Housing Affordability - a return to Feudalism?

[Bushman]

My intention for this thread is to highlight what I perceive to be an inequity in modern Australian society rather than blight anyone's own personal experience.

On a personal disclosure note, I have worked full-time for about 12 years and, through personal circumstance, own my house outright. I have worked hard and have been lucky. Good for me.

Yet I see friends of mine in their 30s only able to enter the housing market now and at LVRs which would make a grown man cry. Statistics in the media suggest this is an issue across Australian society to date for certain demographics (i.e. those under 35). This makes me very angry at the substantial obstacles being thrown in their way to have what their parents had at an earlier age and with a greater financial return. It is no longer a level playing field and this must change.

I have no doubt that previous generations worked hard; my argument is the 'effort-to-assets' ratio if you like is lower now than it has ever been for a variety of issues raised throughout this thread. Thus, hopefully through threads like this, various governments (local, state, feds) will act to return the housing market to a level playing field.

I am sure that there are others that disagree with my views and I am impressed with some of the personal stories shared.

 

[Huitzii]

I can respect what you are saying Bushman but I think that the amount of weeks pay needed to purchace a house back in the early 80s would be approximatly the same now.
ATM I dont have time to do any real comparisons but I might do it tonight.
My advise to the younger generation is "WORK HARD AND BE GOOD TO YOUR MOTHER"

 

[Bushman]

My advise to the younger generation is "WORK HARD AND BE GOOD TO YOUR MOTHER"

Excellent advice H

 

[prawn_86]

I can respect what you are saying Bushman but I think that the amount of weeks pay needed to purchace a house back in the early 80s would be approximatly the same now.
ATM I dont have time to do any real comparisons but I might do it tonight.
My advise to the younger generation is "WORK HARD AND BE GOOD TO YOUR MOTHER"

I dont have data in front of me either, but average house price used to be 3 -5 times average wage, now it is 7 - 10, so either house prices have risen a lot, wages have stagnated, or a combination of both

 

[Bigukraine]

My intention for this thread is to highlight what I perceive to be an inequity in modern Australian society rather than blight anyone's own personal experience.

On a personal disclosure note, I have worked full-time for about 12 years and, through personal circumstance, own my house outright. I have worked hard and have been lucky. Good for me.

Yet I see friends of mine in their 30s only able to enter the housing market now and at LVRs which would make a grown man cry. Statistics in the media suggest this is an issue across Australian society to date for certain demographics (i.e. those under 35). This makes me very angry at the substantial obstacles being thrown in their way to have what their parents had at an earlier age and with a greater financial return. It is no longer a level playing field and this must change.

I have no doubt that previous generations worked hard; my argument is the 'effort-to-assets' ratio if you like is lower now than it has ever been for a variety of issues raised throughout this thread. Thus, hopefully through threads like this, various governments (local, state, feds) will act to return the housing market to a level playing field.

I am sure that there are others that disagree with my views and I am impressed with some of the personal stories shared.

well thought out and presented ,well done Bushman and i would like to put the focus on one of the elements of your comment's and that is the "luck" part.
The main thing in any type of investment is the risk factor associated with that investment eg money in the bank garenteed by govt to the other end of the spectrum ,shares in a minnow exploration company on the asx. (examples only) . The thing i find hard to contemplate is that people seem to not want to understand or aknowlage that there are winners and lossers when it comes to profit making and at times the most ethical and honest people who are hard working don't seem to be able to go forward... they save hard to try to get ahead and as you pointed out now is alot harder to be on the path to owning your own home than it was 40 years ago.
Had this same discussion with the inlaws and as always each generation thinks they had it harder.... after many hard years of work and having to get a second mortgage(bridge finance) he bought his own home and being the main bread winner put money in his super and had it matched $1 for$1 bought up two kids during this time and yes did it on a shoe string... lucky for him he retired 20 odd years ago and his super gave him a resonable retirement.
The point of what i have written above is the average person is like my father inlaw and that same person now with the same values would not have a hope in hell of being in his position in this day and age..... super keeps changing the goal posts, wastefull govt spending,GFC, prop up of the realestate industry through the fhog..... i would hate to be your friends at 30-35 now....
Like you i'm ok financially no millionare but on the way to being comfortable, but i feel for people under my age (42) the 25-35 group with the enf. on higher education ,hex fee's ,living at home longer ,stricter lvr's GFC II and poss III..... in my opinion they don't stand a hope in hell... as i said in the begining you can make good choices ,but through no fault of your own you can be in the wrong place at the wrong time...... so in conclusion if you don't have this your stuffed ............LUCK.

