like this. Parts of Los Angeles near the ocean are now back to their pre GFC pricing or higher after the massive slump which ran for a couple of years.

 

[alieninperth]

(Red) Ken Livingstone introduced this rule in the London as well, since reversed by Boris Johnson, and I believe that NYC have introduced or are looking at it. While I can certainly see the benefits of such a move, there can be a tendancy to have all of the 'affordable housing' in the same building(s). There was a story in the NY times a year or so ago about the rise of 'poor doors' where people who lived in the affordable units accessed their homes through a specific entrance. I believe that this is a sub-optimal result. the redevelopment and land development authorities here in WA also has this approach but they tend to a portfolio approach which does little to aleviate unaffordable housing in specific areas, and tends to push it to the urban fringe. I will not comment on the merits or otherwise of this approach.

I also believe that SA have introduced this mandated ratio. Not sure how that is travelling, or how it is being received by developers.

 

[kamchatsky]

So if someone can't buy a house, do they buy a high-rise death-trap?

Firefighters could be ordered not to enter burning apartments, MFB warns

They can always rent one, or buy one further out.

 

[burmans]

They can always rent one, or buy one further out.

They could move to Cambodia, I believe rents are cheap there too.

 

[whatmeworry]

Couple good articles on Housing affordability. One deals why the most boomers have little realisation regarding housing affordability. The other deals with why politicians are pandering to older home owner/investors at the expense of the young.

What should also become clear from the above charts is that the 1970s was a dream time to purchase a home. Not only were homes highly affordable at roughly three times incomes, but a purchaser was in the fortunate position to have had their debts inflated away via high inflation and centrally indexed wage rises that outpaced the cost of credit.
Of course, it was also the early baby boomers who benefited the most from these favourable conditions before enjoying the rampant house price inflation that followed. If only today’s home buyers were so lucky!

Boomers have no idea about housing affordability - MacroBusiness

The pollies' problem is that they'd love to please everyone, but don't have sufficient resources. So they have to short-change someone, and the victims they pick – apart from those who have no friends to stick up for them – are the people who aren't paying attention to what the pollies are up to.
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The people who pay most attention are the oldies – whose number is being swelled by the retiring Baby Boomers – who have so little else to worry about they even imagine injustices that aren't real. The great majority of oldies own their own homes, but other home owners are equally zealous in protecting their privileges.

But distortions in our tax laws – distortions other countries long ago corrected – are adding unnecessarily to the demand for houses by making them a tax-preferred form of investment. This is "negative gearing", which means first home buyers are having to compete against well-established older investors with a lot more collateral.
It wouldn't be a problem if negatively geared investors were adding as much to supply as they are to demand, but they prefer buying established homes.
The government could easily fix this distortion, and do it in a way that didn't precipitate an immediate exodus of investors from the market but, to date, neither side has been prepared to do so.

All this is of little interest to young people, of course. They know they're never going to get old.
If I were a youngster I mightn't be rioting in the streets, but I certainly wouldn't be voting for any party that wasn't promising to fix negative gearing. If you're more afraid of greedy oldies than you are of me, I'll be voting against you.
Ross Gittins is economics editor.

Politicians betray young while pandering to older home owners

 

[OATEK]

Couple good articles on Housing affordability. One deals why the most boomers have little realisation regarding housing affordability. The other deals with why politicians are pandering to older home owner/investors at the expense of the young.

View attachment 50715
Boomers have no idea about housing affordability - MacroBusiness

Politicians betray young while pandering to older home owners

I'm guessing these were not written by those terrible baby boomers who control the mainstream press.

In that mainstream press we have Sydney more affordable than 26 years ago:

http://news.domain.com.au/domain/re...rdable-than-26-years-ago-20150617-ghoxqb.html

and Sydney pipped at the post:

http://news.domain.com.au/domain/re...but-hong-kong-ranked-no1-20150617-ghp79j.html

 

[amaroo]

I'm guessing these were not written by those terrible baby boomers who control the mainstream press.

In that mainstream press we have Sydney more affordable than 26 years ago:

http://news.domain.com.au/domain/re...rdable-than-26-years-ago-20150617-ghoxqb.html

and Sydney pipped at the post:

http://news.domain.com.au/domain/re...but-hong-kong-ranked-no1-20150617-ghp79j.html

Good to see the comparisons....Oz property prices have plenty left in the tank :mrgreen: