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Housing affordability crisis

Housing affordability crisis

Old Oct 8th 2007, 3:05 am
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Default Housing affordability crisis

Hi there

What’s the real situation about the lack of affordable housing in Australia??

Do you think the housing stress is growing and frustrating more and more people who can not get into the housing market.

As the rental supply is low, price of rentals is increasing; hence some gets stuck in the rental market and can’t even take an average mortgage isn’t it ???

.
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Old Oct 8th 2007, 3:25 am
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Default Re: Housing affordability crisis

Originally Posted by olauf View Post
Hi there

What’s the real situation about the lack of affordable housing in Australia??

Do you think the housing stress is growing and frustrating more and more people who can not get into the housing market.

As the rental supply is low, price of rentals is increasing; hence some gets stuck in the rental market and can’t even take an average mortgage isn’t it ???

.
FTBs are struggling to get into the housing market that's for sure - but no different from FTBs in the UK or most other Western countries. People do get stuck in the rental market - you get have's and have not's. It's always been like this and always will be.
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Old Oct 8th 2007, 6:28 am
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Default Re: Housing affordability crisis

We're looking at buying now and our mortgage payments will be almost twice our rental payments. Add on top of that council fees, water, insurance, etc and it's almost not worth our while. The only thing that keeps us looking at the place we've got our eye on is that it is well underpriced for the market and we know we'll most certainly make money on it should we sell in a few years.
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Old Oct 8th 2007, 7:27 am
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Default Re: Housing affordability crisis

Originally Posted by olauf View Post
Hi there

What’s the real situation about the lack of affordable housing in Australia??

Do you think the housing stress is growing and frustrating more and more people who can not get into the housing market.

As the rental supply is low, price of rentals is increasing; hence some gets stuck in the rental market and can’t even take an average mortgage isn’t it ???

.
I think some of it can be attributed to people wanting more than they can afford, you have to be realistic and if a McMansion in the 'perfect' suburb is your aim (as pushed by the media and estate agents) then maybe get there in stages rather than take out a huge mortgage (you can't afford) and fill the said palace with Stupid Size plasma TVs ...

Which still have a crap picture, in my opinion ... woh, another thread

Maybe a little less of the 'instant gratification' mentality is required and little more graft first, reward later is better for the soul.

I mean, witness the growing per capita credit card debts (on average, of course) ... this is the sort of thing that will make a bad situation worse should the economic situation change (rates up, market goes sideways, petrol crisis for whatever reason, plasma dies (as they do more often than the old fashioned tubes), back projection TV needs a lightbulb .. Jesus those things are expensive, 4wd needs a new tyre ... y'know major expenses like that )

But hey, you've just got to witness an average day at your local Retail Mecca to realise that human nature is human nature.

Wassat I can hear people thinking? Am I immune to all this? No of course not but as a family we do live within our means and put any extra we have against the mortgage rather than a 'thing' whose appeal will rapidly wane and inevitably become a financial burden.

Bloody hell, that's a lot of words but it's something I feel strongly about having been through the whole debt-trap thing ($60k in credit cards).
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Old Oct 8th 2007, 7:43 am
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Default Re: Housing affordability crisis

Originally Posted by Vim Fuego View Post
I think some of it can be attributed to people wanting more than they can afford, you have to be realistic and if a McMansion in the 'perfect' suburb is your aim (as pushed by the media and estate agents) then maybe get there in stages rather than take out a huge mortgage (you can't afford) and fill the said palace with Stupid Size plasma TVs ...

Which still have a crap picture, in my opinion ... woh, another thread

Maybe a little less of the 'instant gratification' mentality is required and little more graft first, reward later is better for the soul.

I mean, witness the growing per capita credit card debts (on average, of course) ... this is the sort of thing that will make a bad situation worse should the economic situation change (rates up, market goes sideways, petrol crisis for whatever reason, plasma dies (as they do more often than the old fashioned tubes), back projection TV needs a lightbulb .. Jesus those things are expensive, 4wd needs a new tyre ... y'know major expenses like that )

But hey, you've just got to witness an average day at your local Retail Mecca to realise that human nature is human nature.

Wassat I can hear people thinking? Am I immune to all this? No of course not but as a family we do live within our means and put any extra we have against the mortgage rather than a 'thing' whose appeal will rapidly wane and inevitably become a financial burden.

Bloody hell, that's a lot of words but it's something I feel strongly about having been through the whole debt-trap thing ($60k in credit cards).
Very well said! I think expectations are incredibly high in terms of material possesions - and for what? So you can work your butt off, be stressed to the max, not see much of your kids, little time to pursue interests etc, just to pay it all off! And all this so in the eyes of those around you, you appear to have "made it"!

Having done the debt thing myself (not to the tune of $60k tho!), my rule of thumb now is, if I can't afford it now I don't buy it now.

Another good one I'm also teaching my kids is to work out what you earn hourly after all deductions. Every time you go to buy something, work out how many hours graft has been put in to pay for it. Bingo, half the time it doesn't seem worth it!

