Real Estate Institute of Australia President Says Renters Should ‘Get Two Jobs’ to Buy a House

tsunamisurfer on 07/09/2018 - 15:58
Last edited 07/09/2018 - 16:07 by 1 other user

The REIA President has come out and said on radio that people should "Do the hard yards. Maybe even, God forbid, get two jobs," .

The message as you can all imagine was not received well at all and is causing a storm.

The articles are below.

https://www.realestate.com.au/news/real-estate-institute-of-…

http://www.abc.net.au/news/2018-09-06/tenants-unable-to-pay-…

My take on it is what Mr Gunning has suggested has merit from a pragmatic sense.

If your income is below what is required to service home ownership increase your income, and one of the most common ways is to get a second job.

However, his delivery, his tone and who he is (someone that is rich and profits from the very issue preventing his target audience from affording a home) works in concert to make him sound like an insensitive, out of touch, Knob.

Its akin to telling the people to eat cake.

But if we were to put aside the outrage for a brief moment, is there anything fundamentally wrong with Mr Gunning's assertions that people who want but cannot afford home ownership should :

  • Increase income as another way of saying get a second job.
  • Move to a more affordable area
  • Review one's expenses / budget as another way of Mr Gunning quoted as saying "first-home buyers should move away from Melbourne, Sydney and Brisbane, cut spending or negotiate their rent."

If I were on the cusp of being able to buy my own home, I would happily take Option 1, because just sitting there and bitching about how everyone else is bidding more than me will not get me into a home any time faster.

If your goal was the Great Australian Dream, and it is 'ohh so close' would you be prepared to make additional sacrifices to achieve that goal?

Home & Garden Affordability Property REIA

Comments

  • mysterytal on 07/09/2018 - 17:42
    +6

    I just want something close to public transport (I do not drive) and is affordable on one full time minimum wage.

    Surely that's not too much to expect.

    • tsunamisurfer on 07/09/2018 - 18:04
      +8

      I don't think that is realistic anymore.

      I think 100k / year is minimum for a one income household to go into the average mortgage and comfortably service it over the interest peaks and troughs of a 30 year cycle.

      But Australians seem to have a aversion to renting…..Renting is not a bad thing.

      • Diji1 on 07/09/2018 - 18:46
        +1

        But Australians seem to have a aversion to renting

        Seventy percent of Australians cannot afford to own their own homes. They are forced to the rental market.

        • HighAndDry on 07/09/2018 - 18:52
          -2

          I think the point was: there's nothing wrong with renting, therefore… so?

        • whooah1979 on 07/09/2018 - 18:59

          http://www.abc.net.au/news/2017-06-27/home-ownership-rates-c…

          Home ownership declined from 68.6pc in 1991 to 65.5pc in 2016
          Fewer people own their home outright, with 34.5pc of owners still paying off a mortgage

        • whooah1979 on 07/09/2018 - 19:02
          +1

          @HighAndDry:

          http://www.abc.net.au/news/2017-06-27/home-ownership-rates-c…

          Renting has risen from 26.9 to 30.9pc of households

        • HighAndDry on 07/09/2018 - 19:15
          -1

          @whooah1979: But if there's nothing wrong with renting, then it's… not an issue. It's like more people eating pasta and less people eating bread.

        • whooah1979 on 07/09/2018 - 19:19
          +3

          @HighAndDry:

          I’m not saying there is. Diji1 has stated that 70% of Australians are forced to rent while the abc article reports it at ~31%.

        • HighAndDry on 07/09/2018 - 19:22

          @whooah1979: Ah gotcha. Oh, I don't take much of what Diji says seriously… do… do many people?

        • Hardicus on 08/09/2018 - 13:51
          +4

          @HighAndDry:
          At the whim of landlords, can be kicked out without reason at any time (2 month's notice I believe), quarterly inspections, 6 monthly or (if you're lucky) 12 month leases, rent increases every time you renew, no maintenance, no ability to alter things, no pets, no home just a house.

          Look at the European model of renting, people aren't that fussed about it there because they have rights and stability.

        • bejahi on 09/09/2018 - 06:44

          Seventy percent of your comments are made up facts. Like most, this is simply untrue.

        • HighAndDry on 11/09/2018 - 10:39

          @Hardicus: They can be, but landlords don't generally kick out good tenants. So the answer might be - be a better tenant then.

        • ely on 11/09/2018 - 19:03
          +1

          @HighAndDry: "good" is a bit of a subjective term though; good may mean "agrees with the massive rent increase" or "doesn't al ask me to maintain things that I should". Like there are bad generator tenants there are also bad landlords and both can be at fault; current laws are generally heavily weighted in favour of the landlord, although one of the silver linings of the housing crisis is that the balance is improving.

      • mysterytal on 07/09/2018 - 18:58
        +1

        $100k is far beyond anything I could ever earn. I'm on Ozbargain as I need to stretch my few dollars that I have as far as I can. If I had a job earning that much I wouldn't be on here anywhere near as much as I am.

        Renting is fine. It just needs to be affordable.

        Looks like waiting on a public housing list for at least 10 years is my only option.

        • HighAndDry on 07/09/2018 - 19:16
          +3

          You can find a place to rent on a minimum wage. I think that's all that's needed. Anything more is really a luxury… and you'll have to work harder for those.

        • mysterytal on 07/09/2018 - 19:39
          +1

          @HighAndDry:

          I live in Outer Eastern Melbourne. My only requirement is the property must be a short walk to a regularly scheduled public transport service as I do not own a car.

          The cheapest property meeting that one criteria that I can find is $300 per week. I can afford $215 per week.

        • HighAndDry on 07/09/2018 - 19:52
          +1

          @mysterytal: I'm speaking from experience - it's not ideal, but it's possible to live fairly decently renting just a room. If two people can share a studio apartment comfortably, one person should be able to live in less than that.

