Housing Affordability - a return to Feudalism?

[Mofra]

LOL Baby Boomers and Gen Y's dissing each other. Both of you are now dependent on Gen X and will be till the day you die, both have failed to care for anyone other than yourselves.

Read a little higher Baf, I am gen X

 

[Julia]

The only think worse are boring sterotypes from Baby Boomers, easily the most useless generation in Australian history.

LOL Baby Boomers and Gen Y's dissing each other. Both of you are now dependent on Gen X and will be till the day you die, both have failed to care for anyone other than yourselves. Seriously the boomers amass and spend their wealth whilst allowing their children to go it alone into rising debt and the Gen Yers want it all now but don't want to work for it (entitlement should read, entitled to a kick up the ****)

There is absolutely nothing I hate more than stupid generalisations like both of these.
Every generation has its variety of responsible and irresponsible people.

In particular, to suggest that the boomers have not cared for anyone other themselves is particularly ignorant. Many of them are caring for ageing parents and still have children living at home, some of this latter generation being apparently reluctant to take responsibility for themselves.

Likewise, I know plenty of GenY people who are motivated and responsible.

Also have Gen X neighbours who own their home outright, plus the same with an IP and a block of land. The female partner is now at home with their first child.

By all means complain about particular characteristics where you can justify these. But you are both doing yourselves a considerable disservice by making these rubbish generalisations.

 

[Bushman]

This is how the Chinese government has popped its housing bubble.

Banking rules announced to curb propety investment.

1. Banks are now forbidden to lend investors more than 50 per cent of the sale price (in Australia, 100 per cent is common).
2. Investors must now pay a premium of at least 10 per cent above the normal interest rate, while first home buyers receive a discount.
3. New loans are banned to investors who already have one property.

Lol; imagine the storm in Australia if the banks were curtailed in their efforts to lend to the ressie market.

 

[Bolle]

1. Banks are now forbidden to lend investors more than 50 per cent of the sale price (in Australia, 100 per cent is common).
2. Investors must now pay a premium of at least 10 per cent above the normal interest rate, while first home buyers receive a discount.
3. New loans are banned to investors who already have one property.

my god that's inspired. what a shake up that would cause here.

 

[Knobby22]

my god that's inspired. what a shake up that would cause here.

Wow! I admire them even as I am fearful of such government control.

 

[Bolle]

BTW i'm gen X and i feel mostly overlooked by everyone. No free education, no guaranteed jobs, little to no help from parents, foundd it hard to buy a house, the only way in was hard work, no big grants or incentives, no low interest rates - i also had difficulty getting a loan when i was single, got turned down for lack of savings (ok fair enough) and being seen as unreliable because i was single. what?? presumably they meant i might have a baby at any moment and be unable to work, but still... what?? Now, they give mortgages to single 21 year olds to build McMansions. wtf? My first home (still in it) is a 2br shoebox. We have a family of 4 in here.

from what i see, gen y get a LOT more help from their parents than my generation ever did. Many Gen Y'ers i know are either living with their parents and saving up, or have bought house with massive help from parents, as well as having their parents (baby boomers) providing them with food, cars, whatever else they need... and the Gen Y'ers with mortgages all seem to be single, with a big 3-4 bedroom house to rattle around in. Meanwhile the Gen X'ers i know are, like myself, variations on the theme of having a few kids, tiny house, reasonable/modest mortgage, one income + some part time work from the stay-at-home partner.

And to that comment earlier someone made about the financially realistic Gen X left supporting the baby boomers and the gen y'ers; i say, amen brother. i've felt this way for a long time. Forgotten, overlooked, can't get promoted cos baby boomers hold those jobs, can't hire underlings because gen Y don't do the job properly.

 

[WaveSurfer]

LOL Baby Boomers and Gen Y's dissing each other....

Huh? When or where did I or anyone else say that they were a boomer or a genny? I'm actually an X if you must know, and proud of it. Worked damn hard for every penny I have and didn't receive any hand-me-downs.

There's a lot to be learnt from the silent and boomer generations. Lucky or not, they worked hard to get where they are, they are the most successful in terms of achievements and we could all learn a great deal from them.

