The dirty little secret that keeps Australian housing wildly unaffordable
The dirty little secret that keeps Australian housing wildly unaffordable
Home owners may express sympathy for renters priced out of the market, but the truth is that they like owning expensive real estate – and don’t want it to get cheaper.
I read the article, but missed the secret. What's the secret?
Yeah, clickbaity title I know. But if you're not being sarcastic:
- Decades of government policy that has favoured property as an investment vehicle
- Little effort to change it as too many voters have financially benefited from it
- Any change that would fix the problem in any significant way would likely result in an economic downturn
I guess it's a "secret" in the sense that government doesn't talk about it so plainly, but not really a secret to anyone else.
Kohler's Quarterly essay should expand on the article significantly, but it's paywalled and quite expensive (and not released yet).
I would have linked the Australian politics podcast episode which goes into more detail too, particularly in terms of the historical causes, but I'm not sure of the policy on linking podcasts here.
Yeah it pretty much just lists known facts, then ends with 'someone outta do something!!' Waste of pixels.
I didn't read the article yet and this is basically what I expected. Hardly a secret, and a fairly good summary. The economy is going to downturn anyway because people just can't afford the new housing. For a two bedroom anywhere with people, it's 650,000 and up. At that point you have to be married to someone who also works full time to have any reasonable chance of being able to afford the mortgage. At the average interest rate of 6% you're paying $4,100 per month, which is about the average pre-tax income (~$54,000 per year, so ~$1038 per week). Of course, that leaves very little wiggle room to save, and if either of you were to lose your jobs or the interest rate goes up, you'd probably default.
EDIT: I forgot to add the point. It's this. A whole bunch of people are going to default. People take bad mortgages because they have to, it's not like its an option to be homeless and sharing a house with strangers can really, really suck. But those people are going to be defaulting, or moving overseas, or just staying at home with their parents. The market will correct itself.
The secret is there are too many beneficiaries to expensive houses to really move governments into fixing the problem properly. There are a Million Millionaires thanks to housing prices and they'll be really cross if you go and make them as poor as the others.
It's not really a secret, though. It just isn't something spoken about in Parliament because it's a huge hit button issue.
1.2 million houses over 5 years while planning to grant 1 million permanent visas in that same time period? While also making it easier to get work visas and massively extending the length of post-study 'reward' visas?
The unrealistic 'aspirational' goal isn't even enough to cover the damage they're causing with their irresponsible migration policies.
Edit: Added for context for those unfamiliar. People who study in Australia are 'rewarded' by being able to apply for 'temporary graduate visas'. These visas are being extended more and more over the past few years, with people able to remain up to an additional 6 years after they finish their study with no work limitations.
No secret at all.
Oh no, I happen to be old enough to have bought a house before the crazy got super crazy, is that the secret, time?