        • owli on 07/09/2018 - 23:12
          +1

          @mysterytal: What was stopping you from owning a car? Having a vehicle may increase your earning potential and lower your rental costs.

        • mysterytal on 08/09/2018 - 10:31

          @owli:

          Lots of things. I no longer have a driving licence. Although I can drive but I'm not very good at it having crashed several times.

          Cars cost money…a lot of money. I need a better job to secure a loan to buy a car and that's not going to happen without a car. Yes I could buy an old banger for a relatively small amount of money but if you knew my driving history I just don't think that's a very good idea at all.

          I actually prefer public transport. Even when I had a licence and car one (well paid) job that I had previously required me to have a licence and car. It was in the city and I took the train leaving the car at home.

        • Quantumcat on 09/09/2018 - 09:49
          +1

          @mysterytal: I prefer public transport too - it is time to yourself to read a book or play a video game or snooze.

      • Shiny Mew on 10/09/2018 - 21:28
        -1

        Renting makes the rich richer and means you never get to own your own piece of land which you can tastefully restore or renovate so that it feels like 'home'. Not to mention the constant stress of wondering whether your lease will be renewed and how much the rent will change.

        • HighAndDry on 11/09/2018 - 10:40

          If you buy an apartment you don't get a piece of land either.

          And christ I'm worried for the legal profession if you're what passes for a lawyer these days. As I've said to ely elsewhere - there's a perennial debate on whether renting or buying is more cost-effective. Owning a property is not free: there are maintenance and general costs of ownership which are just expenses (that you can't capitalize). For a lot of people, and in many cases, it's cheaper to rent than to own a home, even taking into account capital gains.

        • matthewperk on 11/09/2018 - 12:18

          Renting doesn't make the rich, richer. It covers the expenses (or part of) of the ongoing cost of ownership. The numbers have been run before and there is very little difference in wealth outcomes between someone who rents but saves a significant portion of their income and invest that, vs someone who is a property owner.

          "Over the very long term it’s much of a muchness. Owners and renters over the last 60 years have ended up in roughly the same place. That of course relied on renters being just as disciplined about investing those savings in a portfolio with similar returns." https://blog.stockspot.com.au/rent-or-buy-we-do-the-sums/

          and from the same source:
          "Our analysis suggests renters are likely to be better off than property owners over the next 7 years based on long-term assumptions. The market cycle, property yields and the current payback period are all suggesting that now isn’t the best time to be buying."

        • ely on 11/09/2018 - 19:15

          @matthewperk: It depends on a range of things, not least when you decide to put the start and end dates for your study. Individual circumstances also vary, e.g. for us owning at current interest rates is outright cheaper than renting was.

          There are also indirect benefits of owning which can't really be quantified as they're pretty subjective and the value to any given person varies (e.g. security of tenure, ability to make alterations).

          Stockspot (although it's a product I quite like) also has a vested interest in their conclusion, which you can see even in your quote - if a renter invested an identical amount in the stock market then they would have came out about the same. Most people don't have that discipline (or perfect knowledge of what their hypothetical property would cost to maintain either), which is an indirect benefit of the compan compulsory saving scheme called a "mortgage". We can also see how that return would have been skewed had the end of their period been near any of the various stock market crashes!

          Stocks are a much more volatile asset class; as such the returns should be commensurately higher - if you've only ended up equal in spite of taking on more risk then you've really lost out on that your odds of having worse outcome were higher.

          Another benefit probably not factored in is that a retiree with $1m in shares will get no pension, while if that $1m was tied up in their primary residence then they'd be on the full pension. Just another flawed policy that pushes up the cost of housing and penalises those that don't have it.

      • Talonparty on 11/09/2018 - 01:32
        +3

        Why wouldn't someone have an aversion to renting? It is categorically a bad thing long term.

        • Can't pay the rent on the pension, so long term you're stuffed if you don't own
        • Can't have stability in location for raising your children and keeping them at the same schools
        • Can't ever stop having the maximum inspections every year, forever, because agents aren't interested in improving the quality of your life
        • Have no recourse if the agent lets themselves in and claims the notice was lost in the mail (personal experience with this one)
        • Can't secure baby gates, hang photos, paint a nursery, allow your child to put up posters, mount a tv to the wall to keep it out if reach for young children
        • Can't allow friends/relatives to stay semi-long term without getting approval and getting them on the lease
        • Can't install solar and benefit from reduced power costs
        • Don't build equity in something you can sell long term
        • Can't build a lasting connection to your community because you'll probably be in another suburb in a year or two (when the rent is increased too much, the owner decides to sell, the agent has made your life hell, etc.)

        There's probably more but I don't really see any benefit in renting other than

        • Don't pay for repairs/rates/maintenance
        • Can move easier than owning the home (although moving is never an easy or cheap task)

        None of the top stuff mattered to me as a kid and I was happy to rent. Now I'm an adult with a family it matters a lot. I want stability and be able to plan long term. I want to get to know my neighbours and build lasting connections with them. I want what I was told I would be able to get with hard work and dedication and it keeps getting further out of reach.

        I don't want to be told to get two jobs, I want people to realise it could be much fairer than it is and start to make changes to reflect this.

        • HighAndDry on 11/09/2018 - 10:41

          I don't want to be told to get two jobs, I want people to realise it could be much fairer than it is and start to make changes to reflect this.

          Oh boo hoo. Life's unfair. Is that a surprise to you?

          I want what I was told I would be able to get with hard work and dedication and it keeps getting further out of reach.

          Didn't you just say you're now an adult and not a kid anymore? Maybe you should stop believing what you're told so blindly. Hard work is important - so is being good at what you're putting hard work into.

        • Cheezbrgr on 11/09/2018 - 11:42
          +1

          "It is categorically a bad thing long term."