 

[Knobby22]

Like you i'm ok financially no millionare but on the way to being comfortable, but i feel for people under my age (42) the 25-35 group with the enf. on higher education ,hex fee's ,living at home longer ,stricter lvr's GFC II and poss III..... in my opinion they don't stand a hope in hell... as i said in the begining you can make good choices ,but through no fault of your own you can be in the wrong place at the wrong time...... so in conclusion if you don't have this your stuffed ............LUCK.

They do have an option and that is to be politically active.
Form a pressure group. Attack the government through the media.
Show the actions of vested groups. Educate the people in their generation that they are having their future stolen. Influence voting!

Who has the most influence now? It is not them though they make up a substantial proportion of society.

 

[Bigukraine]

They do have an option and that is to be politically active.
Form a pressure group. Attack the government through the media.
Show the actions of vested groups. Educate the people in their generation that they are having their future stolen. Influence voting!

Who has the most influence now? It is not them though they make up a substantial proportion of society.

I agree but politically the lucky country is also the lazy country...i would love to see what you are suggesting ... how much further can the people of australia be pushed.... the answer to that is when they do what you have said stand up and be counted..... one person all be it in a simplistic and naive way tried to already pauline h ..... and the question has to be asked.. would she of done as much damage as the last two govts????? would we of been any worse off ?????

 

[Bushman]

Latest HIA/CBA index has shown that housing affordability has worsened once again by 9% in the June quarter!

Frighteningly, the proportion of average income in capital cities devoted to monthly home loan repayments is near 30% which is the level officially defined as 'mortgage stress'. Worth thinking about.

There has never been a worse time to be a potential buyer or a renter!

Think about it, the great Boomer Aussie home ownership dream is becoming a cultural relic for those aged below 35.

Unsustainable, yet not a peep this election. Lol.

 

[prawn_86]

There has never been a worse time to be a potential buyer or a renter!

I dont think its a bad time to be a renter, you can rent quality places at well below what it would cost to pay the interest of a mortage off the same property. Providing you save the difference then its great

 

[choice1]

To be honest I'm not too fussed with owning a house as they are, on average, a fairly poor investment compared to business. Compare continuously investing in blue chip industrials at the same rate as you would your mortgage minus rent from the date of your house purchase. Not only would you have a much larger capital base but your investment would have paid off many times over.

Anyway given that you can't hold a hold term lease in Australia it pretty much forces people to buy a house purely for lifestyle purposes. Give me a 10 year house lease + excess funds into businesses over owning a piece of property any day.

Why own the land that businesses/employees of businesses rent when you can own the business that makes the profit from the land?

EDIT:

Unsustainable, yet not a peep this election. Lol.

40 billion spending here, 40 there... interest rates on the rise as the RBA tries to cool the economy off. Large numbers of over leveraged Australians buying into a bubble with the FHBG incentive. This sounds like a recipe for disaster and could see the housing bubble pop in the next 5-10 years. Hopefully by then my savings will be large enough, given the 12% interest rate I will be receiving, to buy a property out right and move to the country to trade on my FTTH broadband connection : )

 

[Bushman]

Coalition is all over housing affordability now. Housing afforability along with the cost of living will be Abbot's ticket next election as he tries to recruit a new generation of Howard's battlers.

The Age today, quote by Joe Hockey.

'Australia is suffering from a housing affordability crisis because of rising interest rates and uncertainty surrounding the Gillard government's planned carbon tax, the opposition says.'

 

[Logique]

Some key factors in the historical timeline of housing affordability:

- transitioned to two working adults per family.
- lots of 'working family' type government handouts to bolster the bottom line.
- foreign investment.
- but nobody wants to live in the regions (still, except in a few hotspots), especially health care professionals.