You learned how to walk only by watching others do it, apply the same principle to everything else you want in life and the world is your oyster.

 

[WaveSurfer]

BTW i'm gen X and i feel mostly overlooked by everyone....

Never underestimate the underdogs

 

[Neutral]

The Baby Boomer generation had it easiest regarding housing affordability. Owning a house was a given right relatively speaking. The 'Australian dream'.

Gen X had it harder as house prices rose and people started the investment property wave.

Gen Y come into the housing market...
The property investment wave has turned tidal wave with the extreme lack of regulation on negative gearing (the main culprit), foreign investment & no transparency on realtor sharks artificially inflating prices for their own greed.
Gen Y have it the hardest and only God knows how they are going to afford to pay off a house with a current median price at $450k (& rising) with interest rates also on the up. House prices aren't relative to wages anymore.

If Gen Y can make the repayments then they will have to sacrifice food, electricity & also any semblance of a 'life'. No life = downturn in hospitality & enterntainment industry which = layoffs = business closure = tourism decline etc. A literal slave to their wages, bank mortgages and government taxes. Heaven forbid thinking about having a family! Are future generations to be born into this slavery in a supposed 'developed nation'? I'm struggling to see the upside, excuse my pessimism.

CARE Australia will aptly have to start caring for Gen Y Australians with food & money donations. None of this donating to 3rd world countries anymore! We can't even afford to feed our own!

Gen Z are either going to be renting forever (see Gen Y above) or the housing bubble will finally burst and they will get lucky. Time will tell.

So as you can see, Gen Y & Z will be relying on government support more than ever, which means higher taxes for everyone. Yay!
Let's thank governments past & present for the HUGE mismangement/corruption & utter lack of foresight to end up where we are now. Because anyone with even half a brain would realise what has been going on. Higher property prices means more tax revenue after the banks ever growing record profits off record mortgages & not to mention a harder & longer working Australia (not by choice but necessity). Sounds like a revolving Gen Y/Z a$$ puckering to me!

Last but not least, Australia's direct wealth is a result of a mining boom. BS aside don't be fooled otherwise. With the mining boom came the property boom as AUS GDP rockets & people want to flock to a prosperous country.
So what happens when minerals demand from now industrialised countries peters off? Unemployment, smaller GDP, less investment etc. 20 years from now the 'lucky country' won't be so lucky anymore. Can't wait bring it on!!!

 

[weird]

The Baby Boomer generation had it easiest regarding housing affordability. Owning a house was a given right relatively speaking. The 'Australian dream'.

Gen X had it harder as house prices rose and people started the investment property wave.

Gen Y come into the housing market...
The property investment wave has turned tidal wave with the extreme lack of regulation on negative gearing (the main culprit), foreign investment & no transparency on realtor sharks artificially inflating prices for their own greed.
Gen Y have it the hardest and only God knows how they are going to afford to pay off a house with a current median price at $450k (& rising) with interest rates also on the up. House prices aren't relative to wages anymore.

If Gen Y can make the repayments then they will have to sacrifice food, electricity & also any semblance of a 'life'. No life = downturn in hospitality & enterntainment industry which = layoffs = business closure = tourism decline etc. A literal slave to their wages, bank mortgages and government taxes. Heaven forbid thinking about having a family! Are future generations to be born into this slavery in a supposed 'developed nation'? I'm struggling to see the upside, excuse my pessimism.

CARE Australia will aptly have to start caring for Gen Y Australians with food & money donations. None of this donating to 3rd world countries anymore! We can't even afford to feed our own!

Gen Z are either going to be renting forever (see Gen Y above) or the housing bubble will finally burst and they will get lucky. Time will tell.

So as you can see, Gen Y & Z will be relying on government support more than ever, which means higher taxes for everyone. Yay!
Let's thank governments past & present for the HUGE mismangement/corruption & utter lack of foresight to end up where we are now. Because anyone with even half a brain would realise what has been going on. Higher property prices means more tax revenue after the banks ever growing record profits off record mortgages & not to mention a harder & longer working Australia (not by choice but necessity). Sounds like a revolving Gen Y/Z a$$ puckering to me!