          No. It is not categorically a bad thing. It is a risk. Most people don't want to take on that risk which makes it a bad thing long term for them, but that is a personal preference and not categorical.

          You can use the funds saved from buying a place you want to live in, to purchase another asset which you expect will give you greater return. In the case that the return from this asset (i.e a different property you might not want to live in) exceeds your rent repayment and cost of capital, you are better off. The probability that this will not occur is the risk taken.

          "I want what I was told I would be able to get with hard work and dedication and it keeps getting further out of reach"

          Would many sit back and admit someone else deserves it more? Hard work is relative and difficult to objectively measure at this scale.

        • ely on 11/09/2018 - 19:16
          +1

          @HighAndDry: Life is unfair; that doesn't mean we shouldn't try to address that, especially when the unfairness is a product of things that we can control (i.e. bad policy in this case).

        • HighAndDry on 11/09/2018 - 20:09

          @ely:

          Life is unfair; that doesn't mean we shouldn't try to address that

          Actually it kind of does. If someone wins the lottery, while there's a starving orphan kid who needs a kidney transplant also bought a ticket but didn't win, you don't "address it" by taking the money from the winner and giving it to the kid.

        • Talonparty on 11/09/2018 - 20:56

          @HighAndDry: Life is unfair? Yes at one point animals ate our children and raiders took our belongings unopposed. Over time we built society and collectively we found ways to make life fairer. What point are you really trying to make here? You just seem like a bit of a dick, to be honest.

        • Talonparty on 11/09/2018 - 21:07

          @Cheezbrgr: If risk is your only concern then yes you may disagree with my statement. I didn't make it without providing my opinion and you don't seem to have addressed anything there except that it might be better off financially. The only financial argument I made was the pension argument and the equity. The rest is important to me but that's because risk and financial concerns aren't what I'm seeking to resolve.

          When I say "I want what I was told I would be able to get with hard work and dedication and it keeps getting further out of reach" what I'm trying to say is that, while it may be wishful thinking, I was always under the impression that all work is noble and if I work full time my entire life I should be able to provide for my family. I'm not asking anyone to hand anything to me on a platter, but housing has become about securing investment portfolios at the expense of people who just want the security and opportunity their forebears had. If you study hard, go to university and apply yourself, get a job and continue to work hard these things shouldn't be unachievable but this is what's happening.

        • ely on 11/09/2018 - 21:20

          @HighAndDry: Come on H&D, you can do better than that not at all analogous attempt at an analogy.

        • HighAndDry on 12/09/2018 - 09:42

          @ely: Yeah but that particular example is more entertaining. It's still accurate enough to get my point across: Say a millionaire won the lottery when a starving orphan misses out. Is that fair? Shrugs - most people here would seem to fall on the "no" side of the discussion. And yet it'd be ludicrous to say that gives the orphan a right to go burgle the millionaire's house to steal the money and "make things fairer".

          There's definitely more nuance to the overall discussion, but in the context of someone saying: "Oh no, I don't make enough money to buy the property I want " - because they certainly can afford a property if they lowered their standards - "and that's unfair and the government should do something about it" - no, I have zero sympathy for them.

        • HighAndDry on 12/09/2018 - 09:44

          @Talonparty:

          You just seem like a bit of a dick, to be honest.

          And you just seem poor and bitter, but you don't see me rubbing it in all the time do you? Seriously, your comment boils down to:

          I want what I was told I would be able to get with hard work and dedication and it keeps getting further out of reach.

          I don't want to be told to get two jobs, I want people to realise it could be much fairer than it is and start to make changes to reflect this.

          Effectively you were raised to believe in hard work - which is good - but someone forgot to mention that talent and luck plays a part too. Now you feel cheated, and want someone else to hand you what you can't get with your own ability.

          You don't care about "fairness" - your definition of "fairness" is just "I want to get mine because I was told I'd get it."

        • ely on 12/09/2018 - 11:04

          @HighAndDry: Really I think it's so ridiculous that it fails to make your point at all; we can't fix all unfairness, but that's not the same as saying that we shouldn't fix any unfairness. It also tries to draw an incorrect parallel between unfairness as a result of chance and system unfairness.

          The answer to your question would change for most people if it turned out that the lottery was rigged and that's much more analogous to the property crisis. It wouldn't be ludicrous at all to take away the winnings from a rigged lottery, even if the winner wasn't the one that rigged it.

          With your answer to Talonparty, talent and luck are well and good, but the crisis has a large systemic unfairness problem (basically young people are more or less screwed, barring a substantial improvement in the affordability of housing to rent and buy).

        • HighAndDry on 12/09/2018 - 11:20

          @ely:

          It also tries to draw an incorrect parallel between unfairness as a result of chance and system unfairness.

          This is a distinction without a difference. It's chance that you weren't born into a trust fund family. Chance that your IQ is lower. Chance that you're not as good looking, as confident, as well-connected, as lucky, as others.

          The only thing systematic here is that people with money can buy more stuff than people without money. Yes, that's what money does. That's not unfairness. If I can afford to buy 10 properties and manage them, I'll make more with the same amount of work as a property manager who manages 10 properties but doesn't own them. Same work, different reward. Is that the "unfairness" you're talking about?

          With your answer to Talonparty, talent and luck are well and good, but the crisis has a large systemic unfairness problem (basically young people are more or less screwed, barring a substantial improvement in the affordability of housing to rent and buy).

          Oh please. The narrative that "young people are screwed" is basically the converse of "In my day we had to walk uphill both ways through snow to get to school blah blah blah".

          You know what older generations had to live through? Oh, just World Wars, the Cold War, ever-present actual danger of nuclear holocaust, worse medical science, worse healthcare system, worse coffee, more expensive appliances, lack of modern conveniences, no or far less internet, worse entertainment, worse TV/radio/other programming, worse access to news… etc.