In terms of the Op's question - plenty of people are finding it extremely difficult to buy, even with a lowering of expectations. With an average wage in Australia of about $40-50k and with the average house (in Brisbane at least) costing $430k you can see where the difficulty lies.
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Old Oct 8th 2007, 7:47 am
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Default Re: Housing affordability crisis

I remember reading in the Times over two years ago that Australia had the most overvalued housing market in the world and it's still going strong.

I don't know where or how it will end but it's not gonna be pretty.


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Old Oct 8th 2007, 9:40 am
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Default Re: Housing affordability crisis

Originally Posted by temptininnit View Post
I remember reading in the Times over two years ago that Australia had the most overvalued housing market in the world and it's still going strong.

I don't know where or how it will end but it's not gonna be pretty.


According to the experts, if the trends continue at the rate they are then NO-ONE will be able to afford a house in the not too distant future (well, not an ordinary Joe anyway) ... hence the need for a 'correction', it's not a case of if, it's when.
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Old Oct 8th 2007, 10:11 am
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Default Re: Housing affordability crisis

Originally Posted by olauf View Post
Hi there

What’s the real situation about the lack of affordable housing in Australia??

Do you think the housing stress is growing and frustrating more and more people who can not get into the housing market.

As the rental supply is low, price of rentals is increasing; hence some gets stuck in the rental market and can’t even take an average mortgage isn’t it ???

.
In Brisbane, there isnt a shortage of rentals, its just the prices now required.

The main problem, is Australia is bitten by the own more than one house bug, and it is positively encouraged.

Problems lie, in the fact, as interest rates rise, another due soon !!! Thus the rental prices get hiked to.

Government are looking into ways to make affordable housing available, but god knows how they can do it, apart from building you a townhouse on an ex missile silo.
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Old Oct 8th 2007, 11:01 am
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Default Re: Housing affordability crisis

Originally Posted by Timber Floor Au View Post
In Brisbane, there isnt a shortage of rentals, its just the prices now required.

The main problem, is Australia is bitten by the own more than one house bug, and it is positively encouraged.

Problems lie, in the fact, as interest rates rise, another due soon !!! Thus the rental prices get hiked to.

Government are looking into ways to make affordable housing available, but god knows how they can do it, apart from building you a townhouse on an ex missile silo.

I imagine many of the politicians and their spouses have investment properties, they won't make the hard decisions because it will hit them in the pocket.
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Old Oct 8th 2007, 11:07 am
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Default Re: Housing affordability crisis

Originally Posted by temptininnit View Post
I imagine many of the politicians and their spouses have investment properties, they won't make the hard decisions because it will hit them in the pocket.
I think it's more to do with losing the "middle Australia" vote if they messed with the large tax incentives currently offered on investment properties.
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Old Oct 8th 2007, 11:36 am
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Default Re: Housing affordability crisis

Originally Posted by rabsody View Post
I think it's more to do with losing the "middle Australia" vote if they messed with the large tax incentives currently offered on investment properties.

You are right, but also


http://www.news.com.au/couriermail/s...83-953,00.html
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Old Oct 8th 2007, 11:40 am
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Default Re: Housing affordability crisis

read an article that in 1996, an average home price was only 4X the average annual income....

now it is 7X the average annual income......
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Old Oct 8th 2007, 11:47 am
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Default Re: Housing affordability crisis

So many people moving to the area will keep prices high, and if there is a correction it will hit some areas more then others, anywhere with a lake will get hammered

Originally Posted by Vim Fuego View Post
hence the need for a 'correction', it's not a case of if, it's when.
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Old Oct 8th 2007, 10:19 pm
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Default Re: Housing affordability crisis

Originally Posted by themerlin View Post
So many people moving to the area will keep prices high, and if there is a correction it will hit some areas more then others, anywhere with a lake will get hammered
They have a high proportion of Plasmas and 4wds too, double-whammy

Granted, some areas (and jobs) will be more prone to a correction than others and, as usual, it will be the people who are least able to cope with it (or chose to blatantly ignore it) that will suffer first. And they are the ones living in sin with debt that they can't service.

Then there will be inevitable tedious whining on Today Tonight about 'The Battlers' being down-trodden and bankrupt when in fact a little forward planning would have helped alleviate the situation.

For example, if you have some spare cash (yes, not everyone does) then put it against the mortgage and have a penalty-free redraw facility so if the rainy day (or month) comes then the cash is there .... otherwise it is neatly reducing the interest and period on the loan.

And credit cards ... have a Visa debit card for purchases overseas or over the internet.

The correction will come, it has to, or as the research the other night showed, no ordinary Joe will be able to afford a house. You only have to look at the stats and trends from the past to see bust has to follow boom.

My principles?
- Live within your means
- Be happy with what you've got
- Try not to impulse buy, if you want something then wait a week and see if you still want it
- Don't treat 'spare' cash as spare, make it work
- Take pleasure in the details
- Chill out, it's just a ride, just a ride.
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Old Oct 8th 2007, 11:41 pm
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Default Re: Housing affordability crisis

Or even better get a credit card that pays cash back and an offset account.
Works well if you can be trusted to pay your credit card off every month (the catch)
You get your 1-5% cashback plus the debt is on your credit card for that month with the cash sitting in your offset account, it really does add up.

Originally Posted by Vim Fuego View Post

And credit cards ... have a Visa debit card for purchases overseas or over the internet.
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