Last but not least, Australia's direct wealth is a result of a mining boom. BS aside don't be fooled otherwise. With the mining boom came the property boom as AUS GDP rockets & people want to flock to a prosperous country.
So what happens when minerals demand from now industrialised countries peters off? Unemployment, smaller GDP, less investment etc. 20 years from now the 'lucky country' won't be so lucky anymore. Can't wait bring it on!!!

Believe it is called a bubble ... waiting to be burst.

Don't forget, apart from great beaches, we are in the middle of nowhere. About 7 hours flight for most except WA/NT for most of us to get to a central destination ... nothing wrong with that, but we are remote.

I have traveled enough internationally to know we do not have a monopoly on fab and great places to live.

Actually I plan on moving a little bit more central to the rest of the world in about 8 years, but has nothing to do with my love for this country.

But man, seriously as a young person buying in right now ... difficult.

 

[Tink]

I think its funny when people get in these disputes about different generations, Gen X here, but I do agree with Julia, that you cant generalise.

Opportunities are and were there for all the generations, I think all had to sacrifice if they wanted a home in one way or another.

 

[Bushman]

I think its funny when people get in these disputes about different generations, Gen X here, but I do agree with Julia, that you cant generalise.

Opportunities are and were there for all the generations, I think all had to sacrifice if they wanted a home in one way or another.

There is such a lack of empathy between the generations which I find very sad.

A Boomer will usually get defensive about the opportunity timing and society gave them to accumulate wealth. This opportunity is not available to Gen Y due to the rapid ascent of house prices.

So the option is to live in a backwater, to become a wage slave to the banks paying out 30-50% of their income to service their mortage or to be a renter for life!

I am Gen X but still over half my friends do not own a house. Anyone that is not in a fat cat profession cannot afford a house within 30km of the City.

One day Mr Market (or Mrs Government) will correct this discrepancy.

 

[Neutral]

I think its funny when people get in these disputes about different generations, Gen X here, but I do agree with Julia, that you cant generalise.

I don't think it's funny. Seems like a sign of ignorance & turning a blind eye. No one can deny the facts, although many cloud over these in favour of their own hypotheticals (fiction).
Do you not have children or want children? What about them? As a parent you always wish better for your children. Unless you have generational wealth to help them get a start nowadays then it's bloody hard, if not impossible.

Opportunities are and were there for all the generations, I think all had to sacrifice if they wanted a home in one way or another.

I think the 'sacrifice' gap from one generation compared to another is quite large now. You can't compare apples with oranges.

As mentioned before, if your idea of 'life' is slavery (this is what it has now come to) to your wages, bank mortgages and government taxes then this is sad. This is possible for some, but it looks like Beyond Blue will be getting pretty busy in the future.

Just as the 'lucky country' (result of abundant resources geographic to developing nations) was a result of 'lucky times' (demand is still high), does this mean that Baby Boomers became the 'lucky generation' (of affordable housing at 3-5 x the average income)... no?

There is no government regulation of staples/necessities in this country. Intervention is largely non-existant.
The goverment know it's coming (the bubble), but by that time present leaders won't be in power so just ride the gravy train while the sauce is still thick. Capitalism at the expense of younger generations sounds like a good plan for the future to me!

Then we have the wild generalisations that Gen Y show no commitment to employers anymore. Well there's a simple answer for this. If employers can't pay wages relative to ones mortgage then the employee is forced to look elsewhere. This is called survival.

 

[Bushman]

Affordability has worsened and is now heading for record lows! Not sure why they have not added big 4 lending to homeowners in there? Oh yes it is a survey by the CBD building society


From The Age/HIA CBA survey:

'Housing became less affordable in the first three months of 2010 and may slump to record lows as rising interest rates put further pressure on household budgets.

The HIA/Commonwealth Bank survey of first-home buyer affordability dropped 4 per cent in the March quarter to its lowest since the September quarter of 2008. The index was almost 29 per cent lower than for the same period a year earlier, the Housing Industry Association said in a press release.