          People these days are just spoiled and entitled, and have a worrying lack of perspective.

        • ely on 12/09/2018 - 11:50

          @HighAndDry:

          This is a distinction without a difference.

          If I steal your money, then I have more and you have less. You genuinely think that the distinction between that unfairness and the unfairness that some win a lottery and some do not is a distinction without a difference?

          The only thing systematic here is that people with money can buy more stuff than people without money.

          I know you're a fan of strawmen arguments, but that's obviously not what I'm saying. The thing that is systemic is the poor policies that are pushing up property prices.

          The narrative that "young people are screwed"…

          See above comment regarding systemic unfairness. Yes, older generations had their own shit to deal with, so what? That doesn't mean we shouldn't address current systemic issues.

        • HighAndDry on 12/09/2018 - 12:17

          @ely:

          If I steal your money

          I thought you were complaining about bad analogies. Who's stealing money here?

          The thing that is systemic is the poor policies that are pushing up property prices.

          Okay? Why is that "unfair"? And even if it was unfair, how is it unfair in any way other than "rich people can buy more stuff than poor people"? Because again - yes, that's what money is.

          Yes, older generations had their own shit to deal with, so what?

          So this "older generations had it better than younger generations" schtick is bullsh*t. And if they didn't have it better, it's not unfair anymore, is it?

        • ely on 12/09/2018 - 13:52

          @HighAndDry:

          I thought you were complaining about bad analogies.

          I'm not saying it's analogous to the property market; I'm pointing out that the distinction is important, and we can see that from my example.

          Okay? Why is that "unfair"?

          It's unfair because the effect of those policies has pushed prices up over time; those that were born earlier have had an unfair ability to purchase them at more affordable prices. It's nothing to do with "what money is" or "rich people can buy more"; it's everything to do with how poor policies have disadvantaged those that come to the market later.

          So this "older generations had it better than younger generations" schtick is bullsh*t.

          It is questionable in general and hard to come to any specific conclusion about, but again, this is a strawman because I'm not claiming that they had it better across the board, just that they had it better specifically with regard to property - and that's clearly the case.

          I know you love your strawmen, but could you put a bit more effort into the principal of charity[1] and argue more honestly?

          [1] https://en.wikipedia.org/wiki/Principle_of_charity

        • HighAndDry on 12/09/2018 - 13:59

          @ely:

          this is a strawman because I'm not claiming that they had it better across the board, just that they had it better specifically with regard to property - and that's clearly the case.

          It's not a strawman, it's called context. Arguably you're arguing uncharitably because you're saying "X - without considering context - is unfair". Sure, maybe as it relates to property, we have it worse than previous generations. But to say that that single aspect makes life unfair, without considering all other factors across the board?

          To me that's just whining. Yes, some things will be worse, other things will be better. I'm fairly sure if you asked anyone objectively, they'd prefer to live in the 2000s than in the 1950s.

          Edit:

          You pretty much can't apply the principle of charity to your argument, that's how bad it is. Because taking you at face value, and applying the principle of charity, your argument is this:

          It is much more difficult for current generations to afford to own property than it was for previous generations, and this is unfair.

          Tell me if I can frame it better, but that seems to be the gist of it.

          By your own admission, you're not taking into account any other aspect of living standards. So do I even need to address your argument, other than that you should, because we don't live in a vacuum of only property prices?

        • ely on 12/09/2018 - 14:15

          @HighAndDry: You just can't help it can you?

          But to say that that single aspect makes life unfair

          But nobody is saying that (except for you, when you construct a strawman and pretend that other people are saying it). You want to "add context" (otherwise known as shifting the goalposts) because your disagreement on the actual claims haven't got a leg to stand on so you need to shift the argument to something else.

          I'm fairly sure if you asked anyone objectively, they'd prefer to live in the 2000s than in the 1950s.

          Irrelevant to the topic under discussion.

          It is much more difficult for current generations to afford to own property than it was for previous generations, and this is unfair.

          That's pretty close. "It is much more difficult for current generations to afford to own or rent property than it was for previous generations, largely due to poor policy and this is unfair and can be addressed by correcting the poor policy.

          I'm not taking into account any other aspect of living standard because that's not what we're talking about and it's irrelevant to whether the property specific aspect that we're discussing is unfair. Whether life in general is better now vs at another point in time is irrelevant to whether that specific aspect is unfair; even if it is it has no impact on the fairness or otherwise.

          I'll take your repeated strawmanning and goalpost shifting as a concession that the rigged property market is, in fact, unfair.

        • HighAndDry on 12/09/2018 - 14:18

          @ely: I remember why I don't like talking to you.

          But to say that that single aspect makes life unfair

          But nobody is saying that (except for you

          I'm sorry, you just said this:

          because I'm not claiming that they had it better across the board, just that they had it better specifically with regard to property

          "It is much more difficult for current generations to afford to own or rent property than it was for previous generations, largely due to poor policy and this is unfair and can be addressed by correcting the poor policy.

          I'm still not seeing why this is "unfair". Especially since you arbitrarily have decided "fairness" apparently only takes into account property prices (and rent), and apparently disregard every other aspect of living standards.

          the rigged property market is, in fact, unfair.

          Christ, I really can't talk to you. Look up what "rigged" means in the dictionary. And come back and tell me what relevance the word has to do with the present conversation.

          Edit:

          By your logic, older generations could say it's "Unfair" that they had worse medical science and technology. Or that it's "Unfair" they didn't have fast internet. It's frankly an asinine argument.

          Edit2:

          I still have no idea why "property being expensive" = "unfair". Is it unfair that we pay more for soft-serves too? It used to be 30c. Now I hear they're 50c! Omg a 66% price increase! How unfair!

        • ely on 12/09/2018 - 14:37

          @HighAndDry: Nope, can't help yourself at all - although it's possible that you just don't get it.

          I'm sorry, you just said this:

          Yes, I did. Feel free to point out the bit that claims that it makes life unfair, or that it means any particular generation is somehow worse off (or better off) in general than any other.

          Look up what "rigged" means in the dictionary

          "manage or conduct (something) fraudulently so as to gain an advantage" or "cause an artificial rise or fall in prices in (the stock market) with a view to personal profit" according to Google; sounds like a solid description of the property market here, given the laws in place to artificially inflate the prices and given that our politicians largely are, and have been, huge personal beneficiaries of that.

          By your logic, older generations could say it's "Unfair" that they had worse medical science and technology. Or that it's "Unfair" they didn't have fast internet. It's frankly an asinine argument.

          The unfairness is specifically because this is a situation that has been created because of bad policy that can be addressed now (although your argument is that we should not try to address it); the older generations lack of comparable medical science and technology is not comparable. If we were to deny it to them now through some policy that bans older people from the internet then yes, they could claim it was unfair - of course, if you were consistent, you would say that life is unfair and that we shouldn't fix the law :-/

          I still have no idea why "property being expensive" = "unfair". Is it unfair that we pay more for soft-serves too? It used to be 30c. Now I hear they're 50c! Omg a 66% price increase! How unfair!

          I know you're familiar with inflation, having condescendingly suggested that I look it up in the past, so I can't charitably assume that you're genuinely unaware of it. The price of a soft serve has increased, but I strongly suspect that the affordability has improved. The price of property has increased and the affordability has worsened because it has increased far faster than wages.

          We can easily improve that affordability, as we've discussed elsewhere. It's good to know that you won't disagree with my proposed changed on the basis of fairness, as I don't think you think anything is unfair - so long as it's the status quo then it seems to be OK by you. Once my changes are in place, crashing the property market, it will be good to have you on my side arguing against the older generations complaining about unfair policies crashing the price ;)

        • HighAndDry on 12/09/2018 - 14:41

          @ely:

          I know you're familiar with inflation, having condescendingly suggested that I look it up in the past, so I can't charitably assume that you're genuinely unaware of it. The price of a soft serve has increased, but I strongly suspect that the affordability has improved.

          You're saying that inflation over the past… what 5 years, has been 66%, so that a soft-serve that was 30c before and 50c now is more affordable? I understand the concept of inflation. I'm now left questioning whether you do.

          We can easily improve that affordability, as we've discussed elsewhere. It's good to know that you won't disagree with my proposed changed on the basis of fairness, as I don't think you think anything is unfair - so long as it's the status quo then it seems to be OK by you.

          No, my argument is that there's nothing wrong with the affordability of property - whether buying or renting - and so there is no argument on the basis of affordability to change policy. And I'm not sure if this will come as a surprise to you, economic policy is not made solely on the basis of any one aspect of the economy, whether it be property affordability or soft-serve affordability.

          I don't care that much for the status-quo. There's a lot wrong with it. But if you want to change the status quo, it's incumbent on you to have good reasons for it, because changes will come with a real cost in terms of money, people's living standards, and unintended consequences. Right now? "It's unfair!" is not a good reason, especially when you can't point to even how exactly it's unfair.

        • ely on 12/09/2018 - 14:57

          @HighAndDry:

          You're saying that inflation over the past… what 5 years, has been 66%, so that a soft-serve that was 30c before and 50c now is more affordable?

          I'm going entirely off your own numbers and you didn't provide time ranges; any inaccuracies can be attributed to poor quality source data.

          I understand the concept of inflation. I'm now left questioning whether you do.

          Yes, we know you're a condescending assh*le already, you don't need to repeat yourself.

          No, my argument is that there's nothing wrong with the affordability of property

          Well that's a separate issue; "it's not unfair because affordability is in fact fine" is a totally different argument to what you've been saying. It's also a batsh*t crazy argument to make that doesn't really dignify discussion; even the Liberals concede that affordability is a problem, they're just not willing to do anything about it.

          And I'm not sure if this will come as a surprise to you, economic policy is not made solely on the basis of any one aspect of the economy,

          Yes, we know you're a condescending assh*le already, you don't need to repeat yourself.

          But if you want to change the status quo, it's incumbent on you to have good reasons for it, because changes will come with a real cost in terms of money, people's living standards, and unintended consequences.

          Agreed, but be aware that the status quo also comes with "a real cost in terms of money, people's living standards, and unintended consequences"; that's inevitable even when not changing things.

          Right now? "It's unfair!" is not a good reason, especially when you can't point to even how exactly it's unfair.

          Strawman again, I need a flamethrower. "It's unfair" is an observation about the situation, and one that has been explained ad nauseum above. "Affordability is crap and this has a significant negative impact on quality of life for the majority to the benefit of a minority, not to mention the enormous potential for economic instability created by the bubble" is a reason.

          I think we're done here, thanks for playing and better luck next time.

          For your future reference

        • HighAndDry on 12/09/2018 - 14:59

          @ely:

          "It's unfair" is an observation about the situation, and one that has been explained ad nauseum above.

          Not so much explained as just blindly asserted as fact - "Things being more expensive than they were before is unfair." Again - oh no my soft-serve. The injustice.

  • chriise on 07/09/2018 - 18:27
    +9

    Found it interesting how he said rent would be increasing significantly over the next 18 months. Where I live they just keep building thousands of new units - I don't see rent going that far north anytime soon.

    • doheedo on 08/09/2018 - 22:39
      +5

      Yeah it's almost like he has a vested interest and isn't being forthright about it. Surely no one could be so unscrupulous.

  • Diji1 on 07/09/2018 - 18:34
    +17

    Way back when the government had two options: build housing itself or incentivise the private sector to do it even though that would lead to higher prices and lower socio-economic people being at the mercy of the market.

    The market has now delivered it's subpar results which includes widespread homelessness and poverty that made wealthy people wealthier at the expense of the poor.