"Higher interest rates, exorbitant infrastructure charges, an overly restrictive and time consuming planning system continue to fuel Australia's affordability crisis," said HIA senior economist Ben Phillips.'

 

[schnootle]

Like NZ watch what the brain drain does

This will only become a more serious issue. I think a lot of ambitious people with specialised professions/skills turn their backs on more lucrative jobs in the northern hemisphere and stay in Australia because they love it. But when you can go somewhere else for a better job, earn more and live cheaper........

 

[medicowallet]

"Higher interest rates, exorbitant infrastructure charges, an overly restrictive and time consuming planning system continue to fuel Australia's affordability crisis," said HIA senior economist Ben Phillips.'

HIA forgot: Additional gearing, low doc loans and the first homebuyer grant.

These also contribute to the amount that people are prepared to pay for housing, take these out and the price of houses stabilises. The government's solution? Keep increasing them to make houses "more affordable", that is the extent of the intelligence of politicians.

 

[Bushman]

Melbourne is fast emerging as the least affordable destination for first homeowners in Australia. It now takes six-years to save for a deposit on a house and that is for a couple! Home ownership is now more out of reach for Gen Y and Z than ever. The quote I have highlighted says is all really - what is good for the parents with their investment properties is poor for their kids. The imbalance will be rectified as the Baby Boomers start retiring IMO.

Another factor will be a further decline in the birth rate as couples need to work longer and harder to get a foot in the property market, delaying having families until their mid-30s.

How did it come to this? It is a demographic and political time bomb.


From The Herald Sun'.

'The second annual Bankwest First Time Home Buyers Report shows a couple in Victoria need to save $86,800 for a deposit to buy the median house and $80,500 to buy a median unit.

There are six local government areas in Victoria - Stonnington (15.3 years), Boroondara (13.5), Port Phillip (12.5), Bayside (11.5), Glen Eira (10.1) and Melbourne City (10)- where it would take an average young couple more than a decade to save for their first house.

Bankwest retail CEO Vittoria Shortt said the study exposed the booming market as a double-edged sword.

"While it's clearly of enormous benefit to established home owners, it's the complete opposite for many of their children. Many potential first home buyers are facing long periods in the rental market," Ms Shortt said.'


http://www.heraldsun.com.au/news/re...deposit-for-home/story-e6frf7jo-1225888216134

 

[brty]

Bushman,

My parents generation (Baby Boomers) were born into a life where employment and home ownership were a given.

From your first post in this thread. Do you have any evidence for that initial assumption??

I can assure you that my first property was anything but a given. You had to save a large deposit, have a savings record with the bank, could only count the husbands income, and the bank manager had to like you. Not to mention high interest rates of over 12%.

Yes it is so hard today compared to the good old days..

brty

 

[Bushman]

Bushman,



From your first post in this thread. Do you have any evidence for that initial assumption??

Yep my life experience to date and that of my peer group (family, colleagues, friends, dudes on the internet). We are, after all, the sum part of our experiences.

While interest rates are not 12%, the median house price as a % to income has never been higher and the willingness of banks to lend to the plebs has never been lower, IMO.

At least in the good old days you had a level playing field. How else do you explain how Australian median house price rose despite the GFC?

 

[Huitzii]

Yep my life experience to date and that of my peer group (family, colleagues, friends, dudes on the internet). We are, after all, the sum part of our experiences.

While interest rates are not 12%, the median house price as a % to income has never been higher and the willingness of banks to lend to the plebs has never been lower, IMO.

At least in the good old days you had a level playing field. How else do you explain how Australian median house price rose despite the GFC?

Yep it was easy for me in 1978 I was earning $76 a week as a first year apprentice bricklayer.
I struggled but bought my first house in 1982 for $58000
From then on ive bought in and out of realestate to eventually own my home that im in now and its all mine.
Not to mention the highest interest rates this country has ever seen in the mid 1980's....it was just so easy for me while i worked in my own businesses for 80 hours+ per week, and its so easy for others to say how lucky I am.
The problem these days is the younger generation want to run before they can walk, I lived in a caravan for years while I saved every dollar that I could.
Ive busted my butt to get where I am son as you will have to do the same.
Have fun as ive already done the hard yards