    • rowlandm on 08/09/2018 - 08:25
      +1

      When the head of the central bank declares wages are too low, and urges workers to demand more money, you know you have a problem.
      http://www.tai.org.au/content/wages-crisis-has-obvious-solut…

      and here:
      http://www.abc.net.au/news/2017-06-29/rba-governor-philip-lo…

      • robredo on 09/09/2018 - 15:01

        The central banks and the banking cartels are the problem. They have the ability to expand the money supply and back it with nothing, while the rest of us have to find ways to protect our hard earned currency from the effects of inflation. Currency should be a “store” of value but it is not and has not been since the Federal Reserve Act of 1913 and the de-linking of the US dollar under Nixon and all the world currencies that were linked to it from the gold standard in the 1970’s.

    • No ONE on 08/09/2018 - 13:00
      +16

      You shold take econ101 to understand a basic economics before commenting on it.

      • Optimistic Goat on 08/09/2018 - 13:20
        +1

        If I could upvote this comment more than once, I would.

  • TheBilly on 07/09/2018 - 19:18
    +1

    Really though… this is only a problem in Sydney. Melbourne to a lesser extent. All other states are affordable. I'd move interstate tomorrow if all my extended family werent in Sydney.

    • peterpeterpumpkin on 08/09/2018 - 08:50
      +1

      Western Australia and South Australia are more affordable but have higher unemployment rates and far fewer positions for particular qualifications. Unemployment rates are actually irrelevant in emerging economies, where underemployment is the real determinant of financial security for a greater number of people.

      But I'm not denying that people living in Adelaide can live a lot more comfortably when underemployed and some people will simply choose that lifestyle.

      I'm in the same situation in terms of extended family. A lot of single people raised in Sydney and Melbourne (and in more recent times, Brisbane) find living in the smaller or emerging cities and towns too quiet and boring. I don't know which one would suit me if I made the jump (just to rent in my case).

      • TheBilly on 08/09/2018 - 09:08

        Once we start taking about boring and lifestyle then the argument becomes irrelevant. I.e. yes buying a house might be considered something that should be affordable, but should it be affordable in the heart of the city next to all the restaurants and cafes? I know for a fact you can get 300k houses in outer melbourne and 500k houses in Sydney. People just dont want to live there. They want to spend $500k in Newtown or Strathfield.

        • peterpeterpumpkin on 08/09/2018 - 10:21
          +1

          Exactly.

          When I'm dead I don't think anyone will care where I lived and whether I owned or rented a home. And most people lose friends as they get older and eventually, family. A healthy person that's comfortable in their situation would continue to be that way until someone tells them to feel otherwise.

  • diceman99 on 07/09/2018 - 19:21
    +16

    Why dont you just work 24 x 7
    Then u wont need a house.

    Im sure thats where the fat cats think the workers should be. While they holiday 24 x7 in other sweatshop countries

    • tsunamisurfer on 07/09/2018 - 19:28
      -4

      No one is suggesting this.

      This is about the suggestion that people meet the market.

    • whooah1979 on 07/09/2018 - 19:30

      Nobody is working 24/7 to purchase a property. That’s just silly talk.

      • Shiny Mew on 10/09/2018 - 21:32

        My brother worked 80-90 hours a week for five years to buy a house outright. Granted, he still lived (and lives) with my parents so was able to save every cent, didn't need to cook or clean, didn't have children or a partner and as he wasn't a professional his commute to work was only five minutes one way. Dream situation.

        • Kangal on 11/09/2018 - 22:34
          +3

          In contrast, I finished high school and started uni. Soon found myself studying full-time and without a savings and homeless.
          After graduation there weren't any jobs in my STEM sector, contrary to what the university was preaching. So I worked other jobs almost related to my field getting paid minimum wage.
          And since I needed to pay my share house, bills, food, transport… there was almost no money saved yearly and no time to work a second job or pursue further study. After 1 year of scraping by, I saved enough to improve my situation slightly. Then I managed to get a night-time job, and then a weekend job. Every week I was doing 50 - 85 hours. And after another year, I had a bit of savings. This meant no social life, and lost practically all friends and opportunity to meet a longterm partner. Then I managed to get a job in my field. I quit all three jobs, and was making decent ($45k) with the single full-time job. I slowly drifted into depression. I then moved cities and started working in the same job for a competitor. I also rented my own house (1 bedroom) since I couldn't stand having housemates anymore/kept stealing and leaving me to clean everything. After working there for nearly 5 years my salary has risen to $55k. And now I've saved up a bit of money (nothing special), which has all gone to help the family pay their mortgage (almost lost their house) with no prospect of return. And if you suspect that the problem is me for not having "personal responsibility" and not working hard enough, I'll just say that I have 62 days of Annual Leave accrued. I own my belongings and car, and have no debt but have some savings. So even with a modest pay rise and some savings, I find myself, a professional individual who is actually hardworking… I find myself in a predicament that I can not be a ($350,000+) homeowner in my lifetime. And the amount of properties that are $350,000 or less is diminishing each year.

          And the worst part is, this isn't a unique situation.
          The system was designed for Baby Boomers/GenX, anyone younger will need to come from a wealthy family, start working at a well-paying job ($80k+) early on, live 50km/1hour away from the city, or simply win the lottery!

    • [Deactivated] on 07/09/2018 - 21:06
      +16

      Don't be silly! No one is saying you have to work 24/7….

      But if we look at this objectively, is three 8 hour shifts a day, 8 days a week too hard for the youngsters? Back in my day…

      • peterpeterpumpkin on 07/09/2018 - 21:48
        +10

        That's the problem with kids these days. If you want to achieve a 10 year goal in 1 year you just need to make each day 10 times longer. It's simple maths. You'll be getting 10 times the amount of sleep each day as well so it's a win-win!

        We already did 17 year old retail workers a favour by halving their retail award wage so that us mature folks will consider hiring them. If they keep complaining we should double their wages to teach them a lesson.

  • Godric on 07/09/2018 - 20:05
    +1

    I might pick up a pizza delivery job as a second now

  • peterpeterpumpkin on 07/09/2018 - 22:40
    +1

    With no disrespect to this older fella, he probably won't find many night-shift jobs himself that would appreciate his many years of paper-pushing experience (ageism is a thing as well…).

    I might be wrong, but "night-work" (for the not self-employed) typically falls into limited categories, such as labour of some kind, hospitality, security and care work. If you work an 8-5 job, the only second jobs you can source at night that would consistently allow you to get 6-7 hours of sleep would probably be in hospitality. And most non-chefs give up hospitality night-shifts for the same reasons - they find more "stable" jobs (with longer hours and the holy-grail of minimum wages) or go home when their visa expires. If 200,000 people in Sydney "stopped being lazy" and went looking for second jobs in hospitality tomorrow I don't know if there would be 200,000 vacancies. High turnover creates the illusion of vacancies.

  • TheBilly on 07/09/2018 - 23:11
    -3

    Everyone dies. You dont take your property with you. As long as your parents have one house you will get something. So ultimately who cares.

    • Optimistic Goat on 08/09/2018 - 13:23
      +1

      Many people have multiple siblings or have parents who do not own property. I agree though, for the people with no/one sibling(s) and wealthy enough parents, they don't need to worry too much.

    • moneyhungry on 09/09/2018 - 17:35

      touche'

  • n3xia on 08/09/2018 - 00:13
    +10

    The problem is a lot of people are underemployed or unemployed, for a variety of reasons they can't (easily) control. If they could get a second job, or even one full time job, they would have already. It's not through lack of trying that people can't get into the property market at the moment. This whole "if you're not successful, you're just not trying hard enough" attitude needs to stop. And that's coming from someone who fits the stereotypical idea of 'successful' and has worked up to 3-4 jobs at a time.

  • try2bhelpful on 08/09/2018 - 00:18
    +11

    The problem is the cycle just feeds into the price increases. It is in this guys interest to drive up house prices so they get better commissions. He just wants more blood from a stone. The balance should be more towards home owners and less for investors. You don’t need to worry about a lot of rental stock if people can afford to buy. Housing is insanely overpriced at the moment.

  • terrys on 08/09/2018 - 08:19
    +13

    "The REIA President has come out"
    with a suggestion of what his target market can do to ensure that his Ponzi scheme doesn't collapse…

  • gbarlett on 08/09/2018 - 09:20
    +14

    I did it. In 2005 i got a 2nd job to pay the mortgage after my wife went on maternity leave. 16 hour days on the weekend usually Saturday sometimes Sunday also. I did this for 4 years. It was hard, really hard. its not for everyone however worth it. I now own 3 homes and dont have to worry about money (until the misses needs to visit the hairdresser)

    • tsunamisurfer on 08/09/2018 - 11:02
      +1

      Well done.

      I like reading stories where people who put in the hard yards find success.

      • peterpeterpumpkin on 08/09/2018 - 11:12
        +12

        I know a guy with a similar history but he later had a divorce.

        Let's just say his wife is doing very well :)

    • try2bhelpful on 08/09/2018 - 15:37
      +5

      There is a difference between house prices in 2005 and now. We bought a place in Fitzroy in 1992 and had the mortgage paid off by 2001. It was a much smaller mortgage and one of our wages went straight into the mortgage. Also while you were doing the paid work the missus is bringing up the child on her own. The fact that you now own 3 homes is part of the problem. Housing should be for living in not as an investment vehicle.

      • whooah1979 on 08/09/2018 - 16:23

        The fact that you now own 3 homes is part of the problem

        How is working hard to accumulate assets a problem? People work hard to achieve financial freedom. Gbarlett has done that is now living the Australian dream.

      • gbarlett on 08/09/2018 - 16:27
        +2

        I didn't buy them in 2005. One in 2002 then 2010 and then 2016. Owning 3 homes is not part of the problem. Well not for me. Why shouldn't i have something to show for my hard work? Its the difference between people who want to work hard and make sacrifices verse those who are happy to just get by doing the minimum. We dont live in a communist country. If you are prepared to work hard then you should benefit, if you dont want to work hard then so be it but stop complaining about those who do.

        • try2bhelpful on 08/09/2018 - 18:10
          +12

          I have worked hard and sacrificed. My home is paid off, I have shares and I have enough in Superannuation to live well in retirement. I have worked hard and have things to show for it. I’m not worried about me it is the next generation who have the issue. It has nothing to do with people doing the minimum, because there are plenty of people working their backsides off who won’t be able to afford a house. No, we don’t live in a communist country but we pride ourselves on being egalitarian. Enjoy your non diverse investment.

        • Quantumcat on 09/09/2018 - 09:53
          +1

          @try2bhelpful: every time I read any of your comments I can't help but think we would get along well if we ever met

        • ozbjunkie on 09/09/2018 - 17:51

          @Quantumcat:

          True, it's as if 'try' is actually a sweet and thoughtful person, how uncommon on the internet.

        • idonotknowwhy on 10/09/2018 - 11:02

          @try2bhelpful: Underrated comment. Well done for achieving financial freedom without enslaving future generations. Hopefully diversifying your investments pays off for you personally, in the event of the housing market crash which some people are dreaming of :)

        • HighAndDry on 10/09/2018 - 13:13

          @try2bhelpful: No one is tell you how to live your life. Maybe you should stop telling others how to live theirs. If you want to be generous, no one is stopping you from giving away your money or assets to others.

          I like being egalitarian when the effort put in is also the same. Gbarlett put in the work and is being rewarded for it. Obviously you did too. I see nothing wrong with this.

      • owli on 09/09/2018 - 18:43

        The fact that you now own 3 homes is part of the problem. Housing should be for living in not as an investment vehicle.

        How would the solution to that problem work? Has something similar been done anywhere else?

      • Soluble on 10/09/2018 - 04:59

        @try2bhelpful if you have 2 full time wages today(and put one fully towards the loan), you should be able to pay a mortgage off in the same amount of time as you did back then..

    • scheps on 09/09/2018 - 21:26

      well done! am extra dollar more earned now is worth a lot more later

    • lycaric on 10/09/2018 - 10:00
      +2

      I don't really comment in ozbargain but this is quite interesting. I believe back in 2005 house pricing are much cheaper compared to now and salaries back in 2005 would be similar or slightly less than now. For example, housing back then in 2005 for the same house would cost you $150,000 to $200,000 and now would be $500,000 to $600,000. And in terms of salaries, back in 2005 maybe if you work 2 jobs you can earn average $6000 a month after tax and now 2018 it would be, let's say $8000 for the same 2 jobs. Can you see the difference? That's for a single salary. It's a different game now. Unless the salary rate goes at the same rate as the housing price, which would never happen or the hiked rate of housing price need to be controlled.

  • UNO on 08/09/2018 - 10:43
    +16

    Previously when men were the sole bread winner houses could be purchased with one income. Now women work more, so two incomes are required to service a mortgage.

    Getting a second job is a competitive advantage, until it becomes the norm.

    If everyone worked second jobs, it would just end up in higher house prices.

    Then you need to work three jobs!

    • peterpeterpumpkin on 08/09/2018 - 11:05
      -5

      So, then what's the problem, Einstein? People working 1 job will work 2 jobs and those working 2 jobs will have 3 jobs. Problem solved!

      I can only imagine how competitive our economy would be! And all the cool things we could buy. If you live to retirement, imagine all the sweet technology that will go into your care-taking robots. The future is bright!

    • esq on 08/09/2018 - 11:14
      +7

      Even better idea, why not just get a second wife that also works?

      • UNO on 08/09/2018 - 12:49
        +4

        One wife costs enough!

    • scheps on 09/09/2018 - 21:32

      do you think by having 2 income streams would generally be associated with more spending mortgage aside? eating out more, going to movies more, more holidays, travel, gadgets, phones etc?

  • Illian on 08/09/2018 - 15:21
    +10

    Yeah, right. Have no time or energy left for anything in your life for 10 years just to own a home, then what? You have your home but now you're a broken shell of the man/woman you once were. We shouldn't need to give up our lives for a home, our lives should be 'work to live', not 'live to work'. That's without even mentioning the fact that finding one job is hard enough, and no amount of 'hard work' makes up for the irrevocable fact that everything comes down to chance anyway. You do not control your life, only slightly influence your chances. Just try telling a widowed single mother working three jobs renting a single room and struggling to put clothes on her children's backs that she's not trying hard enough, you would deserve the beating you get.

    • bobolo on 08/09/2018 - 16:30
      +3
      1. keep renting then - nobody is forcing you to own a home
      2. not everyone who is whinging about housing affordability are single mothers working 3 jobs and renting a single room.
      • try2bhelpful on 08/09/2018 - 17:27
        +7

        Yeah, keep renting and have to live with the restrictions the landlords put on you - no thanks. If you have to put your pet down because you can’t take it with you then society is stuffed. Having a roof over your head is an essential and the current game of people using housing as an investment strategy is not good for Australia, instead of money being used to invest in businesses that create jobs it is locked into overpriced real estate.

        Point 2 is why housing affordability needs to change. When even people on a decent wage can’t get a foot in the door then something has gone drastically wrong.

        It should be one house, one investment property and then you are taxed pretty severely beyond that.

        • whooah1979 on 08/09/2018 - 17:48

          money being used to invest in businesses that create jobs it is locked into overpriced real estate.

          Investing in property is seen as less risky.
          http://www.abc.net.au/triplej/programs/hack/startups/9211712

          60 per cent fail in the first three years.

        • try2bhelpful on 08/09/2018 - 18:00
          +3

          @whooah1979: you can invest in successful blue chip shares; you don’t have to start your own business.

          Real estate generates little wealth for Australia so why should landlords get tax breaks for having a portfolio of properties. People need stability for their housing. Before we bought we rented and, although we had good landlords, we still had little say over the property we were living in. The rental conditions now are worse than when we were renting.

          Housing is a necessity, not a “nice to have”. The alternative is you live out of your car or under a bridge.

        • bobolo on 08/09/2018 - 19:03
          -2

          LOL ok….then you better be prepared to be homeless.

          Apart from communist states and a few select countries where housing is subsidised or free to their citizens (like Dubai), housing in high demand areas is certainly NOT a right. If you want to live in the nicest areas then you either have to earn it, be lucky enough to inherit, or win the lottery. There is plenty of affordable housing all around Australia even in Sydney and Melbourne but of course the whingers will not have a bar of not being anywhere further than 20mins to the CBD and heaven forbid need to commute more than 40 mins to their high paying jobs.

          I don't think people realise how lucky it is to be a citizen in Australia. I don't think there are any single mums with 3 kids that don't do it tough anywhere on earth, but at least in Australia she will receive equivalent to a minimum wage from the government (if she chooses not to work) and also have most of her housing subsidised as well. Oh yeah - minimum wage. Lets not forget we have the highest min wage in the world.

          In most major first world cities, middle class households in desirable areas would be lucky to have a 2 or 3 bed unit to raise their families. And they have to work bloody hard to get that in the first place. Meanwhile in Australia, people on their expensive computers and fast internet are talking about having no time or energy after making sacrifices for 10 years and own a home booooohooooooooo …..oh but if I rent there is a risk I can't take my pet??? Naaawwwwwww

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